Commons Sitting of 28 November 1990

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
PRAYERS
  PRIVATE BUSINESS
    ADELPHI ESTATE BILL
    Read the Third time, and passed.
Oral Answers to Questions
  FOREIGN AND COMMONWEALTH AFFAIRS

    Cyprus
    Mr. Haynes: To ask the Secretary of State for Foreign and Commonwealth Affairs what progress has been made on the problem of Cyprus.
    The Minister of State, Foreign and Commonwealth Office (Mr. Tristan Garel-Jones): We want to see a comprehensive, just and lasting settlement of the Cyprus problem. The United Nations Secretary-General's Initiative has our strong and active support. The secretary-general's special representative is continuing to pursue separate discussions with all parties to the dispute.
    Mr. Haynes: As the Minister is a new boy at the Foreign Office, will he come with me to visit that beautiful island so that he can see its problems at first hand? Tragically, the island is divided and in the north there are foreign troops from the mainland of Turkey, and all sorts of armaments. We need to know where the people missing from the southern part of the island have gone. Therefore, will the Minister come with me to look round to see what we can do about those problems and sort them out once and for all?
    Mr. Garel-Jones: Like most hon. Members, I would go to the ends of the earth with the hon. Member for Ashfield (Mr. Haynes). I agree that it is tragic that the island should be divided in that way and that there are several refugee and human rights problems. We think that the best way forward is by supporting the United Nations initiative, and that is what Her Majesty's Government are doing.
    Sir Dudley Smith: I know that the Government believe in the rights of minorities, but will my hon. Friend address the problem more positively, because it has dragged on for many years? Is he aware that, but for the robust efforts of President Denktash in northern Cyprus, there would have been mayhem and bloodshed a long time ago?
    Mr. Garel-Jones: I reject the proposition that the Government are not addressing the problem robustly. We have committed to the United Nations peacekeeping force
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    700 British troops, and that underlines the desire of Her Majesty's Government to bring about a peaceful and proper accord that unites the island.
    Mr. Anderson: I congratulate Foreign Office Ministers on their apparent survival. The secretary-general's initiative seems effectively to be stalled, or even in retreat, following the recent decision of Mr. Denktash to delegate responsibility for contact with the United Nations to a deputy. Does the Minister appreciate the sense of frustration and impatience in Cyprus at the continued tragic division of that island? Has consideration been given to further initiatives to break the deadlock?
    Mr. Garel-Jones: The hon. Gentleman has expressed the frustration that hon. Members on both sides of the House feel about the continued tragic division. We do not believe that the United Nations initiative has run out of steam. It continues to enjoy the full support of Her Majesty's Government.
    The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Mark Lennox-Boyd): With permission, Mr. Speaker, I shall answer Questions 2 and 6 together. [HON. MEMBERS: "Question 7."] Questions 2 and 6.
    Mr. Speaker: Order. Question 6 is about Bulgaria.
    Mr. Lennox-Boyd: I beg your pardon, Mr. Speaker. A question has been withdrawn and the numbering has not been changed.

    BBC World Service
    Mr. Harris: To ask the Secretary of State for Foreign and Commonwealth Affairs whether he will make a statement on the future of the BBC World Service.
    Mr. Nicholas Bennett: To ask the Secretary of State for Foreign and Commonwealth Affairs whether he will make a statement on the future of the BBC World Service.
    Mr. Lennox-Boyd: This year's autumn statement provided for real growth of resources for the BBC World Service during the next three years. That will enable it to improve still further the excellent service that it provides.
    Mr. Harris: I welcome that answer, but does my hon. Friend accept that the Gulf crisis is just the latest in a long series of international events, which prove beyond doubt the vital importance of the World Service in providing an impartial source of news to so many countries? Does my hon. Friend accept that, as in the case, for example, of one of my constituents whose husband is, unfortunately, a hostage in Kuwait or Iraq, the message service of the World Service is the only link with people in the Gulf in this time of crisis? As we approach Christmas could there possibly be a further increase in the amount of time made available for such messages?
    Mr. Lennox-Boyd: I am happy to endorse my hon. Friend's congratulations to the World Service, which has been especially good during the Gulf crisis. The Arabic service has been increased to 10£5 hours a day and the English service is maintained at 24 hours a day. The Gulf link programme, to which my hon. Friend referred, is invaluable for families in Britain to send messages to their relatives. I am happy to say that in the past two weeks the World Service has extended that programme to 45 minutes

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    a day, and we hope that that will provide an adequate facility for families to communicate with their relatives before Christmas.
    Mr. Bennett: Is my hon. Friend aware that the BBC World Service has more listeners than Voice of America and is excellent value for money? In view of its excellent work last year in broadcasting information to eastern European countries and other formerly totalitarian countries, will he look sympathetically on any applications by the BBC for extra broadcasting to countries that are still non-democratic?
    Mr. Lennox-Boyd: Yes, my hon. Friend is correct. The World Service plays a vital role in giving information to closed societies. It is the most successful of all the overseas broadcasting services. It has 120 million regular listeners, the highest in the world, even though its output is fifth in hours. None the less, in recent years its output has increased and it is now the highest that it has been since the 1950s.
    Mr. Home Robertson: Does the Minister recognise the urgent need for more information and entertainment for British forces deployed in the Gulf? Does he further recognise that the World Service and other broadcasting functions could be used most appropriately, to assist those people doing an important job in that area? Will the Minister make a statement on that?
    Mr. Lennox-Boyd: The content of programmes is a matter for the World Service, but I shall ensure that the hon. Gentleman's suggestion and comments are passed on to it.
    Mr. Menzies Campbell: As the radio service has proved to be so successful, will the Government look favourably on the suggestion that there should be a BBC world television service as well?
    Mr. Lennox-Boyd: BBC TV Europe is part of BBC Enterprises, not part of the World Service. Commercial arrangements are for the BBC and we wish it well in its endeavours in that respect.
    Mr. Allason: Does my hon. Friend agree that the most important priority must be English language broadcasting around the world and that before we concentrate on some rather obscure third-world languages, we should at least be able to get the right transmitter sites and the right frequencies around the world? For example, is my hon. Friend aware that it is not possible to listen to the World Service in north America between 10 am and 8 pm?
    Mr. Lennox-Boyd: As my hon. Friend will be aware, during the past 10 years there has been an increase in the audibility programme. It was begun in 1981 to improve audibility and it is almost complete. It has involved expenditure of £100 million or more in 1981 prices so, in that respect, the World Service has done well.
    Mr. Kaufman: Will the Minister disregard the idiotic question just asked of him by the hon. Member for Torbay (Mr. Allason)? It is an absurd notion that languages such as Arabic and Chinese are unimportant and should be disregarded and that the peoples of all the countries of the world should be expected to learn idiomatic English. It is important that we provide proper services throughout the world, especially at times of crisis. Will the Government reconsider the Minister's stodgy answers about television
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    services? When I was in the Gulf, and in other places too, I was told time and again that people there cannot enjoy impartial television coverage but have to rely on Cable News Network rather than the BBC's high-quality broadcasts. It is time that the Government changed their policy and offered proper financing for a world television service.
    Mr. Lennox-Boyd: No, I cannot accept either of the right hon. Gentleman's suggestions. I am sure that he is aware that English is the lingua franca in many parts of the world, and that it is immensely important to maintain English language broadcasting. Nevertheless, my hon. Friend the Member for Torbay (Mr. Allason) was not advocating a cut in World Service foreign language programmes. As to the right hon. Gentleman's second point, ITN has started a commercial world television service without making use of public funds. If ITN can do so, that must be the way forward.

    Romania
    Mr. Irvine: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the progress of reform in Romania.
    Mr. Nicholas Winterton: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the progress of reform in Romania.
    The Minister of State, Foreign and Commonwealth Office (Mr. Douglas Hogg): Romania has made some progress on democratic reform since the grave setback in June. We are also encouraged by the start of economic reform. However, we urge the Romanian Government to press ahead with further moves to transform Romania into a genuine free-market democracy.
    Mr. Irvine: Does my hon. and learned Friend agree that it is important to make it clear to the Romanian Government that the more thoroughgoing their implementation of political, democratic and economic reforms, the greater will be the amount of aid Romania can expect to receive from Britain and other western countries?
    Mr. Hogg: I could not have put the position clearer myself. At my recent meeting with the Romanian ambassador, I took the opportunity to make precisely the same point.
    Mr. Winterton: I apologise for my lack of voice, which I am sure will be welcome—[HON. MEMBERS: "Hear, hear."]—in some parts of the House. Will my hon. and learned Friend tell the Romanian Government that we deplore the continuation of undemocratic procedures in that country and that no aid can be provided until reform is genuinely under way? In that connection, certainly no aid should be made available until the media are accessible to opposition parties and other democratic groups.
    Mr. Hogg: This is the first time in my life that I have had some difficulty in hearing my hon. Friend the Member for Macclesfield (Mr. Winterton). His substantive points are wholly correct. As to the important issue of the media, the Romanian press is fairly free, but there is yet more progress to be made in respect of television and radio. My hon. Friend is right to say that more progress must be

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    made also with economic liberalisation and political reform before the British Government would give aid to Romania.
    Mr. Flynn: Does not the Minister see a great danger in the policy suggested by the hon. Member for Macclesfield (Mr. Winterton), in that if Romania were to be cut off, it might return to the dark days of isolation that it suffered under Ceausescu? The Government have claimed in a ludicrous way all the responsibility for the welcome changes that have occurred in introducing democracy to eastern bloc countries. They should acknowledge also that, in addition to the great difficulties that those countries face in creating new economies, democracy and independence, they are confronted by problems arising from the Gulf crisis, including oil shortages, and a collapsing Soviet economy. Unless the newly democratised countries receive our support, they will face a very harsh winter.
    Mr. Hogg: The hon. Member for Newport, West (Mr. Flynn) was rather unfair to my hon. Friend the Member for Macclesfield (Mr. Winterton). The hon. Gentleman will be pleased to know that giving humanitarian aid, either bilaterally or through the European Commission, is not subject to the criteria that we discussed earlier. There is a balance to be struck. The general view is that one should not extend aid of the type that we have been discussing unless there is clear evidence of progress towards political reform and economic liberalisation. It is most certainly true that Romania has made progress in both areas, but our own judgment—it is shared by the G24 meeting that took place at the end of October—is that sufficient progress has not yet been made.

    Middle East
    Mr. John Marshall: To ask the Secretary of State for Foreign and Commonwealth Affairs when he next plans to meet the Israeli Foreign Minister to discuss the middle east peace process.
    The Secretary of State for Foreign and Commonwealth Affairs (Mr. Douglas Hurd): I met the Israeli Foreign Minister on 16 October. We discussed middle east issues, including the peace process. I have no firm plans to meet Mr. Levy again, but we agreed to stay in closer contact in future.
    Mr. Marshall: Does my right hon. Friend agree that peace will come to the middle east only when Saddam Hussein is forced to disgorge his gains and give up his nuclear potential and stock of chemical weapons? Will he remind those who seek to appease that tinpot dictator that such a course of action would not provide peace in the middle east, but would merely encourage other dictators elsewhere in the world to engage in acts of aggression?
    Mr. Hurd: I hope to make a statement after Question Time on that issue, but I agree with the thrust—[Interruption.]—the thrust of what my hon. Friend said. I am not sure that people in this country are yet fully aware of the test of the international community's will that will be involved in meeting the objectives that my hon. Friend rightly set out.
    Mrs. Dunwoody: Is the Secretary of State aware that constant incursions into Israel from neighbouring states
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    will not be the way to encourage the Israeli people to support peace moves? Will he make it clear in his talks with Arab nations, as well as with the Israelis, that this country supports the maintenance of peace, and we certainly support the integrity of Israel's borders?
    Mr. Hurd: Israel is entitled to security behind confirmed, secure borders. I agree with the hon. Lady that the sort of killings that have again been reported in the past few days—for example, on the border between Israel and Egypt—can serve no purpose whatever, except to retard the peace process. Equally, it is important that the Israeli Government should understand that the security of Israel cannot reasonably rest for ever on the occupation of the west bank, the Gaza strip or indeed, in our view, east Jerusalem. So neither the occupation nor the violence against the occupation from across the borders of Israel in any way helps the matter.
    Mr. Cyril D. Townsend: Bearing in mind the fact that the Government correctly recognise the right of self-determination of the Palestinian people, would not it be sensible for the Government also to support the concept of a Palestinian state, bearing it in mind that that would be the logical conclusion of such self-determination?
    Mr. Hurd: It might be—but I believe that it is more sensible and more logical to support the right to Palestinian self-determination without advocating a specific outcome. We have never specifically advocated a Palestinian state, as opposed to other conceivable outcomes that have been canvassed, such as a confederal link with Jordan. I do not think that it is for us to specify that. We have said that the right of self-determination exists and that it will have to be respected as part of a comprehensive and negotiated settlement, which must also include provision for the security of Israel.
    Mr. Kaufman: May I welcome the right hon. Gentleman back to the Dispatch Box. The number of votes cast for him yesterday was a reflection not on him, but on the intelligence and discernment—or lack of them—of his right hon. and hon. Friends—[Interruption.]
    Mr. Holt: That is out of order.
    Mr. Speaker: It may have been out of order but it was very human.
    Mr. Kaufman: May I ask—[Interruption.]
    Mr. Speaker: Order.
    Mr. Kaufman: The unruliness among Tory Members would make one think that they were still trying to get rid of the right hon. Member for Finchley (Mrs. Thatcher).
    Will the right hon. Gentleman join me in deploring the deaths of Israelis and Palestinians over the past few days? Does he agree that the deaths of young people on both sides of the divide are unnecessary and pointless but will go on taking place until the peace process gets under way? Does he further agree that those who stand in the way of the peace process must take their share of responsibility for the continuing loss of life? Will he urge the Israelis to see sense and take part in the peace process?
    Mr. Hurd: I am obliged to the right hon. Gentleman, but I have always found his compliments rather more damaging than his criticisms. Again, I agree with the basic thrust of his final point. In my answer to the hon. Member

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    for Crewe and Nantwich (Mrs. Dunwoody), I deplored the killings that have taken place recently. It is clear that the sporadic acts of violence by whomsoever committed are retarding the process because they make it more difficult for reasonable people to come together and negotiate. I agree with the right hon. Gentleman about that. Once the aggression against Kuwait is reversed, the international community has to make a fresh effort to seek a solution to the Arab-Israel dispute. That will involve fresh thinking by the Palestine Liberation Organisation, the Arab states and the Israeli Government.

    Bulgaria
    Mr. Stern: To ask the Secretary of State for Foreign and Commonwealth Affairs if he has any plans to visit Bulgaria.
    Mr. Douglas Hogg: My right hon. Friend the Secretary of State has no plans to visit Bulgaria at present.
    Mr. Stern: I am grateful to my hon. and learned Friend for that reply. If he or his right hon. Friend has an opportunity to visit Bulgaria in the near future, will he advise whichever political party has failed to avoid taking power that week that the continual shilly-shallying and niggling while the economy collapses is doing no good to the country's reputation and risks losing the good will that was gained on its rapid transition to democracy earlier this year?
    Mr. Hogg: We are anxious to see Bulgaria move fast towards a process of economic liberalisation and political reform. I suspect that that involves a high degree of bipartisanship within the country. That is the observation that I would put to Bulgarian Ministers and officials should I meet them. Clearly, a bipartisan approach to such policies will enhance the country's reputation within the international community and domestically.
    Mr. Tredinnick: At a time when unity is on the minds of Conservative Members, will my right hon. Friend accept my congratulations on the great contribution that he has made to unity in the past 24 hours? Does my hon. and learned Friend agree that the way to unify both sides of the House in the European currency debate is the hard ecu, which offers——
    Mr. Speaker: Order. This is about Bulgaria.
    Mr. Tredinnick: Does my hon. and learned Friend agree that were Bulgaria to join the European Community, the hard ecu would be of great relevance to it?
    Mr. Hogg: I have received many compliments in my life, and those that I cherish most were made indirectly and unintentionally. But I do not think that I have ever contributed to unity in this place or anywhere else. If my hon. Friend meant my right hon. Friend the Secretary of State, I entirely agree.

    Drugs Trade
    Mr. David Martin: To ask the Secretary of State for Foreign and Commonwealth Affairs what support is being given to the international offensive against the drugs trade.
    Mr. Lennox-Boyd: We play a leading role in the fight against drugs, not only through direct assistance to
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    countries such as Colombia, but through our participation in the activities of the United Nations, the European Community and the Council of Europe.
    Mr. Martin: Will my hon. Friend confirm that we continue to enjoy the closest possible co-operation with the United States of America in combating this evil trade? Will he highlight any recent successes, especially in the Caribbean and the dependent territories?
    Mr. Lennox-Boyd: We co-operate fully with the United States authorities in drug enforcement. We have had some particular success in the British dependent territories for which we must take direct responsibility. I am happy to tell my hon. Friend that in the British Virgin Islands in November, 614 kg of cocaine were confiscated, and in St. Vincent in October, 317 kg of cocaine were confiscated.
    Mr. Corbett: Those finds show not success but growing amounts of cocaine washing round the world. What steps are the Government taking to encourage co-operation by the nations of eastern Europe and the Soviet Union? The fact that their borders are more open makes it easier to smuggle drugs into this country.
    Mr. Lennox-Boyd: The hon. Gentleman is correct: we must pursue further contacts with the Soviet Union and eastern Europe. We are taking a lead in the bilateral contacts with eastern Europe on drugs, and I am happy to tell the hon. Gentleman that plans are under way for a east—west Europe ministerial conference on drugs in Oslo next spring.

    Kuwait
    Mr. Andrew MacKay: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a further statement on the future of Kuwait.
    Mr. Hurd: I hope to make a fuller statement after questions, but I can tell my hon. Friend that in accordance with the Security Council resolutions we remain committed to bringing about the restoration of Kuwait's independence and its legitimate Government. We welcome the outcome of the Kuwaiti people's conference in Ta'if which agreed a framework for future political advancement in Kuwait.
    Mr. MacKay: Does my right hon. Friend agree that the one happy affair in this tragic circumstance has been the role of the United Nations, particularly that of the Security Council? It is encouraging for the new world order that is developing that its permanent members have agreed to so many positive resolutions.
    Mr. Hurd: My hon. Friend is right. There is a chance that the Security Council will establish itself in the role for which its founders designed it—as the supreme political authority of the international community which can take decisions, as opposed to simply uttering decisions, that are respected. We are not there yet, but my hon. Friend is right that there is a chance.
    Mr. Ron Brown: Surely Saddam Hussein cannot be all that bad if he hates Thatcherism. As that lady has parted with her philosophy to stand in Dallas or elsewhere, might the House look at the issue more clearly? Saddam Hussein makes sense in some respects. he says that there must be dialogue, settlement and a peaceful solution to a very big

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    problem. He says that, but, more important, the British community there, whom I met a short time ago, also say it. Does the Secretary of State agree that they want the British Government to achieve some solution which makes sense without going to war, because war would be costly in human and economic terms? What will the Secretary of State——
    Mr. Speaker: Order. The hon. Member has asked his question.
    Mr. Brown: It is important to people in this country and, more important, to people——
    Mr. Speaker: Order. The hon. Gentleman's question is too long.
    Mr. Hurd: To say that the hon. Gentleman's conduct and remarks on this matter are silly is to pay him a compliment. Labour Front-Bench spokesmen are following the tradition of the Labour party, which believes in collective security. In the days of the League of Nations, that sometimes led the Labour party into great difficulty. Now, when the Security Council is beginning to make collective security real, is the time for all people who genuinely believe in an international order to rally to its support. In place of that, and not just today, the hon. Gentleman has been blurring the issue. He has, with others, been helping to give the aggressor the idea that the issue can be confused and that somehow he can go away with part of his spoils. The hon. Gentleman is doing no service to peace by the line that he takes.
    Sir Jim Spicer: In the context of Kuwait today, will my right hon. Friend do all in his power to ensure that our poor citizens who are in hiding in Kuwait know from him and from the House that we view their situation with horror and that we shall do all in our power to ensure that this wretched man is thrown out of Kuwait at the earliest opportunity?
    Mr. Hurd: The position of the approximately 450 British citizens who are now in hiding in Kuwait weighs daily on all of us who know about their situation. That is one reason why Her Majesty's ambassador in Kuwait remains at his duties, despite the difficulties. My hon. Friend is entirely right. The messages and the views that we receive from these, our fellow citizens, are exactly the opposite of the view expressed by the hon. Member for Edinburgh, Leith (Mr. Brown).
    Mr. Redmond: The Secretary of State will agree that, after a conflict, the victors and the vanquished get round the table to discuss solutions to the problems. If we want a peaceful solution, it is obvious that a dialogue must take place. Will the right hon. Gentleman consider Colonel Gaddafi's seven-point plan for starting a dialogue to find a solution to the middle east problem?
    Mr. Hurd: No one in his senses has any wish or appetite for war as a solution to this problem. There is a peaceful solution and it lies entirely in the hands of President Saddam Hussein. He has to comply fully with the resolutions, not of the President of the United States or the Prime Minister of the United Kingdom, but of the Security Council of the United Nations.

    Consular Services
    Mr. Amess: To ask the Secretary of State for Foreign and Commonwealth Affairs what representations have been made to his Department on the quality of its consular services; and whether he will make a statement.
    Mr. Lennox-Boyd: The Foreign and Commonwealth Office—and individual consular officers—receive many appreciative letters from British travellers whom they have helped when in difficulty overseas.
    Mr. Amess: Although I recognise the excellent help that our consular services provide to deal with urgent cases, does my hon. Friend agree that, because of increasing travel abroad, some of the relatively minor matters that are brought to their attention have placed a strain on them? Does he agree that one way of dealing with the matter would be to encourage self-reliance and to encourage people to take out individual insurance policies?
    Mr. Lennox-Boyd: In 1989, 30 million people travelled from Britain abroad, 7 million of them to Spain. Six million British citizens live overseas. My hon. Friend is correct that, inevitably, the great growth in travel imposes strains on the consular services. I emphasise that in cases of great need and bereavement, the consular service is a magnificent service which is always there to help, but my hon. Friend is right that people must look after themselves in dealing with small problems, particularly by taking out insurance.
    Mr. Beggs: Was the first secretary at the British embassy in Washington representing Government policy on Northern Ireland when he called for sacrificial lambs, thereby implying that the Fair Employment Commission in Northern Ireland should discriminate against innocent employers?
    Mr. Lennox-Boyd: We are looking into that report, but it sounds as though it is distorted.

    Antarctica
    Mr. Tony Banks: To ask the Secretary of State for Foreign and Commonwealth Affairs what discussions he has had with the Government of Australia regarding their proposals for designating the Antarctic a wilderness park.
    Mr. McKelvey: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement about the recent conference in Santiago on the future of Antarctica.
    Mr. Garel-Jones: We have had no discussions with the Government of Australia regarding their proposals for designating Antarctica a wilderness park.
    The Australian high commissioner and the French ambassador called on me on 30 October to deliver their Governments' joint proposals for a new convention for the protection of the Antarctic environment. Officials from the Foreign and Commonwealth Office and other Departments are currently attending the 11th special consultative meeting of the Antarctic treaty parties in Vina del Mar, Chile, and it is likely that discussion of designating Antarctica a world park will take place there.
    Mr. Banks: The Minister has the well-deserved reputation of being one of the most Machiavellian Members of the House. He may be able to deceive half the Cabinet about his true voting intentions—[Interruption.]
    Mr. Speaker: Order. This sort of thing takes up a lot time, and it has nothing to do with the question.
    Mr. Banks: —but I do not think that he should try to deceive the British people. A statement was made before the Chile conference, giving a clear indication that the British Government would support the proposal to turn the Antarctic into a wilderness park but what has been said so far at the Chile conference clearly demonstrates that that is not the Government's position. They still support the extraction of minerals from the Antarctic.
    What is the Government's true position? Is it to be a wilderness park or the extraction of minerals? The Minister cannot take it both ways.
    Mr. Garel-Jones: The position of Her Majesty's Government is to attempt to seek consensus in regard to Antarctica. We have made it perfectly clear that, to achieve that, we are prepared to listen to all the options put forward by other signatories of the Antarctic treaty.
    Mr. Jacques Arnold: Will my hon. Friend give us some more detail about the existing convention on the regulation of Antarctic resource activities—CRAMRA—and how it uses international consensus to save the Antarctic environment, especially from mineral extraction?
    Mr. Garel-Jones: It may be worth reminding the House that CRAMRA was introduced by consensus; it was not a departure introduced by the British Government. It has been agreed to by 18 of the signatory parties. We have made it clear, however, that if consensus on this matter no longer lies with CRAMRA, we shall attempt to be the focus of a new consensus to protect the environment.
    Dr. Thomas: I am sure that the Minister will accept that a consensus is achieved when the parties propose various stances. He still has not told us what the Government's position is. What is it?
    Mr. Garel-Jones: As the hon. Gentleman will know, the conference in Chile was called by Britain to protect the environment. I think that the House should understand that Britain has not been dragged to the conference—indeed, Britain called it.
    We have already presented our own protocol for environmental protection which covers environmental impact assessment, tourism, waste disposal, marine pollution and habitat protection. As I think the House knows, all those issues pose an immediate threat to the environment in Antarctica. I am sure that the House will be pleased to learn that the protocol presented by the British delegation has already received a great deal of support from 10 consultative parties, as well as from the five proposing countries. It should be clear that the first thing that Britain has done in the conference is address the immediate threat posed by pollution to the environment in Antarctica.
    The threat posed by mining exists, but it is not an immediate one; the immediate threat to Antarctica is caused by tourism, oil pollution and so forth. As I said, if
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    there is no consensus around CRAMRA, Britain will take the lead in trying to find a way of achieving consensus on this difficult issue.
    Mr. Bellingham: As my hon. Friend is the Minister with responsibility for the polar regions, he will be interested to hear that recently I received a large petition from my constituents who would like Antarctic to be turned into a wilderness park. Is he aware that many of those constituents expressed support and approval for the positive and constructive attitude that my hon. Friend has shown?
    Mr. Garel-Jones: I am grateful to my hon. Friend and to many hon. Members and members of the public who have put their views to the Government. It is important to stress that those views have, I hope, enabled us to express the Government's position more clearly to the many hon. Members who take an interest in the matter and, through them, to members of the public.
    Mr. Foulkes: Is not it true that the Minister, having received a relatively modest welcome as a new broom at the Foreign Office from the organisations concerned about the Antarctic when he said that he had no rigid objection to a world park, now appears to have been nobbled by Foreign Office officials? His delegate in Chile put forward a plan which does not include a mining ban or arrangements for enforcement. Will the Minister now, at the Dispatch Box, re-assert his authority? He says that he is prepared to listen. Will he now talk to the Australian Government and support the idea of an Antarctic world park? If he does not, the next Labour Government will.
    Mr. Garel-Jones: I recognise, of course, that the mining issue is difficult and that it may run for some time, but it will have to run for a considerable time before the hon. Gentleman and his party have any say in the outcome.
    The proposal that our delegation put forward in Vina del Mar seeks to address the immediate environmental threats to Antarctica. As I said, that proposal seems to be gathering consensus around it. It is true that the mining issue must also be resolved, but we know of no one in the world who is intending to mine or is interested in mining in Antarctica. Therefore, although that issue is important, it is not as great a threat as the immediate environmental threats. We have put forward our proposals. We will certainly tackle the mining issue with an entirely open mind and we will listen to any proposals around which consensus may be seen to gather.

    Japan (Whaling)
    Mr. Amos: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will meet the Japanese Foreign Minister to discuss the continued slaughter of whales, dolphins and porpoises, in defiance of the international moratorium.
    Mr. Lennox-Boyd: The Japanese Government are well aware of our views on the killing of whales, dolphins and porpoises.
    Mr. Amos: I am grateful to my hon. Friend for that reply, but will he have another meeting with the Japanese Minister and make it even clearer to him that we are not deceived by their rapacious, duplicitous and selfish action in killing whales because we know that they are killing

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    them not for scientific research but for human consumption? Will my hon. Friend tell the Japanese Minister that we will not allow Japan to continue to fly in the face of world opinion on this very important ecological and environmental matter?
    Mr. Lennox-Boyd: The Government very much share my hon. Friend's views about the undesirability of the Japanese position. On two previous occasions in the past two years we co-sponsored resolutions at the International Whaling Commission calling on Japan to reconsider its programme. We feel that that is the best forum in which to pursue our objectives. I have no doubt that we will adopt a similar position, should circumstances continue to warrant it, at the next International Whaling Commission meeting in May.
    Mr. Flannery: The Minister outlined some of the facts and referred to our contacts, but he failed to answer the question. We have great connections with Japan and the Japanese have many factories here and contacts with this country. Will the Minister use his influence to prevail upon the Japanese in a friendly manner to stop killing these noble animals just for profit? That is what they are doing.
    Mr. Lennox-Boyd: The Japanese are well aware of our views, which we continue to express. My point is that if we make our views known at the next commission meeting, we shall have the support of other people and maximum pressure will be brought to bear.
    Mr. Robert Banks: Is not this slaughter utterly disgraceful? Views and representations are having no effect on the Japanese. Is not it time for countries such as Britain to take direct action by starting to ban certain products from Japan until the Japanese obey the moratorium?
    Mr. Lennox-Boyd: My hon. Friend is not quite right. In many areas the pressure that we have brought to bear on the Japanese Government has undoubtedly paid dividends. We expressed our concern about Dall's porpoises to the Japanese Government. In 1989, as a result of a report from the International Whaling Commission scientific committee, the Japanese catch of Dall's porpoise was unsustainable and the Japanese have now reduced the number that they catch. Our pressure is beginning to bear fruit and we shall proceed in the way that I have outlined.

    Palestine
    Ms. Primarolo: To ask the Secretary of State for Foreign and Commonwealth Affairs when he last made representations to the Israeli authorities about the arrest and detention of Palestinians in the occupied territories.
    Mr. Douglas Hogg: During the visit of my right. hon. Friend the Secretary of State to Israel in October, he put to members of the Israeli Government our position on the treatment of Palestinians in the occupied territories. We have made clear our concern about the recent detention of three Palestinian leaders: they should be charged or released. I made this plain to the Israeli ambassador last week, together with our view that administrative detention is unacceptable.
    Ms. Primarolo: I am grateful to the Minister for that answer. However, will he again press the Israeli authorities specifically about the three prominent Palestinians who have been arrested without charge and gaoled without trial
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    in circumstances that continue to inflame the already difficult situation in the west bank and Gaza? At this time of pressing for peace in the region, we should make it clear to the Israeli authorities that administrative detention is not a way to deal with people whom they believe may have committed crimes.
    Mr. Hogg: I agree with what the hon. Lady said about administrative detention. I do not think that it is right, as I told the Israeli ambassador last week and as I shall do so again should convenient and appropriate circumstances arise. People who are held should be either charged or released. The process of administrative detention is not conducive to peace or to reconciliation.
    Mr. Soames: Was my hon. and learned Friend able to garner from the Israeli ambassador any reason why the Israelis—who, after all, must know more about the terror of persecution than any other race on earth—should treat the Palestinians in such a contemptible manner?
    Mr. Hogg: The Israeli ambassador advanced a number of arguments, but, in my view, the arguments in favour of administrative detention were unpersuasive and unacceptable.

    Middle East
    Mr. Home Robertson: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the implementation of United Nations resolutions affecting the middle east.
    Mr. Hurd: The Security Council resolutions are crucial for peace and stability in the middle east. The vast majority of members of the international community, including Britain, have confirmed their intention to comply with the resolutions on the Gulf crisis. Once the Iraqi aggression has been reversed, we shall play our full part in the Security Council to carry forward the search for a just and durable solution to the Arab-Israeli dispute.
    Mr. Home Robertson: Does the Secretary of State accept that all the resolutions—those involving Palestine as well as those relating to the Gulf—must be implemented if there is to be stability in the middle east and that it is reasonable to set deadlines? Nobody wants a war—not even on a dry Saudi hogmanay. Having visited the Gulf area with the Select Committee on Defence and seen for myself the firepower that is now ranged against the Iraqi occupation forces in Kuwait, may I urge the Foreign Secretary to do everything in his power to convince Saddam Hussein that his position is indefensible in every imaginable sense of that word and that he must now withdraw if he is to preserve peace in that part of the world?
    Mr. Hurd: The hon. Gentleman's question is helpful. That is precisely the point. All the efforts, sometimes well-meaning efforts, to blur the position are fading away. The hon. Gentleman's remarks after his visit to the desert show that the issue is becoming clearer: either Saddam Hussein must leave Kuwait in peace or he will be forced out.
    Mr. Favell: I know that my right hon. Friend is acutely aware that the families of hostages in Iraq and Kuwait are suffering hardship. Do the Government have any plans to relieve their financial burden?
    Mr. Hurd: We are trying to assist both the hostages and their families. We are in close touch with the Department of Social Security. In addition, I have been in close touch, for example, with the chairman of British Telecom about telephone calls. We are helping the Gulf Support Group, organised by my hon. Friend the Member for Kingswood (Mr. Hayward). We have our own Gulf support centre in the Foreign Office. We are always open to ideas by means of which we can give further help, but the help that we are giving to relieve anxiety and, indeed, stress is already substantial.

    Iran
    Mr. Anthony Coombs: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the United Kingdom's relations with Iran.
    Mr. Hurd: We restored relations with Iran on 27 September on the basis of mutual respect and non-interference in each other's affairs. As a result, the British embassy in Tehran opened on 28 October and the Iranian embassy here opened on 2 November.
    Mr. Coombs: Will my right hon. Friend confirm that in the past week no fewer than 700 parliamentarians from throughout the world, including 140 from Britain, have issued a condemnation of the Iranian Government for persistent human rights violations? Will he also confirm that within the past month alone, no fewer than 116 official executions have been admitted by the Iranians, to add to almost 450 further executions this year, some of them carried out in the most bestial manner? Will he do what he can in the United Nations and elsewhere to make the Iranian Government understand that such human rights abuses are not acceptable anywhere in the world, particularly by reference to Islamic law?
    Mr. Hurd: As my hon. Friend knows, recently the United Nations special representative, Mr. Galindo Pohl, issued a new report covering some of the points that my hon. Friend mentioned. We are now considering, as we must, with our European colleagues, what line we should take when the report comes to the third committee of the United Nations general assembly which deals with human rights issues. However, I hope that my hon. Friend will accept the seriousness with which we take the matter.

    Conference on Security and Co-operation in Europe
    Mr. Archer: To ask the Secretary of State for Foreign and Commonwealth Affairs whether, at the forthcoming conference on security and co-operation in Europe, he will propose a limitation of arms sales to the developing world.
    Mr. Atkinson: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the outcome of the conference on security and co-operation in Europe summit in Paris on 19 to 21 November.
    Mr. Douglas Hogg: Arms sales are not within the scope of the agreements endorsed at the CSCE summit in Paris on 21 November, but we maintain strict controls on all arms exports.
    We welcome the adoption by the CSCE summit of the Paris charter. It expresses a universal commitment by all
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    the CSCE states to the principles of democracy, to human rights and to economic liberty, and sets out a new structure of CSCE activity. My right hon. Friend the Member for Finchley (Mrs. Thatcher) gave the House an account of the CSCE summit in her statement to the House last week.
    Mr. Archer: May I direct the hon. and learned Gentleman's mind to the question? Is not there a danger that manufacturers whose markets are shrinking in Europe and north America may be looking for new markets among developing countries? Does he agree that they will destabilise those areas where, in any event, there should be other priorities for the resources?
    Mr. Hogg: The right hon. and learned Gentleman makes a perfectly fair point, but it is not best dealt with in the CSCE, not least because several of the countries with which we are most preoccupied—for example, Iraq—are not party to that process.
    Mr. Atkinson: As so much of the work of the parliamentary assembly of the Council of Europe complements that of the CSCE, and as the Council of Europe now includes 31 out of 32 European CSCE states, should not my hon. and learned Friend look no further than the Council of Europe as the proposed new CSCE assembly of Europe, to which we could welcome the north American parliamentarians who are currently in London taking part in the North Atlantic Assembly?
    Mr. Hogg: My hon. Friend is a distinguished member of the Council of Europe and I understand what he is saying. There are, however, essential differences between the proposed assembly of Europe and the Council of Europe. One important distinction is that the membership of the Council of Europe is not the same as that of the CSCE; for example, the United States is not a party to the Council of Europe. Another important distinction is that the charter of Paris is, essentially, a political agreement and doctrine rather than a legal one, whereas the agreements that underpin the Council of Europe involve strictly legal obligations.

    Iraq (Hostages)
    Mr. O'Hara: To ask the Secretary of State for Foreign and Commonwealth Affairs what provisions are currently being made for the sustenance, comfort and welfare of British hostages in Baghdad and their families in the United Kingdom.
    Mr. Hurd: The embassy in Baghdad has so far sent more than 100 bags of comforts to the hostages in Iraq and Kuwait and delivered more than 30 bags to those brought to Baghdad to meet wives visiting from the United Kingdom. The contents include beer, cigarettes, toiletries, vitamins, books and writing materials. In London we have set up a post office box that families can use to write to the hostages and communities in Iraq and Kuwait. We are working with the British Red Cross to set up a system to send parcels from families in Britain.
    The Foreign Office Gulf families support centre keeps in regular touch with families and works closely with the Gulf Support Group, providing advice and help.
    Mr. O'Hara: Is the Secretary of State aware of the great hardship faced by some families of hostages? In the new dawn of compassion that was at least suggested in the

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    election campaign for the leadership of the Conservative party, will he prevail upon his colleagues in the Government to redouble efforts to secure the comfort of hostages' families, especially their ability to maintain telephone communications with their relatives in Baghdad?
    Mr. Hurd: The hon. Gentleman does not need to give that edge to his question. I am conscious of the valid point he makes. I appreciate that the hon. Gentleman is talking
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    about the families here, rather than the hostages in the Gulf. The Gulf families support centre in the Foreign Office acts as a first point of contact for families facing problems. Representatives from the Department of Social Security are on hand to ensure that any requests for help are dealt with promptly. I accept that the families support provisions are not lavish, but if they are properly and quickly administered they ensure that families do not suffer serious deprivation as a result of loss of income.

Middle East
3.31 pm
The Secretary of State for Foreign and Commonwealth Affairs (Mr. Douglas Hurd): With permission, Mr. Speaker, I should like to make a statement on developments in the middle east since I did so on 24 October.
The international coalition is holding firm. Our objectives remain: the full and unconditional withdrawal of Iraqi forces from Kuwait; the restoration of the legitimate Government of Kuwait; and the release of all hostages. President Saddam Hussein continues to show little sign that he intends to comply with the will of the international community and withdraw. He continues to rebuff the United Nations, to strengthen his military position in Kuwait, to destroy Kuwait's fabric and national identity, and to manipulate the fate of British and other citizens trapped in Iraq and Kuwait.
Only by intensifying all the pressures at our disposal—diplomatic, economic and military—can we persuade him that he has no alternative to withdrawal. Sanctions are being applied rigorously. We hope that the existing pressures will suffice to persuade Saddam Hussein to withdraw. If they are not sufficient, we need to convince him that the military option is a serious one. The option for peace is in his hands. No one does any service by blurring the choice before him.
For that military option to be fully credible, the international community must show that it has the political will to exercise it. That is why the Security Council is expected to meet at ministerial level within the next few days and vote on a resolution authorising "all necessary means"—that is to say, including force—to be used to ensure Iraqi compliance with Security Council resolution 660 and later resolutions. The resolution now being finalised will include a date—probably in the first half of January—by which time Iraq is required to comply in full with those resolutions. The House will see that it does not follow from that that military action will follow immediately thereafter—nor indeed that military action will necessarily take place. The purpose of the grace period is to allow Saddam Hussein an opportunity in which he can safely withdraw from Kuwait and release the hostages. If he does not do so, he must face the possibility of military action and certain defeat.
As questions have illustrated, we remain anxious for the well-being of the many hundreds of British hostages and other citizens who remain in Iraq and Kuwait. Some have been released through the intervention of political figures and relatives. We understand the suffering of the families and the humanitarian motives of most of those who go to Iraq. But President Hussein exploits those visits for his own unacceptable ends, and I believe that the international community is, and must remain, united in resisting that blackmail.
With tension increasing in the region, we are keeping under constant review our advice to British communities in other parts of the Gulf. We are now advising those living in the eastern region of Saudi Arabia, Qatar and Bahrain, with children in Britain, not to bring them to the area, but to spend the Christmas holiday here, and for dependants to remain outside the Gulf until the situation becomes clearer. That does not mean that we foresee hostilities around that time—the Christmas holiday—but it is
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sensible to minimise the number of dependants in that region when we are entering a critical phase, as I hope the House will agree.
I should like to report a positive political step. On 27 September we announced the resumption of relations with Iran. We are now resuming relations with Syria with immediate effect. The respective heads of the interests sections in London and Damascus will be chargés d'affaires pending the exchange, when practicable, of ambassadors. We have received from the Syrian Government assurances that Syria will continue its strenuous efforts to obtain the release of western, including British, hostages in Lebanon and confirmation that Syria rejects acts of international terrorism and will take action against the perpetrators of such acts which are supported by convincing evidence. We have also had a confidential account of the Syrian position on the Hindawi affair. It has not been entirely easy, but I am glad that it has proved possible to overcome the differences between ourselves and Syria.
Mr. Gerald Kaufman: I thank the right hon. Gentleman for responding to my request for a statement. We regard the decision to resume diplomatic relations with Syria as logical. We welcome Syria's commitment to reject acts of terrorism and look to Syria to fulfil that commitment not simply in words but, emphatically, in action.
When I visited Syria last July, I received assurances from the Vice-President and Foreign Minister that their Government would do everything possible to bring about the release of British hostages in Lebanon. They told me that President Bush had written to them repeatedly asking for their help on behalf of American hostages. Now that diplomatic relations have been resumed, will the new United Kingdom Prime Minister write immediately to President Assad on behalf of the British hostages?
Since the Iraq-Kuwait crisis began nearly four months ago, the Labour party, the constitution of which commits it to support the United Nations, has based its approach to the crisis on support for the decisions of the United Nations—sanctions and their enforcement by naval and air blockades and the release of all hostages. We have made it clear that we believe that sanctions should be given the maximum time to work, and that remains our position.
If military force were to be contemplated, we have insisted that any such action should have what I called in the House on 7 September
"the clear and unquestionable authority of the United Nations charter."—[Official Report, 7 September 1990; Vol. 177, 892.]
We have repeatedly put strongly to the Government our view that a legalistic reliance on article 51 of the United Nations charter would not be sufficient justification for the use of force. That being so, while we continue to believe that sanctions should be given maximum time to work, and while we ardently pray that the military option is not taken up and a war which could be horrendously lethal must be avoided if at all possible, we regard a Security Council resolution of the sort described by the Foreign Secretary as fulfilling the stipulations that we have repeatedly laid down since 2 August.
Yesterday, President Gorbachev's spokesman, Vitaly Ignatenko, said in Moscow:
"Our country will vote for language which envisages a clear-cut deadline for withdrawal from Kuwait and freeing hostages."

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Will the Foreign Secretary confirm that the insertion of a deadline in the draft Security Council resolution has been done at the specific insistence of the Soviet Union? Will he confirm once again that the date in the resolution will not automatically trigger the use of force but is the date after which the option of force could be taken up with the authority of the United Nations Security Council?
We in the Labour party have not seen this crisis simply in terms of the unconditional withdrawal of Iraq from Kuwait and the unconditional freeing of the hostages, indispensable though both things are. We see it above all as a test of the authority of the United Nations. If the 10 United Nations resolutions already carried by the Security Council are not implemented, the authority of the United Nations will be shattered and instead of world order there will be chaos.
If the United Nations resolutions are implemented, preferably peacefully of course, the authority of the United Nations will be enhanced as never before. That authority can then be used to provide for the further actions that must be taken in the middle east. Those are self-determination for the Palestinian people, whose intifada approaches its third anniversary, and a hopeful future for the Palestinian refugees with the aid of the wealth of the Gulf states; a settlement of the disputes between Israel and her neighbours and security for the state of Israel; and an arms embargo and the clearing from the whole region of nuclear, chemical and biological weapons.
All those are prizes which can be won once the United Nations resolutions on Kuwait are implemented. It is clear that they will be implemented. It is now for Saddam Hussein to prevent the nightmare of war by accepting those resolutions. He brought about this crisis by an act of aggression. He can end it by good sense and statesmanship, and the House and the world await his response.
Mr. Hurd: I am grateful, and rather more than conventionally, to the right hon. Gentleman. We are entering a time of national anxiety on this subject, and at such times it is right to have as much national unity as we can.
One strong thought in the minds of all of us who have been working to bring about the restoration of relations first with Iran and now with Syria is that restoration should bring closer the release of our hostages now held in Beirut. I note the right hon. Gentleman's specific suggestion to my right hon. Friend the new Prime Minister. I am glad that the right hon. Gentleman supports the Security Council resolution. Other things being equal, I shall go to New York to take part in the debate tomorrow. [HON. MEMBERS: "Hear, hear."'] Of course, that depends on the nature of an announcement which has not been made. That is why I inject a note of uncertainty.
The right hon. Gentleman asked about the deadline in the draft resolution. I am not sure how that originated, but it has strong Soviet support and is one of the points on which the Soviet Union most specifically insisted. I confirm that the right hon. Gentleman is right to say that the date, if it is inserted or when it is inserted in the resolution, will not be the date upon which military action starts. It is the date after which member states will be
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authorised to take action in pursuit not of their own objectives but of the specific requirements of the Security Council.
Sir Peter Blaker: Is my right hon. Friend aware that he deserves the congratulations of the House on the skill with which he has conducted British policy on the Gulf throughout the crisis, and the support of the whole House on his proposals for the Security Council resolution and the resumption of relations with Syria? He will be aware that the one major western country that has not contributed forces to the coalition in the Gulf is Germany. Does he anticipate that, after the German election this coming weekend, there may be moves by the German Government to alter the German constitution so as to enable German forces to be deployed outside the NATO area—for example, in the Gulf?
Mr. Hurd: I am grateful to my right hon. Friend for his remarks. I am happy to tell the House that the Federal German Chancellor informed the Prime Minister a week ago of a quite substantial contribution by the Federal Germany Government to the costs incurred by the Government in moving British military forces to the Gulf. I understand, although it is not a matter for us, that the Federal Germany Chancellor proposes, if he obtains the necessary support in the elections on Sunday, to alter the German constitution to enable Germany to take part in collective enterprises such as this.
Mr. Menzies Campbell: I offer my support for the Foreign Secretary's statement. Will it not be a sombre and anxious moment when the United Nations adopt the terms of the proposed resolution to which, unhappily, there seems to be no alternative? Even after the expiry of the deadline, will the use of force he justified only if all peaceful means have been shown to have failed? Avoiding all questions of linkage, should we not be working through the United Nations to achieve the necessary long-term solution for the middle east?
Mr. Hurd: The hon. and learned Gentleman is right: only when peaceful means have been proved ineffective would we be justified in taking military action. We are now at the end of November, and the peaceful pressures of sanctions, public opinion and diplomacy have been in place at least since the end of August.
As to long-term solutions, I do not see any realistic prospect of a useful initiative on the Arab-Israel problem until President Saddam Hussein has left Kuwait. However, I say, as I have said before, that, once that has happened, the international community will need to make a further effort, recognising that the basis of such a solution must be negotiation between Israel, the Arab states and the Palestinians.
Mr. Richard Luce: Will my right hon. Friend reaffirm that the main objective of the meeting of the Security Council this week is to make it clear to Saddam Hussein that the United Nations as a whole will use whatever means are available to achieve the withdrawal of Iraq from Kuwait, and that the sooner Saddam Hussein gets out, the better for him and for Iraqi citizens?
Mr. Hurd: That is right. The issue has been blurred, sometimes by well-meaning people, but it is now becoming clearer and starker for President Saddam Hussein. He has

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the opportunity to avoid for himself, his people and all of us the undoubted damage and suffering that will be caused by war. That peaceful option is in his hands.
Mr. Tam Dalyell: Does the Foreign Secretary have any sympathy with the view of Senator Sam Nunn that the right question is not so much, "Is it justified?" as, "Is it wise?" What does he say to the right hon. Member for Old Bexley and Sidcup (Mr. Heath), who told us that the Iraqis have sown minefields in most, if not all, Kuwaiti oilfields and that flames will go up such as mother earth has never seen before with unknown results in terms of carbon dioxide, carbon monoxide and sulphur dioxide emissions?
Some of us think that war in Iraq because of Kuwait is unjustified on a scale of proportion. My hon. Friend the Member for Edinburgh, Leith (Mr. Brown), whom the Foreign Secretary treated in an uncalled—for way, was in the Royal Signals. I was tank crew, firing live ammunition, during my national service. I think that the Foreign Secretary was in the Foreign Office and not in the forces. Ought he not to be a little more careful before dismissing us?
Mr. Hurd: The hon. Gentleman's last point is unworthy of him. As I said, I found the interventions of the hon. Member for Edinburgh, Leith (Mr. Brown) on this matter silly and confused, and they have done nothing to assist.
Mr. Dalyell: I am entitled to ask Ministers who send young men to their deaths about their own military experience.
Mr. Hurd: The hon. Gentleman is entirely wrong, and he should not make remarks without checking them. That one is competely untrue, but I shall not go into the details. He is usually very fair, but he has not been fair on this occasion.
To return to the point of principle and leaving the hon. Gentleman's pettiness today on one side, I simply say that I have heard the hon. Gentleman make the same point to my right hon. Friend the Member for Finchley (Mrs. Thatcher) and others; and, of course, he is right in the sense that war is a horrible business and one cannot contemplate a war of this kind without at the same time contemplating a lot of destruction and suffering. But it would not be an indiscriminate campaign of destruction and therefore I am not entering into the kind of details that he postulates. He is perfectly right in that any war, however just, involves suffering and destruction.
The point that the hon. Gentleman has consistently failed to answer when it is put to him is how, if one is to use that argument as being decisive on all occasions, there is an earthly chance of resisting aggression. That argument, if it is allowed to prevail on every occasion, is carte blanche for any aggressor because it could be wheeled forward to justify lying down in front of Hitler, Mussolini or any aggressor of the past. The hon. Gentleman is not a pacifist, but he has not addressed that question. We have to address that question in a serious way.
Several Hon. Members rose——
Mr. Speaker: Order. Please may we have single questions so that I may call as many hon. Members as possible?
Sir Dennis Walters: Does my right hon. Friend accept that the resumption of diplomatic relations with Syria is opportune and wise? Syria occupies a central and key position in the middle east and it is in the British interest to resume diplomatic relations. Diplomatic relations do not necessarily signify approval of a regime. We have diplomatic relations with Iraq and we certainly cannot welcome the appalling acts in the west bank and Gaza which Israel is perpetrating, but we have diplomatic relations with both.
Does my right hon. Friend also accept——
Mr. Speaker: Briefly, please.
Sir Dennis Walters: Does my right hon. Friend also accept that it would be helpful if, while maintaining our stand on Kuwait, we also committed ourselves to take action on the Israel-Palestinian issue as soon as the Kuwait problem has been resolved?
Mr. Hurd: My hon. Friend is right on his first point. I have never regarded having diplomatic relations with a country as conferring great blessing upon it. It should not be regarded in that light. It is simply a question of having a realistic relationship so that useful business can be transacted with a Government.
Once the aggression is reversed, it will be not only possible but necessary to pull the international community together, in so far as we can, in backing a renewed and vigorous effort to bring about a just solution to the Arab-Israel dispute.
Mr. Greville Janner: Is it not sad and cynical opportunism to enter again into diplomatic relations with Syria when it has complied with neither of the Government's prerequisites for doing so, when the Government have pinpointed the person responsible for the Hindawi affair and the Syrians have promoted him, and when, if The Daily Telegraph today is correct, the Syrians are behind almost all the terrorism in the Lebanon today? Will the right hon. Gentleman please review this and see it as a sad first decision of his newly led Government?
Mr. Hurd: I do not agree. We have been wrestling with the problem all the time that I have been at the Foreign Office, and perhaps before. There has been a real obstacle, based on the background of the Hindawi affair, which the right hon. Member for Manchester, Gorton (Mr. Kaufman) went to Damascus to discuss on behalf of the Opposition. We have also discussed that matter through intermediaries and, most recently, directly—and I told the House the outcome in my statement.
We are now in the same position as the United States Government. We shall have diplomatic relations with Syria because it is useful so to do. The hon. and learned Gentleman will have heard the reasonable representations made to us on behalf of hostages held in Beirut, and I do not see the restoration of diplomatic relations with Syria as a patronising pat on the head for the Syrian Government and all that they do. That is not the nature of diplomatic relations. It is a hard-headed calculation in British interests that diplomatic relations should be resumed.
Mr. Tony Marlow: Why is it that the Germans, French, Japanese and Italians, who have greater need for oil from the Gulf, have fewer troops committed and fewer lives at risk, and are less committed to the military option?
Mr. Hurd: We are not primarily concerned with oil from the Gulf. If we were, the international community would have settled with Saddam Hussein and the oil would be flowing. If we were concerned only with oil, as is sometimes shallowly said—although not by my hon. Friend—we would have settled a long time ago. We are concerned with international order, and a fundamental principle of that is that it is unacceptable for one member state of the United Nations to obliterate another.
Mr. Ken Maginnis: My right hon. and hon. Friends in the Unionist party welcome the statement, and we totally support the Government's attitude to the rape of Kuwait. We see some justification for resuming diplomatic relations with Syria in pursuing the Government's actions against international terrorism. However, we cannot help but be suspicious, and we hope that is not being done for purely economic reasons. My party supports such actions only on moral grounds.
Can the United Kingdom justify its attitude to the brutal regime in Cambodia, to the unforgivable genocide——
Mr. Speaker: Order. The hon. Member must raise that matter another time. He must confine his remarks to the middle east.
Mr. Maginnis: I accept your ruling, Mr. Speaker, but I was comparing the situation in the Gulf with the unforgivable genocide in the Sudan and with the more sophisticated but equally immoral attitude taken by the Irish Republic in its harsh, uncompromising and irredentist claim to the territory of Northern Ireland.
Mr. Hurd: I am not sure that all those cases are exactly comparable, but the hon. Gentleman knows of the efforts that we are making in Cambodia and to establish law and security in Northern Ireland. In every instance, we must pursue a consistent line.
Sir Dudley Smith: Does my right hon. Friend agree that one of the success stories of the crisis has been the Western European Union's involvement in naval patrols? Does he agree also that the sheer professionalism of the officers and sailors involved has ensured that the sea blockade of Iraq is at least 90 per cent. effective?
Mr. Hurd: I agree with my hon. Friend. The Western European Union has proved its worth as a focus for co-ordinating European efforts. My hon. Friend mentioned the Italians. The Italian navy is involved as well as the French navy and other members. Their efforts in the Gulf are co-ordinated.
The Royal Navy in the Gulf has already challenged 1,900 vessels and boarded 16 as part of the operation. It is playing a notable part in the peaceful pressure on Saddam Hussein.
Mr. Dennis Canavan: Is the Secretary of State aware that we all deplore the invasion of Kuwait, and that we want to see Iraqi forces out of there as soon as possible? However, bearing in mind that sanctions have
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not yet been given sufficient time, and the deplorable lack of democratic effort to find a peaceful and negotiated solution, would it not be crass irresponsibility on the part of the Government, or indeed of any Government, to declare what is in effect a desert death sentence on many young British soldiers, as well as possibly millions of other casualties, in what could turn out to be one of the most devastating conflicts in human history which would do nothing to solve the problems in the middle east in the short or long term?
Mr. Hurd: We want to avoid such conflict. The whole effort of the British Government since 2 August has been designed to do that. We have not spared ourselves and people in other countries have not spared themselves to do precisely that. Time ticks on. The aggressor is still there.
I do not know whether the hon. Gentleman is fully aware of the enormities now being committed in Kuwait by the aggressor. I hope that he will look at the transcript of the debate in the Security Council today with its evidence by eye witnesses because if that had happened in some of the countries which are dear to the hon. Gentleman we should have had uproar and claims for emergency debates in the House. That is happening day by day. We want to avoid conflict.
Diplomacy has a role—that is right. However, it does not have a role in undermining or cutting away the simple, straightforward demands of the Security Council. Getting those resolutions is fine. We are talking about the diplomatic and economic pressures, such as those applied by President Gorbachev on the Iraqis yesterday—that is diplomacy. If the hon. Gentleman is suggesting that diplomacy should equal doing away with, weakening or subtracting from the resolutions of the Security Council to placate the aggressor, I think that he is wrong.
Sir Philip Goodhart: If the Chinese Government should veto a new United Nations resolution, can we, in practice, ignore their veto?
Mr. Hurd: I hope and believe that that is a hypothetical question. I hope—I have not total certainty—that that will not arise.
Mr. Dave Nellist: Who is the Foreign Secretary getting into bed with in this deal with Syria? What has convinced him that the Syrian regime today is any different from the regime which ordered the murder of 20,000 Muslims in the city of Hama in 1982, which harboured the Lockerbie bombers, and invaded and colonised parts of Lebanon in what is now greater Syria? The Syrian secret police are no less efficient than Iraq's. They routinely use murder, terror and torture, like Saddam Hussein's secret police. Is it really the case that a couple of thousand Syrian troops in the Western force make him believe that the hands of President Assad are any less bloody than those of Saddam Hussein?
Mr. Hurd: The hon. Gentleman is mistaken about diplomatic relations—they are not a form of blessing. We quite rightly have diplomatic relations in Baghdad because our ambassador is needed to help our people there. We had diplomatic relations with Stalin all the time that he was committing what we know now were clearly some of the worst atrocities ever seen, we had them with Hitler and so on. Diplomatic relations are not a form of blessing or approval but result from a realistic appraisal of whether it

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is in Britain's interests to have direct contact with a particular Government. In the case of Syria, I believe that it is.
Mr. Ian Taylor: Does my right hon. Friend agree that one of the miscalculations made by Saddam Hussein was to underestimate the determination, patience and procedural efficiency of the United Nations? Does he also recognise that, when I was there two weeks ago, it was clear that the role of the British permanent mission, under the leadership of Sir David Hannay, was highly respected? When he flies to New York, will he take with him the support of the House for the work being done within the United Nations in British interests, by that mission under his leadership?
Mr. Hurd: Our mission, first under Sir Crispin Tickell and now under Sir David Hannay, has played a distinguished part since August in helping to bring together in a reasonable way and with a reasonable tone the efforts of the international community.
Ms. Clare Short: Is the Secretary of State familiar with the Christian teaching on a just war? Does he agree that there are three fundamental requirements? First, the cause must be just, and there is no doubt about that. However, there are other just causes about which the Americans and the Government have not taken action. That is the problem of double standards. Secondly, there has to be no other way. In this case there is another way—sanctions. Thirdly, the remedy must not be worse than the wrong. The potential of the horrendous war in the middle east is great. The Foreign Secretary is wrong and the United Nations will be wrong if it sets a deadline in order to bluster trying to avoid a war and we end up with a war that the right hon. Gentleman did not seek. That is the danger that the Foreign Secretary is putting before us. He is breaking the basic teaching of what constitutes a just war.
Mr. Hurd: I read the cardinal's letter in The Times and the archbishop's speech and I accept that it is important for Christians to consider the nature of a just war. However, I do not accept the hon. Lady's interpretation of the criteria. First, the cause is right and just. We have tried and are continuing to try peaceful pressure. The answer to her third question is whether it is safe for any of us that the basic principle of international order should be flouted with impunity. I do not think that it is.
Sir Ian Lloyd: Has my right hon. Friend or any of the allies in Saudi Arabia received a single shred of evidence to sustain the view that the Hitlerian intransigence so far displayed by Saddam Hussein is likely to diminish or disappear if he is given more time? If there is no such evidence, does not the contribution of that time merely give him further opportunities to sow more mines and polish his weapons, with an appalling effect on the ultimate gravity of the conflict?
Mr. Hurd: If one is contemplating a military option, time works for both sides. Part of the trouble over the past few months has been the blurring of issues to which I have referred. The value of the resolution is that it will clear away some of the illusions to which the aggressor may have been subject. It will present him with the stark choice
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as it exists—either he complies or he is forced out. It may be a good idea to give him a specific period of weeks—not an extended period—in which to face clearly and without confusion that stark choice.
Mr. George Galloway: The Foreign Secretary was elected this lunch time the Spectator parliamentarian of the year. That accolade is well deserved and I congratulate him upon it. Will he accept that he cuts an unlikely figure in favour of war, war rather than jaw, jaw? Yet the words he has delivered this afternoon amount to an ultimatum, so that it is more rather than less likely that our constituents—young men—will shortly be coming home dead in bags. I have no truck with Saddam Hussein, and I hope that the Foreign Secretary accepts that. However, on the day when Saddam Hussein has asked President Bush for talks, will the right hon. Gentleman accept that the Iraqis and millions of Arabs across the area who agree with them have a point of view and that it might be useful to sit down and talk about that before the place goes up in flames and our young men and many hundreds and thousands of others are killed?
Mr. Hurd: I have never sought to minimise the dangers and suffering that come from war. Of course, we are fully aware of the Iraqi point of view. There is no secret about it. The Iraqis believe that they are entitled to remain in Kuwait. We do not accept that and nor do the international community or the hon. Gentleman's leadership because it is wrong. To use the phrase of the hon. Member for Linlithgow (Mr. Dalyell), it is unwise and unsafe to let that countinue.
Mr. Ivor Stanbrook: Whatever the diplomatic justification for setting a deadline, is not the inescapable conclusion of setting such a deadline that we do not believe that international economic sanctions will ever succeed?
Mr. Hurd: No. The Security Council resolution, if passed, will add to the existing resolutions, including the sanctions resolution, which is the most important of all peaceful pressures. Shortages are beginning to appear, but, as I told the House a week or so ago, they are not decisive. As I said in reply to previous questions, sanctions are being applied. We are proposing to add what should be the most important of the peaceful pressures—the knowledge, which the hon. Member for East Lothian (Mr. Home Robertson), who recently visited the desert, conveyed to us, that the military option is in place and will be used. There is a chance, which I strongly hope will be taken, that this accumulation of peaceful pressures will do the job and that Saddam Hussein will withdraw.
Mr. Giles Radice: Is the right hon. Gentleman aware that most Labour Members support the need for a new United Nations resolution to put new pressure on Saddam Hussein? Is he further aware that the way to achieve peace and to avoid war is for Saddam Hussein to get out of Kuwait?
Mr. Hurd: I am grateful to the hon. Gentleman. That is exactly the point.
Mr. Ian Bruce: In the past few weeks, we have spoken much of European unity. When my right hon. Friend is in New York, will he take the opportunity to talk to other European Community Foreign Ministers to get some positive measures towards European political

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unity and to ensure, as many of my hon. Friends have said, that European Community countries, depending on size, do as much as Great Britain in supporting the United States and the Arab nations in this theatre of conflict?
Mr. Hurd: Burden sharing is very important. As my hon. Friend suggests, if our military contribution, its costs and our economic contribution are added together, we are somewhat ahead of our Community partners. The French are a fraction of a decimal point behind, but they have made military and economic contributions. The Germans have now made a substantial economic contribution, but it is true that, of the European contributions, Britain's represents the highest percentage of gross domestic product.
Mr. David Winnick: Is it not the case that since 2 August Saddam Hussein and the criminal regime in Iraq have had every possible opportunity of avoiding war by getting out of Kuwait? If the argument is that war can never be justified—in my view, if military action is taken, it will be justified in all the circumstances—what would be the purpose of the United Nations? Surely it would mean, in effect, that any country could commit outright aggression where it has no quarrel——
Mr. Dennis Canavan: Why don't you volunteer to go to the desert——
Mr. Speaker: Order.
Mr. Canavan: On a point of order, Mr. Speaker.
Mr. Speaker: No point of order arises.
Mr. Canavan: Hon. Members should go to the desert——
Mr. Speaker: Order.
Mr. Canavan: —instead of sending our young men to their deaths in the desert.
Mr. Speaker: The hon. Member has put his point of view. The hon. Member for Walsall, North (Mr. Winnick) has an equal right to do so.
Mr. Winnick: I have a right, I hope, as I have done all my life, to oppose fascists and criminal aggression, and I shall do so because I could not care less whether it is popular or unpopular.
Will the Foreign Secretary confirm that, if this aggression goes unpunished, if Saddam Hussein refuses to withdraw his troops from Kuwait, it would be direct encouragement for other states to do precisely the same?
Mr. Hurd: I have often disagreed with the hon. Gentleman, but I have always recognised that he is a through-and-through United Nations man. He believes in collective security and international order. He is following the logic of his convictions.
Mr. Cyril D. Townsend: I warmly commend the Government for their decision to restore diplomatic relations with Syria. Some of us feel that four years has been too long. Bearing in mind the more positive approach of the United States and the strategic importance of Syria, will he confirm that it has a crucial part to play in the forthcoming peace process in the middle east?
Mr. Hurd: I am grateful to my hon. Friend. I repeat that I believe that the arguments in favour of restoring relations with Syria are strong. Of course, they do not involve approval of everything that Syria is or does.
Mr. Peter Hardy: Although the military option must remain credible to ensure that sanctions succeed, will the Foreign Secretary reconsider his suggestion that pursuit of a wider settlement will follow resolution of the Kuwaiti problem, especially as it is essential now to pursue and seek to overcome the intransigence of the Likud, which was demonstrated once again at meetings I chaired in Paris last week?
Mr. Hurd: It is a matter of practicalities. Looking at the practicalities, I do not see the opportunity of a successful international initiative on the Arab-Israel question while the Iraqis remain in Kuwait.
Mr. David Tredinnick: Has my right hon. Friend seen the television reports this week of British troops training in the theatre in Saudi Arabia, demonstrating sophisticated anti-tank equipment and methods of clearing minefields? Does he agree that this kind of media circus could threaten the lives of British troops if we ever have to take action there and that it should be stopped if possible? Will my right hon. Friend make representations to the media, because such reports affect the lives of British soldiers?
Mr. Hurd: My right hon. Friend the Secretary of State is here. He tells me that he is keeping a close watch on the nature of this presence.
Dr. Dafydd Elis Thomas: The Foreign Secretary referred in his original statement to intensifying all the pressures at our disposal—diplomatic, economic and military. He did not tell us in his statement or answers what diplomatic initiatives he now supports. Will the grace period be used for the British Government and other European Governments to support a further diplomatic initiative, particularly a further Arab initiative, or an initiative yet again from the United Nations Secretary-General following the decision that looks likely to be taken this week by the United Nations Security Council?
Mr. Hurd: The United Nations Secretary-General has a role under the Security Council resolution, as the hon. Gentleman clearly knows. The Secretary-General was rebuffed when he tried to exercise that role. The diplomatic moves in these circumstances must be to reinforce in the Iraqis' minds the advantage for them of complying with the resolution by peaceful means.
Mr. Stuart Bell: In a sense, the hon. Member for Meirionnydd Nant Conwy (Dr. Thomas) anticipated my question. Does the right hon. Gentleman accept that, of course, everyone in the House and outside it is opposed to war and to young people losing their lives? In relation to the visit to the United Nations tomorrow and the probable signing of the resolution, would it not be appropriate to see the United Nations Secretary-General, Mr. Perez de Cuellar? He began a peace initiative in August which was precipitous and was aborted. It might be appropriate for him now to return again to the middle east and to go to Baghdad to impress on Saddam Hussein

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the will and intention of the United Nations, so that Saddam Hussein has the opportunity to withdraw while there is still a period of grace and time?
Mr. Hurd: I discussed this aspect in September with the Secretary-General in New York and he felt that there was no point in his offering to go again if he were again rebuffed. The hon. Gentleman is right in saying that the Secretary-General has a role, as a servant of the United Nations, in trying to bring about implementation of Security Council resolutions.
Mr. Harry Barnes: During the Gulf debates, the Foreign Secretary was opposed to a resolution of the type that is going before the United Nations, on the ground that there was a possibility of its being vetoed. He did not answer the question about a possible veto by China, and I should like him to do so. If the resolution is carried, and as that would be a United Nations commitment, would it not be appropriate that forces in the middle east should be placed under a strict United Nations command structure and should not be operated at the behest of the Americans?
Mr. Hurd: On the first point, it would not have been sensible to go forward with a resolution that one thought would fail, but, as I said, that is not our information at present. On the second point, I do not think that that is likely to be workable in practice or, if there has to be a military option, that it would exercise that option in the most effective and life-saving way. I do not think that that will happen. I imagine that there will be a requirement that any member states that use the authority which the Security Council is about to confer on them should report the results to the Security Council.
Mr. John Cummings: Does the Foreign Secretary agree that, if British blood is to be spilled in the Gulf, Her Majesty's Government ought to pursue a rigorous policy aimed at the total democratisation of all the Gulf states, which certainly do not have a fine record on human rights?
Mr. Hurd: I referred earlier this afternoon to the conference of Kuwaitis—including Opposition Kuwaitis—held recently in Ta'if. That conference agreed to return to the 1962 constitution in Kuwait. That is the kind of movement that I consider sensible and right for Kuwait.
Mr. Robert Litherland: Does not the Foreign Secretary concede that to specify a deadline would automatically put this country on a war footing?
Mr. Hurd: No. It gives a period of grace—a peaceful pause—in which the peaceful pressures for a peaceful solution can reach their height. The expiry of the deadline —I have said this once or twice already, but it is very important—is not in itself a signal for military action to begin.
Mr. John McAllion: Does the Foreign Secretary accept that one of the most serious obstacles to the establishment of a new international order underpinned by the United Nations is the application of double standards by that body in the face of aggression? If
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aggression must be met with military force and a devastating war in Kuwait, why is it met with little more than polite protest in the Lebanon, west bank and Gaza?
Mr. Hurd: There is, of course, much more than polite protest. There are Security Council resolutions, because the situation is different: the background to the Israeli occupation of the west bank is entirely different. It is the result of several wars. The Security Council has taken a very clear line—the right line—the author of which was Lord Caradon. The Security Council has said that there must be a negotiation and a reconciliation of Israel's security, and of the rights of the Palestinians to self-determination.
It is not a question of a simple act of aggression which must be reversed, as it is in Kuwait. It is more complicated, and requires—and will be given by the Security Council—a more complicated answer. We must search for that answer. Several of my replies this afternoon have concerned that point.
Mr. Ronnie Campbell: Will the Foreign Secretary tell the House what efforts his Department has made, and will make, on behalf of the hostages who are still in Iraq? Is he going to secure their release and start a dialogue with Saddam to that end as countries such as Germany, Sweden, Italy and Spain have done—along with others too numerous to mention?
Mr. Hurd: Our argument—the argument that we have used with the Iraqis throughout—is that the policy of the human shield has no justification, that all our hostages should be released and that those still working in Iraq should be enabled to leave if possible. That is our policy, and we have never ceased to impress it on Iraqis. It is also the policy of the European Community as a whole since 28 October that there should not he negotiations—partial negotiations—for the release of hostages: there should be no bargaining on that subject.
Mr. Andrew F. Bennett: Given that it took nearly 40 years to resolve the cold war, and given that there is no sign that sanctions are being breached, will the Foreign Secretary urge patience on the other countries before the United Nations resolution is passed and make it absolutely clear that it would be a far greater triumph for the United Nations—and far better for a new world order—if we achieved withdrawal from Kuwait by peaceful means, even it it took one, two, three or even four years, rather than through the loss of a large number of lives?
Mr. Hurd: Patience is certainly a virtue in relation to these matters, and it has been displayed. There has been no rush to arms—no rush to counter-attack Saddam Hussein. There has been a great deal of patience, which has not been rewarded with any progress.
We are not saying that patience has been exhausted on 28 November; we simply want to point out to Saddam Hussein that there is a limit to the period in which he can spoil Kuwait, kill some Kuwaitis and torture others. There is a limit to the time in which peaceful pressures can be expected to be effective. That is what we are saying.
Mr. Alan W. Williams: How effective are the sanctions that are already in place against the export of oil from Iraq and Kuwait? Is it not true that those sanctions are completely effective and that exports of oil

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have ceased? Since Saddam Hussein invaded Kuwait to acquire those oil resources and as they have been sterilised, why embark on a path that could lead us to war? Would it not be wiser to give sanctions months or even a year or two to work rather than to prepare for war?
Mr. Hurd: Iraq is not shipping oil. I am not saying that the occasional truck carrying oil does not cross the border, but basically the hon. Gentleman is right. There is no large-scale shipment of oil out of Iraq and therefore Saddam Hussein is deprived of much the greatest part of his foreign exchange. He has quite substantial reserves not least because he stole a lot of money from Kuwait. Shortages are building up in Iraq as a result of sanctions, but, as I have just said, those shortages are not decisive. I do not believe that it is sensible or possible to rely indefinitely on that peaceful pressure to do what is necessary. I doubt whether that kind of peaceful pressure could be sustained indefinitely at its present level of intensity. The hon. Gentleman would have to face the risk of a gradual weakening of the will for collective security. There would then be a danger that at the end of that period the aggressor would sit back in possession of his aggression. It is not safe to contemplate that.
Mr. Tony Lloyd: What can the Foreign Secretary tell the House today that will give us any confidence to believe that if there are non-military means to resolve the dispute after the deadline those means will be allowed to continue?
Mr. Hurd: My right hon. Friend the Secretary of State for Defence and I and, I am sure, my right hon. Friend the Prime Minister will continue to do all we can to make the peaceful pressures effective. However, I have felt for a month or so—and perhaps for longer—that the most effective peaceful pressure is the clarity of the military option. The Security Council resolution will illustrate that clarity.
Mr. David Trimble: I agree with the Foreign Secretary that the case of Kuwait and that of the occupation of the west bank are not analogous. I believe that the attempt to link the two was started by Saddam Hussein as a diversionary tactic. Is there not a danger that that diversionary tactic may soon move from the realm of propaganda to an attempt to embroil Israel in this situation? Should we not take steps to guard against that and would those steps involve supporting the present Government of Jordan?
Mr. Hurd: The hon. Gentleman is right: that is one of the dangers. I am deeply concerned about the position of Jordan, which, for the time being, has lost its friendship with the Gulf states out of which came a lot of financial help. I believe that it is now largely implementing sanctions and as a result is in desperate economic trouble. We are doing our best within the Community and like the Germans and Japanese who have substantial resources and are not committed militarily in the Gulf, to bring help to Jordan.
Mr. Paul Flynn: Will the Foreign Secretary announce today that he is redoubling his efforts to counter what is ultimately an even greater threat than Saddam Hussein, namely, the brisk international trade in armaments research and information? Is he aware that there are many firms in this country and agencies in the
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rest of Europe, in south America, the United States, China and throughout the world that are selling weapons and information on exotic conventional weapons such as fuel air explosives, laser battlefield weapons and nuclear, chemical and, the most terrifying of all, biological weapons? That trade will eventually threaten future Saddam Husseins and crises throughout the world unless the new world order can control it.
Mr. Hurd: Arms embargoes are in place with regard to Iran and Iraq. The hon. Gentleman knows how they have been enforced. With regard to his wider international point, there are various international conventions in place. When this situation is over, and even if Saddam Hussein were to withdraw peacefully from Kuwait, I agree that the existence and potential of those weapons would remain a major problem.
Several Hon. Members rose——
Mr. Speaker: I called three of the hon. Members who are now rising at Question Time—[Interruption.]—but I shall call them again if they remain patient.
Mr. Bernie Grant: Will the Foreign Secretary confirm that our troops are under the operational command of the Americans, which means that they could be dragged into a war without any reference to the right hon. Gentleman or to any other Minister?
The Secretary of State for Defence (Mr. Tom King): They are not under such operational command.
Mr. Hurd: As my right hon. Friend the Secretary of State for Defence said, he has worked out detailed arrangements with the United States, but the position is not as the hon. Member for Tottenham (Mr. Grant) has described it. In any case, there is no question of our forces being committed to military operations without the consent of Her Majesty's Government.
Ms. Dawn Primarolo: I feel horrified about the way in which we are being dragged towards the inevitability of war and that the world community, with all its resources, cannot find ways to make Saddam Hussein get out of Kuwait without war. I am disappointed that the five permanent members of the Security Council now believe that war is necessary. Will the Foreign Secretary explain how the date in the resolution is not the date, upon which war will commence if Saddam Hussein has not withdrawn, because if Saddam Hussein ignores that date, inevitably we will be at war?
Mr. Hurd: The hon. Lady has mistaken the point. The date in the resolution—hether it is 1 January or 15 January—will not be the date on which military action will begin. It is the date from which member states will be authorised—not instructed, but authorised—to take such action which, I repeat, is in pursuit not of their own objectives but of the specific objectives that the Security Council has laid down.
Mr. Ron Brown: I remind the Foreign Secretary and the House that the tabloid press in this country have a motto—"Make it simple; make it juicy; make it up." May I assure the Government that I was never hounded or imprisoned and that I have never been a prisoner of the Iraqis, although certain newspapers, such as the Daily Record, have suggested that that might be the case? Nevertheless, there are prisoners out there

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from our own British community and they expect a lot more from a new revitalised British Government who, I hope, will have new ideas. One of those ideas must be to negotiate on and to discuss this problem. We may speak about linkage, and we may speak about Israel, but the one thing that we must speak about is the lives of those 1,400 British people out there, because they are important. The whole world knows that not only those lives but many other lives are at stake. Indeed, the whole world is at stake. What is the Foreign Secretary going to do about that? Will he approach the Iraqis in some way, even unofficially, because they will approach him?
Mr. Hurd: If we had followed most of the advice that we had received from the Britons trapped in Kuwait, we would have started military action a long time ago.
Mrs. Gwyneth Dunwoody: Does the Foreign Secretary accept that, although we fully endorse his position that diplomatic recognition does not in any way give support, the parents and relatives of those who died at Lockerbie will want to be assured that Her Majesty's Government have genuine assurances from the Syrians that they will no longer support or in any way encourage terrorist action that emanates from their shores?
Mr. Hurd: The hon. Lady has raised a perfectly fair point. Obviously I cannot say anything about the progress of the inquiry into Lockerbie, although I have taken that point into account. The hon. Lady will know the position that the Americans have taken on it also.
Mr. Tam Dalyell: On a point of order, Mr. Speaker.
Mr. Speaker: I shall take the presentation of Bill first.

Middle East
  BILL PRESENTED
    ROAD TRAFFIC
    Mr. Secretary Parkinson, supported by Mr. Secretary Waddington, Mr. Secretary Rifkind, Mr. Secretary Patten, Mr. Secretary Hunt, Mr. Secretary Waldegrave, Mr. Norman Lamont and Mr. Christopher Chope, presented a Bill to amend the law about road traffic; And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 17.]

  WELSH AFFAIRS
  Ordered,
  That the Matter of Education and Training in Wales, being a Matter relating exclusively to Wales, be referred to the Welsh Grant Committee for its consideration.—[Mr. Chapman.]

Points of Order
4.34 pm
Mr. Tam Dalyell: On a point of order, Mr. Speaker. May I congratulate you on allowing questions on the statement to run for so long? I was fortunate enough to be called early. Along with other hon. Members, I congratulate you on allowing questions to run for so long on this important subject so that the Foreign Secretary could patiently answer our questions.
But there is a problem, and it is on that problem that I seek advice. The Gulf crisis is possibly the most important since 1945. You will have detected from the nature of the questioning that passionate beliefs are held by hon. Members other than those on the two Front Benches. Will you reflect on your powers of discretion? I am speaking off the top of my head, but I understand that a long time ago Mr. Speaker Gully, in the days when Sir Steven Runciman's father was a Cabinet Minister, was able to take certain decisions on controversial issues of the day to allow proper arguments to be deployed by Back-Bench Members.
My question to you, Mr. Speaker, is this. Do you believe that you have special powers of discretion to enable the many hon. Members—I hesitate to give a figure, but perhaps 30, 40, 50 or more—who hold views which may be substantially different from those voiced from the Front Bench to put their case? What are the powers of Mr. Speaker on that?
Mr. David Winnick: Further to that point of order, Mr. Speaker. My hon. Friend referred to passionately held views and you had an illustration of them during the exchanges. You will be aware that I, like many of my hon. Friends, disagree with my hon. Friend the Member for Linlithgow (Mr. Dalyell). Time and time again in the history of Parliament, one of the outlets for passionately held views was a debate. Although I recognise that it is not up to you to decide—unless at some stage you grant an application under Standing Order No. 20—it would be unfortunate if parliamentary business was arranged without providing an opportunity for the House to have not merely exchanges such as we have just witnessed but a debate. Presumably the business of the House is being arranged right up to Christmas. Then we shall have the recess. I hold a view different from that of many hon. Members and I would defend and justify it if I were so fortunate as to catch your eye in any debate. I believe that a debate would be useful.
Mr. Speaker: I fully understand that a statement is no substitute for a debate. I have that very much in mind in thanking the hon. Member for Linlithgow (Mr. Dalyell) for what he said. This is an important matter which is of interest to the whole of Britain and to the wider world. That is why I let questions run today.
However, I must always have regard to the subsequent business before the House. I was able to do that today. With regard to a debate, we have business questions tomorrow when we may hear that there is to be a debate on this matter. I fully understand the anxieties that hon. Members on both sides of the argument expressed.
Mr. Andrew F. Bennett: On a point of order, Mr. Speaker. You will be aware that there is a time-honoured tradition in the House that the only

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way in which seats can be reserved is by placing prayer cards. You will also be aware that, according to another tradition, the first seat below the Gangway is always reserved for former Prime Ministers. As we now have two former Prime Ministers, would you perhaps suggest to the right hon. Member for Finchley (Mrs. Thatcher) that she might take up the seat on the second row back so that she can keep an eye on both the Prime Minister and the right hon. Member for Old Bexley and Sidcup (Mr. Heath)?
Mr. Speaker: That was a good try. I can say with my hand on my heart that that is not a matter for me.
Mr. Stuart Bell: Further to that point of order, Mr. Speaker. I would not wish the House or those who read our proceedings to be misled. There is absolutely no tradition on this side of the House of placing prayer cards. That goes back to the end of the last century when the first Labour Members of Parliament came from the north. They found that prayer cards had been placed by their honourable colleagues from the south and removed them. From that time to this, Labour Members have removed prayer cards.
Mr. Speaker: The House knows that there is a convention on the matter. We should now get on.

Orders of the Day
  Statutory Sick Pay Bill
  Considered in Committee.
  Statutory Sick Pay Bill
    Clause 1

      REDUCTION IN THE AMOUNTS RECOVERABLE BY EMPLOYERS WHO HAVE PAID STATUTORY SICK PAY
      4.39 pm
      Mr. Archie Kirkwood: I beg to move amendment No. 1, in page 1, line 11, leave out from 'payments' to 'and' in line 15, and insert
      'after the words "prescribed circumstances", there shall be inserted the words "and in the circumstances in paragraph (aa) below.".'
      The Second Deputy Chairman of Ways and Means (Miss Betty Boothroyd): With this it will be convenient to discuss the following amendments: No. 2, in page 1, line 15, after 'payments,' insert—
      (aa) there shall be added, after paragraph (a), the following provision:
      "(aa) entitling, except in prescribed circumstances, any employer employing twenty or more persons, who has made one or more payments of statutory sickpay in a prescribed period to recover an amount equal to 80 per cent. of the aggregate of these payments.";'.
      No. 3, in page 1, line 21, leave out from 'made' to the end of line 23 and insert
      'there shall be added at the end, the words, "or, where applicable, the amounts which they are entitled to recover by virtue of paragraph (aa) above.".'.
      No. 4, in page 1, line 26, leave out '1(a)' and insert '1(aa)'.
      Mr. Kirkwood: I know that some of the arguments about the Bill were rehearsed on Second Reading, but I cannot understand why it is necessary to complete the Bill with such speed. Second Reading took place on Monday, when, unfortunately, I was unable to attend, but my hon. Friend the Member for Orkney and Shetland (Mr. Wallace) spoke. Why is it necessary for the Bill to be considered in Committee today?
      The speed with which we are proceeding with the Bill has caused some suspicion, to put it mildly, among those who will be directly affected by it. They believe that the Government's undue haste is suspicious. The Minister furrows his brow at that, but the story behind the argument goes back before my time to 1982 when the old sickness benefit was changed into the statutory sick pay scheme. I am told that those changes led to hard-fought arguments that continued for many months. Although small businesses, the Confederation of British Industry and other interested parties were not entirely happy with the final result, they felt that their arguments had been heeded and that they had had a fair crack of the whip.
      I do not believe that the current consultation has been satisfactory in terms of the changes that were first brought to the attention of the House in the uprating statement made a few weeks ago. I do not use unmeasured language often, but it is deplorable and a matter for the House if the Government proceed with the Bill—admittedly it is small and technical, but the changes are far-reaching—at such speed. There are only 15 Bills in the Queen's Speech, and

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      I cannot understand why we should proceed with such haste. Since we are discussing the first group of amendments I hope that it will be in order for the Minister to say something about that. It would be helpful if he could reassure those interested parties that there was no untoward reason for such indecent haste.
      I know that hon. Members have urgent business to attend to in other parts of the House and I accept that the Bill is small and technical, but it is disappointing that more of our colleagues are not present to consider the issues. The statutory sick pay scheme, however, in common with other parts of the social security system, is now so complex that it takes experts to work out the implications of any changes for small businesses, employers and employees. Surely that is another reason for moving slowly on the Bill. It is important to remember that the Bill will have far-reaching effects for businesses and employees.
      The Second Reading debate made it clear that the function of the Bill is to reduce the statutory sick pay rebates from the current level of 100 per cent. to 80 per cent., which is a big jump in one go. It will also remove the additional rebate for national insurance contributions that are paid on statutory sick pay, and it gives the Government the power to cut the rebate again without primary legislation. The Bill also increases the threshold for the higher level of statutory sick pay from £125 to £185, but that higher level will not be uprated, but frozen at £52·50.
      The net effect of the changes will be to put a disproportionate burden on those businesses with a much higher incidence of sickness. That is bad news for small businesses, which will see them as the thin end of the wedge.
      4.45 pm
      In the uprating statement, the Secretary of State spoke about a new partnership between the Government and employers, but in reality it is a new partnership between the treasury and the Department of Social Security. The Treasury required cuts to be made and the Department has found a mechanism for offloading those cuts and their impact on to employers' shoulders.
      An important principle that is buried in the Bill should not go unnoticed. If employers are to be directly responsible for the provision of sick benefits in the future, it should not happen piecemeal. If the Government are intent upon that, they should say so openly, so that we can discuss it properly. The withdrawal of redundancy rebates is an obvious example of what can happen by default. I hope that that change is not part of a trend.
      The amendments are designed to exclude from the Bill firms that employ fewer than 20 people; after all, the proposed changes will have a far greater impact on small businesses than on larger ones. There are precedents in employment law for distinguishing among companies based on their size. That principle should be accepted as there are compelling reasons for questioning whether the full-blown provisions of the Bill should be visited on small businesses that employ fewer than 20 people.
      The general economic climate faced by small businesses is much harsher than that faced by larger businesses. That factor should also be taken into account.
      Mr. Tony Banks: I am sorry to interrupt the hon. Gentleman, but I hope that he will bear with me, as I am new to this. The hon. Gentleman referred to businesses with fewer than 20 employees, but amendment No. 2 speaks of
      "any employer employing twenty or more persons".
      I assume that either a mistake has been made or I am missing something—probably the latter—so perhaps the hon. Gentleman can enlighten me.
      Mr. Kirkwood: I asked the same question this morning. My hon. Friend the Member for Orkney and Shetland (Mr. Wallace) is a distinguished advocate at the Scottish Bar and has chosen to draft the amendments so that the Bill's provisions affect those who employ more than 20 people. Therefore, by implication, they exclude smaller firms with fewer than 20 employees. However, the question of the hon. Member for Newham, North-West (Mr. Banks) was perfectly fair.
      Do not ask me what motivates advocates. If I had had more time, I think that I could have drafted the amendments more simply—that sounds like a direct and vicious attack on my hon. Friend the Member for Orkney and Shetland, and I withdraw it. The Minister is such a generous soul and I know him so well, that I am certain that he would not let the legislation founder on such petty technicalities. Having said that, it was a perfectly proper question to ask. As I said, I asked the same question this morning; I am glad that I did because otherwise I could have been completely floored by the hon. Gentleman's intervention.
      There is a case for considering the special circumstances in the economic climate. The uniform business rate provisions, changes in business rates and interest rates, and the administrative impact of VAT have all had a disproportionately hard effect on smaller businesses. Some of the research undertaken by the Government on the provision, extent and incidence of occupational sick pay schemes is flawed. Will the Minister say something about that? I know that a study was produced which is now in the Library, but it is vigorously contested by the organisations representing small businesses. They believe that the research was selective and produced results that do not reflect reality. I make no comment on that, but merely put the question to the Minister. Had there been proper consultation in advance of the Bill's introduction, we might have been able to deal with such issues.
      People who run and work in small businesses have told me repeatedly that they were given a clear undertaking that additional costs would not be visited on them any more than they were under the scheme introduced in 1982. That is as valid now as it was then. I know that that point was made at some length on Second Reading, but I repeat it because it is of particular relevance to small businesses which employ fewer than 20 people.
      About 96 per cent. of United Kingdom businesses employ fewer than 20 people. Such businesses simply cannot afford statutory or other occupational sick pay schemes. It is not economically feasible for them to do so. The figures that I have been given show that the cost can be anything up to £11 a week, and can run for 28 weeks under the Bill's provisions. If such costs were visited on a one or two-person business, it could face difficulties.
      If one or two of the people involved in a one or two-person business are sick for 28 weeks, they cannot reclaim national insurance contributions because they are

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      not paying any contributions to recover. What are the people in business at that sort of level expected to do in the context of the new provisions? It is all very well if one is running a major company with professionals to advise on such matters, or if one's national insurance contribution of £1,000 or £2,000 is billed each week so that one can deduct and divvy up and, in the fulness of time, everything works out in the wash. The arguments are fairly suspect even at that level, but when applied to businesses that are self-owned or have a sole proprietor, the Bill's provisions have some frightening consequences.
      The Parliamentary Under-Secretary of State for Social Security, the hon. Member for Norfolk, South-West (Mrs. Shephard), provided a useful answer to a parliamentary question tabled by the hon. Member for Coventry, South-East (Mr. Nellist) on 24 January. The question involved the number of changes in the statutory sick pay scheme and its administration since its introduction—there have been 19. I shall not detain the Committee by reading out the list, but they are all of some significance. That is all very well for someone who works in the accounts department of ICI because he or she can cope with it very well—I do not complain about that. But it must have been difficult to keep up with that pace of change since March 1985. I concede that the changes included uprating of statutory sick pay rates, so we can subtract five from the total of 19, but that still leaves a significant number of changes for a small business confronting the Bill's provisions. I see that the ministerial brow is again furrowed.
      The changes will have major effects on employers, particularly those in small businesses. They will encourage the small number of businesses which perhaps do not play to the rules as they should and are guilty of malpractice, to opt out. That will have a direct adverse impact on the employees of the small firms. I read the debate on Second Reading carefully and it contained well-rehearsed arguments about the Bill's impact—which will be big enough—on part-timers, women and disabled employees. However, it will have a particularly great impact on people in smaller firms. The employees in such firms are totally reliant on statutory sick pay and the Bill will have serious consequences for them.
      This is an important debate and I could go on at great length, but I do not want to repeat points made on Second Reading. This is one of the most crucial amendments and unless I receive some fairly convincing answers, I reserve the right to invite the House to divide on it. I shall be grateful if I have some support. It is often a lonely furrow to plough in the modern Liberal Democrat party and I am grateful for support from wherever it comes. If I may be facetious, the three Conservative Members present. should look carefully at the Bill's impact because the Conservative party often beats its chest about what it has achieved for small businesses. To use fighting talk, if they are not careful, the Government will get beaten in the jaw at the next election, and will not be easily forgiven. They must be cautious if they want to introduce such a measure with impunity. I say that with some passion, because the argument has been put to me with great force.
      I shall encapsulate my argument by giving a quote from Mr. Ian Handford, the employment affairs chairman of the National Federation of Self Employed and Small Businesses. I know that the briefing was probably sent to other Members. It states:
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      "The Government is shifting the welfare state onto the backs of the business community. Small businesses just cannot take on board state benefits out of their present meagre profits."
      The sting is in the document's tail, which states:
      "If only 10 per cent. of all businesses take evasive action to defend themselves from this attack then there will be a loss of some 350,000 jobs."
      Rather than take on the additional hassle of the financial and administrative burden of the Bill, companies may simply divest themselves of employees. If that happens it will be a tragedy, not just for the employees and the firms, but for the British economy. Those are the stakes involved in the group of amendments. I hope that the Minister will seriously consider the arguments put to him before he decides to rule out the amendment.
      Mr. Peter Thurnham: The hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) spoke about dividing the Committee. He does not need to go that far, but he is right to put down a marker, because the Bill makes a change to the arrangements that were originally agreed. People would be worried if there were further changes. I spoke on Second Reading, but I had to leave the Chamber before the end of the Minister's opening speech and did not hear his comments about the Bill's effect on smaller businesses. I was concerned when I read in Hansard that he said:
      "it was not possible to engage in advance in substantial consultation."—[Official Report, 26 November 1990; Vol. 181, c. 644.]
      If there is any intention to move further down this road, I hope that there will be time fully to consult small businesses on all the issues raised by the hon. Member for Roxburgh and Berwickshire.
      5 pm
      When I spoke on Monday, I declared an interest as a small employer. I consulted my company about the effect of the Bill and received a fax just before the debate, saying that the effect would be insignificant. My arithmetic suggests that it will mean £5 per annum for each employee. That means that, for a firm employing 10 people, the cost would be £50. Of course, all firms will pass on the cost in order to survive and that may have a small inflationary effect. I hope that no more such costs will be imposed, because they could lead to price rises. The swings and roundabouts effect does not always work for small employers, and it will be necessary to see to what extent employers will need to have insurance to cover the costs.
      Yesterday I attended a meeting with members of the Electrical Contractors Association. They are worried about the Bill's effect on smaller employers and especially about the way in which it could encourage such employers to use self-employed people who work on 714 certificates. They were not happy about the effect of the changes on the structure of the industry; it would encourage some companies to put their work in the hands of self-employed people. That can have an effect on the relationship between the trade association and the industry as a whole.
      Britain is almost unique in having no statutory regulation of the electrical industry in the way that such regulation works abroad. Generally speaking, electrical contracting abroad is subject to statutory regulation. However, in Britain the trade association polices standards. If that association's standing were to be eroded by legislation that would change its structure, such legislation would be viewed unfavourably. If the

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      Government intend to move further down this road, I hope that they will allow proper time to consult representatives of industry and that the electrical contracting industry will be included because of its responsibility to ensure standards.
      Britain is different from other countries in the Common Market in that it does not have the statutory regulation that I have mentioned, and that creates difficulties for British companies trying to compete in the Community on equal terms. At the moment, foreign companies can compete in Britain because we do not have statutory regulations to prevent them from setting up here. However, overseas countries have restrictions that make it impossible for British companies to compete there. There is no comparability enabling a British company automatically to be accepted in France, Germany or Italy.
      Electrical contractors would like to see the industry regulated, but the Government do not like to regulate and prefer arrangements to be voluntary. Such arrangements are threatened by the changes in the Bill. I support the Bill as a whole, but I should like to be assured that there will be full consultation before there are any more changes. Those consultations should be with representatives of smaller firms and with industries that are affected by the Bill.
      The hon. Member for Roxburgh and Berwickshire was right to table his amendment, but I hope that he will not press it to a Division, because in its present form the Bill has a de minimis effect on employers.
      Mr. Paul Flynn: The speech by the hon. Member for Bolton, North-East (Mr. Thurnham) showed modest courage. Unfortunately, it did not last until the end of his speech. We can understand that, because these are dangerous times for the Conservative party and they are fraught with many anxieties. The Secretary of State is not in his place, but we hope that he will rejoin us before the end of the debate. Who can tell?
      The National Federation of Self Employed and Small Businesses in Wales contacted me and no doubt it contacted hon. Members in other parts of the country. It fully studied our deliberations on Monday and has returned with greater vehemence against the Bill. The federation has not accepted any of the Government's assurances. It says:
      "The Government is shifting the wefare state onto the backs of the business community."
      That is right, and the process is being carried out in small ways.
      A regulation about welfare milk was debated in the House and it was discovered that precisely the same process was going on. All six or seven Conservative Members who spoke in the debate derided the change. One went so far as to describe it as crazy. The Government proposed to push on to the milkman, who is a small business man, £80 million which had previously been provided by the state. The Bill is another move in that direction.
      A series of small moves, regulations and changes, passing through Parliament with hardly any attention from outside, are an attempt to privatise the welfare state. Costs have been moved on to the backs of various other agencies. It is good to see that small business men—there is little else in the country except small businesses now —are fighting back. Small business men have had a rough deal from the Government. We are in an economic
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      recession and have high interest rates, and industry is rightly warning us that one of the consequences of this nasty little Bill could be another cascade of unemployment.
      Even at this late stage, the Government should reconsider the Bill. In a modest, persuasive way, the hon. Member for Bolton, North-East said gently to the Government—we shall speak with a stronger voice—that there should have been consultation. He said it is too late now, but perhaps there will be consultation in future. The whole process has been a disgrace. It is quite right for all organisations representing small businesses to rise up against a Government whom they see as representing them and say that this is not government by reason or argument but the policy of an elected tyranny.
      On Second Reading, the Government's case for the Bill collapsed, but still they forge ahead regardless of the arguments. That is not the way that Governments throughout the century until the last dark decade of Thatcherism have behaved. There have been dramatic changes in the past 24 hours. There is a new face, but the Government continue to pursue the same old depressing and tyrannical policies. I hope that in the winding-up speech we shall be given some hope that the changes will be postponed or subjected to major modification.
      Mr. Ian Bruce: As a former small business man, I should like to speak about the difficulties faced by small businesses over statutory sick pay. When I was running an employment agency in Yorkshire, the transfer of the administration of statutory sick pay from the DHSS, as it was then, to the employer was a horrendous business, because there was difficulty in understanding the regulations. In a business employing several hundred people, it is almost certain that at all times somebody is drawing statutory sick pay.
      Every time the part-time employee who calculated the wages in my firm had to deal with statutory sick pay, he came to see me, the managing director, so that we could go through the regulations again to see whether we were applying them correctly. I ask my right hon. Friend the Minister to grab a little booklet on this subject and try to work out how much statutory sick pay has to be paid if somebody has had a few days of sick, or has been sick and then come back and then gone off sick again.
      I know that we are examining the Bill to see whether it needs amending, but I ask my right hon. Friend to be more fundamental in his approach. The Tory party is looking at revision of many aspects of life. It is strange that we have a statutory sick pay scheme that provides only a small amount of the money that somebody in employment who has been sick would normally receive. The person who is working out, at the end of the week, what somebody should receive, would normally, if there were no statutory sick pay scheme, pay the usual £100 a week, deducting the normal tax and national insurance contributions. Instead, the Government provide a contribution in the form of statutory sick pay, the firm makes a complicated calculation, ensuring that all the paperwork is correct, and makes the wages up to the normal level from that basis. The Ministry can examine all the paperwork on SSP.
      The amount of money that the Government give the employer is probably less than the cost of the administration of the scheme. I suspect that knocking only 80 per cent. of SSP off national insurance, rather than all of it—yet another calculation problem and cause of error

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      —will result only in more difficulties. If we go down this route—European legislation may be pushing us this way—employers may be forced to bring in a form of sick pay insurance for all their employees. Perhaps we should go a step further and make all employees have some form of insurance that pays all their wages if they are sick or off work on maternity leave or for some other reason.
      I know that Labour Members may be upset about the thought of fully comprehensive insurance schemes, but the Government insurance scheme is an insurance scheme only for a small part of what people expect when they are in employment. Therefore, we have the worst of all worlds instead of the best of all worlds. People should know what they are paying for, rather than, as they do with the employers' national insurance, piling in the money and——
      The Second Deputy Chairman: Order. I hate to interrupt the hon. Member, but he is going very wide of the amendments.
      Mr. Bruce: I am sorry that you interrupted me, Miss Boothroyd, because I was about to finish, and then I would have stopped being out of order.
      I started by addressing my remarks to the specifics of the small business, but began to go far wider. To attack this problem in its minutiae may be the wrong approach. Perhaps we should be looking at the way that the business works. I hope that my right hon. Friend the Minister will take note of what I am saying. Many of the small business men whom I know are upset; perhaps because they have got hold of some incorrect publicity about what the scheme will cost them. We should look at SSP provisions again. If the Government want to move this away from being an additional Government expenditure and towards loading it on small businesses, we should perhaps go the whole hog and go for a private insurance scheme rather than a statutory sick pay system.
      Mr. Allen McKay: The thrust of Government policy, in general and in the particular with this Bill, is towards private insurance schemes for everybody. That is what it is all about and it would be better if the Government came out and said so. Both the Labour party and small businesses have long been asking for consultations, but the Government have adopted a drip, drip, drip approach, introducing Bills such as this. In my constituency, small businesses are unhappy about the Bill because they are running on a shoestring.
      The Government repeatedly tell us that the rise of small businesses is important. If that is so, why are they loading these extra burdens onto small businesses? The Government say that small businesses will increase in number and employ more people, but Bills such as this make small businesses look again at the bottom line of their costs and decide either not to take on more people or that they have too many people already, and so spend too much on employees. Furthermore, they are uncertain about the future.
      5.15 pm
      There should have been consultations about the Bill, but there was not, because last time the Government introduced such a Bill, there was a great furore, which forced the Government to retract what they intended That
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      is why we have had a two-day debate on the Bill—to make sure that the furore, which has started, will be too late when its get going.
      The Government should look seriously at the effect that the Bill will have on businesses. It is bad enough to load on them administration of a sick pay scheme, which rightly belongs to the state benefit system, because there are so many different employers, different sizes of employers and different possibilities. Now, the Government are going a little bit further and making firms bear not only the cost of administration but part of the cost of paying sick pay. Firms should be reimbursed 100 per cent., because, unless we adopt the Japanese idea of manufacturing, with all the benefits that go with that, piecemeal changes such as this should not be introduced. If there is to be an employers' sick pay scheme, there should be full consultation and it should be introduced properly.
      Mr. Tony Banks: I thank the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) for explaining the thinking behind the amendments. I was slightly confused when I looked at them, but I now understand everything, as he has explained that they were drafted by a Scottish advocate. I suppose that the theory that, by mentioning large firms, only one automatically excludes small firms has a certain logic. Perhaps the hon. Member, as an advocate, submits his bills by sending the client the change and allowing him to deduce from that how much the bill would be. That is a strange way to do it.
      I agree with the hon. Gentleman's comments about the haste with which the Bill is being pushed through. It is rather perverse that we shall have less time for the Committee stage, when we are supposed to look at the clauses in great detail, than we did for Second Reading, the debate on which included repetition of a number of points. We do not understand why there should be such haste, and I hope that the Minister, in his usual courteous way, will explain that to the House.
      The Minister must excuse us for feeling rather suspicious, because we have seen the way in which the Government, under the previous Prime Minister, were wont to deal with opposition by riding roughshod over it. We are about to have a rerun of this, although we have a new Prime Minister. It is clear from the speeches of the hon. Members for Bolton, North-East (Mr. Thurnham) and for Dorset, South (Mr. Bruce) that they are unhappy about the Bill.
      When the hon. Member for Roxburgh and Berwickshire puts the amendment to the vote, the Opposition will support him, but Tory Members will come flooding in from outside, not knowing what the arguments are, and will be whipped through the No Lobby. The Minister should pay heed to debates in the Committee dealing with a Bill. As all the speeches so far have, to some extent, shown concern, ranging through to outright opposition, the Minister should reconsider his position and introduce amendments at a later stage. However, as the Bill's remaining stages will be taken tonight, it will be difficult for him to do that. He seems to have boxed himself into a corner, but I suspect that that is a position into which he wanted to be put.
      The hon. Member for Roxburgh and Berwickshire said that it takes experts to work things out in this area, and I do not pretend to be an expert. However, I had some sympathy with the hon. Member for Dorset, South when

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      he was explaining the problems that small businesses experience as more and more administrative burdens are laid upon them while they try to get on with making some money.
      For the Opposition to come in so heavily in support of small businesses may seem rather strange to Conservative Members, but we do support initiative and enterprise, particularly among those who, by the efforts of their hands and brains, are trying to make a decent living. When I try to complete my tax return at the end of the year and have to look at all my office accounts, I realise what it is to be a small business man. If I had wanted to be a shopkeeper, I could have aspired to being one. I find it tedious dealing with all the invoices and I can well imagine why, with all these changes, small business people feel so frustrated.
      The hon. Member for Roxburgh and Berwickshire said that we must rely on experts and when it comes to the Bill's impact we must rely on the National Federation of Self Employed and Small Businesses. On Second Reading, it was said that, when making their submissions to the Government, many organisations tend to overstress the difficulties as a negotiating position from which to try to pull the Government back a bit. But the federation is not exaggerating; it is being straightforward. I am reinforced in that belief by the contributions by the hon. Members for Bolton, North-East and for Dorset, South. They made a number of good points.
      If I recall correctly, when the views of the federation were dealt with on Second reading, the Secretary of State said that perhaps it did not know the full extent of the proposals and that when it knew the full extent of the national insurance contributions it might feel happier. The federation has sent further details to most hon. Members who took part in that debate, so it has had a chance to study the points made by Ministers on Second Reading and it is still not happy. Indeed, it is even more unhappy than it was on Second Reading.
      It may be that Mr. Handford, speaking on behalf of the federation, is being over-alarmist, but I do not think that he would be happy with such an accusation. In his press release, he says:
      "The Government is shifting the welfare state onto the backs of the business community. Small businesses just cannot take on board state benefits out of their present meagre profits. If only 10 per cent. of all businesses take evasive action to defend themselves from this attack then there will be a loss of some 350,000 jobs."
      I should like to know exactly what that means because it is a rather threatening note to put in a press statement. Does it mean that 10 per cent. of small businesses will lay off workers who are sick? If so, that is alarming. It is surely not something that the Government want to happen. I hope that there will be some reconsideration of the matter.
      Labour Members and small businesses suspect that this is part of an onion-peeling exercise which the Government so often adopt when making changes, particularly in social welfare, and that this is one small step which will be followed by other small steps. The Bill clearly gives the Government the opportunity to make even further reductions. There is a great deal of suspicion that the payment of workplace benefits will, in the end, be moved on to the backs of all businesses. If that is the objective, the Government should come clean and tell us, but I suspect
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      that they will not. I am sure that the Minister realises, and often believes passionately, that honesty is the best course, but at times he is not prepared to give in to the temptation.
      In those circumstances, we are right to table the amendments and to pay attention to the opinions expressed by the federation. I hope that the Minister has received them because the federation makes a number of points with which he should deal when he replies. He does not appear to have done so, so let me tell him about the various points.
      The document says that the federation
      "estimates that if only 10 per cent. of the small business sector were to take defensive action against the new SSP regime there will be a loss of some 350,000 jobs."
      Secondly, it says:
      "An extra 350,000 unemployed would cost considerably more in benefits than the Government's estimated saving of £100 million not to mention the social cost."
      Thirdly, it says:
      "The NFSE is not concerned about the large company that suffers the average three-week sick pay. We are concerned about the small business with one or two employees that could suffer the full 28 week sick leave."
      Lastly, it says:
      "Such a business would suffer costs under the new SSP scheme of over £300. The reduction in employers national insurance will only save the small business £100. A cost to small businesses of over £200."
      The federation represents the sort of people to whom the Government are often pointing to show where the real economic miracle is happening. The Opposition never believe them, and nor, it would appear, do the small business people.
      I hope that when the Minister replies he will direct his reply specifically to the points made by those who will suffer the most—the small businesses.
      The Minister for Social Security and Disabled People (Mr. Nicholas Scott): The hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) complained, I think twice, that my brow was furrowed. He should try being Minister with responsibility for social security. As my right hon. Friend the Foreign Secretary said, other things being equal, I expect that my brow will continue to be furrowed for some time to come as I deal with what is essentially a complex area of Government policy. Social security can never be simple and straightforward, because it seeks to respond to a range of different needs of individuals in society who, one way or another, fall upon hard times.
      The hon. Gentleman asked why we were proceeding so quickly. I do not want to bore the House by reiterating what my right hon. Friend the Secretary of State and I said on Second Reading only about 48 hours ago, but our main reason for proceeding quickly was to give employers the maximum possible notice so that they could make arrangements, adjust their software or whatever they have to do, to ensure that all the arrangements can be implemented by April 1991.
      We had no ulterior motive and we have gone out of our way to alert employers, their organisations and so on to what we were proposing. I cannot remember how many letters I have signed in reply to hon. Members who forwarded to me the concerns of the small employers' organisations and other bodies so that they will have time to consider those replies and, if necessary, come back to me.
      It is only tangential, but I was asked why, since there were only 15 Bills in the Queen's Speech, we could not proceed at a slightly more relaxed pace. I must remind him

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      that there were only 15 Bills in the previous Queen's Speech, but about 40 reached the statute book that Session. The Queen's Speech does not necessarily cover every contingency that arises during the parliamentary Session.
      5.30 pm
      The hon. Gentleman suggested that the Bill will result in savings, and of course that is true. Government and Social Security Ministers will have to reassess their priorities constantly, and the savings that flow from the Bill will play some part in meeting the cost of the special provision for poorer pensioners and of uprating residential care and nursing home limits in the coming year. There is nothing wrong with asking businesses to accept a modest increase in the contribution they make to meet the sickness costs of their employees.
      Mr. Kirkwood: Does the Minister have any information about the cost of limiting the measure according to the size of the firm? That calculation may be almost impossible to make, but it would help the Committee if the right hon. Gentleman could say what the cost of the amendment would be.
      Mr. Scott: I will deal shortly with the specific impact of the Bill, but I shall first answer some of the more general points that have been made.
      The hon. Member for Newham, North-West (Mr. Banks) used the phrase "onion peeling" and other hon. Members asked whether, by introducing this measure in the current Session, we are embarking on a process of steadily reducing the percentage of sickness pay that will be met by the Government. On Second Reading, both my right hon. Friend the Secretary of State and I said that we have no plans to go down that route.
      Ms. Clare Short indicated dissent.
      Mr. Scott: The hon. Lady may not take my word for that, but I assure her that I am speaking the truth. I say the same to my hon. Friend the Member for Bolton, North-East (Mr. Thurnham.
      Mr. Thurnham: The point has been made to me that firms which cover their sickness costs by an insurance scheme will now face higher premiums, so the Bill will contribute to inflation—although I accept that the amount involved will be quite tiny.
      Mr. Scott: That money will be spent one way or another, either by the Government or by businesses.
      The assumption is often made that sickness payments are always for a period of 28 weeks, but as was made clear on Second Reading, the average spell of sickness is only three weeks. Ninety per cent. of absences end within eight weeks, and many end earlier, after only one or two weeks.
      I dispute any suggestion that the IFF survey was slanted towards larger firms. It covered a range of businesses, from small to much larger firms, and the patterns of sickness that occurred in them all were taken into account.
      The Department gives maximum assistance to employers in helping them to cope with the undoubted burden of administering statutory sick pay, in the form of videos, seminars, wall charts and other aids, so that they can make their calculations as simply and accurately as possible. The help given by the Government to small firms
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      in a variety of ways far outside the scope of my Department has encouraged the growth in small businesses over the past few years.
      My hon. Friend the Member for Bolton, North-East asked about the electrical contracting industry. My recollection of that industry, from long before I entered the House, is that it was in the forefront of providing sick and holiday coverage to small contractors. I imagine that that continues. I have a great deal of admiration for the industry's innovations in that respect, and if my hon. Friend will convey to me the detail of the concern that he expressed, I will give him a considered reply.
      The amendments seek a restriction on the reduction in reimbursement from 100 per cent. to 80 per cent. to employers with 20 or more employees. They would create two reimbursement rates—one for firms with fewer than 20 employees, which would recover all the SSP they paid, and another of 80 per cent. for the remaining firms. It will not surprise the hon. Member for Roxburgh and Berwickshire that, while appreciating the concerns that he has expressed, the Government are unable to accept the amendments.
      When my right hon. Friend the Secretary of State examined the national insurance fund to establish whether its ingoings and outgoings were in balance, and whether contributions could be reduced in any way, he was aware of the intention to follow the route that we have followed in respect of SSP, and consciously made extra and special provision within the alterations to national insurance contributions, to devise a package that would give particular help to smaller employers.
      The reductions are specifically geared to contributions payable by employers in respect of employees subject to the lowest rates—that is, earning £185 or less a week. From April 1991, the lower rates of 5, 7 and 9 per cent. will be reduced by 0·4 per cent. to 4·6 per cent., 6·6 per cent. and 8·6 per cent. respectively. That compares with the much smaller reduction of 0·05 per cent. in the employer's contribution in respect of employees earning more than £185 a week. Concentrating reductions on the lower paid will give extra help to small employers in particular.
      The precise implications for individual employers will vary considerably, according to the rates of pay that their employees enjoy and the level of sickness experienced in their work force. Assuming the normal incidence of sickness, in many small firms any extra SSP costs will he offset by reductions in the employers' national insurance contributions. On Second Reading, my right hon. Friend gave examples of the positive savings that will accrue to at least some employers. Therefore, we do not believe that the amendments are either justified or necessary.
      Mr. Tony Banks: The Minister describes what he believes will happen, but it might not turn out like that. To what extent will the new arrangement be monitored by the Department, so that if some of the claims made by hon. Members prove to be true, amendments can be produced?
      Mr. Scott: Elizabeth I said that when she died, they would find Calais engraved on her heart. When I die, "monitoring" will be found engraved on my heart. We constantly monitor every aspect of the social security system, and that is often done by independent research organisations that the Department commissions to monitor the impact of social security changes.
      Mr. Ian Bruce: As someone who has argued that employers' national insurance contributions should be lower, I ask my right hon. Friend to say whether employers as a whole will incur less cost under the new arrangements. The note on the financial implications of the Bill says that it will save my right hon. Friend's Department £250 million each year, but will the national insurance fund stand to lose that £250 million—or an even higher sum?
      Mr. Scott: Broadly, the savings that employers will gain as a result of reductions in national insurance contributions will offset a large part of the extra costs that they will incur because of the reduction in their reimbursement for statutory sick pay. There will be a saving which will help to fund other improvements in the social security system. Many small employers will find that, because of the way in which we have altered the structure of national insurance, there is no cost to them. Some may see some savings as a result of the changes that we are making.
      There are two other reasons why I do not believe we should accept the amendments. It is quite common for Ministers to stand at the Dispatch Box and to plead administrative difficulties with any changes. In this case there will not merely be administrative difficulties for the Department of Social Security and the Inland Revenue in operating a dual system of reimbursement. There would be practical problems and increased costs for employers were we to go down that route.
      Many companies, especially small businesses, have fluctuating work forces they may employ 20 people one week and take on 20 people the following week. Different levels of reimbursement for statutory sick pay would severely complicate the employer's work. Also, monitoring checks have to be carried out by the Department of Social Security and the Inland Revenue to ensure that the right contributions were being paid by employers and that the correct amount of statutory sick pay was being paid to the employees. Administrative difficulties would look quite large in the public sector and for the employers.
      The hon. Member for Newham, North-West asked me to cover the question of additional costs. I do not think that the Committee would expect me to overlook that point. The latest figures suggest that about 85 per cent. of businesses—2·5 million firms operating in this country—have under 20 employees. It is estimated that, if we went down the road proposed in the amendment, the public expenditure savings that we will make because of the Bill would be reduced by about £45 million, which is a far from insignificant sum.
      For all the reasons that I have outlined, we do not believe that that is the right course. Bearing in mind the fact that the average absence of sickness is only three weeks and that 90 per cent. of absences are over within eight weeks, we do not believe that the implications for employers will be significant.
      As I said in response to an earlier intervention, we shall of course monitor the position, but I have to invite the Committee to reject the amendments.
      5.45 pm
      Mr. Kirkwood: That was a genuinely disappointing response. I get a clear impression—although I do not necessarily put the blame on the Minister—from the Minister's reply that he has no idea of the difficulties which are being thrust upon small businesses. He may say, quite
      902
      reasonably, that it is a matter not of his Department but of the Department of Employment and other people. I get no impression that he understands the difficulties that the Bill will cause.
      At the end of his speech he helpfully said that if we excluded businesses with fewer than 20 employees as we do in the amendment, it would cost £45 million. The change is not worth a candle—it is not worth the trouble, hardship and administrative inconvenience and difficulty that it will cause. Out of a departmental headline total of £52 billion — £55 billion next year—£ £5 million is insignificant when compared to the stress, anxiety and anger that will be felt throughout the country in small businesses because of this measure.
      I warn the Minister that I shall send copies of his speeches to people who send complaints to me. I am glad that he is writing to organisations representing small businesses. However, they have difficulty communicating with their membership. By the time that reality filters down to the shop floor or to the corner shop, the damage will have been done and the anger will be great. I do not blame them for being angry. The House should be angry and I urge hon. Members to reflect that anger by dividing on the amendment and voting against the Government's refusal to accept the amendments.
      Question put, That the amendment be made:—
      The Committee divided: Ayes 128, Noes 180.

      Division No. 13]

      [5.46 pm

      AYES

      Allen, Graham

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

      Alton, David

      Fisher, Mark

      Anderson, Donald

      Flannery, Martin

      Archer, Rt Hon Peter

      Flynn, Paul

      Ashdown, Rt Hon Paddy

      Foot, Rt Hon Michael

      Banks, Tony (Newham NW)

      George, Bruce

      Barnes, Harry (Derbyshire NE)

      Gilbert, Rt Hon Dr John

      Barron, Kevin

      Gordon, Mildred

      Battle, John

      Grant, Bernie (Tottenham)

      Beckett, Margaret

      Griffiths, Win (Bridgend)

      Beggs, Roy

      Grocott, Bruce

      Benton, Joseph

      Hardy, Peter

      Bermingham, Gerald

      Hattersley, Rt Hon Roy

      Boyes, Roland

      Haynes, Frank

      Bray, Dr Jeremy

      Heal, Mrs Sylvia

      Brown, Nicholas (Newcastle E)

      Hinchliffe, David

      Buckley, George J.

      Hogg, N. (C'nauld & Kilsyth)

      Caborn, Richard

      Home Robertson, John

      Callaghan, Jim

      Howarth, George (Knowsley N)

      Campbell, Menzies (Fife NE)

      Howells, Geraint

      Campbell, Ron (Blyth Valley)

      Hughes, John (Coventry NE)

      Campbell-Savours, D. N.

      Hughes, Robert (Aberdeen N)

      Carl Me, Alex (Mont'g)

      Hughes, Roy (Newport E)

      Clay, Bob

      Hughes, Simon (Southwark)

      Clelland, David

      Janner, Greville

      Clwyd, Mrs Ann

      Jones, Barry (Alyn & Deeside)

      Coleman, Donald

      Jones, Martyn (Clwyd S W)

      Corbett, Robin

      Kilfedder, James

      Corbyn, Jeremy

      Lambie, David

      Cousins, Jim

      Leadbitter, Ted

      Cox, Tom

      Leighton, Ron

      Crowther, Stan

      Lestor, Joan (Eccles)

      Cryer, Bob

      Lewis, Terry

      Cummings, John

      Litherland, Robert

      Davies, Ron (Caerphilly)

      Livingstone, Ken

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

      Livsey, Richard

      Dixon, Don

      Lloyd, Tony (Stretford)

      Doran, Frank

      Lofthouse, Geoffrey

      Dunwoody, Hon Mrs Gwyneth

      Loyden, Eddie

      Eadie, Alexander

      McAllion, John

      Eastham, Ken

      McFall, John

      Evans, John (St Helens N)

      McKay, Allen (Barnsley West)

      Ewing, Harry (Falkirk E)

      McWilliam, John

      Field, Frank (Birkenhead)

      Mahon, Mrs Alice

      903

      Marek, Dr John

      Richardson, Jo

      Meacher, Michael

      Rooker, Jeff

      Meale, Alan

      Rooney, Terence

      Michael, Alun

      Sheerman, Barry

      Michie, Bill (Sheffield Heeley)

      Sheldon, Rt Hon Robert

      Michie, Mrs Ray (Arg'l & Bute)

      Shore, Rt Hon Peter

      Molyneaux, Rt Hon James

      Short, Clare

      Morley, Elliot

      Skinner, Dennis

      Morris, Rt Hon A. (W'shawe)

      Taylor, Mrs Ann (Dewsbury)

      Mowlam, Marjorie

      Taylor, Matthew (Truro)

      Mullin, Chris

      Thomas, Dr Dafydd Elis

      Murphy, Paul

      Turner, Dennis

      Nellist, Dave

      Wareing, Robert N.

      Oakes, Rt Hon Gordon

      Williams, Rt Hon Alan

      O'Brien, William

      Williams, Alan W. (Carm'then)

      O'Hara, Edward

      Wilson, Brian

      Owen, Rt Hon Dr David

      Winnick, David

      Pike, Peter L.

      Wise, Mrs Audrey

      Prescott, John

      Primarolo, Dawn

      Tellers for the Ayes:

      Quin, Ms Joyce

      Mr. Archy Kirkwood and Mr. A. J. Beith.

      Redmond, Martin

      NOES

      Alison, Rt Hon Michael

      Fox, Sir Marcus

      Allason, Rupert

      Franks, Cecil

      Amos, Alan

      Fry, Peter

      Arbuthnot, James

      Gale, Roger

      Arnold, Jacques (Gravesham)

      Glyn, Dr Sir Alan

      Ashby, David

      Goodlad, Alastair

      Atkinson, David

      Goodson-Wickes, Dr Charles

      Baker, Nicholas (Dorset N)

      Grant, Sir Anthony (CambsSW)

      Beaumont-Dark, Anthony

      Green way, Harry (Ealing N)

      Bellingham, Henry

      Greenway, John (Ryedale)

      Bennett, Nicholas (Pembroke)

      Griffiths, Peter (Portsmouth N)

      Benyon, W.

      Ground, Patrick

      Bevan, David Gilroy

      Hamilton, Neil (Tatton)

      Blackburn, Dr John G.

      Hanley, Jeremy

      Body, Sir Richard

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

      Boscawen, Hon Robert

      Hargreaves, Ken (Hyndburn)

      Bottomley, Peter

      Harris, David

      Bowden, A (Brighton K'pto'n)

      Haselhurst, Alan

      Bowden, Gerald (Dulwich)

      Hayhoe, Rt Hon Sir Barney

      Bowis, John

      Hayward, Robert

      Brandon-Bravo, Martin

      Higgins, Rt Hon Terence L

      Brazier, Julian

      Hill, James

      Bright, Graham

      Hind, Kenneth

      Brooke, Rt Hon Peter

      Hordern, Sir Peter

      Brown, Michael (Brigg & Cl't's)

      Howard, Rt Hon Michael

      Browne, John (Winchester)

      Howarth, G. (Cannock & B'wd)

      Bruce, Ian (Dorset South)

      Howell, Ralph (North Norfolk)

      Buck, Sir Antony

      Hunt, David (Wirral W)

      Budgen, Nicholas

      Hunt, Sir John (Ravensbourne)

      Burns, Simon

      Hunter, Andrew

      Butcher, John

      Irvine, Michael

      Carrington, Matthew

      Jack, Michael

      Carttiss, Michael

      Janman, Tim

      Chapman, Sydney

      Jones, Gwilym (Cardiff N)

      Churchill, Mr

      Jones, Robert B (Herts W)

      Clark, Sir W. (Croydon S)

      Kellett-Bowman, Dame Elaine

      Colvin, Michael

      King, Roger (B'ham N'thfield)

      Conway, Derek

      Kirkhope, Timothy

      Coombs, Simon (Swindon)

      Knapman, Roger

      Cormack, Patrick

      Knight, Greg (Derby North)

      Couchman, James

      Knight, Dame Jill (Edgbaston)

      Cran, James

      Knox, David

      Critchley, Julian

      Lawrence, Ivan

      Day, Stephen

      Lester, Jim (Broxtowe)

      Dickens, Geoffrey

      Lightbown, David

      Dunn, Bob

      Lloyd, Peter (Fareham)

      Durant, Tony

      Luce, Rt Hon Richard

      Eggar, Tim

      Macfarlane, Sir Neil

      Evennett, David

      MacGregor, Rt Hon John

      Favell, Tony

      McLoughlin, Patrick

      Field, Barry (Isle of Wight)

      Madel, David

      Fishburn, John Dudley

      Mans, Keith

      Forman, Nigel

      Maples, John

      Forsyth, Michael (Stirling)

      Marshall, John (Hendon S)

      Forth, Eric

      Marshall, Sir Michael (Arundel)

      Fowler, Rt Hon Sir Norman

      Martin, David (Portsmouth S)

      904

      Mates, Michael

      Shepherd, Richard (Aldridge)

      Meyer, Sir Anthony

      Smith, Tim (Beaconsfield)

      Mills, Iain

      Speller, Tony

      Mitchell, Andrew (Gedling)

      Stanbrook, Ivor

      Mitchell, Sir David

      Stern, Michael

      Montgomery, Sir Fergus

      Stevens, Lewis

      Morrison, Sir Charles

      Stewart, Andy (Sherwood)

      Moss, Malcolm

      Taylor, Ian (Esher)

      Mudd, David

      Taylor, John M (Solihull)

      Neale, Gerrard

      Tebbit, Rt Hon Norman

      Neubert, Michael

      Temple-Morris, Peter

      Newton, Rt Hon Tony

      Thompson, D. (Calder Valley)

      Nicholson, David (Taunton)

      Thompson, Patrick (Norwich N)

      Nicholson, Emma (Devon West)

      Thornton, Malcolm

      Norris, Steve

      Thurnham, Peter

      Onslow, Rt Hon Cranley

      Townend, John (Bridlington)

      Oppenheim, Phillip

      Tracey, Richard

      Page, Richard

      Twinn, Dr Ian

      Pawsey, James

      Viggers, Peter

      Peacock, Mrs Elizabeth

      Waddington, Rt Hon David

      Porter, Barry (Wirral S)

      Walden, George

      Porter, David (Waveney)

      Ward, John

      Powell, William (Corby)

      Watts, John

      Price, Sir David

      Wheeler, Sir John

      Raffan, Keith

      Widdecombe, Ann

      Raison, Rt Hon Timothy

      Wilkinson, John

      Renton, Rt Hon Tim

      Wilshire, David

      Roberts, Sir Wyn (Conwy)

      Winterton, Nicholas

      Rossi, Sir Hugh

      Wood, Timothy

      Sackville, Hon Tom

      Woodcock, Dr. Mike

      Scott, Rt Hon Nicholas

      Yeo, Tim

      Shaw, David (Dover)

      Young, Sir George (Acton)

      Shaw, Sir Giles (Pudsey)

      Shaw, Sir Michael (Scarb')

      Tellers for the Noes

      Shelton, Sir William

      Mr. Tim Boswell and Mr. Irvine Patnick.

      Shephard, Mrs G. (Norfolk SW)

      Question accordingly negatived.
      Mr. Dave Nellist: On a point of order, Miss Boothroyd. Do you know whether the House is to receive a statement later today? Now that the right hon. Member for Henley (Mr. Heseltine) has been made Secretary of State for the Environment, he may like to take this opportunity of making real the promises he made in the dying hours of yesterday morning's contest when he said that he intends to abolish the poll tax.
      The Second Deputy Chairman: The House is always happy to be kept abreast of the news, but that has nothing to do with our Standing Orders or the Statutory Sick Pay Bill, discussion of which we shall continue.
      Mr. Michael Meacher: I beg to move amendment No. 8, in page 1, line 14, leave out from 'of' to 'and' in line 15 and insert
      'so much of each of those payments as was made in respect of the first two weeks of

      (a) a period of incapacity for work, or

      (b) two or more such periods separated by a period of not more than two weeks, and 100 per cent. of the remainder of those payments.'.

      The Second Deputy Chairman: With this it will he convenient to consider new clause 1—Limitation on
      restricted reimbursement of statutory sick pay.—
      'The provisions of this Act, insofar as they amend section 9 of the Social Security and Housing Benefits Act 1982 (recovery by employers of amounts paid by way of statutory sick pay) shall only have effect to the extent of amount paid by an employer in respect of statutory sick pay paid to an employee during the first three weeks of his absence from employment.'.
      Mr. Meacher: One of the worst aspects of the Bill is that it puts at risk the employment prospects of those with poor health records. In his reply to the Second Reading debate,

      905
      the Minister of State said that he acknowledged the importance of that point, but he sought to reassure the House about the work of the Department of Employment in trying to promote the job opportunities of the disabled.
      That misses the point. All that work, such as it is, is undermined by the Bill. The Bill will act as a greater deterrent to employers taking on disabled or chronically sick people than all the positive efforts of the Department of Employment taken together. That is what we are trying to redress, and it is the reason why we have tabled the amendment.
      The amendment will retain the 100 per cent. remimbursement rate for any sick pay period after the first two weeks of sickness. For that purpose, we propose that two spells separated by an interval of two weeks or less will be treated as a single spell—a reasonable proposal—so that the 80 per cent. reimbursement rate would apply for only two weeks.
      The amendment does not imply—one must always be careful to meet the procedures of the House, and although we cannot table an amendment to negate the purpose of the Bill we must get as close as possible to doing so while keeping within the rules—that we would be in favour of reducing the reimbursement rate to below 100 per cent. for any period. To prevent that, Parliament would have had to have rejected the whole Bill, but, unwisely, it did not do so on Second Reading.
      Therefore, we tabled the amendment to draw attention to one of the Bill's worst effects—the fact that employers will be unwilling to employ not only people who have had prolonged or repeated periods of sickness but those whom they believe, rightly or wrongly, may have poor health prospects. In future, such people will clearly be at risk.
      6 pm
      There is plenty of evidence of job discrimination against disabled persons or those who suffer from poor health. On Second Reading, I quoted the study carried out by the Spastics Society entitled "An Equal Chance for Disabled People? A Study of Discrimination in Employment". I said that its findings were that there was
      "systematic evidence of the most blatant discrimination by employers."—[Official Report, 26 November 1990; Vol. 181, c. 649.]
      Although I did not say this on Second Reading, in the further analysis of this debate I shall quote its report more fully:
      "Employers were sent identical pairs of applications to jobs advertised, the only difference being that one application was a non-disabled person and the other from someone who mentioned that they had a disability of some kind. It was found that able-bodied applicants were 1·6 times more likely than disabled applicants to be offered an interview. On the basis of these tests, the researchers concluded that 'disabled applicants had far less than an equal chance.'"
      Those are the facts about employers being prepared to offer an interview to disabled persons or to those with chronic ill health. The disparity in offering jobs to disabled or chronically sick people is far greater.
      On Second Reading, the Minister of State mentioned a survey entitled "Employment and Handicap" by Patricia Prescott-Clarke of Social and Community Planning Research, which was published this year. It found that there was strong evidence that people who become sick or disabled while in employment are already in a very vulnerable position. For example, nearly one third of those
      906
      who had to leave their job for health reasons had been dismissed or had felt pressurised into leaving because of impairment.
      The study found:
      "Employers appear to be more likely to dismiss employees of short acquaintance who had acquired an impairment that affects their work than those who have worked for them for several years."
      If that is the attitude of employers to disabled or chronically sick people already in their employment, what will be their attitude to those applying for jobs? That is the issue that the amendment addresses. There is clear evidence of substantial discrimination against those already in employment. We believe that the Bill will create a much higher and more difficult recruitment hurdle for disabled people.
      Another vulnerable group whom we do not discuss as much as we should is those with a record of mental illness. Many people who have a degree of mental illness are capable of entering at least the fringes of the job market if they have support. Responding to the Government's proposed extension of the statutory sick pay scheme to 28 weeks, the National Association for Mental Health gave this warning:
      "Shifting the payment of SSP to employers will add to discriminatory practices and make employees vulnerable to dismissal if the employer chooses to investigate the health records of those with a history of mental illness."
      I could go on giving much more evidence, but the picture is perfectly clear: disabled people are at a considerable disadvantage.
      It was inveighed on Second Reading that I have it in for employers and that I think that all employers are bad. Many employers take their responsibilities seriously and try to employ people who have a measure of disability, but many are reluctant to do so, and if given any incentive, encouragement or excuse not to do so will be only too pleased to take it. We must give employers an incentive to employ people with chronic health or disability problems, not a disincentive. That is the force of the amendment.
      I have been commenting on the position as it is now, but what will be the position for those highly vulnerable people when the Bill gives employers an added real financial deterrent to employing them? Perhaps the Under-Secretary's reply will be along the lines of what the Minister for Social Security and Disabled People said on the last amendment. She may argue that having to bear 20 per cent. of any sick-pay cost will not make very much difference to employers' recruitment practices.
      The Minister for Social Security and Disabled People seemed to be saying that the effects of the Bill would be fairly minimal and would not act as much discouragement, even to small employers. We dispute that. It is true that the effect will be fairly small for many employers. One can quote averages, but for every favourable case quoted by the Minister or the Secretary of State on Second Reading, there are many employers who will clearly suffer significant cost disadvantages, and one must take account of the less favourable cases.
      The Secretary of State is always fair when he makes these points, so I admit that I am quoting one extreme —the last 10 per cent. for whom sickness lasts more than eight weeks. Adding 20 per cent. of 28 weeks' statutory sick pay at the highest rate comes to £294, which for a small employer is certainly not a negligible sum. Moreover —this is an important point—if the Government are right about a high proportion of employees being covered by

      907
      occupational sick pay schemes, the £294 that small employers will have to pay may be added to the much larger sum that he is already committed to paying.
      We dispute the figure given by the Government because we believe that they have been exaggerating, but if they are right—I put it ad hominem to them—that about 90 per cent. of people are covered, the effect on the small employer is not only when there is a significant period of sickness costing him up to about £300 per employee but also the cost of occupational sick pay, which the Government say will apply in the vast majority of cases.
      The effect on employers recruiting disabled and chronically sick people will be all the greater in the future if further reductions in the reimbursement rate are made. All the arguments are premised on the 80 per cent. rate applying, and of course that will be the rate for a time.
      Many of us have listened to the Secretary of State choose his words carefully and say that he has "no plans to do so". I admit that my memories of Whitehall are somewhat distant, although they are soon to be refreshed, but I remember that when Governments do not wish to admit to something they say, "We have no plans to do so." Technically, being somewhat economical with the truth, that is probably correct—there are no immediate plans lying about. Ministers have used such phrases but, a few years later, we have been told, "Circumstances have changed", "Different conditions prevail", "There has been a further review". Perhaps there has even been a new face in the Department—these things do happen. What we were assured would never happen has somehow come about. Under the amendment, if there are further reductions in the reimbursement rate, the disadvantageous effect—the deterrent to the recruitment of chronically sick or disabled people—will be all the greater.
      I admit that I am not talking to a packed Chamber. I wish that more people were listening to the argument. Under our amendment, whatever changes are made in the reimbursement rate for the third and subsequent weeks, there will still be 100 per cent. reimbursement for the first two weeks. I hope that I have made the case that this is a serious point. I should be the first to admit that Conservative Members are concerned about the employment prospects of disabled people. I therefore hope that they will accept this as a non-partisan amendment. We believe that the Government are putting the employment prospects of disabled people at risk. They are an important section of the work force. We believe that the Government's measure is unnecessary. I hope that they will reconsider the amendment.
      Mr. Kirkwood: I support the comments of the hon. Member for Oldham, West (Mr. Meacher). New clause 1, which was tabled in my name and that of my hon. Friends, is another attempt to limit the damage that will be inflicted by the Bill on employers and employees. Estimates have been made of average periods of sickness and so on. The new clause is an attempt to restrict the Bill's provisions to cope with the average periods of sickness in firms and businesses. Any opportunity to limit the damage that will be caused by the Bill is welcome. The new clause is a probing measure to get the Government to justify seeking wide provisions which will damage small and large businesses. I am happy to leave my comments on that basis, and I await with interest the response by the Under-Secretary of State.
      Mr. Flynn: It is difficult to concentrate on this fascinating business when we have information about the remarkable appointments being made by the new Prime Minister, who is proving that at least he has a sense of humour. One of his appointments has been the right hon. Member for Henley (Mr. Heseltine) as Secretary of State for the Environment—one of the most remarkable appointments since Caligula appointed his horse as consul——
      The Second Deputy Chairman: Order. I think that we should get on with the business.
      Mr. Flynn: Indeed, Miss Boothroyd.
      My hon. Friend the member for Oldham, West (Mr. Meacher) referred to a debate on Second Reading which, unfortunately, did not reach a conclusion. The debate concerned the report by IFF Research Ltd. and how many firms had been covered by occupational schemes. We should bear in mind what the report said and find guidance from it. I am sure that hon. Members used their time usefully in the past 48 hours to read that report. Two days ago, the Secretary of State for Social Security said that the Government did not know exactly how many people were covered by sick pay schemes—a nice confession of the ignorance on which the proposition is based. He went on to say that 90 per cent. of firms have such schemes.
      The IFF report provides the clearest evidence we have. Paragraph 2.5 states:
      "The proportion of private sector establishments offering sick pay schemes cover is as follows".
      The report shows that for short-term cover only, it is 42 per cent.; for short and long-term cover, it is a mere 14 per cent.; and for long-term cover, it is less than 1 per cent. The key figure is 14 per cent., which would be comparable.
      The Secretary of State for Social Security (Mr. Tony Newton): I cannot see why that is the relevant figure. We are talking about what counts as short-term sick pay. It is clear from the report that the coverage of short-term sickness is much greater than coverage of long-term sickness.
      6.15 pm
      Mr. Flynn: I said that it is the key figure because it will be important when the Bill comes into effect. The Bill gives the Government greater powers by order to make cuts over a long period until, in effect, the scheme disappears. I could argue at length with the right hon. Gentleman on this point, but I intend to speak briefly. That percentage is a long way from the 90 per cent. figure which Ministers repeatedly trumpet.
      Every organisation that represents people with disabilities is genuinely worried that the Bill will harm the job prospects of such people. I should love to hear about any such group that supports the Bill. The opposition from those organisations has not been dulled by Monday's debate. They still vehemently oppose the Bill. I hope that the Under-Secretary will say that the Government have taken this into account.
      The only measure that we have of the proportion of people with disabilities in employment is the number of registered disabled. The record of industry and Government Departments is shameful. Half the target of 3 per cent. has been achieved by the Department of Social

      909
      Security, which is presenting the Bill. I should have thought that that Department would blaze a trail by employing at least that target of 3 per cent.
      The Parliamentary Under-Secretary of State for Social Security (Mrs. Gillian Shephard): The Opposition alleged that if 80 per cent. reimbursement applied for the whole period for which SSP is payable, it would lead to employers not employing or discriminating against people with disabilities or people who suffer from health problems. I should have thought that, on Second Reading, my right hon. Friend the Minister for Social Security and Disabled People laid that argument to rest.
      The Opposition quote a report compiled by Patricia Prescott-Clarke entitled "Employment and Handicap" and published in June this year. That report states that, for the majority of disabled people,
      "The time taken to get a job was relatively short. It was shortest for those not in work at onset—(64 per cent. got a job within two months of looking compared to 56 per cent. of those having held an onset job.)"
      Clearly, it must take some disabled people some time to get a job, but the problem is by no means as widespread as the Opposition have said.
      The report to which my right hon. Friend the Secretary of State referred extensively on Second Reading, showed that half the people with disabilities in work took less than five days a year off for sickness or treatment. As my right hon. Friend pointed out then, in general, people with disabilities have work records as good as, if not better than, those of the able-bodied. The figures certainly do not suggest that the SSP liabilities of employers will be any greater in relation to employees with disabilities than they will be for other employees.
      Of course, many factors other than SSP are important in the determination of job opportunities for the disabled, and our Department and the Department of Employment have developed policies to promote the employment of such people—not least our own proposals for a brand-new benefit, the disability working allowance, to be introduced in April 1992. Having listened carefully and with interest to Opposition Members' proposed solutions to the problem, I can find little logic in them; certainly, the administrative complexities that an employer would incur in operating different rules for different employees, depending on how long they had been ill, hardly bear thinking about.
      Speaking to the earlier group of amendments, the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) complained about the complexity of the SSP scheme, and I am therefore astonished that he should be prepared to support the introduction of yet more complexity. Let us think what the implementation of new clause 1 would mean in practice. Each month, when an employer paid his tax and national insurance contributions to the Inland Revenue, he would need to establish which payments of SSP attracted 80 per cent. reimbursement and which attracted 100 per cent. He would also have to work out whether he could claim additional compensation. In the worst scenario, he might have to try to apportion a monthly SSP payment for an employee between the part on which he could claim 100 per cent. and the part on which he could claim only 80 per cent.
      Attempting to enforce the proposals in either the amendment or the new clause would be an administrative
      910
      nightmare for employers. Indeed, the Department and the Inland Revenue would encounter just as many difficulties in trying to ensure that the correct deductions in respect of SSP were being made for employers' national insurance contributions, and that the right amounts were being paid to employees. I accept that some employers may be unhappy about the move from 100 per cent. to 80 per cent. Reimbursement—I understand that—but I suspect that they would be even less happy if they had to operate the Opposition's proposed arrangements.
      Although I do not want to accuse the hon. Member for Oldham, West (Mr. Meacher) of tabling a wrecking amendment, I am bound to say that he seemed to imply that that was his intention, and I can certainly think of no better way of wrecking the operation of SSP—which does involve some complexities—than the system that he has proposed.
      Hon. Members have mentioned the problems that small employers may experience, although that was the subject of the first group of amendments. We have costed the proposals in amendment No. 8 and new clause 1: the costs of the amendment would be about £107 million in 1991–92, and those of the new clause about £89 million. Cost is by no means an insignificant factor, but the main point is that the administrative nightmare proposed by Opposition Members—apparently in all seriousness—is not worthy of consideration, and should be rejected.
      Mr. Meacher: I find the Minister's explanation unconvincing. I know that the Opposition are expected to say that every time, but I genuinely mean it: I do not think that the Minister has answered our case at all.
      Quoting from a survey from which I, too, quoted, the Minister suggested that it took a relatively short time for most disabled people to obtain a job. I am glad to hear it. She also said that the great majority of disabled people took fewer than five days off for treatment, and, in general, had good work records. If that is true, it is very reassuring, but, as I have said to the Minister of State and repeated today, it really misses the point. We are not discussing whether disabled people take a long time to find jobs under the current arrangements or whether they take only a few days off in a working year; the point is whether the Bill will act as a strong financial deterrent, dissuading employers from taking on disabled people. The survey from which the Minister quoted is entirely irrelevent in that context.
      I said all this on Second Reading, and I hoped that what I said had been taken on board. One likes to think that one's remarks are mulled over in the bowels of Whitehall after Second Readings, but apparently that is not the case; I am very disappointed. Let me repeat, then, that we are considering the effects of the Bill. The Minister has said nothing that diminishes our anxiety and apprehension: we fear that the Bill will have a considerable effect in reducing recruitment of disabled people. The Minister of State may shake his head, but we need some evidence.
      I appreciate that we are talking about a system that will operate in the future—that, to that extent, the scheme is hypothetical, and that it is therefore impossible to produce any factual, empirical evidence. The likelihood is, however, that the scheme will act as a considerable disincentive.
      Mr. Scott: All these scares were put about when the SSP scheme was introduced, and exactly the same arguments were advanced at the time of the extension to 28 weeks.

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      There is absolutely no evidence that the scheme has had such an effect. Given all the pressures designed to encourage the employment of disabled people that I mentioned on Second Reading, I do not believe that these proposals will make so much as a ripple on the pond.
      Mr. Meacher: That is a very complacent forecast. The right hon. Gentleman says—I do not know whether this has been factually verified—that the introduction of the scheme and the extension to 28 weeks had little effect. Even if that is true, in neither instance was there any disincentive for employers. What we are discussing today, for the first time, is a significant disincentive for a number of employers—not all, but a significant number—particularly small employers. Small employers have to keep a close watch on the margins if they are to survive, especially in today's declining market. The right hon. Gentleman underestimates the probable negative impact of the Bill.
      Mrs. Gillian Shephard rose——
      Mr. Flynn rose——
      Mr. Meacher: I will give way to my hon. Friend first, and then to the hon. Lady.
      Mr. Flynn: I drew attention to at least one ripple on Second Reading. I do not claim that my evidence was entirely convincing, as it was based on some questions that I had tabled the previous week. The most detailed answer that I received showed a decline in the number of people with disabilities who were employed by the Welsh Office, coinciding with the introduction of SSP in 1983. I am not suggesting that the two events are necessarily connected; it is a case of "post hoc, ergo propter hoc". But the Government are trying to make their case, and I feel that we should at least be given the complete picture. That ripple may well be a flood.
      Mr. Meacher: I think that that constitutes significant evidence. My hon. Friend has admitted that the decline in recruitment of disabled and chronically sick people may not be solely—or even mainly—a result of the introduction of SSP, but the Minister should accept that, just as I cannot prove a causal relationship, he cannot prove the opposite.
      Mrs. Gillian Shephard rose——
      Mr. Meacher: I know that the hon. Lady has been desperately trying to get in, so I will give her a chance.
      Mrs. Shephard: Most of the hon. Gentleman's comments have been based on the question whether our proposals introduce a disincentive. Does he not accept that the administrative nonsense that he has proposed would be the greatest possible disincentive?
      Mr. Meacher: I was coming to the second part of the Minister's argument. At first, she drew an irrelevant analogy when she referred to previous experience with regard to the time taken to get the job and time off. Her other argument against the amendment is that it would be administratively complex and quite costly. She said that it would cost about £100 million.
      We are not recommending the ideal solution. We believe that a cost of £100 million as opposed to allowing the Bill to progress without amendment would still be advantageous in net terms. On the other hand, we would be the first to say that it is not ideal to drop to 80 per cent.
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      and then to try to protect a vulnerable section of the market by way of an administrative complexity at a cost of £100 million. That is not the ideal solution. Ideally, we should stay as we are with 100 per cent. reimbursement.
      6.30 pm
      The Minister's arguments about administrative complexity and cost are not the point. She forces us to use the amendment as a device. We have been prevented from negating the Bill as a whole, so we have to produce a second best. I readily admit that, but is not that a great deal better leaving the Bill unamended?
      Will the Minister look me straight in the eye and say that she believes that there will be no disadvantage to the recruitment of chronically sick people, the disabled, people with poor health records and older workers who are desperately trying to regain a place in the employment market if the 100 per cent. reimbursement of sick pay is reduced to 80 per cent.? I do not see how she can possibly say that. If she can and she honestly believes it, she deserves to defeat the amendment. However, we believe that the amendment should stand.
      Mrs. Gillian Shephard: I agree totally with the points made by my right hon. Friend the Minister of State on Second Reading when assurances were given on that particular point.
      Amendment negatived.
      Mr. Kirkwood: I beg to move amendment No. 5, in page 1, line 27, leave out 'or lesser'.
      The First Deputy Chairman of Ways and Means (Sir Paul Dean): With this it will be convenient to consider amendment No. 10, in page 1, line 27, at end insert—
      '(1ZB) A statutory instrument containing an order under subsection (1ZA) above shall not be made unless a draft of the instrument has been laid before Parliament and approved by a resolution of each House.'.
      Mr. Kirkwood: I recognise the unanimity of view on the Opposition Benches about my amendment. Independently, and without collusion, the hon. Member for Oldham, West (Mr. Meacher) and his colleagues and my colleagues and I decided that it would be sensible to table amendment No. 5.
      The amendment is designed to leave out two small words, but their omission would make a great difference to the way in which employers and their representatives consider the Bill. The purpose and thrust of the amendment is crystal clear. It will restrict the power that the Government are taking in clause 1 to vary the rebate. The amendment would make it impossible for the Government to reduce the rebate level beyond 80 per cent.
      In contemplating that, a number of important points should be made. The fundamental point was raised on Second Reading. Why do the Government need to take this power at all? By virtue of changing circumstances and the extent and complexity of the social security system, we know that the Department faces the prospect of updating, improving and amending social security law on a yearly basis. In relation to another matter the Secretary of State said the other day that he thought that there was a need for consolidation because of the complexity of the numerical labelling of some of the amendments. I do not know whether he meant that as a threat.
      The Government have regular opportunities every year to make amendments to primary legislation relating to social security. There is a suspicion that, if they are looking

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      for the ability to make those changes by order, they are doing that with a purpose in mind. They are trying to make it easier for themselves. I suspect that they will give themselves an enabling power to introduce secondary legislation and then do just that. If they do that, the Bill gives them the power both to increase and to decrease the rebate. The amendment would remove by statutory instrument their ability to reduce the percentage level of the rebate.
      Employers' representatives believe that that power is not in the Bill by accident. They believe that it is designed to be used and that it will be used. They quote precedents like the redundancy rebate schemes which they had to endure in the past. They are deeply suspicious of this part of clause 1. There was some discussion about this on Second Reading. However, the Minister should consider it again and give us specific guarantees, if she will not accept the amendment, that there is no intention now, and no intention in future, to reduce the level of rebate that goes back to employers. I hope that she will go that far, but even if she does, she will know that Ministers, on this day of all days, are transient creatures.
      Mr. Newton: It was announced some minutes ago that, for the moment at least, I am not a transient creature.
      Mr. Kirkwood: The Secretary of State has put the House out of its collective agony. I am genuinely pleased to hear what the Secretary of State has said, and I look forward to many constructive hours of debate with him and his ministerial team.
      There is no linkage between the level of rebate and the level of employers' national insurance contributions. The Government could perfectly properly say that they have tried to balance the effect of the changes in the rebate by making marginal and balancing adjustments to compensate for the extra additional cost for employers. There is no guarantee in any legislation that in future, if the rebate is reduced further—perish the thought—compensation will be paid in a balancing way by an alteration in the employers' rate of national insurance contribution.
      We are looking for clear assurances about that. It is not just a matter of the Government taking powers that we do not think they need and which if they are to use them, they will do so to the detriment of employers. There is no balancing provision or power. I have heard no statements from responsible Ministers to the effect that if the rebate is reduced in future there will be a guaranteed equalisation of the effect through a change in the level of the rate of national insurance contributions.
      It is blatantly obvious what the amendment seeks to do. It is glaringly obvious to Opposition Members and to the employers' organisations that the Government will have the power to introduce things in an unnecessary way. The Government have not yet made a case in any statements made by the social security team that the fears that have been expressed to me by employers and their organisations are not well founded on that important issue. I hope that the Government will take the opportunity of this amendment to try to allay some of the fears that are being expressed with great passion and vigour by employers and their organisations.
      Ms. Short: I support amendment No. 5. Great minds think alike and both main Opposition parties tabled an
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      amendment on the same lines. Amendment No. 10 is less robust, and it will be indefensible if the Government do not accept it. They would then have to admit that the whole structure of the Bill is intended to enable them or any future Government to erode over time and by stealth the statutory sick pay scheme. I hope that this Government will not get the opportunity, but it is dangerous to allow on to the statute book powers that could be misused by any Government.
      As we said on Second Reading, when there was agreement between the Opposition and the hon. Member for Beverley (Mr. Cran), who does not seem to be attending to the debate at the moment although he is in his place, it is impossible to understand why the Government should have introduced the Bill unless the thinking behind it is, in the long term, to erode the reimbursement to employers and to privatise sick pay over time, handing the burden over to the employers.
      I know that the right hon. Member for Chelsea (Mr. Scott) was a little annoyed when I said that I found it difficult to accept his word that there are no such plans. Of course, I accept those words in their tightest and smallest meaning and I know that he would not deliberately mislead the House. However, as my hon. Friends have said, the fact that the Government do not have any detailed plans to implement right now does not mean that they do not have that strategic long-term intention.
      On Second Reading, the Secretary of State went to a lot of trouble to stress that the cost to employers—we know that employees will lose £100 million—was neutral. He laid a lot of stress on that, saying that his first statement had suggested that the reimbursement under the new formula for employers might amount to only £200 million, but that since then he had firmed up the details of the national insurance proposals, amounting to £250 million, which meant that the package was neutral.
      The right hon. Gentleman said that he thought that all the complaints from small employers would go away once they understood the details of the national insurance compensation. We now know—I think that the right hon. Gentleman accepts this—that the complaints have not gone away and that, as my hon. Friend the Member for Newham, North-West (Mr. Banks) said earlier, the National Federation of Self Employed and Small Businesses has not been reassured by our Second Reading debate and is still angry and deeply hostile to the package.
      There is no point in the Government introducing this Bill. As we know, they could have saved £100 million by changing the thresholds and the uprating figures relating to the amount of statutory sick pay. The Bill has nothing to do with the saving that the Government were seeking to make from sick pay so that they could fund other needy groups, such as poor pensioners and elderly people living in residential homes. The Government have taken this opportunity to introduce legislation that opens the door to the erosion over time of a state-protected national insurance sickness benefit scheme for people at work.
      6.45 pm
      I prefer honesty in these matters. There is grave disagreement across the House on social security issues, but I know that the DSS Ministers are honourable people. Nevertheless, I am totally perplexed, because the Bill makes no sense whatsoever, unless what I have suggested

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      is the Government's intention. It is unacceptable for the Government to say, "We have no plans, but never say never."
      The Government have tried this sort of thing before. They have made it clear that they want to move the burden of sick pay on to employers. They had a big fight with the employers' organisations the first time round and were forced to give in.
      Although we have been told that this is wrong, I firmly believe that the indecent haste with which the Bill is being handled is designed to prevent that resurgence of opposition from the employers' organisations. I can think of no other reason. It is extraordinary to have a Second Reading on Monday and Committee stage on the Floor of the House on Wednesday. I am sure that that is deliberately intended to prevent the resistance that previous Bills have engendered from building up again.
      I cannot see any other reason, although Ministers have said that the Government have moved with such haste because they are anxious to give the employers' organisations the full details in plenty of time for them to prepare for the implementation of the provisions. I cannot believe that. Although I can understand a certain amount of speed, this indecent haste does not make sense. Having analysed what the Government are doing, it is my belief that the intention to erode sick pay provisions by stealth is the whole explanation for the Bill.
      We know that when the Secretary of State says that the effect will be neutral this year, it will not be neutral next year or the year after, unless the right hon. Gentleman can give us the assurance that the £250 million reimbursement to employers will increase steadily as the years go by—[Interruption.] I think that the right hon. Gentleman is seeking to give that assurance.
      Mr. Newton: We are talking about figures that are related to a percentage of earnings. We are talking about reductions to 4·6 per cent. and whatever the other figures are—from 5, 7 and 9. The figures are a percentage of earnings, so as earnings rise, the figures will rise.
      Ms. Short: Good. That is the logic and we now have another commitment on the record which, I am sure, will be gratefully received.
      However, that does not remove from the Bill the power to change the percentage and to reduce it from 80 per cent. over time without the Government even seeking an affirmative resolution in the House. We are seeking two amendments. The first is more robust and is preferable. It seeks to remove that power and to require any Government who wish to change that 80 per cent. reimbursement to come back to the House with new legislation and to argue their case properly. Any such proposal would be so serious that that must be the right course.
      If the Government cannot stomach amendment No. 5, we also have a gentler proposal, but that would mean the Government admitting that they are wrong, which is something that Governments rarely do. Indeed, the Government would change Prime Minister rather than do that. Amendment No. 10 could be more easily conceded by the Government because it simply seeks a positive resolution of the House for any change from the 80 per cent. reimbursement. I hope that the Secretary of State will say that he accepts amendment No. 10.
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      On Second Reading, the right hon. Gentleman said that a Prayer could be tabled against such a resolution and that, if determined, the Opposition could bring the matter to the Floor of the House, but surely he and the Government will admit that the proposal to move to a lower than 80 per cent. reimbursement is serious and significant to our social security policy and to the way in which we provide for the protection of employees who are sick. Surely, therefore, in the framework of the statute, such a change should be debated in the House as a matter of course.
      I hope that the Government can reassure us somewhat. I am not trying to accuse them of having such intentions over time simply out of opposition to their proposals. My intellect can see no reason for the Government taking the trouble to prepare and table the Bill unless that is their intention over time. I hope that, at the very least, the Government will concede amendment No. 10, which would mean that they could not bring about such a change by stealth because it would have to be debated in the House.
      Mr. Newton: The hon. Member for Birmingham, Ladywood (Ms. Short) ranged fairly widely over many of the points that were made on Second Reading and which have been reiterated in some of our debates earlier today. In view of the pressure on time, I hope that hon. Members will understand if I do not again go over all the ground covered in my extensive speech on Monday afternoon. Indeed, many of those points have been made by my right hon. Friend the Minister for Social Security and Disabled People.
      My next point may seem unduly provocative, but that is not intended to be the case. I find something slightly odd in the spectacle of the hon. Members for Ladywood and for Oldham, West (Mr. Meacher) and their colleagues presenting themselves this afternoon and this evening as defenders of the interests of employers, when the Labour Government invented and introduced the selective employment tax as a major tax on all jobs. When they were finally pushed out of that tax, they invented the national insurance surcharge.
      If I remember rightly, by the time that we took office and abolished it, the surcharge amounted to about £3 billion. I have not checked the figure, but my recollection is that £3 billion of additional costs were imposed on employers, both small and large. It had absolutely nothing to do with insurance. It was simply an impost designed to finance the Labour Government's spending ambitions. Yet the hon. Lady and the hon. Gentleman make an interesting song and dance about sums of money measured at about 0·05 per cent. of labour costs throughout the economy. It is extraordinary.
      It is important that the hon. Lady should understand that the proposals in the Bill have no effect of any nature on the entitlement of any employee.
      Ms. Short: The Minister speaks about a Conservative Government who doubled VAT as soon as they took power and increased inflation massively. Every survey of small business shows that VAT tends to be their biggest problem. In a constituency such as mine, there are many small businesses and small employers. They tend to vote Labour and they prosper when the people who live in Ladywood prosper. It is not the case that small businesses

      917
      belong ideologically with the Government. Their interests lie much more closely with the ordinary people in society, for whom Labour speaks. That is our position.
      Mr. Newton: I shall return to a more light-handed mode and simply observe that if the hon. Lady really believes that, she will believe anything.
      Mr. Kirkwood indicated assent.
      Mr. Newton: I am glad to see that at least on that point I have the support of the Liberal Democrats. I am duly grateful to the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood).
      I hope that those perhaps unwise remarks have not unduly disturbed the scene, Sir Paul. I see you looking at me with a faint air of disapproval. I shall return more directly to what the hon. Lady said. As reference has been made to it, perhaps I should begin by quoting from my remarks on Second Reading on Monday afternoon. I said:
      "We have no plans to make further changes, but given the way that matters have been developing and the continuing need to examine priorities across the whole spectrum of social security, it seems sensible to have a provision that is capable of being changed. … A large part of the social security system, including nearly all the rates of benefit—quite apart from the whole range of other rules—is in a form that does not lock it into primary legislation, so that changes can be made by secondary legislation. Governments of all complexions have acknowledged that that is a sensible way of dealing with social security matters."—[Official Report, 26 November 1990; Vol. 181, c. 651–52.]
      Similar arrangements apply to national insurance contributions. There are powers to vary them by secondary legislation, subject to certain parameters.
      The words that I quoted were not scripted. They were in response to a request by the hon. Member for Oldham, West to comment on that point. To be honest, when I read them I thought that they were rather good and perfectly sensible, so I decided to repeat them in my speech this afternoon.
      Mr. John Battle: I am not sure whether I prefer the Minister in his ideological or sympathetic mode. It does not seem to make too much difference. Does he accept that there is a crucial difference between simply altering the rate and altering the structural relationship between employer and employee contributions? To level down the percentage from 80 per cent. to 60 per cent. would change the relationship. It is a question not simply of uprating or downrating, but of changing the structural relationship. Why did the Government decide to move away from the affirmative to the negative procedure?
      Mr. Newton: It is not a question of moving away from the affirmative to the negative procedure in this case. I shall come to that in a moment. The hon. Gentleman's first point was that it would be appropriate to use a different procedure for a structural change. That is precisely why we are debating the legislation today. A structural change—if that is the phrase that we want to use—is what the Bill proposes. It would create a move away from 100 per cent. reimbursement—for practical purposes the contribution is now 107 per cent.—to less than 100 per cent., or 80 per cent. It is entirely proper that we should come to the House with primary legislation to effect that change. Indeed, that is the primary legislation that we are debating.
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      The Bill proposes to make a structural change and introduce a percentage figure. It then seems entirely reasonable to take powers to enable the percentage to be varied in secondary legislation in exactly the same way as across a wide range of provisions in the social security and national insurance systems.
      Mr. Meacher: Before the Minister pursues that argument further, I suggest that there is a major difference between changing the national insurance rates—they are often reasonably changed by marginal percentages in the light of increasing benefit levels, increasing costs or the state of the fund—and reducing the reimbursement to the employer from, say, 80 per cent. to conceivably nil, without coming back to the Houses of Parliament under the affirmative procedure. That is an entirely different matter, and there is no precedent for it.
      Mr. Newton: Again, I do not wish to prolong the discussion unnecessarily because I hope to say something marginally helpful to the hon. Lady in a few moments. There is not much point in describing changes in national insurance contributions as marginal, and effected by secondary means, when what seem to be small changes in employers' national insurance contributions—which have been adverted to many times during this discussion—can amount to substantial sums.
      The standard rate of employers' contributions is being reduced only from 10·45 per cent. to 10·4 per cent. That is 0·05 per cent. One cannot get more marginal than that. It is worth about £100 million out of the £250 million overall reduction. Whatever arguments the hon. Gentleman adduces, he should not suggest that we can make only marginal changes by secondary means in the social security and national insurance systems. Some changes are substantial. However, I shall not dwell further on that point.
      I cannot advise the House to accept amendment No. 5, tabled by the hon. Member for Roxburgh and Berwickshire, and with which the Opposition Front Bench team has tagged along, if I read the amendment paper correctly.
      Ms. Short: We tabled amendments independently.
      Mr. Newton: Oh, they tabled the same amendment at the same time. I do not wish to dispute who set the precedent. I am sure that the amendments were tabled at exactly the same moment. I certainly do not wish to become involved in an argument about which came first. I accept that both parties had the same idea. Even-handedly, I tell both parties that I cannot accept an amendment that would involve more primary legislation before further change could be made in the light of the changes proposed in the Bill.
      The hon. Member for Ladywood reasonably put more weight on amendment No. 10, suggesting that we should at least consider adopting the affirmative rather than the negative procedure. It would not be appropriate to do that in respect of a proposal to increase the percentage. It is highly unlikely that an increase would be thought controversial. This is another rash remark, Sir Paul, but I suspect that if, in the wake of the legislation, I introduced a proposal to increase the percentage, I would be attacked by the hon. Member for Oldham, West for providing a giveaway for our rich friends, the employers. We would then be faced with a totally different argument.
      Mr. Meacher: Perhaps the right hon. Gentleman would like to be my speech writer?
      Mr. Newton: I am not volunteering to do that; my style is much too calm, measured and low key to have any chance of qualifying for that post.
      There is force in the argument for Parliament to take a positive further decision about any significant reductions in the percentage were such a change to be contemplated.
      In the light of recent events, I approach today's proceedings with even greater magnanimity than usual. Although I am not ready to advise the House to accept the amendment, I am willing to give an undertaking that I shall bring forward in another place an amendment to provide for the affirmative procedure were a further reduction in the percentage proposed.
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      Mr. Kirkwood: Can the right hon. Gentleman foresee any circumstances in which. were the rebate reduced, there would not be a corresponding compensatory allowance through a reduction in employers' national insurance contributions?
      Mr. Newton: I cannot give the hon. Gentleman the exact assurance he seeks, for practical and legal reasons. My statutory duty, which I hope I have faithfully fulfilled this year, is to look at the rates of contribution in relation to the balance in the national insurance fund. My prime responsibility is to be concerned with the balance in the fund and I must bear that in mind when considering employers' contributions. For that reason, I cannot give the hon. Gentleman the direct guarantee he seeks.
      In the light of the experience gained from what I proposed this year, and with a reasonable degree of conviction that I shall carry the hon. Gentleman with me, I should certainly expect, were any further changes to be made to the percentage—we have no such plans now—to take into account the balance in the national insurance fund. I note that the hon. Member for Ladywood is smiling. I accept that that undertaking falls short of the straightforward, clear-cut guarantee which the hon. Gentleman sought. I hope that the hon. Gentleman understands why I cannot give that guarantee.
      I always seek to be open with the House about such matters and it is not inconceivable that this Government, or any future one, might make a judgment in particular circumstances that it was reasonable to propose a further change in the percentage without compensation, or whatever, through the national insurance system. After all, the previous Labour Government came to believe that it was right to impose billions of pounds of extra costs on employers with a national insurance surcharge. They did not compensate those employers in some other way. Governments necessarily must make judgments about where the burden of taxation and the like should lie at any given time and where money is to be raised to fulfil particular social or spending objectives. The Government cannot and will not be able to escape that.
      I intend to introduce an amendment in the other place to provide for the affirmative procedure where any further reduction in the percentage is proposed. In the light of that and of what I said to the hon. Member for Roxburgh and Berwickshire—I accept that it fell short of the undertaking he sought—I hope that the hon. Gentleman and the Opposition will withdraw the amendments.
      Mr. Kirkwood: Although I am not satisfied with the Secretary of State's reply, it would be churlish not to acknowledge the concession that the right hon. Gentleman made to the hon. Member for Birmingham, Ladywood (Ms. Short). On that basis, I shall withdraw the amendment.
      The First Deputy Chairman: Order. Before the hon. Gentleman does that, I believe that the hon. Member for Birmingham, Ladywood (Ms. Short) wants to speak.
      Ms. Short: Half a loaf is better than no bread and, on the basis of the Secretary of State's undertaking, I shall not press amendment No. 10.
      Mr. Kirkwood: I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.
      Mr. Tony Banks: I beg to move amendment No. 11, in page 2, line 1, leave out subsection (3).
      The First Deputy Chairman: With this it will be convenient to take the following amendments: No. 6, in page 2, line 4, at end insert
      'in respect of an employer, employing twenty persons or more.'.
      No. 7, in schedule, page 4, leave out lines 4 to 19.
      No. 14, in schedule, page 4, line 5, column 3, leave out paragraph (a).
      No. 15, in schedule, page 4, line 6, column 3, leave out paragraph (b).
      No. 16 in schedule, page 4, line 12, column 3, leave out paragraph (d).
      No. 17, in schedule, page 4, line 17, column 3, leave out paragraph (e).
      No. 18, in schedule, page 4, leave out lines 20 and 21.
      Mr. Banks: Subsection (3) abolishes employers' entitlement to compensation for the national insurance contributions they must pay on statutory sick pay.
      Statutory sick pay was originally paid at three rates and for the first eight weeks of sickness only. In the autumn statement of 12 November 1984, the right hon. Member for Blaby (Mr. Lawson), then Chancellor of the Exchequer, announced that the SSP would, in due course, be extended to 28 weeks. At the same time, he announced that employers would be
      "relieved of the burden of contributions on payments under the statutory sick pay scheme".—[Official Report, 12 November 1984; Vol. 67, c. 417.]
      The implication was that that would compensate employers for the extra burden and cost of 20 more weeks' payment.
      The Social Security Act 1985 provided for the reimbursement of the national insurance contributions on SSP, which came into effect in April 1985 and the extension of the duration of the SSP from eight to 28 weeks, which came into effect in April 1986. Employers are not reimbursed the precise amount they pay in national insurance contributions. The additional compensation is actuarially calculated to reflect the aggregate amount of secondary contributions paid on SSP and, since 1987, on statutory maternity pay. At present, the national insurance contribution compensation rate is 7 per cent. of the gross SSP paid. If it was right to give that compensation in 1985, the onus is on the Minister to explain why it is now right to take it away.

      921
      A number of things have been said tonight about the way in which small businesses in particular believe that the Bill is part of a "salami" approach to change. I used onions earlier, now I am using salami. Those businesses believe that the Government are working towards an undisclosed objective in a hidden agenda.
      Although we might be accused of being cynical, we have some basis for it—for example, the way in which the Government sold the idea of the sale of council houses. Many objections were raised, but the idea was sold to local authorities on the basis that 100 per cent. of the money received would be used to build new accommodation. However, the percentage to be used thus was gradually reduced to 40 per cent. and, most recently, to 25 per cent. The Government advanced a number of supporting arguments to limit the opposition to the sale of council houses, and, once the opposition was out of the way, they proceeded further with their plans. We believe that that is the philosophy behind the Bill.
      Since the national insurance compensation is 7 per cent. of the amount of SSP paid by the employer, abolishing it means that, with the reduction of the reimbursement rate to 80 per cent., the total burden falling on employers will be equivalent to 27 per cent. of SSP. When an employee is sick for 28 weeks and is entitled to the higher rate of SSP, the cost to the employer will be £396·90, made up by £294 for the reduction in the reimbursement rate and £102·90 for the loss of compensation for national insurance contributions. It is calculated on the basis of 28 weeks.
      I feel sure that the Minister will address a subject that has been mentioned a number of times—the fact that we are talking about an average of three weeks. The National Federation of Self Employed and Small Businesses said that it was worried not about the large company suffering the average three weeks sick pay, but the small businesses with one or two employees which could suffer from someone taking the full 28 weeks' sick leave.
      One is always in great danger when talking about averages. There is no such thing as the average person, who is always someone else. If the figure is 28 weeks, a small company with only one or two employees will suffer an horrendous impact. Legislation should take that into account rather than fall back on comforting talk about averages.
      The objections to that proposal are precisely the same as those to the reduction of the reimbursement rate. The amendment would simply delete the whole subsection.
      Mrs. Gillian Shephard: The hon. Member for Newham, North-West (Mr. Banks) made a lot of play of hidden agendas. In relation to that, and the point he made about additional compensation, I should like to reassure him about the Government's intentions.
      On Second Reading, my right hon. Friend the Secretary of State clearly stated that the additional compensation arrangements have been of limited success in relation to statutory sick pay. The intention of the arrangements was to compensate employers for national insurance contributions they have to pay on SSP. However, in the interests of simplicity, compensation is available on all SSP, even where the amount of sick pay payable falls below the lower earnings limit for national insurance contributions and does not attract liability for contributions in the first place. Therefore, people are receiving compensation for national
      922
      insurance payments that they have not made. That is unsatisfactory, and the position was fully described on Second Reading on Monday.
      As my right hon. Friend made clear on Monday, despite the relative simplicity of the calculation and the extensive publicity given to it, almost 25 per cent. of the additional compensation goes unclaimed. Within the Department, a great deal of work is done with employers, often those in small firms, on statutory sick pay—seminars are held and there are help lines for employers. That work is being elaborated and extended by the new contributions unit that is being set up in Newcastle. The Department makes every possible effort to explain to employers how the system works and, even then, about 25 per cent. of the additional compensation is unclaimed. Given that people are receiving compensation for something for which they have not paid, the scheme is unsatisfactory and we feel it should be changed.
      The hon. Member for Newham, North-West also made more general remarks about the plight of the small business employer, a motif that has recurred throughout the debates. The changes in the rates of national insurance contributions that employers will pay from April 1991 will go a considerable way towards compensating employers for the measures in the Bill. Obviously, employers will not always come out ahead, because the proposals' effects clearly depend on individual levels of pay and sickness. However, with the proposed reductions in national insurance contributions, the increased costs for individual employers will be modest. That point has been made a number of times this afternoon.
      On Monday, my right hon. Friend the Secretary of State described the effect of the changes. He said:
      "Those changes will reduce employers' costs by about £250 million and … are likely to be especially helpful to employers, often smaller employers, whose employees are among the less highly paid."—[Official Report, 26 November 1990; Vol. 181, c. 642.]
      He gave two illustrative examples, which I shall not repeat because the hon. Member for Newham, North-West was present on Monday and will have heard the examples. He will also have heard my right hon. Friend acknowledge clearly that he was giving examples where employers would gain, and there would be other examples, particularly where employees earn more than £185 a week, where some employers would lose. We believe that the compensatory measures in the reduction in national insurance contributions that will come into force in April will go a long way to meeting the concerns of employers and of the hon. Member for Newham, North-West.
      7.15 pm
      Amendments Nos. 6 and 7 would give employers with fewer than 20 employees a continuing right to additional compensation for SSP. As has been repeatedly said, we have acknowledged that the changes in the Bill might bear more heavily on the small business employer. That was why we structured the reductions in the national insurance contributions as we did. By reducing the employers' national insurance contributions for rates of pay up to £185 by 0·4 per cent., as against a reduction of 0·05 per cent. for those earning above that level, we are trying to weight the contributions reductions in respect of the lower paid. That will mean that the savings to small business employers, who are more likely to employ the less highly

      923
      paid, will be proportionally greater than for other employers and, in some cases, will fully match the extra costs resulting from the changes proposed in the Bill.
      It would be inappropriate for me to go further, as the hon. Member for Newham, North-West wishes and give smaller business employers the continued right to additional compensation That would cost about £18 million a year and would clearly have implications for what has been a carefully constructed package. That would be an unwelcome complication in a scheme which we have been trying to keep as simple as possible. We would have to obtain and keep up to date details of the numbers of employees in the relevant firms. My right hon. Friend the Secretary of State made that point during the debate on the first group of amendments, which have a similar effect. We believe that the amendments could affect the employment patterns of employers with a work force numbering approximately that of the threshold figure. For all those reasons, I urge the Committee to reject the amendment.
      Mr. Kirkwood: I am particularly grateful to the Minister for replying to amendments Nos. 6 and 7, which were originally considered to be consequential. The ministerial response provoked one or two thoughts.
      I do not think that, in all conscience, the Minister can describe the measure as a carefully considered package, if for no other reason than that the timetable has been so constrained, whereas the Bill's impact will be wide-ranging. Parliamentary consideration of the Bill has taken place with unusual haste. The legislation will create difficulties for organisations seeking to represent small business employers that do not have the benefit of a sophisticated trade union structure or the Confederation of British Industry's resources and expertise. They do their best and do a good job with the professional help that they receive, but they face a mamonth task because they cover so many sectors and different businesses with employees in jobs at various levels. Therefore, given the timetable that the Government have set them to consider the Bill, it is virtually impossible for them to undertake proper consultation and make constructive suggestions on how to alter the measure.
      We are all in the hands of the business managers, and the timetable is not necessarily a departmental matter entirely under Ministers' control, but will they give us an absolute assurance in the remaining few days, or indeed hours, left before the Bill goes to the other place and on to the statute book, that, if approaches are made by bona fide organisations representing small businesses, they will be given every conceivable opportunity to meet Ministers and officials, and make the points that are being fed back to them and through Members' postbags? I hope that the ministerial team will consider constructive proposals. That would go some way to reassuring us that there is no nefarious purpose behind the indecent haste with which the Bill is proceeding.
      Mrs. Gillian Shephard: Hon. Members have spoken about the timetable. My right hon. Friend the Minister of State has said that monitoring is engraved on his heart. I assure the Committee that bona fide organisations will be welcome when they come to meet the ministerial team and officials. That is always the case, irrespective of the cause.
      Mr. Tony Banks: It would have been more useful if discussions had taken place before the proposals came to
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      us. Perhaps there were such discussions, but if that is the case why are there so many alarming noises from the National Federation of Self Employed and Small Businesses? The legislation is detailed and technical and we can see that it has not grabbed the imagination of the great majority of our colleagues.
      The Minister is reasonable and emollient, but, of course, that is normal. Perhaps we should feel assured, but I have a rather nasty sinking feeling in my heart that, although she is certainly not misleading us, the implications are such that when some small businesses feel the full impact they will be even more angry than they are now. By that time it will be too late. The Minister of State said that he had "monitoring" engraved on his heart. I hope that that is for some good purpose because monitoring is important when the Committee is being asked to agree to technical proposals.
      We have been assured that the Bill will not have any great implication for small businesses. I suppose that we can all repent at leisure if the Minister is wrong about that. I hope that, if monitoring reveals the difficulties that small businesses have talked about and which we have tried to amplify, there will be changes. In such areas it is perfectly correct for the Government to say that an administrative mistake might have been made.
      I was disappointed by the Under-Secretary's reply, even though she put it over in a reasonable way. She said that the compensation scheme had had only limited success and that compensation had been paid on payments that had not been made by employers. She also said that 25 per cent. of additional compensation is unclaimed. That is obviously true, because the Minister said it, but the corollary is that 75 per cent. of it is claimed. Rather than scrapping the scheme because 25 per cent. of compensation is unclaimed, it would be better to get through to those who are eligible to claim and tell them that they are missing something.
      The Minister was precise about the percentage of unclaimed additional compensation, but did not tell us in figures how much compensation was paid to employers who had not already made payments. As I understood it, we were being told that they were getting something for nothing. The Minister should quantify that, or we shall be left with generalities that sound all right in debate. We are not responsible for keeping the books of small companies and trying to make ends meet, and they say that they are finding that increasingly difficult.
      We are disappointed that the Minister is not prepared to accept the amendment, but we shall not push it to a vote. I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.
      Ms. Short: I beg to move amendment No. 12 in page 2, line 18, at end insert—
      '(6) in section 22(3) of the Social Security Act 1989, in the definition of "relevant benefits", at the end there shall be inserted the words "but, in the case of statutory sick pay, only such proportion of any payment as is recoverable by virtue of section 9(1)(a) of the Social Security and Housing Benefits Act 1982".'.
      The amendment seeks to prevent the DSS from recovering the whole of the statutory sick pay from compensation for personal injury when only 80 per cent. of statutory sick pay will be reimbursed when the Bill becomes law. Section 22 of the Social Security Act 1989 provides for the recovery of benefits paid as a result of personal injury by deduction from any compensation

      925
      payments. We debated that issue at great length in 1989 when the Social Security Bill was going through. We felt passionately that it was wrong to reclaim compensation that might have been paid, for example, for pain and suffering in order to reimburse the DSS. That is not the issue contained in the amendment and, therefore, the matter is narrower.
      The amount recoverable under the 1989 Act is the
      "gross amount of any relevant benefits paid or likely to be paid to or for the victim during the relevant period".
      Section 22 leaves the relevant benefits to be defined by regulations, and the Social Security (Recoupment) Regulations 1990 list a wide range of benefits, including some which have little or no connection with personal injury, for example, family credit and unemployment benefit.
      The new disability living allowance and disability working allowance may be added to the list in due course. Perhaps the Minister will tell us about that. The list already includes statutory sick pay. Presumably the justification is that although statutory sick pay is paid by employers, they are reimbursed by the DSS. However, in future the reimbursement will be only partial—80 per cent. in 1991–92. It cannot be right for the DSS to recover benefit that it has not paid. That is the point of the amendment, which proposes that only the amount actually reimbursed by the DSS should be recoverable from any compensation payment.
      If the long title of the Bill had allowed, we would have tabled an amendment removing statutory sick pay from the list of benefits recoverable under the 1989 Act. The treatment of sick pay for these purposes is chaotic, different parts of sick pay being treated in different ways. However, the long title is tightly drawn and it was not possible to amend it.
      We seek to ensure that a minor injustice is put right. It would surely be wrong if the DSS were allowed to claim back 100 per cent. of statutory sick pay when people receive compensation as a result of an accident, even though the DSS had been responsible for only 80 per cent. of that sick pay. I hope that the Minister will concede the point.
      Mr. Scott: As the hon. Member for Ladywood said, the amendment seeks to change the amount of statutory sick pay recoverable under the compensation recovery scheme which we discussed at great length during the passage of the Social Security Act 1989. At present, the scheme provides for an amount equivalent to the sum of statutory sick pay paid to be recovered from any compensation payment. As we know, the Bill proposes to reduce Government funding of SSP from 100 to 80 per cent. I listened with great care and attention to the hon. Lady, but I do not think that an amendment on the face of the Bill is the correct vehicle for introducing any change that might be required.
      Section 22(3) of the Social Security Act 1989 refers to benefits in broad terms and provides that individual benefits covered by the scheme should be prescribed in regulations. The list of benefits is contained in the Social Security (Recoupment) Regulations 1990. For the sake of consistency, therefore, we wish to pursue that line and see whether an amendment to regulations is required. I am advised that there is no need to take any primary powers
      926
      additional to those contained in clause 2 of the Bill. We will therefore undertake to consider the precise implications of the changes, paying close attention to the hon. Lady's comments.
      I hope that the Committee will accept this assurance of our intention to look at the matter with the utmost urgency, care and sympathy. In the light of that undertaking, I hope that the hon. Lady will withdraw the amendment.
      Ms. Short: This is getting better as the night goes on. On the basis of that undertaking, I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.
      Clause 1 ordered to stand part of the Bill.
      Clauses 2 and 3 ordered to stand part of the Bill. Schedule agreed to.
      Bill to be reported, without amendment.
      Order for Third Reading read.—[Queen's Consent, on behalf of the Crown, signified.]
      7.30 pm
      Mr. Tony Newton: I beg to move, That the Bill be now read the Third time.
      In the interests of the time of the House, and on the understanding that if the hon. Member for Oldham, West (Mr. Meacher) says anything to which I should like to respond I shall have the leave of the House to do so, I confine myself to commending the Bill to the House.
      7.31 pm
      Mr. Meacher: That was the shortest speech commending the Third Reading of a Bill that I have heard for a long time. I do not know whether it is in anticipation of a deluge of words from me or because the Secretary of State can find so little to commend in the Bill.
      The Opposition are clear about the Bill. Despite the soothing and emollient atmosphere that developed as we went rather rapidly through the Committee stage, problems remain. There is a good argument for having a small group of activists going through the minutiae of the Bill because they do so with a precision and mutual understanding that is often helpful. However, I see no reason not to return to my initial judgment that this is a mean and nasty little Bill, the sole purpose of which is to make one group—the sick and disabled workers—pay for those concessions in social security policy that the Government have been forced to make so as to placate public opinion.
      After freezing child benefit for three years, the Government were forced this year to make a partial uprating for the first child and, as evictions of elderly residents from private residential and nursing homes increased, the Government were forced to make bigger increases in income support, although nothing like enough to eliminate the shortfall.
      It is now clear where the money to pay for these enforced concessions is to come from. Reducing employers' recovery of statutory sick pay from 100 to 80 per cent. will save £80 million in 1991–92, rising to £200 million in 1992–93, although that is offset for some employers by a compensatory reduction in employers' national insurance contribution. On top of that, as part of the package, freezing the higher rate of statutory sick pay and raising the threshold above which it is paid will save £100 million in 1991–92.

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      In effect, the Bill makes one poor group pay far the increase in benefits to another. Apart from the Treasury, no one gains from it. It is also a Bill that is uniquely without friends. I cannot recall any recent Bill with the same distinction. The CBI, the National Federation of Self Employed and Small Businesses, the TUC, the trade unions and the voluntary sector do not have a good word to say about it.
      No doubt it is a coincidence that the remaining stages of the Bill are going through the House on the first day of the new premiership. Whether the new Prime Minister is son of Thatcher—something that is disputed, although the Opposition have a clear view of it—we can say that this package is son of Thatcher. It is mean in its dealings with the low-paid and sick, particularly women. It is a further whittling away of workers' basic sick pay rights, which even employers agree—the National Federation of Self Employed and Small Businesses argues this—should be undertaken by national insurance. I never thought that I should see the day when smaller employers would argue the case for the welfare state and national insurance. The Bill is being forced on employers and employees alike without consultation, as several Tory Members have pointed out.
      The Bill has been rushed through to prevent small employers' organisations from mounting the kind of intensive lobbying that stopped the Government in their tracks 10 years ago. I cannot think of a recent example of a Bill that has had Second Reading on a Monday and its remaining stages two days later. No emergency or external conditions require this haste. It is simply to serve the Government's convenience and to block off the opposition that they know exists. Furthermore, by doing this, the Government have reneged on promises and commitments given by the previous Secretary of State in 1981 when the Government clearly accepted that they should stick to 100 per cent. compensation.
      The only rationale that the Secretary of State has been able to offer for this wretched little measure is the alleged spread of occupational sick pay schemes. The survey on which this supposed finding is based has been scoured to elicit the statistic that 91 per cent. of the work force is employed by companies with occupational sick pay schemes. Therefore, cuts in statutory sick pay by adjusting both thresholds and levels of benefit could be justified. It is on that that the Bill depends, and it is closely linked to that figure of 91 per cent.
      If the right hon. Gentleman does not yet have the message, I point out again that that 91 per cent. figure has been comprehensively discredited in even these brief proceedings, both on Second Reading and today. The survey showed that 44 per cent. of private sector employers did not offer any form of occupational sick pay and, worse than that, more than half of all firms with fewer than 10 employees have no occupational sick pay provision. With those facts, the rationale behind the Bill collapses. We have had no answer to that point, and that is a critical and decisive judgment of the Bill.
      The losers under this Bill and this package—I must remember that I should use this wider word, although on Third Reading we keep more closely to the detail of the Bill—are the 3 million employees with earnings of between £125 and £185 a week who will no longer be eligible for the higher rate of statutory sick pay. About one fifth of them
      928
      —more than 500,000—are expected to claim statutory sick pay every year, and they will lose on average £9 a week, and the majority of them are women.
      The disabled will also lose, as will those with chronic ill health, and those who have poor health prospects. The last mentioned is a wide group and includes many older workers, all of whom are having an employment warning pinned on them by the Bill. If the Bill is passed, employers everywhere, but I suspect particularly smaller employers, will have a strong financial incentive to be wary of recruiting anyone who has a health risk. The answers given by the Under-Secretary on this critical point of the Bill were thin and unconvincing. That is an important effect of which we have had no explanation.
      Small employers are also losers. We are told that 19 out of 20 businesses employ fewer than 20 people. There are many small employers in Britain now. Many of them will be significantly out of pocket as a result of the Bill when, at a time of accelerating recession, they can ill afford it. The federation made that point clearly. The losers will be those penalised with costs of up to £200 which they can ill afford and which may well entail a significant rise in unemployment. All are losers; there are no winners except the Treasury.
      For all those reasons, we strongly repudiate the Bill. It is based on a selective and grossly misleading interpretation of the evidence that is used to justify it. It creates only losers. It is unanimously rejected by all the relevant parties outside the House. It has been introduced without consultation and it is being propelled through the House—I think that all hon. Members will agree—with unseemly haste. I submit that that is to preclude an offensive, similar to that in 1979–80 when the Government were derailed, being mounted against it. The Bill will undoubtedly pin on hundreds of thousands of chronically sick and disabled people the sign "Employment risk—you have been warned" when they are seeking recruitment in the labour market.
      Few Bills have less to be said for them than this one. On those extensive and convincing grounds, we shall strongly and unequivocally repudiate the Bill in the Lobby tonight.
      7.41 pm
      Mr. Kirkwood: I shall concentrate on how the Bill affects employers, particularly small employers, but, in doing so, I do not want in any way to diminish the important points made by the hon. Member for Oldham, West (Mr. Meacher) about its effect on employees, because they are well worth considering.
      The Government do not fully appreciate the Bill's impact on businesses throughout Britain. My small rural constituency has thousands of small businesses, all part of the Border economy in south-east Scotland, and the Bill will have a profound impact on their future ability to prosper. The Government have not considered the Bill's full implications and ramifications. If they had consulted the kind of businesses that we have in my constituency they would have come to a different conclusion. I have no doubt that the Bill will be deeply inimical to business interests.
      The Secretary of State was at pains to say that only the Labour party takes billions of pounds out of the pockets of business. To a certain extent I agree, but in the fulness of time the Bill will result in a top-line saving of about £250 million. Not too many years have to pass before £250

      929
      million amounts to billions being taken from the pockets of British business, so the right hon. Gentleman is not in such a strong position as he might think.
      The Government's defence for proceeding with such speed cannot be believed. People outside will not believe that the Bill has been brought forward in this way for the convenience of small and big businesses which would have found it difficult to make the necessary administrative changes if the Government had waited until after Christmas. It is a bit like sentencing an accused before the case for the defence has been properly heard.
      The federation and, to a lesser extent, the CBI, feel that they have not had a proper hearing. Consultation has been inadequate. The Bill is being hung round their necks without a proper consideration of its implications. They tell me, and I have every sympathy with them, that, had more time been available for discussions with the Secretary of State and others in the Department, they might have been able to prevail upon them to mitigate the damage or even to prevent it.
      In recent years, the courts have had great difficulty in interpreting social security legislation that has been rushed through the House and the full weight of the appeal procedure has had to be brought into play to remedy the defects in statutes that have not been properly considered. By any objective test, this Bill has been pushed through too fast for its own good, as well as for the good of those whom it will affect.
      It is still, at this late stage, open to the Secretary of State to say that he will not push through the remaining stages in another place. If he were to say that he would hasten more slowly, the consultation process could proceed and even at the eleventh hour that would be beneficial.
      The Department's package to help small business men become familiar with the Bill adds to the confusion. The 50 per cent. reduction in the rebate is another complication adding to the burdens on small businesses.
      Some years ago the Government made great play of the fact that they were reducing the burdens on businesses. They produced glossy publications to show that they were aware of the problems and were doing something about them. Their rhetoric will ring hollow tonight if the Bill receives its Third Reading.
      The compliance costs have been largely underestimated by the Government. As the hon. Member for Oldham, West said, nobody is in favour of the Bill, because there is nothing to be said in its favour. The Bill is unfair, damaging and unnecessary. It is a deliberate and calculated move which will damage British business interests. The Secretary of State will never be able to allay that charge and I hope that it comes back time and again to haunt him. If it does, it will be entirely justified.
      7.48 pm
      Mr. Battle: When the House debated the introduction of the "next steps" agencies by the Treasury, the Secretary of State for Social Security was keen to distance himself from any idea that the method of providing social security would be privatised in any way. The Bill might not privatise the method, but it is a classic case of the privatisation of the provision of social security.
      This measure is another example of enforced privatisation, pushing responsibility for statutory sick pay
      930
      on to the employer. The Government are only a tiny step away from returning to the House to argue that SSP is no longer necessary because it merely duplicates private provision. That argument has been made before, when we debated pensions and the shift away from SERPS. I expect that the Government will be back to reduce the percentage reimbursement still further.
      The very nature of SSP is being changed from a state benefit to a mixture of state and employer provision. As hon. Members on both sides of the Chamber have pointed out, ultimately low-paid workers will pay the price for the Bill. The Social Security Advisory Committee pointed out that SSP is intended to replace lost earnings and performs an income maintenance function for those unable to work through sickness. That should be a basic function of the welfare state, provided by the taxation and national insurance system.
      It will be interesting to see whether in these new days there will be talk of collective responsibility again. We have endured 10 years in which words such as "collective", "common provision", "public", "society" and "social" have become pejorative terms and been banished from the political vocabulary. It will be interesting to discover whether the Government will start to believe again in collective responsibility. We say that the state has a collective responsibility for providing a comprehensive maintenance system for all workers, regardless of their level of pay and the nature of their work.
      Far from SSP being an important and vital source of income for low-paid workers who, through no fault of their own, are unable to work, under the present Government those benefits will be winnowed out and chipped away at until they provide only a minimum form of third party, fire and theft coverage—rather than be part of a comprehensive actuarial plan.
      The Government claim that cover is already given by the private sector, but I invite the Secretary of State to examine who will be affected by exclusion clauses on hours and rates of pay. Guess who is excluded, as usual—part-time workers and manual grades receiving low wages.
      West Yorkshire traditionally has the lowest rates of pay in the whole of the British Isles. They are even on a par with those in Northern Ireland. Leeds has 4,500 medium and small-sized firms. It does not have one large industry, such as coal and steel, nor is its employment centred on one large company. Instead, Leeds owes its prosperity to a myriad of small and medium-sized firms, many of which do not pay high wages. We have seen the shift from employment to unemployment—and, matching that, the shift from comparatively secure work to part-time, temporary and low-paid work, particularly for women.
      We are seeing a further shift to means testing. The Government call it targeting, but it is just another structural step away from universal benefits. There are not many of them left. Child benefit has already been frozen to death, and we now have another quiet cut in the social security budget to save the Treasury money, with the costs passed over to employers.
      I am not convinced by the Government's argument that the disabled will not be penalised and that the Bill cannot possibly contribute to positive discrimination against disabled and long-term sick people. One group of poor people will again be axed from benefit so that assistance can be given to another. We have seen that happen before, with housing benefit.

      931
      It is clear that the Bill is being squeezed through the House during an interregnum for the change of Tory leadership. We are told that the Government are changing their policies, but the Bill proves that they are not pulling back from a Thatcherist approach. The Bill demonstrates that Thatcherism remains intact and is on course. It is a further step in the Government's plans for privatisation and for making the poorest pay.
      7.54 pm
      Mr. Flynn: My hon. Friend referred to the interregnum, black hole or news vacuum in which we find ourselves at this moment. New benefits—and there are some—are being introduced by the Government with a great fanfare of trumpets and trombones, while they make cuts elsewhere.
      I will be generous to the Secretary of State because he has been re-employed in his old job. The kindest interpretation that we can place on the right hon. Gentleman's actions is that he does not understand the basis of the report on which the Bill is founded. The Secretary of State laughs. I will not draw any conclusions from that, because I refuse to be sidetracked. Nevertheless, the right hon. Gentleman has tonight admitted his unabashed admiration for some of his own extempore words during the Second Reading debate. He quoted them with some satisfaction. However, he may find some of his other statements less admirable on reflection.
      When we hit on the great misconception behind the Bill, and when we question the figure of 91 per cent., relating to the number of employers offering sick pay schemes, the Secretary of State said:
      "Under some schemes, some new employees may have to serve a qualification period before becoming eligible for occupational sick pay. A typical qualifying period for short-term sickness cover is three months. However, it is worth remembering that half all private-sector schemes … have no exclusion clauses at all."
      The original IFF survey qualifies that argument:
      "However, those schemes which are more likely to have exclusion clauses are the larger private establishments, (72 per cent.) and public sector organisations (67 per cent.). Thus, almost three quarters (72 per cent.) of employees working in establishments offering short-term cover are potentially affected by eligibility factors. Schemes in the finance business services sector are least likely to have any exclusion clauses."
      Occupational schemes do exist, but many are far from adequate.
      On Second Reading, the Secretary of State said also:
      "where there is a qualifying period, it would typically be about three months—perhaps, in some cases, six months".
      He gave the impression that three months is the norm, but that in some instances a six-month term might apply.However, the IFF report states:
      "The factor which most frequently affects employees' entitlement to short-term sick pay is length of time with the company. The qualifying period is typically between 3–12 months. It is the larger employers … who are more likely to have this exemption clause. As a result, about half (50 per cent.) of the work force is potentially affected."
      The Secretary of State was wrong, because a typical exclusion is not three months but between three and 12 months.
      Arguing that the qualifying period should be compared with state sickness benefit, the Secretary of State said:
      "where there is a qualifying period, it would typically be about three months—perhaps, in some cases six months—which is substantially less than the qualifying period for state sickness benefit."—[Official Report, 26 November 1990; Vol. 181, c. 633–34.]
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      That comparison is totally meaningless. State sickness benefit entitlement does not depend on length of service with a particular employer.
      From day one of their employment, everyone is qualified, provided that they have enough national insurance contributions credited to them in the past two years and regardless of whether they have been working for that employer or not. A more relevant comparison would be with statutory sick pay, which is payable from day one of the period of employment, with no contribution conditions.
      Those misunderstandings by the Secretary of State strike at the root of the Bill and the justification for it. I was recently speaking to a total stranger who happened to read the deliberations of the meetings of the Standing Committee that considered the Social Security Bill last year. He identified me by a label I was wearing—as we often do. He told me that he had read the proceedings on the Social Security Bill and—as a student of history—he thought that it was similar to an account of what had happened in the Reichstag in the 1930s. The Opposition are constantly attacking Bills, in good faith. We undermine the rationale of the Government's case, but we do not get a reply. We merely have the Government's steamroller, bulldozing through legislation, using the muscle of their majority.
      Social security legislation has followed two main trends in the past decade. That is the way that people see it. Year after year we have been copying the Americans and repeating the mistakes made by the Reagan regime. The result of all the myths that fed the Reagan mythology is that 3 million homeless people are now on the streets of America—the people whom Bush has described as "America's shame". Visitors to the most prosperous cities in the United States see—side by side with obscene riches—groups of people, many of whom are mentally ill, camping out. We are progressing blindly and stupidly in that direction year after year.
      The second trend is a return to the last century. We are being compelled in that direction by the falsely named No Turning Back group. Much of what has been argued in the debate would take us back to the era before 1911, when the social welfare programme started in this country for very good reasons. Perhaps we should return to the justification for our social welfare programme, which has been built up over that long period of time. We are gradually tearing it down and turning back to a cruel and unfair past.
      The Bill will re-establish all the uncertainty and anxiety of sickness, made worse by the knowledge that one does not have a secure income. The Bill is mean, malicious and ill-conceived, and it hits most strongly at the people who have been short-changed by life—those who have been cheated by disability or who are daily under-rewarded with low pay. The Bill is a disgrace.
      Madam Deputy Speaker (Miss Betty Boothroyd): Will the Secretary of State make it clear that he has signified the Queen's Consent?
      8.4 pm
      Mr. Newton: I am glad to confirm that I have signified giving the Queen's Consent—[Interruption.] If the hon. Member for Birmingham, Ladywood (Ms. Short) wants an explanation of the Queen's Consent, I invite the Chair

      933
      to give it because I cannot remember it. I know that it is not lese-majesté, and that I have to do it, and I think that I have satisfied the Table that I have done so.
      I am glad that I am not the speech writer for the hon. Member for Oldham, West (Mr. Meacher) but I am even more glad that I am not the speech writer for the hon. Member for Newport, West (Mr. Flynn). After I had listened to the former, I thought that it would be impossible to incorporate any more exaggeration, hyperbole and general overstatement into a speech, but then I heard the hon. Member for Newport, West, who took the biscuit.
      In the interests of brevity I shall not seek to answer all the nonsense trotted out in the past few minutes. I merely observe that it is mildly ironic that—in view of the new-found European enthusiasm sometimes to be found on the Opposition Benches—on a number of occasions Opposition Members urge us to go in the direction of the more generous provisions of this kind in Europe. The remarks of the hon. Member for Newport, West about returning to the 19th century should be considered against the background that Denmark is the only European country that provides a cash benefit for sickness which is solely funded by the state, and that, of the other 11 EC countries, six provide no state subsidy and in most countries, the major payment comes from the employer.
      The Low Pay Unit report, which I suspect is the source of much of the stuff that we have heard in the House in the past few days, quotes Luxembourg where employees get 100 per cent. of earnings for a year when they are sick. That is fine. Compare that rhetoric which has been used in the debate. One discovers that that benefit is paid entirely by the employer. The only state involvement is 50 per cent. of the administration costs.
      Mr. Allen McKay: I am sure that the right hon. Gentleman does not wish to mislead the House. When he quotes information like that, he should also take into consideration the employees' work contracts and the salaries that they receive to make up for it.
      Mr. Newton: I am also taking employers' rights here into consideration, as well as the fact that a large part of the work force is covered not only by the sort of arrangements that we are talking about tonight, but by occupational sick pay schemes.
      I am not going to return to that argument. I merely point out that anyone who reads the IFF report and its clear-cut conclusions about the growth in coverage of occupational sick pay schemes, would have grave reservations about some of the remarks made in the debate. I shall not return to that subject because it is largely irrelevant to the Bill, which—as is common consent between the Front Benches—does not affect the rights of any employee. No-one's entitlement to statutory sick pay will be affected by the Bill. All that will be affected is the way in which statutory sick pay is funded, and the balance between funding it by the state and by the employer—it is a change in balance.
      That change, which amounts to about £250 million, is accompanied by reductions in employer national insurance contributions of broadly the same amount. Although that is not in the Bill, it is clearly associated with the argument for it. In that context, against the
      934
      background of those figures, and the fact that no employees' rights are affected by the Bill, I reject many of the arguments put to me in the past few minutes out of hand. I reject the accusations made, and I commend the Third Reading of the Bill to the House.
      Question put, That the Bill be now read the Third time:—
      The House divided: Ayes 156, Noes 114.

      Division No. 14]

      [8.07 pm

      AYES

      Adley, Robert

      Hayhoe, Rt Hon Sir Barney

      Alison, Rt Hon Michael

      Hayward, Robert

      Allason, Rupert

      Heathcoat-Amory, David

      Amess, David

      Hind, Kenneth

      Amos, Alan

      Hordern, Sir Peter

      Arbuthnot, James

      Howard, Rt Hon Michael

      Arnold, Jacques (Gravesham)

      Howarth, G. (Cannock & B'wd)

      Arnold, Sir Thomas

      Howell, Ralph (North Norfolk)

      Ashby, David

      Hunt, David (Wirral W)

      Atkins, Robert

      Hunt, Sir John (Ravensbourne)

      Atkinson, David

      Hunter, Andrew

      Baker, Rt Hon K. (Mole Valley)

      Irvine, Michael

      Baker, Nicholas (Dorset N)

      Jack, Michael

      Beaumont-Dark, Anthony

      Janman, Tim

      Bellingham, Henry

      Jones, Gwilym (Cardiff N)

      Bennett, Nicholas (Pembroke)

      Jones, Robert B (Herts W)

      Benyon, W.

      Kellett-Bowman, Dame Elaine

      Bevan, David Gilroy

      King, Roger (B'ham N'thfield)

      Blackburn, Dr John G.

      Knapman, Roger

      Boscawen, Hon Robert

      Knight, Greg (Derby North)

      Boswell, Tim

      Knight, Dame Jill (Edgbaston)

      Bowden, Gerald (Dulwich)

      Knox, David

      Bowis, John

      Lang, Ian

      Bright, Graham

      Lawrence, Ivan

      Brown, Michael (Brigg & Cl't's)

      Lennox-Boyd, Hon Mark

      Bruce, Ian (Dorset South)

      Lightbown, David

      Burns, Simon

      Lloyd, Peter (Fareham)

      Butcher, John

      Lyell, Rt Hon Sir Nicholas

      Carrington, Matthew

      Maclean, David

      Carttiss, Michael

      McLoughlin, Patrick

      Chapman, Sydney

      Madel, David

      Chope, Christopher

      Mans, Keith

      Churchill, Mr

      Maples, John

      Clark, Sir W. (Croydon S)

      Marshall, John (Hendon S)

      Coombs, Simon (Swindon)

      Marshall, Sir Michael (Arundel)

      Cormack, Patrick

      Martin, David (Portsmouth S)

      Couchman, James

      Mates, Michael

      Cran, James

      Meyer, Sir Anthony

      Curry, David

      Miller, Sir Hal

      Davis, David (Boothferry)

      Mills, Iain

      Day, Stephen

      Mitchell, Andrew (Gedling)

      Dunn, Bob

      Mitchell, Sir David

      Eggar, Tim

      Moate, Roger

      Evennett, David

      Morrison, Sir Charles

      Favell, Tony

      Moss, Malcolm

      Field, Barry (Isle of Wight)

      Neale, Gerrard

      Fishburn, John Dudley

      Neubert, Michael

      Forman, Nigel

      Newton, Rt Hon Tony

      Forsyth, Michael (Stirling)

      Nicholson, David (Taunton)

      Forth, Eric

      Norris, Steve

      Freeman, Roger

      Page, Richard

      Fry, Peter

      Paice, James

      Gale, Roger

      Pawsey, James

      Glyn, Dr Sir Alan

      Peacock, Mrs Elizabeth

      Goodson-Wickes, Dr Charles

      Porter, David (Waveney)

      Grant, Sir Anthony (CambsSW)

      Portillo, Michael

      Greenway, Harry (Ealing N)

      Price, Sir David

      Greenway, John (Ryedale)

      Raffan, Keith

      Gregory, Conal

      Raison, Rt Hon Timothy

      Griffiths, Sir Eldon (Bury St E')

      Rhodes James, Robert

      Griffiths, Peter (Portsmouth N)

      Rifkind, Rt Hon Malcolm

      Hamilton, Neil (Tatton)

      Roberts, Sir Wyn (Conwy)

      Hanley, Jeremy

      Sackville, Hon Tom

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

      Shaw, Sir Giles (Pudsey)

      Hargreaves, Ken (Hyndburn)

      Shephard, Mrs G. (Norfolk SW)

      Harris, David

      Shepherd, Richard (Aldridge)

      Haselhurst, Alan

      Smith, Tim (Beaconsfield)

      935

      Speller, Tony

      Walden, George

      Spicer, Sir Jim (Dorset W)

      Waller, Gary

      Stevens, Lewis

      Ward, John

      Taylor, John M (Solihull)

      Wardle, Charles (Bexhill)

      Tebbit, Rt Hon Norman

      Wheeler, Sir John

      Temple-Morris, Peter

      Widdecombe, Ann

      Thompson, D. (Calder Valley)

      Wood, Timothy

      Thompson, Patrick (Norwich N)

      Yeo, Tim

      Thornton, Malcolm

      Young, Sir George (Acton)

      Thurnham, Peter

      Tracey, Richard

      Tellers for the Ayes:

      Twinn, Dr Ian

      Mr. Irvine Patnick and Mr. Timothy Kirkhope.

      Waddington, Rt Hon David

      NOES

      Allen, Graham

      Hughes, Robert (Aberdeen N)

      Alton, David

      Hughes, Roy (Newport E)

      Anderson, Donald

      Jones, Barry (Alyn & Deeside)

      Ashdown, Rt Hon Paddy

      Jones, Martyn (Clwyd S W)

      Banks, Tony (Newham NW)

      Kilfedder, James

      Barnes, Harry (Derbyshire NE)

      Kirkwood, Archy

      Barron, Kevin

      Leighton, Ron

      Beith, A. J.

      Lestor, Joan (Eccles)

      Bellotti, David

      Lewis, Terry

      Benton, Joseph

      Litherland, Robert

      Bermingham, Gerald

      Livingstone, Ken

      Blunkett, David

      Livsey, Richard

      Boateng, Paul

      Lloyd, Tony (Stretford)

      Boyes, Roland

      Lofthouse, Geoffrey

      Bray, Dr Jeremy

      Loyden, Eddie

      Buckley, George J.

      McAllion, John

      Caborn, Richard

      McKay, Allen (Barnsley West)

      Campbell, Menzies (Fife NE)

      McWilliam, John

      Campbell, Ron (Blyth Valley)

      Mahon, Mrs Alice

      Campbell-Savours, D. N.

      Marek, Dr John

      Carlile, Alex (Mont'g)

      Meacher, Michael

      Clay, Bob

      Meale, Alan

      Clelland, David

      Michael, Alun

      Clwyd, Mrs Ann

      Michie, Bill (Sheffield Heeley)

      Coleman, Donald

      Michie, Mrs Ray (Arg'l & Bute)

      Cook, Robin (Livingston)

      Morley, Elliot

      Corbett, Robin

      Mowlam, Marjorie

      Cousins, Jim

      Mullin, Chris

      Cox, Tom

      Murphy, Paul

      Cryer, Bob

      Nellist, Dave

      Cummings, John

      O'Brien, William

      Davies, Ron (Caerphilly)

      O'Hara, Edward

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

      Pike, Peter L.

      Dixon, Don

      Prescott, John

      Doran, Frank

      Primarolo, Dawn

      Dunwoody, Hon Mrs Gwyneth

      Quin, Ms Joyce

      Eadie, Alexander

      Redmond, Martin

      Evans, John (St Helens N)

      Rooker, Jeff

      Ewing, Harry (Falkirk E)

      Rooney, Terence

      Ewing, Mrs Margaret (Moray)

      Ruddock, Joan

      Field, Frank (Birkenhead)

      Sheerman, Barry

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

      Short, Clare

      Fisher, Mark

      Skinner, Dennis

      Flannery, Martin

      Smith, J. P. (Vale of Glam)

      Flynn, Paul

      Steel, Rt Hon Sir David

      Foot, Rt Hon Michael

      Taylor, Rt Hon J. D. (S'ford)

      Foster, Derek

      Thomas, Dr Dafydd Elis

      Galloway, George

      Thompson, Jack (Wansbeck)

      Gilbert, Rt Hon Dr John

      Turner, Dennis

      Golding, Mrs Llin

      Wallace, James

      Gordon, Mildred

      Wareing, Robert N.

      Griffiths, Win (Bridgend)

      Williams, Alan W. (Carm'then)

      Hardy, Peter

      Winnick, David

      Heal, Mrs Sylvia

      Wise, Mrs Audrey

      Hinchliffe, David

      Young, David (Bolton SE)

      Hogg, N. (C'nauld & Kilsyth)

      Home Robertson, John

      Tellers for the Noes:

      Howarth, George (Knowsley N)

      Mr. Frank Haynes and Mr. John Battle.

      Howells, Geraint

      Hughes, John (Coventry NE)

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

    Development Board for Rural Wales Bill
    Order for Second Reading read.
    8.19 pm
    The Secretary of State for Wales (Mr. David Hunt): I beg to move, That the Bill be now read a Second time.
    The purpose of the Bill, as effected by clause 1, is to increase the statutory financial limit for the Development Board for Rural Wales from the present level of £100 million to £175 million. It may assist the House if I explain the background to the limit.
    The Development of Rural Wales Act 1976 set a limit of £25 million, which was raised to £40 million in 1980 and further increased to its current level of £100 million by the Industry Act 1981. At the end of the current financial year, expenditure counting against the financial limit will he some £90 million. Present forecasts suggest, therefore, that the limit will be reached during the 1991–92 financial year. It is therefore necessary to raise it now so as not to inhibit the development board's contribution to the redevelopment of that region in Wales for which it is responsible.
    The development board's key objective is the expansion and diversification of the economy of mid-Wales. Its area covers the district of Ceredigion in Dyfed, Meirionnydd in Gwynedd and all three districts of Powys, Montgomeryshire, Radnorshire and Brecon. The area covers some 40 per cent. of Wales. About 8 per cent. of the Welsh population reside in it and, according to the mid-year estimates, since 1981 the number has risen from 203,100 to the 1988 level of 213,500.
    There is little doubt that a winning pace has been set for the economic and social development of mid-Wales. During 1989–90, more than 260,000 sq ft of factory space was allocated, some 50 per cent. of which was taken by businesses already established in mid-Wales. Those projects are expected to create more than 1,000 jobs in the next three years. During 1989–90, just under 140,000 sq ft of factory space was built, and a further 165,000 sq ft is being built under the 1990–91 programme.
    Despite the slowdown in the economy, factory allocations in mid-Wales have shown an increase on the first six months of last year. About 57 units, representing 182,074 sq ft of factory space, have been allocated from April to September this year, which compares more than favourably with 49 units totalling 154,624 sq ft in 1989. Those allocations are expected to create 680 jobs in the next three years.
    The chairman of the development board, Mr. Glyn Davies, said at the presentation of the half-yearly report in October:
    "There is still encouraging growth in the region, with many companies forging ahead with expansion plans, supported by the Development Board's attractive grants and loans."
    I understand that inquiries for factories are significantly higher than last year.
    The development board holds some 473 factories—1·9 million sq ft—and has sold a further 96—1·3 million sq ft. They provide more than 8,500 jobs, in the main for the indigenous population of mid-Wales. About 40 per cent. of the development board's stock has already been sold to the private sector and by 1993–94 it is expected that 47 per cent. of the floor space will have been sold.
    The board's activity is focused on encouraging and strengthening the private sector within its area. Its economic strategy is contingent on a thriving private

    937
    sector, creating jobs and prosperity. With that in mind, I have taken a particular interest in the launch of the board's recent policy document, "Strategy for the 90s," which contains details of its investment plans for the next three years and its increased commitment to the more remote western half of its area. We can have no doubt about the success of its policy on the eastern side, an area which enjoys a fair degree of prosperity and low unemployment. The Government's approach is to consolidate recent success by helping to build better businesses and to help ensure a better life style for all in the board's area. The result will be a significantly stronger and more diversified economy.
    It is appropriate to mention how important it is for there to be continued close co-operation between the board, the Welsh Development Agency, the Welsh tourist board and, of course, local authorities and all public bodies. The development board is particularly keen to build on its achievement and I applaud that approach.
    Hon. Members will be aware that there are two major economic challenges in rural areas: first, rural decline and the exodus of population from rural to urban areas; and, secondly, the difficulty of sustaining communities in the most vulnerable areas. Unless rural Wales can achieve a viable economic base, outward migration of young people will continue. I believe that we are making good progress on that front.
    In 1972, on the night of the census, the development board area had a population of 185,000. The 1988 mid-year estimates show that the population in the area is now 213,000, which is an increase of 15·2 per cent. That increase coincides with the development of the board's policies since its creation in 1977. However, the Minister of State and I are well aware of the continuing difficulties with the loss of young people from the area, continuing depopulation of the most remote rural areas and the challenge of a worsening age structure, with high dependency ratios and a relatively high proportion of people of pensionable age. Without continued net inward migration, the population of mid-Wales would not be able to replace itself.
    Our policies help to create an environment in which young people can find new jobs in manufacturing industry, tourism and the service industries, providing a much greater diversity of employment opportunities. Such achievements help the creation of a much-improved quality of life for local people as well as attracting inward investment. All that helps to create a new confidence in the region.
    There is little doubt that entrepreneurship has been cultivated and is beginning to flourish in rural Wales.
    Mr. Win Griffiths: The Secretary of State seems to have moved from the challenges facing the Government in rural mid-Wales without referring to the difficulties being experienced in agriculture, which have become more pronounced since the development board considered its strategy for the 1990s. What new account will be taken of those agriculture difficulties, and will the Secretary of State refer to them in his speech?
    Mr. Hunt: I certainly will. I assure the hon. Gentleman that agriculture as an industry is vital for the whole of Wales. However, that is not part of the work of the
    938
    Development Board for Rural Wales; it is very much the concern of the Welsh Office and its Agriculture Department. It is part of an overall picture. There must be a continuing welding together of policies in this important area if we are to ensure the continued revival of the rural areas of Wales. I agree with the hon. Gentleman in that respect.
    There is little doubt that entrepreneurship has been cultivated and is beginning to flourish in rural Wales. I was pleased that last year nearly 700 people took part in the development board's "Getting into Business" courses operated through the network of seven local business centres. Some 5,300 inquiries were handled, 2,000 of which were from new clients. It is estimated that about 400 new businesses were formed in 1989–90.
    It was just over a year ago that the development board launched its western initiative with the determination to ensure that the prosperity, employment and business confidence seen so clearly on its eastern side should be spread to the more rural areas on its western side.
    Mr. Christopher Gill: My right hon. Friend mentioned the board's success in improving circumstances in the eastern part of Wales. Does he concede that some of the problems which he described as coming within his responsibility exist in parts of England adjoining Wales? The effect of the assistance that he can give to enterprises in Wales can impinge, sometimes seriously, on enterprises in England which do not have access to the same funds. Perhaps my right hon. Friend can give some comfort on that point.
    Mr. Hunt: I wish that I could give my hon. Friend comfort, but this is a matter not for me but for my right hon. Friends in England. Tonight we are addressing the problems of rural Wales, not those of Ludlow and other adjoining parts of England. My hon. Friend's point is a matter for another occasion, but I recognise that he has had an opportunity to draw attention to the importance always of looking at the overall impact of policies such as those that we are purusing in Wales and their impact on adjoining areas of England. I sympathise with my hon. Friend, but I hope that he will understand if I cannot answer his point.
    The development board therefore diverted some £1 million of its existing resources to its areas on the western edge of Brecknock, Radnorshire and Montgomeryshire, as well as the whole of Meirionnydd and Ceredigion. The initiative has many strands including the allocation of more staff by the development board, the creation of more business premises, enhanced promotional marketing of the areas, and the intensification of the business start-up and business growth programmes, including the opening of a satellite office in Machynlleth staffed by Welsh speakers and offering business advice.
    I am encouraged by the progress which has already been made and we need now to consolidate and build on this impressive start. The development board has prepared a special rural action programme which will enable the work of the western initiative to be carried forward with increased factory construction and economic and rural support measures. I have been convinced by the quality of the case put forward by the chairman and members of the development board and have, therefore, in addition to a £400,000 increase in baseline provision, agreed that an extra £1 million will be available in 1991–92 for the special

    939
    rural action programme. The budget contribution from the Welsh Office to the board will now rise from £12·7 million to £14·1 million—an 11 per cent. increase in its budget.
    Dr. Dafydd Elis Thomas: I am grateful to the right hon. Gentleman for making that announcement at the start of the debate. Will he confirm that this is new and additional funding to the board and that it is not a recycling of promises made earlier?
    Mr. Hunt: I always have difficulty when I am asked about recycling of promises made earlier because I have been Secretary of State for Wales for only six months. So far as I am concerned, this is extra money for these plans next year over this year and I hope that it will give an extra boost to the special rural action programme.
    Mr. Barry Jones: Will the right hon. Gentleman give us a breakdown some time tonight as to where the money will go and how much of it is new money?
    Mr. Hunt: As I explained, there will be an increase in the total resources for the Development Board for Rural Wales from £12·7 million to £14·1 million—an 11 per cent. increase. I believe that that will be more than enough to cope with the board's objectives. I have identified one aspect—the special rural action programme—but I should be happy to give the hon. Gentleman any further facts and statistics later.
    Mr. Paul Flynn: The Minister made it clear that he was not responsible for the actions of his predecessor. Will he reflect on the unfortunate acronym for the rural action programme, where he is inviting people to take the RAP? Will he give us some guarantee that these action programmes are in line with modern thinking and that they will be environmentally friendly? It is important that any new agriculture programmes are benign towards the environment.
    Mr. Hunt: I have two points to make in answer to the hon. Gentleman. First, I take full responsibility for the actions of my predecessors—although not those going back beyond 1979—and I am not seeking to avoid responsibility. I was merely being a little cautious in response to the hon. Member for Meirionnydd Nant Conwy (Dr. Thomas), which I think was justified in the light of experience. I was extra-cautious so that I did not miss some comment that might have been made before I became Secretary of State for Wales.
    Secondly, on RAP, of course I shall bring the hon. Gentleman's remarks to the attention of those who administer the programme. It is important that we relate such programmes to modern-day circumstances and requirements.
    I confirm that I shall take a close and great interest in the development board's package of measures designed to help the western part of the region. I am certainly confident that, in using this "fine brush" technique, the development board will be able to achieve greater success.
    The board's primary objective is the creation of a self-sustaining economy and this is being achieved by providing an ever-widening manufacturing base to create high-quality jobs which can complement the quality of life in terms of culture, language and the scenic beauty of mid-Wales.
    940
    I should like to return to the comments by the hon. Member for Bridgend (Mr. Griffiths) about agriculture. Yesterday, I was with several hon. Members who attended the Royal Agricultural Society's winter fair. I had the opportunity to say some words about agriculture. I reaffirm how vital is the provision of a healthy agricultural economy in Wales. It underpins the economic, social and environmental structure of Wales.
    I think that you would be quick to point out, Madam Deputy Speaker, that we are dealing with the Development Board for Rural Wales, not with agricultural policy; but, in so far as you allow hon. Members to raise points relating to agriculture, I shall—with the leave of the House—try to respond to them at the end of the debate.
    I urge the House to support the Bill, so that the development board can continue its fine work and achieve the objectives that the Government have set it.
    8.39 pm
    Mr. Barry Jones: I welcome the extra £1 million. It can, I think, be defined as new money; we shall hear confirmation of its newness later if the Secretary of State catches your eye, Madam Deputy Speaker, and perhaps also learn for what purposes it will be earmarked.
    I agree with the right hon. Gentleman's identification of the major problems—not least rural decline, the exodus and the difficulty of sustaining communities. The former chairman, Mr. Leslie Morgan, did some very good work, and I think that rural Wales will also miss the work of Dr. Iain Skewis, whom I knew for many years. I understand that the new chairman is making himself very accessible, and trying to be helpful to Members. Much good work has been done and is still being done, and we shall continue to support and encourage the board in the same way as the right hon. Gentleman.
    I remind the House that it was a Labour Government who enacted the legislation to set up the board——
    Mr. Donald Coleman: Will my hon. Friend also remind the Secretary of State that, had it not been for the work of his predecessors before 1979, he would not be at the Dispatch Box this evening, announcing the granting of this welcome new money?
    Mr. Jones: My hon. Friend has a long memory; he is also a skilled parliamentarian. He knows that, when the Bill to set up the Development Board for Rural Wales was in Committee, the attitude of the then Opposition—the right hon. Gentleman's party—was less than encouraging, and the stance and style of the then hon. Member for Pembroke—now Lord Crickhowell—less than welcoming. Perhaps it was the effect of the hot summer; he was occasionally choleric.
    From my perusal of Hansard, I note that members of the Committee included the hon. Members for Ceredigion and Pembroke, North (Mr. Howells) and for Meirionnydd Nant Conwy (Dr. Thomas). Time has passed: some of the others have retired, some have died and some have been ennobled. It was my right hon. and learned Friend the Member for Aberavon (Mr. Morris), however, who conceived the measure and pushed it through. Perhaps his inspiration was the great Mr. Jim Griffiths.
    Dr. Dafydd Elis Thomas: I recollect that the board was conceived in Llandyssul by Viscount Tonypandy, at a particularly difficult time—the time of the 1970 general election.
    Mr. Jones: The identification of my former right hon. Friend Viscount Tonypandy with the conception of legislation is indeed apposite. I remember the welcome that the hon. Gentleman gave the measure: he used the word "unique".
    The Bill concerns such towns as Blaenau Ffestiniog, Newtown, Welshpool, Llandidrod Wells, Builth Wells, Brecon, Rhyader, Aberystwyth, Penrhyndeudraeth, Llanfyllin, Hay, Crickhowell and Ystradgynlais. These are small, isolated and beautiful towns, and their citizens, whose quality and standard of living we are now to debate, are some of the finest citizens in the British Isles. All is not well; the position is not exactly as the Secretary of State described it. Given the present rate of increase—on which I agree with the right hon. Gentleman—the £100 million limit will probably be reached in 1991–92. More money is therefore needed if the current plans for the funding of the board next year are to proceed: that is why we are here, and why we want to give a fair wind to the Bill.
    An increase in the financial limit, however, will not of itself provide any guide to the future level of expenditure or Government funding. I hope that the Secretary of State does speak later, so that we may hear about the various headings under which he intends the new money to be spent.
    Page 23 of the annual report draws attention to continued high interest rates, and to the uncertainty of national economic indicators. Page 24 emphasises that the availability of more land that can be developed to meet future needs is an urgent priority; from my reading of the report, I judge that there is a problem there. It also refers to an acute housing shortage in the area of the board's jurisdiction. Another sobering passage refers to the effects of a tightening economy and to business failures. I feel that I should stress that, given that the Secretary of State chose to present the position in the best possible light—as he is, of course, entitled to do. I hope that the Government can assist the board by meeting these difficult challenges.
    Rural Wales needs to hold on to its young people. It needs more, and lasting, job opportunities; it needs stronger and more diverse businesses; it needs a better transport infrastructure; and it demonstrably needs more help from the Government. It needs much more support and much more leadership. I hope that the Bill will mean positive change.
    The new money relates to the board's priorities, which should be emphasised again and again. We need to target manufacturing industry—the board refers to "focus development". It also mentions the creation, or maintenance of 1,500 jobs a year. I welcome the news of the new Machynlleth office and the co-operation that has taken place with other bodies; I also welcome the special action in the west. Those are laudable objectives and I think that the Bill will help to achieve them.
    I hope that ministerial financial backing will improve communications in Wales. I see Powys as the bridge between north and south Wales; without a shadow of a doubt, there is a pressing need for improved road links between north and south. The journey time is appalling, as
    942
    the Secretary of State has found out, and he may agree that the quality of the roads between the two great communities is also unacceptable.
    I think that the north-south link militates against bringing the two Wales together. Better road links would mean better social, cultural and economic links. A good link would help to unify Wales and we want more unity there. The country faces many challenges, not least those of 1992, the channel tunnel, the bewildering changes in eastern Europe and the many changes presaged in the Common Market.
    We need to end the near permanent division of Wales caused by poor communications. A better road would lead to more unity. As the end of the century draws near and after the receipt of £87 billion worth of North sea oil revenue, we still have not improved the communications between north and south Wales. That is not good enough. The Secretary of State should devise a strategy as soon as possible.
    I also hope that the Bill will help the many low-paid workers in rural Wales. Rural Wales has a low pay problem every bit as bad as that in the industrialised south and north of Wales. Powys is the heart of rural Wales and I am sorry to tell the House that it has the highest proportion of very low paid manual workers in Wales. The House will not like the statistics that I have obtained from the Library's research division. They show that the average gross normal weekly earnings of workers in Powys was £220, compared with a Welsh average of £258 and a national average of £295. The Library statistics show that the average for Powys was the lowest among the Welsh counties.
    Mr. Richard Livsey: Is it not odd that over the past five years the Welsh Office statisticians have been unable to publish the figures and the hon. Gentleman had to go to the Library to get them to expose the low wages in Powys?
    Mr. Jones: I warmly agree with the hon. Gentleman. So far as these matters are concerned, the extreme modesty of the Welsh Office is curiouser and curiouser. In April 1990, 36 per cent. of male employees in Powys earned under £180 a week compared to 26 per cent. in Wales and 19 per cent. in Great Britain as a whole. The situation is even worse than that. Only 12 per cent. of male employees in Powys earned more than £320 compared to 22 per cent. for Wales as a whole and 31 per cent. in Great Britain. The ratio for Powys was the lowest among the Welsh counties.
    Among full-time male employees reporting normal weekly hours, the average hourly earnings in Powys were £5·18 in comparison to the Welsh average of £5·95 and the national average of £6·89. Again, the figure for Powys was the lowest among the Welsh counties.
    The Government have had almost 12 years of office and those incredible statistics have had to be dragged out of them. That is a disgrace. I hope that the Government Front-Bench spokesman will respond to that and tell us what policies the Government will follow.
    Mr. Gill: Would the hon. Gentleman care to highlight the other significant figure which he obviously has not obtained from the Library, which is that the community charge in Powys will be about £170, compared with £310 in the adjoining county which it is my privilege to represent?
    Mr. Jones: That was an asinine and unwelcome intervention. The poll tax is hated in Wales. It has been rejected. Many people in mid-Wales have been hit greatly by the imposition of the poll tax. The Welsh people realise that a Conservative Government have imposed that unjust tax on our people.
    Mr. Gill: Will the hon. Gentleman give way?
    Mr. Jones: No, sit down.
    The rural economy faces immense challenges in the short term as a result of the Government's economic mismanagement and in the longer term from the uncertain future facing farming. The upland farmer needs urgent help. He faces a genuine and deepening crisis. Does anything in this legislation offer help to the upland farmer? He struggles alone with his family in an inhospitable climate at considerable altitude for little profit, but with much physical hard work. Those farmers can only raise sheep. There is no alternative.
    The National Farmers Union and the Farmers Union of Wales have told me about the plight of their members. I have met them and they were convincing. If that farming community does not receive help, it will be bankrupt. If the family farm folds, so will the village garage, the village shop, the village school, the village surgery and the village carrier. Communities in that part of Wales which are centuries old are now at risk. This is an unhappy time and for once perhaps the poetry of R. S. Thomas may be appropriate. Certainly "bitter is the taste".
    Will this legislation spark an imaginative and practical response from the Government? So far the Government have been lethargic and evasive on those issues. This debate is about a way of life, a culture, a language and a landscape which are at risk and under severe pressure. As the common agricultural policy is dismantled, 'Welsh Office Ministers should produce a regime to sustain the upland population.
    Why has the Secretary of State not been to Brussels to fight his corner for those communities? When my right hon. and learned Friend the Member for Aberavon was Secretary of State, he went, did his best and was successful. I remember my journey to Brussels with the then Minister of Agriculture, the late Mr. John Silkin. We were also successful and we kept the milk marketing board in being.
    How sorry I am to see the predicament facing the Secretary of State. He backed the wrong horse in the leadership stakes. Clearly he has been under the spell of his still substantial colleague, the right hon. Member for Worcester (Mr. Walker), the former Secretary of State. Perhaps his colleague threw some dust in his eyes or gave him one of the many press releases that he produced when he was Secretary of State. I am sorry to note the right hon. Gentleman's predicament. I remind him that yesterday he said:
    "The best person has won and we are all united behind John Major".
    I should like the right hon. Gentleman to set the record straight because the Western Mail states:
    "Mr. Poll Tax Hunt backs Heseltine".
    That was one day, but the next day the right hon. Gentleman said that the best person had won. Well, has the best person won? The Secretary of State and his team did not vote for the best man——
    Madam Deputy Speaker (Miss Betty Boothroyd): Order. We can all have a little fun with these matters, but
    944
    the hon. Gentleman is straying a long way from the Bill. I am very tolerant, but I am sure that he will come back to his text.
    Mr. Barry Jones: A charmingly made point, Madam Deputy Speaker. I shall obey your silken stricture and conclude simply by saying, "O ye of little faith," in the knowledge that other right hon. and hon. Members wish to speak.
    My criticism is not of the board. It is doing its job effectively and with dedication. My criticism is of the ministerial team. Clearly, there is a lack of direction and, because of the Ministers, rural Wales is missing out at a time of crisis. Farming is facing major challenges. The employment scene is fragile. The schools service, the health service and the transport service are all buckling under the intense pressure. The poll tax is proving oppressive to our people. It is blighting their lives. The Bill is a stark reminder that Ministers must face up their responsibilities. I insist that they devise a strategy that will lead to success in rural Wales. I want them to give a lead, but so far they have failed.
    9 pm
    Mr. Keith Raffan: The hon. Member for Alyn and Deeside (Mr. Jones) should know all about backing the wrong horse. He was the parliamentary private secretary to the right hon. Member for Leeds, East (Mr. Healey), who—
    Madam Deputy Speaker: Order. What is good for the goose is good for the gander.
    Mr. Raffan: Exactly. I could not agree with you more, Madam Deputy Speaker and I am delighted to hear that. That was my one sentence on the subject. I could not resist the temptation of knifing the hon. Gentleman good and proper.
    I shall speak only briefly, because my constituency is not covered by the Development Board for Rural Wales. I am grateful to the hon. Member for Meirionnydd Nant Conwy (Dr. Thomas) for the dispensation so generously given. My excuse for making this brief speech is that, together with other hon. Members present in the Chamber, as a member of the Select Committee on Welsh Affairs I have, on several occasions, taken oral evidence from the DBRW. I join the hon. Member for Alyn and Deeside in paying tribute to its previous chairman, Mr. Leslie Morgan, and to Dr. Jain Skewis, who is a fellow Scotsman. We are everywhere in Wales. I am glad that the hon. Gentleman agrees that Scotsmen do such good work in the Principality. I pay tribute also to Mr. Glyn Davies, the new chairman of the DBRW.
    I shall refer later to the Select Committee hearings of 9 May 1988 at Powys castle, which the hon. Members for Brecon and Radnor (Mr. Livsey) and for Meirionnydd Nant Conwy will remember. That was the first time that I met Mr. Glyn Davies, who was then the chairman of the finance committee on Montgomeryshire district council. He is an impressive character, who has been extremely energetic in his post as chairman of the development board.
    I want to outline the problem of how we define "rural Wales", a problem which arose again and again in the Select Committee. The DBRW has a synonym—it is the acronym MWD—because the Development Board for Rural Wales is also known as Mid Wales Development.

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    Indeed, the previous chairman consistently referred to that body as Mid Wales Development, but the Bill is entitled the "Development Board for Rural Wales Bill".
    In those Select Committee hearings at Powys castle on 9 May 1988, Mr. Leslie Morgan, the then chairman, made it clear that he preferred being described as the chairman of Mid Wales Development. He did not regard that organisation as purely a rural body because he would then be faced with an odious comparison as the country cousin of the Welsh Development Agency. Mr. Morgan wanted his organisation to be seen as a regional development agency. I hope that my right hon. Friend the Secretary of State will address the real problem of defining rural Wales because there is confusion. The DBRW's boundaries are not and cannot be as clear as those of the Highlands and Islands Development Board in Scotland. Some of the worst unemployment spots in rural Wales lie outside the boundaries of the board. That means that rural areas outside the DBRW boundary do not have equal treatment when compared with the rural areas within it.
    There are two ways of dealing with that problem. One way is to review the boundaries of the board. In hearings of the Select Committee the previous chairman said that he was keen that there should be a detailed review of its boundaries. I ask my right hon. Friend the Secretary of State seriously to consider that. The chairman was keen to see the boundaries reviewed, provided that his resources would be increased as the boundaries were extended. He was not keen to see his boundaries extended if his resources remained the same.
    I have read a document, which I am sure that my right hon. Friend the Secretary of State has seen, produced by the Institute of Welsh Affairs. The institute does some valuable studies not only for Members of Parliament but for everybody in the Principality. It has produced an interesting study entitled "Rural Wales". It tackled the definition of the rural parts of the Principality. I shall not go into that in too much detail, but basically, although it is a statement of the obvious, the document classed rural Wales as
    "excluding industrial or urban South Wales and North-East Wales, whilst using district council boundaries to delineate rural Wales."
    The institute preferred to use district council boundaries because that allowed the use of official statistics, which clearly are important. It defined rural Wales as:
    "Colwyn, Glyndwr and Rhuddlan in Clywd"—
    I was somewhat surprised at the inclusion of Rhuddlan, but I go along with it because the institute has studied the matter much more than I have—
    "Dyfed except Llanelli plus Gwynedd and Powys."
    If we are to stick to a definition of the DBRW as representing rural Wales, we must consider a review of the boundaries. If not, the way in which the Welsh Development Agency deals with rural Wales must be reviewed. That is important because, as the then chairman of the board, Leslie Morgan, said in a hearing two years ago implying a criticism of the performance of the Welsh Development Agency:
    "It requires an act of will and decision from the WDA to determine that it will do more in its rural areas."
    I represent a constituency which is predominantly urban, although it appears rural. A good two thirds of my electorate reside in towns. However, we have many of the problems that confront rural areas more severely. As my
    946
    right hon. Friend the Secretary of State will know, we have experienced one particular problem recently. I pay tribute to him for his quick help and speedy action following the proposal to close the Laura Ashley factory at Leeswood. [ Interruption.] I should be grateful if the hon. Member for Alyn and Deeside, having opened the debate, would listen to the speeches. It would be polite if, instead of chatting to the hon. Member for Wrexham (Dr. Marek), he would listen to what I have to say. I am making a constructive point. It is not a party point. I am not making a party political broadcast, as he did. I am seeking to contribute to the debate on rural Wales. I believe that it is valuable. He is good at plagiarising. Who knows?—he might put my ideas in his next manifesto.
    Now that I have the attention of the hon. Member for Alyn and Deeside, I refer him to the Laura Ashley closure at Leeswood. I am particularly grateful that he is paying attention because, of the 330 who were made redundant at the factory, more than half are resident in his constituency, as he will be aware. That is why I was rather surprised that he was chatting and not paying attention. I should have thought that he would be worried about electors in his constituency being made unemployed.
    I pay tribute to my right hon. Friend the Secretary of State for what he did in the event of the closure. He moved speedily. He got in touch with the Welsh Development Agency chairman, Dr. Gwyn Jones, whom I subsequently met to see what could be done to help the area. Although only about a third of the employees were resident in my constituency, one relatively small community, Leeswood—a former mining village—had 62 residents employed there. When 62 people in a relatively small community lose their jobs it hits the community hard.
    My worries about the overlap and lack of clear definition of the roles of the Development Board for Rural Wales and the Welsh Development Agency are illustrated in examples such as that of the Laura Ashley closure. Expertise in dealing with rural affairs lies predominantly with the Development Board for Rural Wales. It is particularly good at and has a long experience and history of establishing starter units in rural areas to tackle rural unemployment, which can hit small communities hard. I am not certain that the same kind of expertise exists within the WDA. I am not seeking to criticise the agency, which does a good job in many ways, but hon. Members such as myself, whose constituencies are not covered by the development board, are concerned.
    We believe that the constituencies of the hon. Members for Brecon and Radnor (Mr. Livsey), for Ceredigion and Pembroke, North (Mr. Howells), for Meirionnydd Nant Conwy (Dr. Thomas) and the hon. and learned Member for Montgomery (Mr. Carlile)—I am sorry that the hon. and learned Member is not present, but I am sure that he has good reason to be absent on this important occasion for his constituency—which are covered by the DBRW, have two bites of the cherry in terms of industrial development in their areas and the steps that can be taken to tackle rural unemployment and depopulation. Those of us whose constituencies contain rural areas, but which are not covered by the board, do not have the opportunity to enjoy such two-tier treatment.
    Dr. Thomas: I am following the speech of the hon. Gentleman with great interest, especially his analysis of the interface between the two agencies and the fact that the WDA has a rural arm. What is the hon. Gentleman's

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    thinking in terms of medium and long-term development? Does he envisage that the DBRW will take in the whole of rural Wales, as normally defined by the Welsh Office, or does he believe that the rural arm of the WDA will take over from the DBRW?
    Mr. Raffan: The hon. Gentleman sat next to me in the Select Committee and he will recall that I was somewhat anti the DBRW because of the two-tier treatment meted out to the rural areas that it covered which meant that they had an advantage in comparison with the rural areas outside its boundaries. Often, these are the rural areas with the highest unemployment. They do not have the advantage of the two-tier treatment. I was leaning towards the view that the DBRW conferred an unfair advantage, but the hon. Gentleman knows that I am never dogmatic and I am open to persuasion and good argument—usually such good argument comes from the Benches behind the Opposition Front Bench.
    I hope that my right hon. Friend will be in office for a long time, as it is important that he should tackle the issue of the boundaries of the DBRW and what the WDA does to help rural areas.
    The Laura Ashley closure at Leeswood revealed that there was no clear strategy on the part of the WDA to deal with the problem, but the closure had a great impact on that small rural community. There were two options available to deal with it. The first was to open starter units close to the village community and the second to develop one or two larger units of between 10,000 and 15,000 sq ft at the Nercwys road industrial park estate near Mold, some miles away.
    Laura Ashley was a great boon to one rural area of my constituency, but perhaps its location was not the most advantageous for that company. Nevertheless, it was an important source of employment to the rural community. I accept, however, that there is no point having starter units close to the village if they are not filled. The strategy of the WDA appears to favour larger units in industrial estates or business parks closer to the towns rather than developing starter units closer to villages. Certainly the DBRW has greater experience of developing such nursery units near villages.
    This debate should be about getting to grips with such problems. I am proud of the fact that I am occasionally labelled a corporatist, I am not a socialist or a crypto-socialist, but certainly I am a corporatist. I would not dream of applying to my right hon. Friend a label of which he was not proud, but the way in which the Government have pursued their policies in Wales is something from which the rest of the country can learn a great deal. That is especially apparent in my constituency where, in the past two years, unemployment has dropped dramatically by 56 per cent. That is a measure of the success of our policies.
    I pay tribute to the work done by the DBRW. I do not think that, simply because of the success of its work, it should take over every rural area of Wales, but its boundaries should be reviewed in detail. The definitions used by the Institute of Welsh Affairs are a good starting point and worthy of further examination by my right hon.Friend. I also look to my right hon. Friend for a reassurance that the rural arm of the WDA and its efforts in rural districts are not overlooked, but developed. That sector of the WDA's work should not be allowed to grow stale or stagnate. It is important for those of us in parts of
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    Wales not covered by the DBRW that the rural arm of the WDA is active, vigorous and innovative. I hope that my right hon. Friend will pay heed to what I have said.
    I also hope that we can develop this debate on a future occasion. We have few Welsh debates on the Floor of the House but perhaps we can develop this discussion in the Welsh affairs debate on 1 March next year. There are important issues for the Principality, for my constituents who are not covered by the DBRW as much as for constituents of Opposition Members who are.
    9.16 pm
    Mr. Roy Hughes: I welcome the Bill and the marginal additional spending power that it provides for the Development Board for Rural Wales which, over the years, has done some good work. As the Secretary of State said in his opening remarks, it covers 40 per cent. of Wales's land mass, but only 8 per cent. of its population. Sheep outnumber people by 20 to one. The Bill comes before us on the first day of a new Prime Minister's term of office and at a time when the country is moving deeper into recession, with Wales, as usual, at the sharp end. The additional scope for the Development Board of Rural Wales is a mere flea bite, welcome though it is.
    We must face the fact that the unhappy state of the British economy has a major detrimental effect on rural Wales. In housing, mortgage rates stand at about 14·5 per cent.—an extraordinarily high rate that is way above that which ordinary people living in mid-Wales can afford. Is it any wonder that young people pack up and go? Empty houses are left for better-off people, usually from across the border, who often turn them into holiday homes and, in the process, Welsh culture and language are undermined. The solution to that problem lies in the Government's hands and, presumably, they are at least recognising the problem by giving this small extra funding for the Development Board for Rural Wales.
    Some people cross the border into mid-Wales as permanent residents. They should be given a traditional Welsh welcome, but I get a bit nauseated when some of them start bellyaching when their children are taught Welsh at school. Surely that is what they should expect when they come to live in Wales.
    Rural Wales has tended to rely on agriculture which, over the years, has shed many jobs. Consequently, the depopulation of that region has been quite dramatic. From 1891 to 1981, the population of mid-Wales fell by 23,500, whereas the total population of Wales in the same period increased by 1 million. The mid-Wales population decreased from 12·6 per cent. of the Welsh population in 1891 to only 7·2 per cent. in 1981. That shows a fall in absolute and relative terms.
    The big issue of jobs is essentially what the rural development board is all about. I said earlier that the board had done some good work. For instance, since 1977 it is reckoned to have created 12,000 much-needed jobs. However, Mr. Glyn Davies, the board's chairman, recently said that the prosperity of mid-Wales would he determined by the success or otherwise of the United Kingdom economy as a whole. The single European market and the channel tunnel will also play an important part. My guess is that both will tend to increase the

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    regional imbalance in Britain. In that sense, they are likely to aggravate the problems of mid-Wales. There must be Government support to counteract such tendencies.
    Let us look at what has been happening to the Welsh economy as a whole. According to the most recent official figures, manufacturing investment in Wales has fallen by more than 19 per cent. in the past decade and over the same period regional preferential treatment has been cut by £166 million. Is it any wonder that unemployment in Wales is still 6·7 per cent. of the work force, even on the basis of the Government's adulterated figures? In mid-Wales, the partial collapse of Laura Ashley has not helped. Equally, the decision to move the headquarters of that company from mid-Wales will not help to engender confidence in the area.
    The new Prime Minister, when he was Chancellor of the Exchequer, clamped down on the economy, and that has had evil side effects. For example, in the past year business failures in Wales have increased by 4 per cent. That is a spectacular rise. Further evidence of the regional imbalance affecting mid-Wales can be seen in living standards. The official figures show that, although Wales has had a 3 per cent. increase in living standards over the past 10 years, that is only one ninth of the increase that has occurred in Greater London. What a contrast.
    Most indicators show that Wales is at a disadvantage compared with other regions of Britain. However; when my hon. Friend the Member for Alyn and Deeside (Mr. Jones) speaks about some of those basic facts, he is accused of spreading doom and gloom. I do not agree with such accusations against my hon. Friend. He should be congratulated on exposing the real situation in Wales.
    The infrastructure in mid-Wales is sadly lacking, and that is one of the principal causes of poverty and depopulation. The rural development board does not have the funds to do much about that, but the Government, through the Welsh Office, can improve matters. British Rail is reluctant to electrify main line services to Wales and passengers on our rural lines suffer deplorable conditions. In mid-Wales, British Rail seems to use everybody's cast-off rolling stock. The Government should show that they care about our rural communities by being prepared to subsidise transport services.
    The eastern towns of mid-Wales, such as Newtown and Welshpool, are fairly close to the motorway network, which gives them an advantage. In the 1960s and 1970s, the concentration was on building the M4—what we would do without it today, I do not know. In more recent years, road building for Wales has tended to focus on the A55, the north Wales coastal road. In future, we should pay more attention to north-south road links which could do nothing but good for mid-Wales. The Minister will be aware that I tabled a spate of questions on this matter. The Western Mail, the daily newspaper circulating in Wales, has campaigned on this issue. The road network between the north and the south is a relic from the horse-and-cart age.
    We are told that the demand is just not there, and that the number of journeys travelled do not justify such large-scale public expenditure. I feel that people do not make the journey between north and south because the facilities are so poor. For example, I am fond of Llandudo as a resort; it is a wonderful place. However, I do not go
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    there as often as I would wish because journeys from south Wales are so difficult. Some do not wish these major road improvements, which could so benefit Wales, to be made. The same people expressed opposition to the second Severn crossing. They have what I would call a ghetto mentality, but I find their attitude detrimental not only to mid-Wales but to the interests of Wales as a whole.
    I have only recently returned from a visit to Patagonia, which reminded somewhat of mid-Wales. It was fascinating to hear the Welsh language still being spoken. Some of the traditional Welsh chapels were thriving—Tabernacle, Moriah, Bethel and so on. People out there have put up a tremendous fight to keep the Welsh language and culture. In Wales as a whole, we must fight for our fair share of the cake. If we achieve this, we shall be in a better position to fight for the Welsh language and culture. I support the Bill. Minimal though it is, at least it is a small step in the right direction.
    9.27 pm
    Mr. Richard Livesy: In supporting the Bill, I begin by paying tribute to the late Emrys Roberts, the first chairman of the Development Board for Rural Wales, who sadly, passed away two months ago. He did sterling work in starting up the board and he was a former Liberal Member of Parliament for Merioneth. He has been followed by Mr. Leslie Morgan and now Mr. Glyn Davies, an energetic chairman of the development board, who is using his time extremely well.
    I am particularly interested in the development board because I was brought up in rural Wales in the development board area. I think that I am right in saying that I and the hon. Member for Bridgend (Mr. Griffiths) are the only two hon. Members who have been in the Chamber tonight who have been depopulated out of mid-Wales. That is not a pleasant experience. I was away from the area for 14 years, and when I returned the development board was operating there and starting to do good work.
    I gently chide the Secretary of State on his figures for population expansion. I recommend that there should be research into those figures in order to show what is happening to school leavers. I believe that a considerable exchange of population is taking place in mid-Wales with some of our most youthful people leaving and many retired people coming in, giving us an unbalanced population in terms of its age.
    Only last weekend, a young lad of 19 told me that he had applied for a job with the local council in my area. Brecon has only 3 per cent. unemployment, an extremely good figure, but 72 people, mostly youngsters, applied for that job. I know from personal experience that many people have to leave because they cannot find a job. The statistics conceal a problem. I hope that the universities will be able to investigate further to see exactly what is going on. I know that there is a project to study what happens to school leavers in mid-Wales and their attitudes.
    I welcome the aggregate increase of resources for the board. Looking at the board's annual report and accounts, it is noticeable that in 1986 expenditure was 12·4 million and in 1990 it was scheduled to be £12·9 million. I am pleased that the Secretary of State has announced that that will be increased to £14·1 million. At least that is some progress.
    Mr. Coleman: Does the hon. Gentleman agree that the announcement that the Army is to leave his area means that the development board will be extremely important, because that move will cause considerable problems?
    Mr. Livsey: That is an extremely important point. The Army has headquarters in Brecon and it looks likely to be demoted. I have written to the Secretary of State about that. We do not wish to see any reduction in the staff at the Army headquarters at Brecon. I hope that the Secretary of State will campaign to ensure that a major general still commands the forces at HQ Wales and that there is no reduction in status. In that respect, we deserve a similar status to Scotland. The Sennybridge range of 30,000 acres is one of the largest training areas in Wales and in the United Kingdom. Troops returning from Hong Kong and elsewhere could well be accommodated in camps in Wales such as Cwrt–y–gollen camp in Crickhowell.
    I should have liked the Bill to make provision for future expenditure for the board to be increased by statutory instrument. I was told that I could not table an amendment to that effect, but I shall discuss that further in Committee.
    I should like to see an extension of the board's remit in two particular areas. It is now becoming painfully obvious that, although those areas were excluded from the board's remit when it was founded, times have changed radically. I am sure that the Secretary of State will have noticed the references to the present general state of agriculture in mid-Wales. The board has said that up to 25 per cent. of the population of mid—Wales is employed in agriculture. In my constituency 18 per cent. of the population is engaged in agriculture in one way or another. The present depression in agriculture and the reduction in incomes is forcing young people out of the family farms. We must address that problem. We need more marketing. I was at the winter fair yesterday, to which the Secretary of State referred when dealing with his worthwhile initiative for food from Wales.
    It is important to give the development board more resources to increase abattoir and meat packing capacity. Wales has only three abattoirs that meet EEC standards, whereas there are 20 in Scotland. That is a serious shortfall when one considers 1992 and the European single ma rket, and the ability of Welsh farmers to market lamb efficiently and effectively in proper packs. They must compete properly in the supermarkets of not only Britain but France, Germany, elsewhere in Europe, and even Japan —which the Secretary of State visited recently.
    Mr. Raffan: I strongly endorse the hon. Gentleman's point about abattoirs in the Principality. There is strong feeling on that aspect among the farmers in my community whom I met recently. New abattoirs would also generate additional employment, and the Government should look at that matter quickly.
    Mr. Livsey: I thank the hon. Gentleman for his support, which the Secretary of State would find widely echoed throughout Wales.
    The farming community is particularly exposed in the market place at this time. They compete only as individuals, and about 45 per cent. of the British retail market is controlled by five supermarket groups. That does not put farmers in a very good bargaining position. They need to co-operate, and to establish new abattoirs.
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    I was particularly disappointed when an application to build a new abattoir at Three Cocks did not come to fruition. There were problems about the land, whose owners were not prepared to sell. I understand that the Welsh Office and the development board were able to put up only 30 per cent. of grant aid support. It is well known that on the continent, and in France in particular, grant aid for abattoirs can be as high as 50 per cent., which makes a crucial difference. I shall be grateful if the Secretary of State will closely examine that aspect, to see how the board can assist more in the building of new abattoirs, especially before 1992.
    Mr. Alan W. Williams: The same point was forcefully made by National Farmers Union members in my constituency when I met them in September. They pointed out that Wales would be left in 1992 with only three abattoirs conforming to European standards. Meat processing is a sensible industry in rural areas because of the value-added employment that it offers. Also, rather than export our live sheep in the cruel conditions under which they are transported to the French markets, it would be much more sensible to slaughter them here and then export them as processed meat products.
    Mr. Livsey: The hon. Gentleman reinforces my argument, and mentions also the important issue of live exports. Our industry will come under increasing pressure in that respect.
    Under present conditions, farming families need to boost their incomes. I know of a number of recent cases in which the single son of a family farm has had to leave the business to find employment elsewhere—not just 10 miles away but hundreds of miles from home. The development board should consider providing part-time jobs to boost the incomes of farming families. Members of the family could work away from the farm two or three days a week, in order to supplement their incomes and to preserve family farms.
    The other aspect that the development board has not considered is tourism. That is not in its remit either, but I should like it to be taken into account, and perhaps considered in the future.
    Affordable housing is an enormous problem, as other hon. Members have pointed out. The average value of a house in my constituency often turns out be about £60,000, whereas the mortgage that can be obtained on average earnings in the local community is about £20,000. That means that it is impossible for someone on an average wage in my constituency to purchase a house.
    Rented accommodation has virtually dried up. Although the development board is doing good work in terms of housing for key workers, it is especially frustrating for young people to see houses that are often empty for up to two years before they can be occupied—it can be a great heartache for them.
    The development board programme has been outlined and it plans for the maintenance of 1,500 jobs per year. I note the chairman's statement that 1,000 jobs will be created in the next three years. That will not be adequate to retain a larger part of of the school leaving population, and we need to consider that.
    We need to assist young entrepreneurs in central Wales. One of our problems is that we do not have enough home-bred industry. I remember my mother telling me when I was in my early 20s, "There is nothing here for you,

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    my boy. You'll have to go away to earn a decent living". The situation has changed, but there are still too many service industries and too much local government employment compared to employment in businesses. We must encourage young entrepreneurs who are born and bred in mid-Wales. The present strategy can be improved.
    I note from the report that approximately 18 towns in mid–Wales have been concentrated on to encourage growth, but it needs to spread further afield. I welcome the development board's western initiative. However, we have to spread out into some of the smaller communities and villages to balance employment.
    The remarks that have been made about poor infrastructure are very important. I measured my constituency on the mileage clock of my car the other day. I started from Ystradgynlais and ended at the top of the Teme valley. I travelled 92 miles—that is a long way on a very poor road system. As other hon. Members have said, the system needs vast improvements.
    We need to be geared up into a higher-waged economy. Wages in the eastern part of the area are too low. Unemployment has been brought down, although there is still a problem in the west, but wages remain very low. Far too many people work for £80 or £100 per week. Averages mean that it is still very much a case of people having their head in the fridge and their feet in the oven. Between those two poles there are bad examples of low wages.
    We need to support the development board. There should not be any movement towards co-operating too closely with the Welsh Development Agency. The development board must protect its independence fiercely because it concentrates on rural areas. As the hon. Member for Delyn (Mr. Raffan) suggested, the case for other areas coming into the development area should be studied carefully. The Welsh Office should appoint a Minister to concentrate on rural areas. After all, they cover a vast area in Wales.
    I have been fortunate enough to obtain space in the exhibition area. There will be an excellent exhibition for the development board from 10 to 14 December and there will be a reception on 10 December. 1 hope that all hon. Members present, including you, Mr. Speaker, and all Welsh Members will come along and see the good work being done by the development board. I am sure that when we next debate the development board we will all wish to increase its funding even further.
    9.45 pm
    Dr. Dafydd Elis Thomas: It is a pleasure to debate rural Wales because we do not often have the opportunity of doing so. I associate myself with what has been said by my colleagues from the region, particularly the hon. Member for Brecon and Radnor (Mr. Livsey), who spoke of the late Emrys Roberts. As the hon. Gentleman said, he was one of my predecessors as the Member for Meirionnydd Nant Conwy. I was able to count on him as a good friend. He played a distinctive role inside the House as a Liberal Member of Parliament and outside it in his enterprise, legal and cultural activities. We remember him particularly as the chairman of the Mid-Wales Development Corporation, a predecessor organisation of the development board.
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    It is appropriate to remember the history of the Development Board for Rural Wales because, as the Mid-Wales Development Association, it initiated the Mid-Wales Industrial Development Association of Local Authorities, whose leading light was Mr. Peter Garbett Edwards, another great Montgomeryshire Liberal. He is still very much alive and active in development issues as a consultant for Antur Dwyryd, the enterprise agency in north-west Meirionnydd.
    When the then Government instituted the new towns legislation and brought it into mid-Wales in the new town development corporation, the team at the Mid-Wales Industrial Development Association provided the basis from which the Development Board for Rural Wales was established.
    I am listing the organisations because I want to make a plea that we should not look for too much tidiness in the way in which statutory agencies operate in rural communities. The hon. Member for Delyn (Mr. Raffan) said that at one time he leant towards the idea of a combination of agencies working together. Like many who have a lifelong interest in rural development, I have leaned towards a concept of integrated rural development that produces some sort of line management. After the happy hour that I spent in the Monet exhibition this morning, I tend to take a different approach in terms of broad brushes and concentration. Although different agencies are coterminous and overlap, they can still provide different textures of enterprising and social development activity.
    I want an assurance from the Secretary of State—I am sure that he will be able to give it—that the intention is that the Development Board for Rural Wales will continue for as long as the Government continue. I assume from the gentle rhetoric of the hon. Member for Alyn and Deeside (Mr. Jones) that a Labour Government—if there were ever to be one—would also continue the activities of the board. There has been loose talk in some quarters about strengthening the rural arm of the Welsh Development Agency. That is important in areas of rural Wales that are outside the territory of the Development Board for Rural Wales. However, strengthening the rural arm of the WDA does not mean reducing the powers of the development board and strengthening the overall activities of Welsh Development international does not mean weakening the development board's marketing role in the United Kingdom and beyond.
    Mr. Barry Jones: I make it clear that my party is 100 per cent. behind the Development Board for Rural Wales. Having heard about his broad-brush approach, I hope that the hon. Member for Meirionnydd Nant Conwy (Dr. Thomas) will consider the royal collection at the national museum in Cardiff and the Mostyn gallery in Llandudno, where Piper is exhibited. There are good exhibitions in Wales as well as the serial numbers of Monet in Piccadilly.
    Dr. Thomas: I was pleased to see one of the Davies collection, "Rouen cathedral", in the Royal academy here. I am an internationalist, as the hon. Member knows. I am glad to hear his commitment to the future of the DBRW.
    I want to consider the interface of agencies. There is not only the WDA and the DBRW—I hope that Hansard will follow all these acronyms—but the Welsh tourist board and the Agricultural Development Advisory Service, which is the authority for redirecting activity and

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    diversification in agriculture. Linked with that are the activities of local government economic development officers and, more recently, the enterprise agencies, which are working in the constituency of the hon. Member for Ceredigion and Pembroke, North (Mr. Howells), which is part of the DBRW area, and in Antur Dwyryd. In addition, there is the activity of large voluntary landowners such as the National Trust and our recently announced Snowdonia appeal, which we hope will bring additional voluntary and private sector funds into the area.
    There are other agencies that I have not mentioned, but I list those to emphasise that we have a diversity of organisations and that it should be possible to have an approach that maximises their contribution without looking for a simplistic structure. Therefore, we must consider how we can collaborate on working parties and projects in which the various agencies take the lead role.
    In the context of rural Wales, we look particularly to the western initiative of the board and to the activity of its new offices in Machynlleth, which have been successful in answering queries and stimulating interest. The enterprise culture is developing as a bilingual enterprise culture in that part of the world.
    We face a number of fairly major crises. In my own patch, there is the future of the energy industry and of the Magnox station at Trawsfynydd. We are still waiting to hear about the extension of the life of that station, which is under the control of the nuclear installations inspectorate. Obviously, we all want to see the maintenance of jobs for as long as possible in environmentally safe conditions, but in the next five or 10 years there will be a major closure involving 600 job losses. Obviously, there will be jobs in decommissioning, which is a complex and difficult technology, but there will be substantial job losses.
    We need to plan for that in the same way as we planned for steel and coal enclosures, for which there was a major input of resources. I am aware that Nuclear Electric is not able to do what British Steel and British Coal were able to do, but we need an approach which matches that, and we look for help from the European regional development fund and for further enhancement of DBRW funds. I am sure the local enterprise agency in Antur Dwyryd will have a particular role to play.
    We must consider that in terms of a task force and a project-led approach which anticipates and itemises the skills that are already available in the area, encourages people to move into the self-employed or small enterprise sector and seeks co-operative activity. There is a range of possibilities, provided that we are ready in time to anticipate those closures.
    I very much endorse what has been said about the need to improve the abattoir facilities in mid-Wales. We must add value to our agriculture produce. I pay tribute to the work of Welsh Lamb Enterprise, which is based in mid-Wales, which has been active in its promotion. We must back that up with investment programmes in abattoir capacity to bring us up to the standard that we need to export our cuts. As I was told when I was last at the Commission talking about these issues, there are still opportunities in the Spanish and Italian lamb markets. Forty per cent. of the German lamb market—there is opportunity for growth—is taken up by New Zealand. That country is not exporting lamb on the hoof to
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    Germany, but it prepares cuts so that they are attractive to German housepersons. That is a lesson for us all on how to produce and market our goods.
    One of the first appearances by the Secretary of State for Wales in his new post was when he dressed as a waiter at a Welsh Lamb Enterprise promotion and wore an apron showing the excellent Lamb Enterprise logo. I know that he is already convinced, so I hope that he will put new money behind his commitment to Welsh lamb.
    Mr. Raffan: There is great concern even in the farming community about the number of sheep farmers who contribute towards Welsh Lamb Enterprise. We need to make the farming community much more aware of the need to market its products. It is pretty appalling when one can go into a butcher's shop in a village in my constituency and find three posters advertising New Zealand lamb.
    Dr. Thomas: Far be it from me to suggest that the hon. Gentleman should change his butcher.
    Mr. Raffan: I did not buy the lamb.
    Dr. Thomas: Oh. My hon. Friend the Member for Ceredigion and Pembroke, North pays 4p at least per animal. Every other Welsh lamb producer should do the same.
    I wish to refer to the interrelationship between what the board does in terms of manufacturing and small-scale enterprise and its more general aim to improve the quality of life in mid-Wales—for example, the social development and infrastructure programmes. In a consultancy capacity, the board has produced ideas and has worked with British Rail and other major agencies to upgrade amenities and the infrastructure.
    I pay tribute not only to the late Emrys Roberts but to an amazing friend, John Hughes, who for 13 years was secretary of the board and ended his career as social development director far too young. He was also one of the leading lights of Newtown football club. Halls, football pitches and television reception facilities throughout mid-Wales benefited from the social development programme in which he was involved. I want to ensure that such a programme continues under the board and that there is no reduction in those activities.
    I do not want any of the board's functions privatised, moved out of Ladywell house and given to consultants from outside the area. There has been concern that, under new management in the board, there may be a tendency to look at ways of moving activities out of house and reducing the interface between the board, as an accountable organisation within the community, and the local community. I want an assurance that the core activities of the board are not privatised. It is not just a factory-building or industrial estate agency, but a social development agency. To return to my impressionist analogy, social development in the countryside is a soft touch technique which relates to the fabric and texture of society.
    Dr. Iain Skewis, the board's chief director, was also enthusiastic about soccer tournaments, especially for young people. He brought skills that only a Scots person can bring to the development of mid-Wales. His experience at the Highlands and Islands development board brought into mid-Wales a flamboyant and always straight style. Sometimes he created a bit of a stir in certain local authority planning agencies, but that was all to the good

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    because it gave the board a high profile. I should like to pay as handsome a tribute as I can to his work and the time that he devoted to mid-Wales.
    The new chairman, Gwyn Jones—whom many of us knew in his earlier incarnation as a very active chair of Montgomeryshire district council—graced the borders of my constituency and Montgomeryshire with a huge, garish sign announcing, "Croeso i Faldwyn" —"Welcome to Montgomeryshire". That was one of his first actions as the council chair, and he has brought the same style to the development board.
    Wales is blessed with many quangos. A great triumvirate now runs three of the main ones. Wyn Jones, of the Welsh Development Agency, brings his own Hollywood style to the job of running a Welsh quango; Prys Edwards, of the Welsh tourist board, has brought his own cultural approach to the job—he, too, is always well groomed—
    It being Ten o'clock, the debate stood adjourned.
    Ordered,
    That, at this day's sitting, the Development Board for Rural Wales Bill may be proceeded with, though opposed, until any hour.—[Mr. Greg Knight.]
    Question again proposed, That the Bill be now read a Second time.
    Dr. Thomas: As I was saying, we have a triumvirate. The third member, Glyn Davies, has also brought his inimitable style to the development board.
    In the absence of an elected Government in Wales, we could do a great deal worse. Those people are giving their time to public service, and providing an upbeat image of what goes on in the country. The Opposition parties are not turning a blind eye to the reality of social deprivation and economic problems such as unemployment and low incomes; we are well aware of those problems. However, we also want to emphasise the good news—not just the positive aspects of Government policy, but the benefits of voluntary activity undertaken by the people. Many are incomers—"born-again Welsh", as I call them—who bring their skills into Wales, making cheese in Dyfed, or honey ice cream in Towyn. I must not leave out Towyn, which contains some of my nicest constituents.
    Whatever they may be doing, those people have brought a new energy to Wales. It is all part of the new upbeat attitude. Wales, and mid-Wales in particular, has become a location for inward investment of multinational capital, because of the attractiveness of the area, the skills of the labour force and the existence of a corporate Welsh state—if I may take up the point made by the hon. Member for Delyn.
    All this is because of the form of selective intervention that we are operating—the combination of public-sector activity on the part of the Welsh Office and the agencies, and the activities of local authorities and the voluntary sector. Some of the workers have been involved in development for 20 or 25 years. Obviously, the interest of multinationals in making relative profits in the location is part of the equation: people locate in Wales not for reasons of charity, but because it makes economic sense.
    The reason for all those developments is not only the decision of the multinationals to locate outside the metropolitan centres and to turn to the regions, but the willingness of Wales and its institutions to play the game.
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    I pay tribute to the Minister of State, not just because he has been in the Welsh Office longer than the Secretary of State; he has been involved in every aspect of inward investment, linking that involvement with his work as Minister for rural Wales. My hon. Friend the Member for Brecon and Radnor says that we do not have such a Minister, but the Minister of State must do that job, because of his brief.
    We are celebrating the provision of new money—I am advised that that is what it is, so I am able to welcome it. I hope that my advisers and those of the Secretary of State agree about that. We also welcome the additional borrowing power, and look forward to a long rolling programme for the board, in collaboration with the other agencies. In that, we will be able to build on the massive contribution of people like the late Emrys Roberts and the late John Hughes.
    10.4 pm
    Dr. John Marek: My comments will not be very different in tone from what other hon. Members have said, and I have no intention of voting against Second Reading. The Bill is important for central and rural Wales and the increases provided will be very welcome.
    The Development Board for Rural Wales did not get everything right and there were problems with overexpansion in the new towns and the bringing in of too many people from outside the area and outside Wales. As a result, we still have bad housing shortages. Perhaps more attention should be paid to local growth. We have to bring in businesses to help to advance the economy of rural Wales, but we must do that while bearing in mind the local people first and foremost.
    I was slightly worried by the remarks made by my hon. Friend the Member for Alyn and Deeside (Mr. Jones). He said that we need more roads to unify Wales. We certainly need more roads, but I am not sure whether we necessarily need them to unify Wales. It is important to unify Wales, but money is extremely limited. If we are to spend money on roads, as we should, we should do so to help the economy of Wales and to help people who travel to and from Wales and different parts of England and those who travel within Wales. If we unify Wales we will simply have roads between north and south Wales so that local government councillors and officers, Members of Parliament and all sorts of administrators can get into their cars and consume petrol, which is a non-renewable resource, instead of travelling by train.
    Roads are important. We need better roads from the M4 into Cardiganshire from Carmarthen to Aberaeron or from Carmarthen to Aberystwyth. However, the criteria for building those roads must be right. They should not be built because of status or because of a need to unify one part of Wales with another.
    Mr. Raffan: I agree with the hon. Gentleman. I am sure that he would accept what the previous chairman of the DBRW said—I believe that the present chairman agrees with this—which is that the crucial roads to the local economy of mid-Wales are east-west links rather than north-south links.
    Dr. Marek: There is a lot in that. Roads from Aberaeron or Aberystwyth to Carmarthen are important

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    because they would join that area to the M4, which runs east to west. I am sure that my hon. Friend the Member for Alyn and Deeside had that kind of programme in mind.
    I agree with nearly every point that has been made tonight. Farming is vital to rural Wales. I disagree slightly with the hon. Member for Delyn (Mr. Raffan). It is not a matter of not buying New Zealand lamb and buying Welsh lamb. Of course we must buy Welsh lamb whenever possible, but we survive as a trading nation. We should be able to compete. Many of us would say that Welsh lamb is better than New Zealand lamb, but we should not try to ban New Zealand lamb.
    Land in Wales is only good for sheep. Land in New Zealand is certainly good for sheep, too, but the land in other areas like England and France is good for sheep and many other things. If the agricultural system is such that those other things are not produced, the other parts of Europe and especially England, France and Spain might turn to sheep rearing. If that happens, we shall lose out in Wales. That is my great fear.
    The Government should be able to regulate the industry so that we are allowed to do the things in Wales that we are best at doing. There is a serious crisis in farming in rural Wales. The Government must consider that carefully and they must fight their corner in the corridors of Brussels on that point.
    I am sponsored by the National Union of Railwaymen and want to make two points about the railway connections between Wales and England. Unfortunately, it is no longer possible to make any comments about railway connections between north and south Wales because one has to go into England to make such a connection. There would be nothing wrong with that, provided that the service was good.
    The mid-Wales line, from Aberystwyth to Shrewsbury, has had a good service, with InterCity rolling stock. The Cambrian coast express leaves Euston at about 3.40 pm and the public can travel all the way through mid-Wales to Aberystwyth in comfortable InterCity rolling stock. The train leaves Aberystwyth at about 7.20 am and travels back to the capital. I understand that that service is to be withdrawn next May. We should be advancing as a nation, not regressing. Central Wales will have to rely on a sprinter service. It can take about two hours 20 minutes to travel from Aberystwyth to Shrewsbury, but everybody in central Wales will have to make that journey on a sprinter.
    Not many hon. Members—apart from hon. Members representing Wales—realise how difficult it is to get to central Wales. If central Wales is to develop, communications must be good. There is no airfield and the roads need improving. They are not very good and the journey gets worse as one travels by car to London, because the motorway cannot cope with the traffic. We must therefore have a good railway system, but it takes five and a. half hours to travel from Aberystwyth to London.
    I represent Wrexham and it is easy for me to travel from Wrexham to London. I can do it in two hours 50 minutes by the fastest train. I believe that hon. Members representing the north-west coast can make their journey in even less time. If one travels to Aberystwyth from London, one spends over five hours on a train, yet British Rail is proposing to withdraw the only comfortable service from next May. It is the only service that business men would dream of using. I believe that the Bill could help the
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    development board to persuade British Rail to maintain the service. Perhaps the DBRW could even provide some extra funding to help British Rail to do so.
    Dr. Thomas: I am sometimes accused in the House of speaking for the Government, but I am certainly not speaking for British Rail. My understanding is that British Rail is to introduce rolling stock for the local haul routes similar to that which is available in the highlands of Scotland, which is the super sprinter.
    Dr. Marek: The hon. Gentleman may be right and British Rail may introduce the super sprinter—the class 158. Let me disillusion the hon. Gentleman now, because there is no way in which that train will run from Wrexham to Euston. The latest plan is for the train to go via Birmingham to Nuneaton, then on to the overpass at Nuneaton, and to travel to Leicester before proceeding down to St. Pancras. That is a tortuous journey.
    The Minister of State, Welsh Office (Sir Wyn Roberts): I have been speaking to senior officials of British Rail this morning and I can confirm what the hon. Member for Meirionnydd Nant Conwy (Dr. Thomas) has been saying, and that it is British Rail's intention to introduce the 158s, which will provide a better service, from next May. British Rail is also taking a look at all its regional services in Wales with a view to improving them.
    Dr. Marek: I hope that we shall have a bipartisan policy on this, because that is what Wales needs if we are to ensure that the service does not deteriorate. The Minister must be aware that the early morning service from Aberystwyth to Shrewsbury has been withdrawn and that the last service from Shrewsbury to Chester is also being withdrawn. Furthermore, the area manager for Chester has been told to make cuts of £2 million by next April, which will mean a loss of staff and services. He must know that the Bidston line will be single in perhaps two or three years.
    In a friendly way, I warn the Minister to be careful about what British Rail tells him. "Improvements" usually turn out in practice to be cuts in services. Importantly for the development board's area, I am not sure that a class 158 sprinter, however grand, can make up for the loss of an InterCity service direct to Euston. It will be difficult for passengers to know whether to go to Euston or St. Pancras to get a train to Wales. For some services which go through Birmingham they may have to go to Paddington. That is not an improvement.
    If we had the money and British Rail had the finance available, Euston could be the one station for passengers travelling between Wales and London. There should be at least one direct train a day between Euston along the electrified line to Shrewsbury and then to Aberystwyth, using InterCity class coaches. That is important.
    I do not wish to take too long, but I wish to make an equivalent point about the north Wales main line which feeds into Blaenau Ffestiniog, which is an important part of the area of the DBRW. Again, class 47 engines will be withdrawn in one or two years. British Rail has refused to say when, but in practice and according to the proposed timetable, it will be in 1992. It is intended to replace those trains with high-speed trains. Again, the HSTs decanted from the east coast main line will not travel to Euston. They will travel to Nuneaton and thence to Leicester and St. Pancras.

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    The trains are expensive to run and have a life of only about eight years. Significantly, when they are introduced, there will be no train leaving Euston for north Wales at about 5 pm—an important time. That will have a serious effect on our infrastructure and transport connections between the north of Wales and Euston. There is a case for electrifying that line, as the Minister and the Secretary of State must know.
    If the line were electrified, how much would it cost? I am told that it would cost about £60 million. What percentage of that money would be available from Europe? How much money would be available from the European regional development fund? The line will be in a development grant area. How much extra money would be available from the European grant for improving international railway lines connecting different member states of the European Community? The Crewe-Holyhead line is the only such line in Britain. Perhaps the fast line through Kent to the channel tunnel could be another example but certainly north of London the Crewe-Holyhead line is the only one that would qualify for such help.
    How many millions of pounds will be available if that line is electrified? Let us suppose that half of the money is available. If the interest on capital employed is 4 per cent., if the cost was £60 million and if half of the money were available from Europe, immediately the interest on the capital employed by British Rail would rise to 8 per cent., which would be above its target. For that reason, British Rail will not electrify the line because it knows very well that, because of the additionality principle, the Government will take the money that it receives from Europe away from its grants in a future year.
    So British Rail will rightly say, "We are happy to electrify that line but if we do, the Government will take away the grant so we shall receive only 4 per cent. on the capital employed. There are other areas where the scarce resources would be better employed and we could get a better rate of return on our capital." The result is that there is money sitting in Europe which we could use, but for our silly administrative procedures.
    Sir Wyn Roberts indicated dissent.
    Dr. Marek: If the Minister believes that I am wrong, I should be happy to let him intervene. I had hoped that the Government would agree that, because of a silly administrative system, we have lost out. Some people say that three quarters of the money would be supplied by Europe for the electrification of the line—£45 million out of £60 million. If that is so, it is a crying shame that that money cannot be used because of administrative procedures followed by the Government.
    I do not want to make a party political point about the electrification of the line, but we should unite about it in Wales. We should recognise that money would be given to us, without any strings attached, if we electrified the line.
    I hope that I have argued my case sensibly and without acrimony and party political bias. This subject should unite Wales. When we have the ability to use European money, we should do so. We should not let procedures between British Rail and the Government prevent us from
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    so doing. I hope that the Government will consider the case carefully and that, where appropriate, the DBRW will also be asked for assistance.
    10.20 pm
    Mr. Geraint Howells: I have the pleasure of living within the catchment area of Mid Wales Development. I have resided there all my life. George Borrow, a well-known Englishman who travelled Wales from north to south many decades ago said, on passing through our village:
    "This is an area where men will live when crows will die".
    I have had the privilege to live in a part of Wales which I am so proud.
    I am delighted that hon. Members on both sides of the House are united in their deliberations to say thank you for the excellent work done by Mid Wales Development over the years. I remember the early 1950s when it all came about. A few county councillors from Cardigan, Montgomery, Meirionnydd, Brecon and Radnor got together because they were worried about the rate of depopulation from mid-Wales. Many young people were leaving and I remember one alderman getting up in the county council and saying, "I remember the turn of the century when the population of Cardiganshire was at its highest. Here we are 50 years later, and the population is dwindling." I am delighted that, 40 years later, mid-Wales is thriving. That is due to the excellent work of those pioneers who thought to set up a development board for rural Wales.
    We have made a few mistakes. I do not blame the Tory Government of the early 1970s or the Labour Government of the late 1960s. The Bill concerning the rural development board that was introduced by the Labour Government in the 1960s was intended to ensure that agriculture came under the remit of the DBRW.
    Unfortunately, the Bill went too far and an element of compulsion was introduced. For example, a farmer who wanted to sell a piece of land or his farm had to gain permission of the chairman of the development board. Many of us fought hard against that incursion on the liberties of the individual. We won our case, rightly so, in 1969. I am sure that that problem was an oversight by the then Labour Government. The Tory Government of 1970 decided to abolish the previous legislation. In the late 1970s a new Bill was introduced by the then Labour Government and accepted. We are by now united in our belief that the board has done excellent work.
    Hon. Members from both sides of the House have referred to agriculture and I believe that the Government and the Secretary of State should take another look at the board's remit, which should include agriculture within the catchment area of mid-Wales.
    Mid-Wales has been transformed. Let us imagine what would have happened to our language, culture and economy if we had not had the board in mid-Wales. If we are all so committed to the Development Board for Rural Wales and the excellent work of the Welsh Development Agency, so complimentary of the Welsh Office and want to see all those organisations flourish, we should all be united in our deliberations. If those organisations are doing such excellent work for the people of Wales, we should have a Welsh Assembly to ensure that they all get together to look after the interests of the Welsh people.
    To be fair to him, the Secretary of State is a good Welshman, as is the shadow Secretary of State, the hon.

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    Member for Alyn and Deeside (Mr. Jones), who has 'Wales at heart. They should get together and think seriously of bringing forward proposals as good as those suggested by our forefathers for the development of rural Wales, so that, by the turn of the century, we can have our own Parliament run by our own people to look after our own interests.
    10.26 pm
    Mr. Alun Michael: While the Bill simply raises the legal limits on the financing of the Development Board for Rural Wales, it does not, of itself, give new money. It is right and proper that it should be seized on as an opportunity to discuss the Government's strategies towards rural Wales.
    There have been several useful contributions to tonight's debate, not least that of the hon. Member for Ceredigion and Pembroke, North (Mr. Howells), who emphasised the unity of purpose and aspiration that exists in the House. My hon. Friend the Member for Wrexham (Dr. Marek) and others rightly referred to the importance of public transport.
    The hon. Member for Delyn (Mr. Raffan), while sounding like an express train without tracks, illustrated the confusion and despair that arise at times of industrial closure. He should address his strictures to the guilty men in the Cabinet who have been responsible for this country's economic plight. The reply to his crocodile tears was given by my hon. Friend the Member for Newport, East (Mr. Hughes), who highlighted the fact that a new Prime Minister moves into No. 10 Downing street as the country moves into a recession which he has helped to create. The effect of that recession on the rural economy has been, and will be, devastating, and we cannot ignore that in the context of tonight's debate.
    The hon. Member for Brecon and Radnor (Mr. Livsey) rightly highlighted the need for a balance of ages in the communities of rural Wales and his suggestions about the support of family farms and the place of tourism in the economy of rural Wales were constructive and should be followed up. I hope that the Secretary of State will respond to those comments.
    The remarks of the hon. Member for Meirionnydd Nant Conwy (Dr. Thomas) contained much that was unexceptionable. He appears to have time to attend the Monet exhibition as well as lecturing in Scotland and was as petty as ever in his references to the Labour party. He should have more confidence in my hon. Friend the Member for Alyn and Deeside (Mr. Jones) as well as the imminence of a Labour Government who would certainly not only retain the Development Board for Rural Wales established by a previous Labour Government, but provide the proper economic and social framework within which its work will be greatly enhanced. If he has any doubts about the future of the board, I suggest that he checks the Government's intentions. There is certainly no doubt of the Labour party's intentions, but he is always kinder to the Conservative party than to the Labour party.
    I welcomed the Secretary of State's remarks about the importance of close co-operation between all the organisations involved. I hope that he will take that policy wider than he did in his introduction. He also spoke of sustaining communities in the most vulnerable districts and the high proportion of elderly people in the rural
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    communities, which requires the Government, as well as improving the economy, to give resources to the social infrastructure.
    The Secretary of State also spoke about the importance of agriculture. Research by economists at Aberystwyth suggests that Britain could lose about 12,000 jobs in agriculture and another 12,000 in related employment. That underlines the importance of the work of the Development Board for Rural Wales in stimulating other sectors of the rural economy to create compensating employment opportunities. The development of high-tech industries which can operate in rural areas brings opportunities but also brings a need for adequate training. The rural areas face difficulties about such training because of failures throughout the economy.
    As the Secretary of State said, the board has adopted a smaller scale and more diffuse approach. He called it the western approach. The board also encourages a more economically self-sustaining approach. That is important because, as Trawsfynydd reminds us, large-scale industries in rural areas can have a distorting and destabilising effect on the rural economy.
    A recent House of Lords Select Committee on the European Communities report makes strong reference to the need for coherence in planning. In its conclusion the report refers to the Development Board for Rural Wales and states that it is one of three United Kingdom bodies which
    "have proved successful in promoting diversification of the rural economy and remain the proper vehicles through which to channel public support for rural economy and social development."
    I emphasise the words "and social development" and I shall return to them.
    The report also states:
    "The Government should provide broad strategic guidance on the way in which the countryside should develop. Without such guidance rural policies will continue to suffer from lack of integration, lack of targeting and an imbalance in resource allocation … . There is a need for greater institutional coordination at local level".
    Hon Members will be aware of concern about the lack of a coherent approach to marina developments in Wales. I highlight that as an example of an area where the Secretary of State should build in greater co-operation and adopt a slightly wider approach than he showed in his speech. He will be aware that the Countryside Commission report for 1990 speaks of the importance of a policy for marinas. It states:
    "It is essential to develop policy in this area, in response to the burgeoning number of proposals received."
    It is an example of one form of development which needs a coherent approach.
    As a result of pressure, over the past 18 months the Wales Tourist Board brought together the statutory bodies and local authorities. It did that with the public blessing of the Minister of State, Welsh Office who commented favourably on that co-ordinated approach. I am delighted that he did so. Nine months of discussion resulted in a statement of policy being drawn up, and that is to the advantage of development and conservation alike. A strategic all-Wales approach instead of a sporadic approach is precisely what is needed in this and in approaches to other forms of development and planning.
    I understand that the report was ready at Easter but that the Welsh Development Agency declined to sign the statement that was drawn up, even though it was involved in the whole process. I understand that they obtained

    965
    concessions for their point of view, which is the whole point of a consultative process. I also understand that no clear and public explanation has been given for that refusal to sign.
    The Secretary of State and his colleagues should ensure that the statement is published as soon as possible. They should urge the chairmen of the two bodies to appreciate that they need to become involved as full parties in the process. The Secretary of State should reaffirm the Government's support for this process and he should tell us how the Welsh Office will ensure a sustainable and sensitive strategy that can be implemented with authority and not just left as an aspiration which can be shelved and ignored in the development of future policies.
    I am pleased that many professional bodies are increasingly willing to look outside their own narrow or special interests. For example, but for today's debate I would have been speaking to the conference of the Association of Countryside Rangers which this year meets in Wales. Its conference concentrates on new roles in the community of the countryside and the strengthening of links between communities and their surroundings. As well as ideas for looking at working and needs of communities and practical projects, it is trying to develop
    "a wider appreciation of the network of agencies and individuals involved in countryside care and how to build working relationships with them."
    That is wise and practical, and it is the approach that the Government must urge on their agencies. However, these issues of conservation and development can be resolved only if a partnership approach is made unavoidable. That should involve not only farmers, conservationists and landowners sitting down together to work out policy approaches, but residents, local authorities, developers, development corporations and Government Departments.
    That is too uncomfortable an interface to be achieved on a voluntary basis, except in the most unusual of circumstances because most of the groups mentioned will avoid the difficult bits of co-operation if they can, on the understandable and reasonable ground that they are too busy getting on with the job to spend the time, unless they are assured of proper results that will mean something to everybody involved, leading to coherent, long-term approaches to the countryside.
    We look to the Secretary of State for an assurance that he will not take short cuts or easy ways so that development in the countryside looks dynamic, while ignoring the views and voices of everybody involved. That warning is necessary because the Government have gone down that road, and the experience of several urban development corporations in England proved the dangers that can arise if development is encouraged in isolation from the interests of the community.
    In respect of the community and the responsibilities for the social infrastructure, I emphasise the importance of the health service to economic development. This has been stressed to me by people in mid-Wales when I have had discussions with them. There is evidence that it is a consideration for firms considering relocation. Mid-Wales has the hospital at Bronglais in Aberystwyth, and certain issues about the hospital service in the eastern part of mid-Wales need to be addressed. There are problems if people have to look over the border to England for their
    966
    hospitals services, or to the extreme western point of mid-Wales, Aberystwyth, for their treatment. This is especially true when treatment has to be over a considerable time, and that is again related to transport problems.
    Community care is extremely important, and we shall be entering difficult times in this because of the delay in its implementation. These problems will hit urban areas, but they will be writ large in rural areas because of communications and the demographic changes to which several hon. Members have referred. Education, training and public transport are all part of the pattern, but I underline the fact that the DBRW has a responsibility for social development. The difficulty comes in how that responsibility is discharged, and what finances will be available to it. In a budget of nearly £20 million, there will be a reduction in the statutory authority social grant over the next few years.
    It is interesting to contrast what happened in the last year or two with what happened under the last Labour Government. The latest annual report, for 1988–89, like all Government publications, is a rather more flashy document than its predecessors, but in it the chairman refers to
    "improved social facilities that accompany and depend on economic development."
    Up to a point, that is true, but social facilities do not depend on economic development. As I have already said, economic development depends on social infrastructure. The statement in the accounts reflects a pious claim for business growth to be
    "supported by a corresponding growth in social opportunities."
    The board's social policy cannot match that aspiration with the sums of money available. It is nonsense to suggest that the DBRW can compensate for the ills of Government policy.
    Genuine social infrastructure work and the development of community facilities are needed, not just by means of grants to the village halls and small community facilities, but by means of help for the social infrastructure. Perhaps that should be from the work of other Government agencies and perhaps it should be developed by the DBRW. Either way, it needs to be developed. I stress again the interdependency of policies for development and policies for society as a whole.
    I contrast that with the first annual report which was presented to the then Secretary of State, my right hon. and learned Friend the Member for Aberavon (Mr. Morris), which made strong reference to social development powers—much stronger than has been the case in subsequent reports. It said:
    "The board's task is one of social as well as economic development."
    The expenditure in that year was £250,000 in the first year's part-year budget—very significant in comparison with the £6 million which was the second year budget, when that element of the board's spending rose to nearly £1 million, £996,941 in the first two years. Therefore, despite the growth in the budget, there has been a real cut and a cut in the percentage of the budget in respect of the social and social infrastructure responsibilities of the DBRW.
    In responding to my hon. Friend the Member for Alyn and Deeside with a breakdown of where the finances will go within the board's work, will the Secretary of State tell

    967
    us how much will go to address the social infrastructure of the rural areas and where his other policies will pull in resources to that end?
    Finally, I underline again that successive Conservative Governments have steadily eroded the planning system in Britain, which has particular importance in rural Wales. I appeal to the Secretary of State to take this opportunity to halt that process. Structure plans and local plans have been replaced by strategic guidance and unitary development plans. But the guidance is neither strategic nor particularly useful to local authorities seeking to reconcile the demands of their communities and wider regional and national priorities. It is not good enough for the Government to take a short-term view, following market demands and neglecting the important task of long-term planning.
    I ask the Secretary of State to take this opportunity to avoid the worst of this by ensuring that the DBRW takes a co-operative approach in which development is sensitive to the community and to the environment, and to give us an assurance that the Government's resources and the policies that he operates in the Welsh Office will complement community development as a whole as well as seeking new jobs for the rural communities of Wales.
    10.42 pm
    Mr. David Hunt: This has been an interesting debate with some excellent contributions. I think that we have had nine speeches and several interventions, and we have covered a lot of ground. We have managed to cover care in the community and the health service as well as education, social services and all the other aspects of life in Wales.
    But our prime purpose has been the DBRW, and one thing that has come across—I am delighted that it has—is the respect and admiration that we all have for the work of all those involved in the board and the illustrious predecessors of Glyn Davies in Leslie Morgan and the late Emrys Roberts. A number of tributes have been paid and I thank hon. Members for their kind words about the board's work. We are proud of the tremendous commitment of all those involved.
    The hon. Member for Alyn and Deeside (Mr. Jones) asked me about figures. With regard to the special rural action programme, the areas covered by the additional £1 million for that programme include, first, workshops and enterprise centres; secondly, enterprise stimulation, which includes local business expansion schemes, workshop promotion, training, branded farmgate shop schemes, practical research and work with schools and industry; and, thirdly, social, which includes community agents and special rural social development, with emphasis on improved quality of life and increased access to facilities. The precise allocations will be decided by the board according to the priorities that it determines.
    The hon. Gentleman knows the way in which the board currently allocates its resources. One main area is running costs and salaries, fees and charges for professional services, computer and estate management, research, promotion and publicity—which amount to more than £5 million. Capital expenditure on land, factories and other construction amounts to £1·3 million in the current year. Construction and site works, particularly in respect of
    968
    advanced factories, amounts to nearly £6 million. Grants to discretionary and public bodies, and cultural and welfare services total nearly £2 million.
    The hon. Gentleman asked about the north-south link, and made what I like to think was an affectionate acknowledgement of the troubles that I am experiencing in travelling between north and south Wales. I pay tribute to my hon. Friend the Minister of State—and to his travels—and to the sharp focus that he has brought to the importance of making improvements all the time through imaginative schemes. Significant improvements have already been made to the A483 and the A470, and other schemes already under construction include the Llanidloes bypass and the Felinfach-Brecon bypass improvement, which will continue to upgrade those routes.
    I pay tribute also to my hon. Friend the Member for Delyn (Mr. Raffan), who raised a number of important issues—one of which was mentioned by several other hon. Members. I refer to the synergy with the Welsh Development Agency. We are particularly fortunate that support for rural development is provided by my Department and a number of other public agencies under the wing of the Welsh Office, such as the WDA and Welsh tourist board, as well as the Development Board for Rural Wales.
    The WDA recently published a policy document, entitled "Rural Prosperity", and the proposals detailed in that publication will help to achieve further improvements in the prosperity of, and quality of life in, those rural communities for which the WDA has responsibility. I make particular reference to the words of the hon. Member for Ceredigion and Pembroke, North (Mr. Howells). It is important to realise the seriousness with which the WDA takes its responsibilities for those parts of rural Wales for which it has particular obligations.
    The creation of a rural affairs division in the WDA is a worthwhile and welcome development, and shows clearly that the agency is cognisant of the unique problems and challenges of rural areas. That innovation will help to provide the right impetus in holding back the drift of young people to the big cities, by providing them with high-quality jobs within their own communities.
    Like the development board, the WDA will work closely with local authorities and local people in those initiatives. It is that synergy that will make such schemes successful. To ensure further success, I stress the need—as did my hon. Friend the Member for Delyn—for people and organisations, public and private, to work closely together. I am confident that that will be the case, which will ensure greater achievements.
    My hon. Friend also mentioned Laura Ashley. If there are points that I am unable to cover in the time available, I shall of course respond in much more detail to hon. Members in correspondence.
    My hon. Friend mentioned boundaries, as did the hon. Member for Ceredigion and Pembroke, North. Although as Secretary of State for Wales I have power, by virtue of section 1(2) of the main Act, to extend the board's boundaries, until now it has always been considered that it would not be right to do so. I recall that the issue was studied by the financial management review in 1986, and it concluded that any extension to the board's territory would merely dilute its efficiency and resources. We must always bear in mind how important it is to focus, and to have a focus. However, the question of extending the territory of the Development Board for Rural Wales is,

    969
    and will be, kept under continual review, and I shall arrange for it to be reconsidered as part of the board's financial and management policy review in 1991.
    The hon. Member for Newport, East (Mr. Hughes) raised some important issues, and quoted a number of important statistics. The only trouble was that they differed from some of the statistics that I quoted. Before I comment further on that, I should like time to reflect on the derivation of his statistics and to verify my own. I believe that mine were correct. He raised a number of important points, and I should like to respond to him in due course.
    The hon. Member for Brecon and Radnor (Mr. Livsey) mentioned a problem which is hidden in the statistics—unemployed young people. That was a very important point. He also raised the question whether the Development Board for Rural Wales should have a more specific project for abattoir provision. I have spoken to the chairman of the board, and I know that it recognises the strategic importance of approved abattoirs come 1992. However, it has no current plans under way to develop an abattoir in mid-Wales. The hon. Gentleman referred to the application at Three Cocks, Brecon. That application for an integrated meat processing plant at Three Cocks was submitted by the DBRW in 1989. Subsequently it had to be withdrawn, as the landowner was unwilling to sell. I know that the board is willing to respond positively to any approach from an operator.
    The hon. Member for Meirionnydd Nant Conwy (Dr. Thomas) asked about the future of the DBRW. We should not bring forward this legislation if it were not clear that the board has a future, and there are no plans whatsoever to alter the present statutory arrangements for the agencies in Wales. They are doing an excellent job. Very committed people operate within them, and I see no reason to disturb the arrangements. However, I hope that he recognises that it is necessary continually to review their functioning and operation to ensure that they deliver an efficient and effective service within their remit.
    As for the nuclear power station, the problem is several years away, but the north-west Wales training and enterprise council is already starting exploratory discussions with the industry about possible retraining of workers, and I think that that is a proper way to deal with the matter.
    I have to tell the hon. Member for Ceredigion and Pembroke, North that I know that the DBRW recognises that its remit does not cover agriculture, because that is a matter for the Department of Agriculture within the Welsh Office. However, the role of agriculture is significant in a rural area such as ours. The board has told me that it seeks to build other businesses to help to ensure alternative jobs for those who might previously have formed the agricultural work force. I am reassured that the board is intensifying and focusing its efforts to find ways of adding value to existing agricultural production and to funding alternative work.
    The hon. Member for Wrexham (Dr. Marek) made several points about railways and rail links. I am not going to duck out of answering his points, but I shall arrange for them to be brought to the attention of those specifically involved and my right hon. and learned Friend the new Secretary of State for Transport.
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    The hon. Member for Meirionnydd Nant Conwy and my hon. Friend the Member for Delyn spoke of Welsh Lamb Enterprise. As I said yesterday at the winter fair, it is important for the industry to support Welsh Lamb Enterprise and for all farmers to pay the levy. I hope that the initiatives that we have announced will enable us to focus in a more specific way, particularly at international fairs, on the quality of Welsh produce and to get across the clear message that if one buys Welsh food and produce, one buys quality. Quality means a great deal in today's markets.
    The hon. Member for Cardiff, South and Penarth (Mr. Michael) made a series of points. I am not sure that it would be a good idea to answer all of them now, but I shall deal with a couple. I recently met representatives of the Wales tourist board and the issue of the marina review group was raised. As the hon. Gentleman will know, in May 1989 the Wales tourist board, with the Welsh Development Agency, set up the marina review group, or, as some would prefer it to be known, the harbour redevelopment review group. It included representatives of the WDA, the Countryside Commission, the Nature Conservancy Council, the Sports Council for Wales, the National Rivers Authority, the national park authorities, the Council of Welsh Districts and the Assembly—I stress that word to the hon. Member for Ceredigion and Pembroke, North—of Welsh Counties.
    On reading the list of bodies involved, one might be a little troubled about whether agreement would be reached because many interests are represented. I am aware that it is proving difficult to come up with a policy that is acceptable to all the participating bodies. That is a matter for the group members. I have made the members of the Wales tourist board aware that I await the outcome of the group's deliberations with great interest. Obviously we would like some form of agreement to be reached.
    Mr. Michael: Will the Secretary of State reassure me? Does he agree that it is important for the development bodies to participate fully and to reconcile the interests of development, conservation and the other bodies to which he referred? I accept that perfection is difficult to achieve, but the process needs all the organisations to engage in an attempt to find an appropriate way forward.
    Mr. Hunt: I dare say that if I were to receive a note from somewhere, it would tell me to be extremely careful about how I respond. I have planning responsibilities that I have to exercise in a quasi-judicial capacity. When we are talking about a set of strategic policy principles on marina developments in Wales, I must be careful. As I said, it is a matter for the group members, but I await the result of the deliberations with great interest.
    On social policy, I agree with several of the comments of the hon. Member for Cardiff, South and Penarth. If one examines the purpose of a Development Board for Rural Wales and the Welsh Development Agency, one sees that it is vital to seek every possible way of strengthening communities. If we allow communities to weaken, it puts pressure on all the infrasture, social and otherwise. That is why social policy is important. I reassure the hon. Gentleman that when I consider overall policy I shall bear his comments in mind.

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    A range of issues has been raised in the context of an important Bill that extends the limit for the Development Board for Rural Wales, and I commend its proposals to the House.
    Question put and agreed to.
    Bill read a Second time.
    Bill committed to a Committee of the whole House.—[Mr. David Hunt.]

    DEVELOPMENT BOARD FOR RURAL WALES BILL [MONEY ]
    Queen's Recommendation having been signified—
    Resolved,
    That, for the purposes of any Act resulting from the Development Board for Rural Wales Bill, it is expedient to authorise any payment out of money provided by Parliament, the National Loans Fund or the Consolidated Fund resulting from the increase to £175 million of the limit specified in section 12 of the Development of Rural Wales Act 1976.—[Mr. David Hunt.]

  Tobacco Products (Advertising)
  11 pm
  The Parliamentary Under-Secretary of State for Health (Mr. Stephen Dorrell): I beg to move,
  That this House takes note of European Community Document No. 6071/90 on the advertising of tobacco products and the supplementary explanatory memoranda submitted by the Department of Health on 19 July 1990 and 26th October 1990.
  The document proposes a system of statutory regulation of tobacco advertising in the press and on poster displays. The formal proposal was set out by the Commission in a draft directive published on 26 April, the main contents of which would achieve three purposes: first, it would require, by law, that all advertisements in the press and on posters should contain a health warning; secondly, it prescribes in article 3 that the content of the advertisement should simply be a representation of the package of the tobacco product; and, thirdly, it would require, again by law, that no tobacco advertisement should appear in a publication designed for distribution to a readership of under-18s.
  Since the original directive was tabled by the Commission, some amendments have been proposed, particularly to article 3, which specifies that an advertisement could take the form of only a representation of a cigarette package. The effect of the amendments were described in the supplementary explanatory memorandum dated 26 October which was issued by my noble Friend Baroness Hooper.
  I should like to give the House a few more details of the revised approach, which is now proposed on an informal basis, to the type of advertisement that would be allowed under the proposed formulation. The revised draft—it is not yet an official proposal from the Commission, which is why it has not been presented formally to the House—would require that advertising should comply with the following rules: first, that it should not be aimed specifically at young people nor depicit heroes, personalities or situations likely to attract young people; secondly, it should not link the consumption of tobacco products with physical prowess; thirdly, it should not create the impression that the consumption of tobacco products contributes to social or sexual success; fourthly, it should not claim that tobacco products have therapeutic qualities or that tobacco is a stimulant, a sedative or a means of resolving personal conflicts; fifthly, it should not present abstinence or a desire to stop or moderate the consumption of tobacco products in a negative light; and, sixthly, it should not place emphasis on tar or nicotine content as being a positive quality of the product.
  Those regulations would replace the requirement in the original draft that a tobacco advertisment could take the form of only a representation of the cigarette package. If the Commission tabled that alternative formulation of article 3, the revised draft directive would much more closely correspond with the approach of our voluntary code on tobacco advertising.
  Mr. Peter Griffiths: I hesitate to interrupt my hon. Friend because I am sure that we realise the significance of his points about the way in which advertising should be presented. Does he agree with me about the fundamental flaw in the original and the amended drafts? It is not so much the question of how
  974
  advertising should be presented in different countries as the fact that it is nonsense to suggest harmonisation of advertising when the ownership and operation of tobacco companies varies from a free enterprise economy in one country to a Government monopoly in another.
  Mr. Dorrell: I entirely agree with my hon. Friend. I shall deal with that specific point later. I have described the amendment to the original draft directive which it is expected the Commission may be willing to table. It would move from a system of regulation based on describing the type of advertisement that is acceptable towards a system of describing the type of advertisement that is unacceptable, which more closely corresponds with our voluntary code. To the extent that the revised form of article 3 brings the draft more closely into line with our voluntary code, we regard it is an improvement, but substantial objections to the Commission's approach remain.
  The first objection to the Commission's approach is simple and is based on the Government's doubt about the basis on which the Commission is introducing the proposal. One need not be committed to any dogma to ask, if someone wishes to impose a new obligation or to restrict an activity, on what legal authority that regulation is being introduced. The Commission claims that the directive is being introduced on the basis of article 100A of the treaty, which is directed towards removing barriers to trade and the completion of the internal market.
  I do not believe that the Commission can, in truth, maintain the argument that the directive is based on article 100A and can be justified on those terms. That claim is bogus for two reasons. First, even if the directive is accepted and implemented throughout the Community, we will not have created an internal market with the same rules in force throughout the Community. The directive specifically envisages the possibility of two different regimes governing tobacco advertising—the possibility of a ban in some countries and regulations that satisfy the directive in others. It would not create an internal market. On that basis alone, the Commission's claim to justify the directive under article 100A fails.
  Secondly, one must be pragmatic and ask whether the Commission can justify introducing a directive under article 100A to remove barriers to trade in terms of any improvement in trade that would follow. We are talking about a directive which is designed to remove a supposed barrier to trade in the printed word. To justify that approach, the Commission would have to show that there was an existing barrier to trade, based on different advertising practices covering tobacco products.
  I do not believe that the Commission could show that that is a significant inhibition on the trade in printed journals. The United Kingdom press circulates freely in Italy, although there is in force in Italy a total ban on the advertising of tobacco products. It is not an effective inhibition of trade in the Community. Even the most convinced supporter of the Commission's approach must recognise that by far the most important inhibition of trade in the printed word is not different advertising regimes, but the fact that most Community countries speak different languages from their neighbours. I do not think, therefore, that the Commission can justify the proposal on the ground that it removes trade barriers—which is the only basis on which it can justify introducing the directive under article 100A.

  975
  I am forced to conclude that the real reason has nothing to do with removing trade barriers, and nothing to do with the substance of article 100A, but is connected with the Commission's ambitions relating to health and social policy. Let me explain why the Government do not accept its approach. First, the Commission clearly has no competence to direct any member state on issues of health and social policy: indeed, it has said explicitly that it embraces the principle that it calls subsidiarity, and recognises that health policy is properly a matter for national rather than Community decision-making. But even if we put that argument aside and consider the issue on its merits rather than the legalities, the Commission's approach to introducing statutory controls on tobacco advertising is misconceived. I believe that the evidence shows this country's voluntary arrangement to achieve health policy objectives more effectively.
  One reason why our approach is more effective is that all the principles that would restrict the type of advertising that would be allowed under article 3 are already in force under our voluntary code, and we also apply additional restrictions. It would be impossible to design a statutory framework that would allow the introduction of such restrictions in the legalistic language that the statute requires. We have, for example, an agreement with the industry that poster advertising should be allowed only up to 50 per cent. of the 1980 level of spend. The industry has agreed to impose that restriction on itself; but I challenge anyone to frame it in language that would satisfy parliamentary draftsmen or, indeed, the House were it to be submitted as a legislative proposal.
  In the same terms, our existing voluntary code restricts the right—that is, the industry voluntarily restricts its own right—to advertise tobacco near schools. Those are two examples of self-imposed restrictions that are not encompassed in the statutory code suggested by the Commission.
  I do not want to rely entirely on assertion. Let us examine the record of the different approaches to tobacco advertising in the Community. I do not think that it is merely coincidence that the two Community countries that have achieved the biggest reduction in cigarette consumption over the period between 1975 and 1987 are two of the countries that tackle the problem with voluntary agreements. Over those 12 years, the United Kingdom experienced a 29 per cent reduction; the Netherlands, which also operates a voluntary agreement, experienced a reduction of 41 per cent.
  That is the record of voluntary agreements. However, not one of the four countries of the Community which have imposed or proposed a ban on advertising or consumption recorded a fall in consumption. In all the four countries there was growth in consumption over the four years when we saw a 29 per cent. reduction and the Dutch saw one of 41 per cent. Over the same period consumption increased by 7 per cent. in Portugal, 5 per cent. in France, 8 per cent. in Italy and 11 per cent. in Spain. Track records do not support the assertion of those who suggest that the more heavy-handed legalistic approach is a more effective way of securing our health policy objectives.
  As my hon. Friend the Member for Portsmouth, North (Mr. Griffiths) suggested, there is an interesting correlation between the four countries to which I have referred. Each one has imposed a ban on advertising, or proposes to do so, but each has an effective state monopoly of production.
  976
  There is no local production that is not state-owned. The evidence shows that a total ban is ineffective, and the fact that such a ban is imposed or proposed only in countries where cigarette production is effectively a state monopoly must raise questions about the bona fides of the basis on which their Governments support a legalistic ban on advertising.
  At the Council of Ministers meeting next Monday we shall oppose the proposals, even if they are submitted in their amended form. First, we do not believe that they can be justified as measures to liberalise trade. We do not accept that any inhibitions to trade arise from the printed word. We do not believe, therefore, that the Commission has competence to tell us, on health policy grounds, to introduce the restrictions. Leaving aside competence, we believe that the evidence demonstrates that we have been presented with an undesirable way of approaching the problem on health policy grounds.
  11.18 pm
  Ms. Harriet Harman: The Minister's speech was disappointing, because it did not sound in any respect like one that should be made by a health Minister. We are, of course, dealing with an important issue of public health. The Minister said that one of the key considerations is the legal authority that the directive purports to introduce. Surely the key consideration is whether it is a good idea to restrict or even ban the advertising of tobacco. It is not one of constitutional niceties, which is what detained the Minister and concerned him throughout his speech.
  The Minister referred to why other European countries support the measure and sought to pick holes in their records. I have two criticisms on that score. First, the question for us is whether it is a good idea to support the measure. Secondly, I question the relevance of relating advertising and smoking levels in a vacuum. Surely we should relate also price and health education, for example, which have an effect on the consumption of tobacco. I think that the Minister trivialised the complexity of the factors that bear on whether people smoke tobacco. It might have suited the Minister's case, but it is a pity that he began the debate on that basis.
  This is not—or should not be—a party political matter. No doubt some Opposition Members disagree with our party policy on this matter and no doubt many Conservative Members who are waiting to speak will disagree with the Government's approach. The most important aspect of the directive is that it would replace the United Kingdom voluntary agreement with a legal system of controls. It does not go far enough, but it is a step in the right direction.
  We need to move on from the constitutional niceties and remind ourselves of the background to the directive. The dangers of smoking have not always been known. One can go round hospitals and see people who are now terminally ill because they became addicted to smoking when tobacco was given out as part of their naval rations. One can also meet people with chronic bronchitis who remember being given a cigarette at the surgery by their general practitioner to help them to relax.
  Although the dangers of smoking have not always been known, they are known now. The trouble is that public policy lags behind scientific knowledge and public opinion on this issue. Both smoking and non-smoking parents alike do not want their children to begin to smoke and 80

  977
  per cent. of those who currently smoke have tried to give up and would like to give up. I do not know who the Minister thinks that he is defending with his constitutional niceties except the tobacco industry——
  Mr. Peter Bottomley rose——
  Ms. Harman: I am sure that the hon. Gentleman will be seeking to catch your eye, Mr. Deputy Speaker— [Interruption.] I shall give way, but it is against my better judgment.
  Mr. Bottomley: The hon. Lady speaks like a lawyer, as though only things that are written down in law work. Did she hear my hon. Friend the Minister say that cigarette smoking in this country has been declining faster than in at least four other Community countries? Did she hear his example of how the voluntary agreement led to a reduction in tobacco advertising rather more quickly than is likely to be the case with the directive? We must face up to the question whether we are talking about an effective reduction in both the promotion of cigarette smoking and the levels of cigarette smoking.
  Ms. Harman: Yes, I heard what the Minister said, but the only factor that he seemed to be taking into account in comparing different countries' records in reducing the consumption of tobacco was the different ways in which they dealt with advertising. But there are many other variables. Advertising is only one piece of evidence and should not be taken in isolation.
  We have nothing to be complacent about. Yes, we have reduced tobacco consumption and smoking in this country, but it is still an immense public health issue, a killer and a disabler. I do not want to hear Conservative Members saying how great our record is when our national health service hospitals are full of people who are disabled and dying because of smoking. I want to hear concern and to see some action, not complacent self-congratulation and criticisms of other countries because they are not doing as well as we are.
  I should like to illustrate the way in which the scientific evidence has built up. A turning point came in 1962 when the Royal College of Physicians published its "Smoking and Health" report which, for the first time, surveyed the evidence. Its second report, "Smoking and Health Now", was published in 1971. In 1976 Professor Sir Richard Doll and Mr. Richard Peto published the results of their 20-year study of nearly 35,000 doctors' smoking habits. One of their major conclusions was that one in every three smokers will die as a direct result of smoking.
  I hope that the Minister will bear with me as I run through the evidence; as he failed to put on the record the seriousness of the issue, I feel that I must do so, despite the lateness of the hour. In 1977, the third report of the Royal College of Physicians was entitled "Smoking or Health". It had become clear that one could either smoke or be healthy. The fourth report of the Royal College of Physicians, "Health or Smoking", introduced the question of coronary heart disease-related deaths and smoking, and stated that 20 per cent. of coronary heart disease deaths were related to smoking. In 1988 the fourth report of the Independent Scientific Committee on Smoking and Health —the Froggatt report—raised the question of passive smoking—people whose health suffered not because they
  978
  were smokers themselves but because they inhaled other people's smoke. It said that several hundred of the current annual total of lung cancer deaths in the United Kingdom could be attributed to passive smoking.
  The roll call of death and disability is clear for people to see. I suggest that all hon. Members who intend to oppose my view that the Government should support and, indeed, strengthen the directive should go round their local hospitals. They should go into wards where there are premature babies who are under weight because their mothers have smoked, bronchial wards where people have an oxygen mask over their face because they can hardly breathe, wards where people have had heart operations or people are waiting for the amputation of a second leg, having had the first leg amputated already because of the circulation problems caused by smoking. Hon. Members should go to their local hospitals and see the damage being done. Then they should not rule out anything that could help in the war against tobacco.
  I shall run through the roll call of death and disability in this country as a result of smoking. At least 110,000 people die prematurely every year from diseases caused by smoking. That is 300 every day. Smoking costs industry about 50 million working days a year. Some 60,000 to 75,000 people each year have heart attacks because of smoking. Some 320,000 people a year consult their doctor about angina. Around 25 per cent. of that will have been caused by smoking. That is 80,000 people. Of the coronary by-pass operations performed each year, 3,000 are attributable to smoking. The total number of new lung cancer cases in the United Kingdom in the latest year for which figures are available was 30,345. At least 90 per cent. of lung cancer cases were caused by smoking. That is 27,310 new cases of lung cancer attributable to smoking. There is also the incidence of cancer of the pharynx.
  The most recent figures for amputations show that 5,780 amputations were performed, of which 3,699 were due to peripheral vascular disease. Medical opinion now accepts that 90 per cent. of peripheral vascular disease is caused by smoking. It is an individual tragedy for each person whose health suffers in that way, but it is also a tragedy for the national health service because it is a drain on its resources and represents a failure of our public health policy. As I said, I went round Dulwich hospital a while ago with a consultant. He reckoned that about 20 per cent. of all the beds in the hospital were occupied by people with smoking-related diseases. It is a terrible position.
  Of course, advertising controls are only one measure which affects the rate of smoking in any country. There are others. The Government have dragged their feet behind the medical evidence and public opinion on not only advertising but health warnings, tax and particularly policy on children and smoking. The idea that somehow one can distinguish between magazines that are directed at children and those directed at adults is wrong. In any household one can see an issue of Fast Forward or some other children's magazine containing all the "Parents Against Tobacco" anti-smoking message and on the same table, written in equally accessible language will be Woman or another magazine which is likely to contain an advertisement for cigarettes.
  Mr. Dorrell: Is the hon. Lady saying that she is against the proposition that we should treat magazines directed at children as a special risk requiring special controls over and above the controls on the printed word generally?
  Ms. Harman: No.
  Mr. Dorrell: That is what she is saying.
  Ms. Harman: Before the Minister jumps to conclusions about my answer, he should listen to me. This is a serious issue. I am saying that we should have a ban on tobacco advertising in all magazines. I accept, of course, that if one allows such advertising in magazines, it should at least be exempt from children's magazines. That solution, however, does not go far enough.
  No cigarette advertising has been allowed on British television since 1965, yet 64 per cent. of children aged between nine and 15 claim to have seen such advertising on television. They are, of course, referring to sporting events and competitions that are sponsored by tobacco companies. Such sponsorship should cease.
  Toy cars sold on street stalls have Marlboro written all over them. They are an exact replica of a sports car. a car which a child will recognise from television coverage. A child will play with such a toy and come to recognise the logo on the cigarette packet.
  The tobacco industry spends more than £100 million a year on advertising alone, which does not include the sponsorship of sporting events, but such sponsorship is also advertising. Why else would the tobacco industry provide it? It does not do so out of the goodness of its heart, but because it knows that that sponsorship sells cigarettes. The Government spend about £5 million a year on anti-smoking education. It is ludicrous that the Government should spend taxpayers' money on such education while allowing the tobacco industry to spend £100 million on advertising.
  All the leading national and international medical and health organisations that have studied the problem of smoking have called for a total ban, enforced through legislation, on the promotion of tobacco. I support that. Tobacco advertising undermines national, public health education—of course it does. The health education authorities recognise that.
  It is important to cut out all tobacco advertising and promotion, because it influences people to smoke. The tobacco industry would not spend such large sums of money if that was not the end effect. Tobacco advertising is also one of the factors behind the uptake of smoking by children.
  To allow advertisements for a product that kills one in four of its users is unethical. We now know about the death toll and therefore we have a moral obligation to ban tobacco advertising. Moreover, to promote the use of a product that has proved to be harmful to non-users as well as users is absolutely unjustifiable.
  I am disappointed that the Under-Secretary has reiterated the point made by his colleague in the Department who said:
  "The UK Government continues to believe that the best way to control tobacco advertising is by means of voluntary agreements."
  What absolute nonsense. The evidence produced by the Under-Secretary is bogus, paper thin and designed to suit his case. No one agrees with him except the tobacco industry. He should appreciate that his stand is opposite to
  980
  that held by all public health organisations, including the World Health Organisation, the medical profession and health educators. He has some support, however—that of the tobacco industry. It is a sad day when a Minister responsible for health argues the case for that industry.
  Voluntary agreements have been abused by the tobacco industry and, by their very nature, they are subject to an element of negotiation. The industry will never agree voluntarily to restrictions that would put it out of business. It will never agree to anything that seriously threatens its sales. The Government go along with that, which is irresponsible.
  The scale of the tobacco problem and the determination of the industry mean that we must have a tobacco control policy that is comprehensive and implemented by legislation, not by negotiated voluntary agreements. We are committed to that and urge that commitment on the Government.
  We also want a ban on tobacco advertising, the ending of sports sponsorship by tobacco companies, the promotion of wider use of non-smoking restrictions in public places and the creation of a new right to a smoke-free environment at work. There is strong evidence from the past three decades that the single largest factor in any variation in the consumption of tobacco is a change in its real price, and the most powerful contribution to reducing consumption would be a real increase in excise duty. Conversely, a fall in the value of excise duty is liable to undo any achievement in health education. The British Medical Association has been critical of the Government's policy on tobacco, under which, although the excise duty rose during the early 1980s, it has fallen 9 per cent. since 1986 and is now about the same level as in the mid-1960s.
  Although we are discussing only one part of the problem of smoking—advertising—the next time that the Minister comes to the House he must give us a sense that the Department of Health has an anti-smoking strategy, complete with target, and he wants to use advertising as one of the weapons in that strategy. He must take the problem more seriously. It is no good wishing that people would not smoke; we must have targets for a reduction in smoking. Just as we must have defence industry diversification to save jobs, we must have tobacco industry diversification. We want not just to reduce the menace of smoking, but totally eliminate it.
  11.36 pm
  Mr. Peter Griffiths: I congratulate my hon. Friend the Minister on his excellent exposition of the Government's view. I am sorry that I interrupted him because had I not done so he might have been even more effective in putting forward the case, which completely demolished everything that the hon. Member for Peckham (Ms. Harman) had prepared to say. I do not know how the hon. Lady can call the official figures which the Minister gave bogus. If they were bogus, that would be a serious matter, but they were obviously not bogus—the word that the hon. Lady used. They simply did not accord with her previously held prejudices, and so she dismissed them.
  The sweeping statement with which the hon. Lady opened her speech, by saying that we were discussing a health matter, was also misleading. It is not only a health matter, but an employment matter and, most of all, a matter of political and legal freedom. We are deciding whether a directive from Europe is justified, whether it

  981
  would be effective if it were justified and, even if it were effective if it were justified and, even if it were effective, whether the difficulties involved would make it worth while for Her Majesty's Government to accept the principle.
  As the report clearly shows, we would need legislation to deal with the directive, and the moment we have legislation we lose the tobacco industry's voluntary co-operation. I am a non-smoker and so I have no remit for the tobacco industry, but I believe that we have something in this country that is extremely valuable—a dialogue and an agreement with the tobacco industry, which has shown itself able to respond to changed circumstances. The moment we introduce a rigid legislative framework, the tobacco industry, like any other industry faced with legislation, will operate closely and exactly within the parameters of the legislation.
  Is the hon. Lady really suggesting that whenever circumstances change or there is a new idea in marketing we should change the legislation by taking it through the House? That would be hopelessly time-consuming and we would always be trailing after the event. The advantage of a voluntary agreement is flexibility, so that if a new situation arises the matter can be discussed.
  I do not want to take up the hon. Lady's arguments about the merits of advertising or sponsorship, which are for another occasion. However, I emphasise what I said in my intervention, that it is unreasonable for countries that operate a state monopoly on tobacco products to seek to restrict the advertising system in countries that have a free market economy. The purpose of advertising in such an economy is entirely different from methods of promotion in countries with a state monopoly where there is probably no need for any advertising, even if the state were prepared to accept it.
  Mr. Dorrell: The situation is even worse than my hon. Friend suggests. There must be a suspicion that the purpose of the advertising ban in the four countries that have a state monopoly on production is to keep out foreign competition.
  Mr. Griffiths: My hon. Friend's comment is the key to the argument. We are debating the merits not of tobacco advertising but of a legislative framework instead of a voluntary agreement. It would be to our disadvantage to give up the good will between the Government and the tobacco industry by seeking to restrict sales to vulnerable groups. Such groups have a choice, but they need to be protected, especially at certain times such as during childhood.
  No one is calling for advertising to be extended. In some countries there is an absolute ban on advertising while in others agreements such as ours with the tobacco industry might be more liberal. The directive's proposals do not go as far as some of our existing agreements. The directive contains no provision for a halfway stage because it seeks a total ban. We need to examine that carefully before reaching a decision on the issue. It is vital that we do not weaken our regime. I emphasise that I have no wish to see increased market penetration of cigarettes, and I certainly do not wish them to be sold to children or vulnerable people. The most effective way to deal with the
  982
  problem is by devising a carefully planned and developed agreement with the tobacco industry that is flexible enough to meet changing circumstances.
  11.48 pm
  Mr. Peter Bottomley: I normally try to leave tobacco on one side because it might confuse Auberon Waugh if I started to criticise smokers as well as those who engage in drink driving. The last time that I met him was at The Spectator parliamentarian of the year lunch two years ago. That lunch was held today and I was not invited, so I might be forgiven one small slip into this field. I do so partly because the European Community needs to learn to pursue effective matters and partly because I was mightily provoked by the speech of the hon. Member for Peckham (Ms. Harman).
  The hon. Lady constantly used the word "we". She is accompanied in the Chamber by a Whip, but there does not seem to be a great deal of interest among other Opposition Members. Perhaps she thought that she could not be trusted to speak by herself or perhaps her hon. Friends knew the sort of speech that the hon. Lady was likely to make. I am surprised at the absence of the Liberal Democrats.
  I agree with the hon. Member for Peckham that this is a serious health problem. The consequences of smoking are appalling. It appals me even more to know that the growth in smoking is among women. We need to learn not that advertising has been aimed specifically at women—it has not—but that there is a false sophistication, rather like some of the hon. Lady's false arguments, that leads people to believe that smoking calms them down, just as socialism is supposed to calm people down, or that there are some other reasons to take up smoking.
  People smoke for the same reasons as they drink-drive —it is socially acceptable. If we seriously want to go on cutting the amount of tobacco that is smoked, we should realise that we shall not achieve that with a lawyer's approach. It does not work. I do not argue that there is no place for the law, and I should not trust the tobacco producers always to do the right thing at the right time. That is not the way that life works. But we can ask the hon. Lady to bring in some facts occasionally. She is good at bringing in assertions, and when we debate other health issues she brings in individuals, and does so very effectively. That does not work when we are trying to get a further dramatic improvement in public health.
  The European Commission must look to see what is happening in the different countries in Europe. That is what partnership is about.
  I should like to see league tables of the different social groups, and how their smoking has been increasing or decreasing. That would provide a publicity focus, which would start to draw the attention of those who smoke to the fact that they are addicted. Most smokers give up only when they realise that they are addicted, not when they think that they can give up whenever they want to. We shall have to squeeze the tobacco companies out of sponsoring sport, and the sooner we have agreements on that, the better. It will happen far faster that way than if we rely on directives.
  My hon. Friend the Minister, in one of his typically effective speeches, mentioned the intervention that matters. If monopoly suppliers of tobacco want to keep out competition, it is unlikely to be because they want to

  983
  sell fewer products. If the Labour party has not learnt that monopoly socialism should have gone out over the period when my right hon. Friend the Member for Finchley (Mrs. Thatcher) was Prime Minister, it has not learnt much. The socialist Government of Spain has learnt far more from what Britain has done in the past 10 years than the hon. Member for Peckham has.
  I hope that the Commission will start looking at the figures. Has it provided a league table of the amount of smoking per head in each country, or of the amount that smoking has dropped in each country? Has it learnt the lessons from the anti-drink-driving campaign in this country? I do not mind being associated with the reduction in road casualties for the rest of my parliamentary service. I remind the House of what we did. In 1986, we discovered that an estimated 2 million times a week, men drove after drinking above the legal limit. After two and a half years, that figure fell to 600,000. There had been a two thirds reduction with no change in the law, sentencing or enforcement and with a reduction in the amount of Government-funded advertising.
  The change in the consumption of tobacco will not be so easy, because at least the drink suppliers were able to provide non-alcohol beers and low-alcohol beers. Sales of those went up from about £15 million a year to £250 million a year. That is worthwhile. It is important to monitor and find out how social groups are behaving, and we can move further on that.
  Ms. Harman: I have all that information.
  Mr. Bottomley: The hon. Lady did not use it. She asserted that what other countries have done, which appears to be worse than what we have done, should be substituted for our approach, which appears to have worked. She is right to emphasise that most people are not aware of the consequences of tobacco smoking.
  We should devote the time that would otherwise be directed to debating the competence of the European Commission in this sector—it is fairly well established that it does not have competence—and whether, if it did have the competence, its approach was the right one, and it is clear that it is not, to raising the consciousness of people, especially those among whom tobacco consumption is rising, and the women who look to the hon. Lady as an example, or a role model. She should work with us in the non-political way for which she has asked to get those people to realise that smoking is a menace to society. Giving up smoking means that it will not kill. It sets children a good example. If parents do not want their children to smoke, the best thing is for parents not to smoke. That is the way to make dramatic progress.
  In four or five years' time, experts from the Commission and other European countries may come to see how we have achieved better progress by ourselves in a way that can be copied by others. I hope that we will also have the humility to go to the other countries that have done better than us, such as the Netherlands, and find out what we can from them. That would be a far more effective process. It is likely to empty some of the hospital beds and reduce family distress rather faster than relying on a legalistic approach.
  11.50 pm
  Mr. Alan Amos: The proposed directive is expected to enshrine into United Kingdom law the current voluntary agreement with the tobacco industry, or at least to enshrine some parts of that voluntary agreement. That so-called agreement is an embarrassment, having been put together by the Department of health and the tobacco industry behind closed doors in smoke-filled rooms.
  It is only the industry and, almost apologetically, people in the Department of Health, who defend this method of controlling tobacco advertising as being effective. There are numerous examples of how the tobacco industry is able to bypass that agreement. We have only to look around us—in newspapers and on billboards—to see the portrayal of smoking as everything from macho and virile to chic and sophisticated. The image of the Marlboro cowboy is not dead.
  As I understand it, the proposal would make it a matter of legislation that cigarette advertisements could not appeal to the young and link smoking with physical prowess or sex, or claim therapeutic qualities for smoking. The thought that those things could end up as matters for courts to decide—whether an advertisement for Marlboro that shows a black-clad, gun-toting motor cycle cop, astride his machine, a real example, suggests that smokers have more physical prowess—seems a long drawn-out nightmare. I am advised that the courts would not touch it and certainly would not wish to judge on such matters.
  Even in the case of less clear breaches of the spirit of the rules, it is anathema for the Government to be officially blessing advertisements that present witty, clever images of smoking, the kind of images that win marketing awards for being so compelling. After all, images are what tobacco companies are all about. Tobacco companies are not selling smoking, they are selling an image of smoking. In enshrining the voluntary agreement in legislation, the Government would in effect be saying that it is legitimate to use such clever images.
  The idea of putting the agreement into United Kingdom law would, therefore, only perpetuate an already discredited agreement with the tobacco industry. In fact, the directive itself is seriously flawed and, if introduced, would create a legislative limbo for tobacco advertising. In short, it would be bad law and it is extremely doubtful whether any court would be prepared to spend valuable time arguing whether the industry had broken the law.
  The United Kingdom Government would therefore be entirely right to oppose the new directive, as other countries, such as Germany, and possibly the Netherlands, intend to do. I can quite understand the argument that any legislation on advertising is better than nothing at all because it breaks the mould of the voluntary agreement and makes further legislation—that is, a total ban—easier, and a total ban is something that all reasonable people must want, aim and work for.
  However, there is no certainty that the current version of the European advertising proposal would bring the United Kingdom closer to a ban. Certainly, if it is bad law, as I believe it is, it would make a total ban more difficult and would enable the tobacco industry to say that it is difficult to enforce the law that we have, so we cannot dream of extending the law to a total ban. I would not want to give the tobacco industry another argument for doing nothing.

  985
  The directive is intended to control permitted advertising, but, as I have said, in reality such a law would not be enforceable. The only real solution—I am sure you will agree Mr. Deputy Speaker, because you are a very reasonable man—is to do what the Royal College of Physicians, the British Medical Association and other medical authorities have called for—to end all forms of tobacco promotion.
  A recent survey of the United Kingdom's top 300 advertisers found that even they were in favour of a total ban on tobacco advertising—62 per cent. agreed with that proposition. Such a ban must embrace not only the advertising we see in print and on billboards but the more pernicious promotion of tobacco through sports sponsorship.
  Just how pernicious it is was shown recently by the publication of a report on tobacco sponsorship of televised sport by the Health Education Authority, "Beating the Ban: Tobacco advertisements on BBC TV—A threat to our children's future health," which I recommend every right hon. and hon. Member to read. The HEA is not a shady organisation but is part of a Government Department.
  That report found that, although cigarette advertising on television has been banned since 1965, 64 per cent. of children between the ages of nine and 15 claimed to have seen cigarette advertising on television. They had, in fact, seen sports events sponsored by tobacco companies—cricket, snooker, motor racing, tennis, and so on. Surprisingly, all that coverage is on BBC television. In 1987, ITV companies formally decided not to televise tobacco-sponsored sporting events.
  Mr. Peter Bottomley: I draw my hon. Friend's attention to the fact that only on BBC can those selling drink associate their alcohol with motor racing. I hope that those who read the report of this debate for the BBC will realise that the corporation ought to obey its guidelines—and certainly do nothing worse than ITV allows to advertisers.
  Mr. Amos: My hon. Friend makes a very valid point. The HEA report concludes:
  "The BBCTV coverage of tobacco-sponsored sport appears to be in breach of the letter or the spirit of the 1987 Voluntary Agreement or exploits defects in the Agreement."
  It cites three apparent breaches on the agreement, and adds:
  "These apparent breaches should be investigated by the Monitoring Committee and appropriate action taken."
  It details another six breaches of the voluntary agreement, and remarks:
  "Action should be taken by the Monitoring Committee to review these apparent defects. The BBC and the European Broadcasting Union should be asked to examine these matters, to avoid broadcasting channels being used to promote tobacco."
  Most damning of all is this conclusion:
  "The extent of broadcasting of tobacco promotion images appears to be increasing and needs to be curtailed in the interests of health. The impression remains that the tobacco companies effectively control the televising of these programmes, whose aim appears to be to use BBC airtime to sell cigarettes."
  That goes to show how useless and irrelevant is COMATAS, the committee that is supposed to monitor tobacco advertising and sponsorship, but half of whose members are from the tobacco industry itself, and without
  986
  whose permission no report may be published and nothing done. The committee is useless anyway, because the agreement is voluntary and the committee does not have to do anything about breaches of it—and does not. We need to redress the balance in favour of health. The tobacco companies have had it all their own way for far too long. How can we possibly hope to compete when the tobacco industry spends an estimated £117 million each year on direct advertising alone in promoting its deadly products, when all the Government spend on anti-smoking health education is a total of £5 million. We must follow the lead of our colleagues in Europe and throughout the world and go further than the proposed directive, by banning all forms of tobacco promotion.
  So often people say that it cannot be done. Of course it can—it is done in the United States, Canada, Australia and New Zealand. We can also do it, if we are really serious about preventing 100,000 deaths each year, and saving more than £500 million of needless expenditure on NHS treatment.
  I can do no better than to quote from the chairman of the Health Education Authority who was talking about the tobacco companies sponsorship of sporting events:
  "The time has come to close this loophole in the regulatory machinery the Government has set up to protect children from tobacco promotion. This anomaly is damaging the Government's own laudable efforts to tackle the serious issue of children's smoking."
  He goes on to mention the number of children who smoke, and says:
  "there are disturbing signs that an earlier decline in smoking among children is not being maintained. This is why the Government, through the Health Education Authority, has just launched a five year programme to help children resist the pressures to smoke.
  This programme is undermined by the promotion of cigarettes on the most powerful medium to which children are exposed. In surveys of children's attitudes to smoking, the sponsorship of sports and other events by cigarette companies is cited as evidence that the Government is not seriously concerned about the problem of smoking. 'If they really want to make us realise smoking is dangerous, why do they allow all this sponsorship' is a typical comment.
  Children see things straight. We should be straight with them."
  Please, let us be honest and go for a total ban. We can argue whether it is within the competence of Europe. We can have a ban without diktat from Europe. Whether this is the right directive to do it is a debating point. If we want a ban we could have a ban. We know the dangers of smoking. We know that people are influenced by advertising. That is why the industry goes in for so much sponsorship.
  I sincerely believe that it is a great tragedy that we know the effects of smoking, but we are not doing enough to stop it. I urge my hon. Friend please to do something about it.
  12.2 am
  Mr. Dorrell: My hon. Friend the Member for Hexham (Mr. Amos) is quite right to say that if we want a total ban we can have one, and I shall return to that issue later in my summary of the debate.
  I think that there are probably two things that my hon. Friend the Member for Portsmouth, North (Mr. Griffiths), the hon. Member for Peckham (Ms. Harman) and I have in common. The first is that I suspect that all three of us are non smokers. Certainly, anyone who comes to see me in my office in the Department of Health will not be offered an ashtray. I have to tell my hon. Friend the Member for

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  Mid-Worcestershire (Mr. Forth) that that is simply because I do not like the smell of cigarette smoke in my office, and if it is my office, I think that I am entitled to determine what the atmosphere is like.
  Ms. Harman: That is power.
  Mr. Dorrell: Yes, that is right.
  The second thing that we have in common is that I think that we all agree that the substance of this directive is a health matter. Therefore, it is not anything to do with the removal of barriers to trade around the Community, as the Commission is seeking to argue. It seems to me that the House has united on that this evening. It is clear that this is a health matter, which should be considered on health grounds. It has nothing whatever to do with alleged barriers to trade. The House accepted without demur that this is a matter to be determined here, and not as a result of leadership by the European Commission. In my view, it is clearly outside the competence of the Community. It is a domestic matter, which should be decided here and has nothing to do with article 100A of the treaty of Rome. The House has demonstrated unity on that view.
  Mr. Bottomley: Our hon. Friend the Member for Southend, East (Mr. Taylor) usually raises the question of competence and he is not in the Chamber. Is that the reason for unity?
  Mr. Dorrell: I shall delight in pointing out to my hon. Friend the Member for Southend, East (Mr. Taylor) that, even in his absence, we were able to agree on that aspect of this evening's debate.
  Mr. D. N. Campbell-Savours: Perhaps he is waiting by his phone.
  Mr. Dorrell: It might be a long wait.
  Having established that it was a health matter, the hon. Member for Peckham went on to ask whether it was a good idea. It must have been a rhetorical question, because she answered it by saying, "Of course it is." The difficulty with that is that it is merely assertion, not argument. With respect, she did not address the facts. The facts, as I sought to present them to the House, are that cigarette consumption has fallen in countries that operate voluntary agreements on the model that I have sought to defend, and the countries that rely on legislative restrictions have done less well than we have. The countries that have done least well are those relying on a total ban. One has to approach this on the basis of the evidence. If one of our public health objectives is to reduce cigarette consumption, is not it relevant to look at the experience of different Community countries? If cigarette consumption has fallen fastest—as is the case—in countries that have observed voluntary agreements and has risen in countries that have or propose a total ban, should not that at least inform our debate?
  Mr. Amos: Is my hon. Friend saying that where there is no advertising of tobacco products people are more likely to smoke and that where there is advertising under a voluntary agreement they are less likely to smoke? That is the logic of what he is saying.
  Mr. Dorrell: I am quoting the experience of member states. In every country that has or proposes a total ban on cigarette advertising, cigarette consumption has risen. In countries that have a voluntary code on cigarette
  988
  advertising, consumption has fallen by a significant margin. The House should bear that in mind when it addresses this issue.
  My hon. Friend the Member for Portsmouth, North suggested that a voluntary agreement is preferable to a legislative framework of restriction on cigarette and tobacco advertising. As he rightly said, a voluntary agreement is, by its nature, more flexible. It makes it easier to insist that those who are governed by it observe the spirit rather than purely the legal letter of it. Perhaps even more significantly, as he said, it puts the onus much more on the industry to satisfy itself that it is observing the spirit of the agreement that it has signed rather than believing that if it merely satisfies the letter of the agreement it has discharged its social obligation. Although one or two hon. Members have sought to suggest that the voluntary code has not been fully observed, the committee set up to monitor the code has expressed itself satisfied that, by and large, the conditions are being observed.
  My hon. Friend the Member for Portsmouth, North also rightly pointed out that we should remember that the countries in the Community that have or proposed a total ban on cigarette advertising are the countries that have a state production monopoly. Four countries have or propose a ban and the same four countries have a state production monopoly. We should not simply dismiss that as a coincidence.
  My hon. Friend the Member for Eltham (Mr. Bottomley) said that we should take seriously the public health objective of reducing cigarette consumption. He rightly pointed out that it is a women's health issue as well as a general public health issue because cigarette consumption is particularly concentrated in the female population. My hon. Friend is right to bring that fact to the House's attention. The Government take seriously the public health objective of reducing cigarette and tobacco consumption and the number of unnecessary deaths caused by it. We take seriously the need to draw to the attention of anyone contemplating using tobacco the health hazard that any smoker runs. That is an entirely legitimate objective of a Government in a free society. If we set ourselves an objective, we must surely require that we take effective action to meet it, not action that satisfies an untested assertion.
  My hon. Friend the Member for Hexham (Mr. Amos) at least agreed with me that if the directive were accepted it would lead to bad and unenforceable law. He was therefore with me in opposing the directive at the Council of Ministers meeting next week. I am grateful for his support on that.
  My hon. Friend argued the case for a total ban on cigarette advertising, which I do not accept. Evidence suggests that such a ban is not effective in reducing cigarette consumption and a total ban on advertising and sports sponsorship would lead to an ever more ingenious system of evasion and of bringing the brand names of cigarettes and smoking products into the public arena. It would not achieve the purpose of denying producers of smoking products access to brand recognition. If that is my hon. Friend's purpose, he cannot design a legislative ban that would achieve it.
  I emphasise that the Government accept that public health education is a proper responsibility of a Government in a modern society. We take that seriously and we shall take the effective steps necessary to discharge it. In the context of tobacco advertising, that obligation is

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  best discharged by a voluntary approach that limits the scale of tobaco advertising to an acceptable minimum. That is the approach that we have adopted and will continue to adopt, which is why we shall oppose the directive in the Council of Ministers next Monday.
  Question put and agreed to.
  Resolved,
  That this House takes note of European Community Document No. 6071/90 on the advertising of tobacco products and the supplementary explanatory memoranda submitted by the Department of Health on 19th July 1990 and 26th October 1990.

  Tobacco Products (Advertising)

    WELSH GRAND COMMITTEE
    Ordered,
    That during the proceedings on the Matter of Education and Training in Wales, the Welsh Grand Committee have leave to sit twice on the first day on which it shall meet, and that, notwithstanding the provisions of Standing Order No. 88 (Meeting of standing committees), the second such sitting shall not commence before Four o'clock nor continue after the Committee has considered the matter for two hours at that sitting.—[Mr. Patnick.]

  PETITION

    Lowdham Grange
    12.12 am
    Mr. Andy Stewart: I wish to present a petition,
    To the Honourable the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled. The Humble Petition of
    4,300 residents of Nottingham and the Sherwood constituency
    Sheweth
    That the Prison Department propose to close part of the prison estate at Lowdham, Namely Lowdham Grange. Wherefore, your Petitioners pray that your honourable House hold an enquiry into our case against closure.
    To lie upon the Table.

  NHS Industrial Tribunals
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Patnick.]
  12.13 am
  Mr. D. N. Campbell-Savours: Industrial tribunals were originally set up to provide a procedure that was easily accessible, informal, speedy and inexpensive. In short, they are meant to provide cheap and easily understandable justice for workers wronged by employers. Unfortunately, the Government seem to have decided to run them down and to deny working people that justice.
  Last year, applications to industrial tribunals increased by 10 per cent. This year, the increase is 32 per cent. That is not surprising, and it must be remembered that the vast majority of cases involve unfair dismissal claims—workers seeking compensation for dismissal or pursuing an employer for wages and redundancy money owed. A minority of cases concern sex or race discrimination and claims for equal pay. Thus it is hardly surprising that, as we enter a recession caused by the Government's economic incompetence, the caseloads should increase.
  Why, in the light of that increased demand, did the Government set this year's budget allocation on the entirely unrealistic assumption that applications for cases would remain constant? Indeed, the Government's Employment Act 1990 creates the likelihood of some complex new claims arising out of the new law on refusal of employment on the grounds of union or non-union membership. It therefore clearly follows that, because of their own legislation, the Government are likely to have increased caseloads, yet they have allocated only a 3 per cent. increase in funding for the year. It is a familiar story of Government funding taking no account of demand for the service.
  As a result of these inadequate allocations, the president of the industrial tribunals, Judge Sir David West-Russell, recently instructed regions which had overspent—that is all of them, except Nottingham—not to use part-time chairmen except in an emergency. As 40 per cent. of all cases are heard by part-time chairmen, we therefore face the prospect of a large backlog building up and those workers seeking justice facing the prospect of lengthy waits before their case is even taken to a first hearing.
  Backlogs are currently worse in some areas than others. For example, although in my area there are currently few problems, in Southampton there has been a 40 per cent. reduction in workload which is expected to result in backlogs of six to 12 months for cases awaiting a first hearing. This horrendous prospect of delay will face the north-west region—my region—in due course, as it now faces Southampton. It will not be long before hon. Members throughout the north-west of England will begin to pick up cases and have to make representations to Government. It is merely a matter of time. How can the Minister reconcile the Government's action with the target set by the Department of Employment that 60 per cent. of applications should be heard within 12 weeks?
  As you know, Mr. Deputy Speaker, I am sponsored by the Confederation of Health Service Employees, and I should make it clear that I receive no payments from that union, nor do I receive any out-of-pocket expenses. My union is extremely worried about these developments.

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  Let me give two examples involving health service workers who have been badly affected by the Government's penny-pinching. Enderby v. Frenchay health authority and the Secretary of State for Social Services is an equal value claim involving speech therapists. It commenced in February 1986. The case had made its way to the employment appeals tribunal by February 1989, where it has been held up, despite appeals by my hon. Friend the Member for Barking (Ms. Richardson) and the solicitors involved. Both were told that the delay was caused by insufficient funding of the employment appeals tribunal. Indeed, I am told that a delay of 15 to 18 months on appeal to the tribunal is not uncommon.
  The other case concerns race discrimination. What has happened here will, I suspect, be an all-too-familiar story unless the Government fund the industrial tribunals adequately. This case was lodged with the London North industrial tribunal in April 1990 and listed for hearing in October. The night before the hearing the regional office of the industrial tribunals sent the following letter:
  "I apologise for the late cancellation of your case. I write to explain the position.
  In this Region there is now unavoidable delay between the time that the Originating Application is received and the date of hearing. There are two main reasons for this:

  (1) In its budget for the current year the Region has insufficient funds to set up enough Tribunals to deal with the cases which are ready for hearing; in particular, I have been formally directed to restrict the use of part-time Chairmen. Therefore I have to limit the number of cases listed for hearing on any particular day to a number which can be dealt with by the full-time Chairmen but allowing for the possibility of pre-hearing settlements.

  (2) There has been an increase in the number of applications to the Tribunals without a corresponding increase in funds for additional administrative staff to deal with the added workload. Therefore it takes longer for cases to be made ready for hearing.

  (3) In addition to the problem of delay, it is sometimes necessary to cancel listed cases at very short notice. This occurs when there are fewer pre-hearing settlements than expected, and there is no Tribunal available to hear the case. In those circumstances, because of lack of funds, I cannot arrange for a part-time Chairman and additional Members to hear it … I apologise to the parties for the delay and inconvenience caused to them. You will understand that the circumstances are wholly beyond my control."

  I wonder how the Minister can justify the sending of such correspondence. It is clearly an invasion of civil liberties. He may care to refer to that case when he replies, although I was not able to give him notice of it when I spoke to him today.
  The TUC was also extremely worried about the underfunding of tribunals and made representations to the Secretary of State for Employment. Even he admitted that there was a problem, and allocated an extra £500,000 this year. However, the president of the Industrial Tribunals for England and Wales, Judge Sir David West-Russell, expressed the view that £500,000 was inadequate. On 19 October, he wrote to Norman Willis, general secretary of the TUC:
  "I was naturally pleased that the Employment Department has been able to allocate an additional £500,000 to the Tribunal budget although this must be set against an overspend of £375,000 during the first six months of the current financial year. I am advised by the Secretary of Tribunals that, in the circumstances, we shall need more than this amount if we are to function normally for the remainder
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  of the year. I am therefore continuing to press the Department for further funds in order to ensure that the resumption of full listing procedures can be maintained on a permanent basis."
  The question is, will the Government respond positively to such pleas as
  "we shall need more than this amount if we are to function normally for the remainder of the year"?
  In another letter to Norman Willis, the Secretary of State for Employment also raised the problem. Replying to a letter from Mr. Willis, he wrote:
  "The fact is that unlimited funds do not exist for the industrial tribunals any more than they do for any other activity financed by the public purse. That is why the President of the Industrial Tribunals in England and Wales, as a temporary measure, has asked regions which are overspent against their budget to use part-time chairmen for emergency cover only. It is inevitable that for the time being some people may have to wait a little longer for their cases to be heard. Of course I regret this. However, this temporary inconvenience must be set against the paramount need to control public expenditure across the board, which is a prime objective of Government. If we did not succeed in this, the consequences for the economy, and therefore for every one of us, would be very much more serious."
  That letter contains an admission that delays exist—a letter in the hand of the Secretary of State. It is all very well for him to view such delays as unfortunate. For the individual workers involved, they can be disastrous. First, the wait is not "a little longer", as the Secretary of State has claimed; in some cases it is a year, 18 months or even longer. Moreover, the delays are likely to worsen without adequate funding of the tribunals. Secondly, in a case of unfair dismissal, a longer delay between dismissal and the hearing will reduce even the slim chance that reinstatement can be won and leave the victim without a job and any compensation, or the prospect of receiving any compensation within a sensible period.
  Mr. M. A. Rick, the regional chairman of the Southampton tribunal, is of the opinion that delays will lead to higher awards because tribunals will have direct evidence of financial loss between dismissal and the tribunal's decision when it is finally made. That could lead to longer hearings as arguments about what mitigating steps applicants have taken will become more frequent and more complex. We have moved a long way from the quick and cheap justice that the tribunal system was established to provide.
  I shall suggest where the necessary extra funds could he found. Last year, 31,956 people applied to industrial tribunals, and the budget was £9·92 million. In the same period, a mere 324 people contacted the so-called Commissioner for the Rights of Trade Union Members, whose job is to advise trade union members on how to sue their unions. I am sure that the Minister played a notable part in advancing arguments and impressing upon the Government the need to set up that organisation, judging by his reputation.
  The Parliamentary Under-Secretary of State for Employment (Mr. Eric Forth): The hon. Gentleman is besmirching me.
  Mr. Campbell-Savours: Hardly.
  Only 70 per cent. of the 324 cases were relevant to the commissioner's duties and only one case ended up in court. The Government allocated £1·3 million to that office and the commissioner managed to spend only one fifth of that sum. Yet the same allocation has been made for this financial year. It is clear that a great deal of money is being wasted in that area. Some even argue that the organisation

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  has no work and that valid cases are not coming forward. It seems that malcontents and troublemakers are wasting taxpayers' money. Perhaps it is a matter that the National Audit Office should be asked to examine. Even the Public Accounts Committee might wish to undertake an inquiry. It seems that the demand for industrial tribunals far outweighs the almost completely unused and unwanted service of the so-called commissioner. I suggest to the commissioner that she should shut up shop. Why do not the Government abolish the pointless office and use the considerable sum saved to ease the funding crisis that faces industrial tribunals? Is it the Government's priority to spend their time bashing campaigning unions which wish to defend the rights of their members while cutting the funds of tribunals that the same trade unions want to use in the defence of their memberships?
  The Secretary of State defended the proposed introduction of pre-hearing reviews and deposit orders following the expression of concern of the TUC's general secretary in his letter to the right hon. Gentleman. The Secretary of State explained that the proposals were designed to
  "weed out ill-founded cases."
  There must be a genuine concern, however, that the system would place an unreasonable element of doubt in the minds of any applicants who felt worried about their chances before a tribunal. It could even discourage them from making use of a tribunal regardless of the merits of their case.
  What comments does the Minister have about that? If consistency in government is the name of the game, can he explain, given the failure rate of the Commissioner for the Rights of Trade Union Members, why the system of deposit orders is not extended to those who attempt to take cases against their own unions? Surely such orders should apply to both or neither. These are important issues in the classless society that the new Prime Minister believes that he can create before the end of the century. Natural justice must surely be of paramount importance.
  12.29 am
  The Parliamentary Under-Secretary of State for Employment (Mr. Eric Forth): I am grateful to the hon. Member for Workington (Mr. Campbell-Savours) for raising this important matter. I share the concern that he expressed about recent delays in industrial tribunal hearings. I welcome the opportunity to make it clear that the Government have taken steps to ensure that the industrial tribunals can continue to operate effectively and that delays are kept to a minimum.
  It is obviously in the interests of all concerned—applicant, respondent and tribunal itself—for cases to come to a hearing quickly. That is why, as the hon. Gentleman said, the tribunals have as their target that 60 per cent. of cases should come to a first hearing within 12 weeks of the original application. The hon. Gentleman will recognise that this target represents a much faster performance than the ordinary courts normally achieve. That is why the industrial tribunals are so helpful in sorting out individual industrial relations problems. They can and do produce a quick solution to a problem which
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  is usually acceptable to both parties. I pay tribute to their work, day in, day out, in quietly sorting out problems and avoiding damaging disputes.
  Perhaps I could now sketch in the background to the recent problems which the hon. Gentleman has rightly raised. They arose because of the great and unexpected surge in the number of applications to industrial tribunals in England and Wales over the past 12 months or so. I do not want to get bogged down in statistics, but I must give a few figures to illustrate the problem that we face.
  From 1981 up to the 1988–89 financial year, the number of applications fell in every year except one. In 1981, there were just over 40,000 applications. In the financial year 1987–88, there were fewer than 27,000 and in the following year the number of applications fell still further to just over 26,000. In other words, there was a significant and sustained long-term downward trend. Some of this reduction, but by no means all, was, of course, due to the fact that in 1985 we increased the qualifying period for making applications from one year to two years. But even allowing for that change in the law, the caseload was obviously falling significantly.
  A few months into the financial year 1989–90, this long-term downward trend was reversed and the number of applications started to rise. By the end of that financial year—1989–90—the annual total had reached over 31,000 applications, a rise of 20 per cent. In the present financial year—1990–91—the number of applications has continued to rise substantially. Up to the end of October, there had already been over 21,000 applications, and on present trends the annual total will have risen to about 37,000 by the end of this financial year. That amounts to a further increase of 20 per cent. over last year, which itself showed an increase of 20 per cent. over the previous year.
  The reason for this sudden increase are still not entirely clear—certainly not to us. Part of the increase, especially in 1989–90, is due to an unexpectedly high number of applications under the Wages Act 1986. But that is far from the whole story. The great bulk of tribunal applications—around 70 per cent.—concern unfair dismissal and redundancy payments. Applications under these jurisdictions have also increased substantially.
  In the light of that, I turn now to the budgetary matters that the hon. Gentleman rightly raised. This year's budget for the Industrial Tribunals was, of course, drawn up in early 1988 when the caseload was around 26,000 and still falling. Earlier this summer, it became clear to the president of the Industrial Tribunals for England and Wales that, if the present trend of applications continued, the tribunal budget for 1990–91 would be overspent.
  The president therefore very properly decided that to keep within their budgets the tribunals must cut their use of part-time chairmen, who are paid a daily fee for their work. I should emphasise that this was the president's decision—not, as I think the hon. Gentleman may have suggested, the Government's. That is how it should be. It was not for the Government to tell the industrial tribunals how to ensure that they keep within their budget. That is and remains very properly a matter for the president.
  The president of the industrial tribunals therefore told the industrial tribunal regional offices on 7 August that part-time chairmen were to be used only in emergencies. That was not an easy decision to take. It was clearly going to cause delays, since, on average, part-time chairmen hear a quarter of all cases. It was also clear that it would

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  seriously affect performance in relation to the targets which I mentioned earlier and to which the hon. Gentleman referred.
  But in my view it was a responsible and correct decision. Perhaps at this point I can pay tribute to the president of the Industrial Tribunals for England and Wales, His Honour Judge Sir David West-Russell. Sir David will retire at the end of the year having spent more than six years as president. He has been an excellent president and a tonic for the industrial tribunal system generally. We are sorry to see him go, but we look forward equally to working with his successor, Judge Timothy Lawrence.
  Mr. Campbell-Savours: How can the Government possibly blame that gentleman for taking the decision that he had to take because the Government refused to give him adequate resources to ensure that everyone had a hearing within the target date? It was the responsibility not of that gentleman but of Government. I want to hear in the Minister's speech a commitment that all cases will be heard within the target time and that money will be made available to ensure just that.
  Mr. Forth: I regret the hon. Gentleman's use of the word "blame". I tried to make clear that it was the responsibility of the president—which he correctly discharged—to ensure that, within the resources available at the time, correct decisions were made about how to administer the system. That was done. I shall come in a moment to the present position in response to what the hon. Gentleman said. I want to put it clearly on record that I do not accept the use of the term "blame". I have acknowledged that the president correctly discharged his responsibilities.
  The decision to cut the part-time chairmen attracted some publicity, to which the hon. Gentleman referred. He also referred to the TUC's concern and the fact that there was an exchange of letters on the subject between Norman Willis, the general secretary of the TUC, and my right hon. and learned Friend the Secretary of State.
  The hon. Gentleman also referred to the difficulties caused by this decision and to the large number of NHS cases before industrial tribunals. He acknowledged his special interest in NHS matters. I do not deny those difficulties for one moment. Nor do I deny the difficulties in Southampton. They arose with particular acuteness in Southampton because that region makes more use of part-time chairmen to hear cases than do most other parts of the country. I know that the regional chairman in Southampton was especially worried about the situation.
  But I am happy to tell the hon. Gentleman that those problems are now substantially over. At the same time as he took his decision about the use of part-time chairmen, the president naturally approached the Department of Employment to see whether additional funds could be made available to the tribunals. After careful consideration, the Government decided to make further funds available to the tribunals so that they could operate normally for the rest of the year. Those extra funds—amounting in total to some £750,000—have now been allocated. The hon. Gentleman will be pleased to hear that that has enabled the president of the
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  industrial tribunals to review his decision about the use of part-time chairmen. He has decided—it is his decision—that it will be possible to use them again for hearings in the normal way. The tribunal regional offices were therefore told on 9 November that they could return to normal working.
  Mr. Campbell-Savours: May I take it, therefore, that no longer will there be problems of backlogs, that any backlogs will be cleared and that perhaps from some date in the next few months all cases will be heard within the target date that the Government have set for the hearing of such cases?
  Mr. Forth: I can certainly say that the resources now available to the tribunals are adequate for their needs and that the president is satisfied that the work of the tribunals can continue in the way that he would desire. The additional resources to which I referred are adequate to the needs of the moment. I shall come on to the future in a minute.
  The main issue that we must explore is the need to make better and more effective forecasts of industrial tribunal applications—that is from where our difficulties have stemmed. As I tried to suggest, such forecasting is notoriously difficult. I doubt whether we can come up with anything that carried any certainty, but it is important to try to achieve it. Given the hon. Gentleman's interest in the matter, I should be happy to consider any suggestions that he has for making forecasting more effective in the current circumstances. I do not want the problems to recur.
  I cannot say anything definite about next year's budget—because final decisions have yet to be reached about the detailed allocation resulting from the recent public expenditure settlement that my right hon. Friend the Prime Minister announced when he was Chancellor.
  I believe that the concept of industrial tribunals as inexpensive, speedy and informal dispensers of justice is important. I want to do all that we can to preserve that concept. I am therefore grateful to the hon. Gentleman for raising this matter and for giving me the chance to put on record the response that the Government have been able to make to the difficulties that arose.
  Mr. Campbell-Savours: Can the Minister assure me that he will keep under permanent review whether target dates are met in terms of hearings held in the target period? Will he ask for a report every three months from the chairmen? If at any time it appears likely that, due to increasing caseloads, a backlog may develop again, will he use his best endeavours to ensure that moneys are made available?
  Mr. Forth: Given the lessons that we have learnt about the forecasting system and its inadequacies, and the experience gained from the president, I assure the hon. Gentleman that we are reviewing all the relevant parameters. We are attempting to ensure as best we can, within the limitations of the budgeting and forecasting system with which the Government are inevitably involved, that the problems will not recur. We are working closely with the president to ensure that the system works effectively.

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  We believe in the system of tribunals and we want to make them work properly. I am grateful to the hon. Gentleman for raising this matter again and strengthening my hand to deal with it as effectively as possible. I hope
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  that he will accept that we are approaching it in the most positive manner. Tonight's debate will benefit the system of tribunals that we both value so highly because of the contribution that they make.
  Question put and agreed to.
  Adjourned accordingly at eighteen minutes to One o'clock.