Commons Sitting of 8 May 1991

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
PRAYERS
  PRIVATE BUSINESS
    HEATHROW EXPRESS RAILWAY BILL [Lords]
    Read the Third time, and passed, with amendments.
    HEATHROW EXPRESS RAILWAY (No. 2) BILL.
    Read the Third time, and passed.

  COMMITTEE OF SELECTION
  Ordered,
  That Mr. Bob Dunn be added to the Committee Selection.—[Mr. Boswell.]

Oral Answers to Questions
  ENVIRONMENT

    Community Charge
    Mr. Eastham: To ask the Secretary of State for the Environment when he will publish a draft Bill on the replacement of the community charge; and if he will make a statement.
    The Minister for Local Government and Inner Cities (Mr. Michael Portillo): The Government are currently consulting on the council tax. Our intention is to introduce legislation in good time to implement the new system for the financial year 1993–94.
    Mr. Eastham: Why do the Government intend to wait two years to introduce this new legislation when it is obvious that it could be introduced in the coming year? As the Government appear to have a light legislative programme for the coming year, why are they dithering and not getting on with getting rid of the poll tax? Let us kiss it goodbye once and for all.
    Mr. Portillo: I am delighted to have that welcome for the council tax. I wish that all Opposition Members had been so welcoming. Clearly the hon. Gentleman has been reading the Local Government Chronicle and he agrees with its conclusion that the council tax will do Manchester a lot of good. As for why we cannot legislate earlier, the hon. Gentleman will know, because the Opposition set it out in a document, that it is necessary to consult on the matter, to get it right and to give the House and another place time to consider it in detail.
    Mr. Sims: My hon. Friend refers to the consultation paper, but his right hon. Friend the Secretary of State has made it clear that he has no intention of altering the bands proposed in the document. Will he therefore take this
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    opportunity to explain the basis of the valuation of properties to be put in the bands? I am sure that he will be aware of the concern in constituencies such as mine where it appears that, if the valuation is based on the price of properties as exhibited in the offices of local estate agents, people in quite modest properties will find themselves in the same band as those living in millionaires' row. It would be helpful if my hon. Friend could explain the basis of valuation.
    Mr. Portillo: We thought carefully about the number of bands proposed and looked at a number of different options. We decided that seven bands was the right number to put forward as our firm proposal. The capital valuation will be based on capital values—that speaks for itself. A number of special factors may be involved in certain properties and that is one of the matters on which we are consulting.
    My hon. Friend may not be giving enough weight to the fact that the tax is intended to collect much less than the old rating system used to do and that we have arrived at a balance where those in the most expensive properties will be asked to pay two and a half times as much as those in of the least expensive properties. On the whole, people think that that is a fair apportionment of the burden.
    Mr. Wigley: If it will take two years to implement such legislation, have the Government considered introducing parallel legislation, which could come into effect much sooner, to prevent those who presently receive an 80 per cent. reduction from having to pay anything at all under the present poll tax system?
    Mr. Portillo: Of course, we have thought about it, but we do not propose to do that. People on income support who are expected to pay 20 per cent. of the community charge bill receive an addition to their benefit in respect of the average of those 20 per cent. bills. There has been no adjustment to the amount that they get to take account of the fact that the community charge has been reduced by £140, so a number are receiving more in their benefits than they are asked to pay in their 20 per cent. community charge. That is particularly the case in those local authorities where the charge is low.
    Mr. Oppenheim: Bearing in mind that the Labour party proposes to abolish capping and spending limits if it comes to power, will my hon. Friend invite his opposite number to explain to the House how his so-called "fair rates" figures could be kept down to the quoted levels if Labour abolishes capping and competitive tendering? Are not Labour's figures a complete sham?
    Mr. Portillo: Labour's figures are not worth the paper that they are written on—partly because the arithmetic is wrong but also because, as my hon. Friend said, Labour does not intend to limit in any way the amount that Labour authorities can spend. We know that those authorities spend through the roof, if they are given the opportunity to do so. We know also that Labour has opposed the transfer of part of the burden to value added tax. Again, Labour's figures are based on an entirely false assumption—on the lower burden being taken from local taxpayers. However, Labour has spoken out against the VAT increase that made that possible.
    Mr. Gould: Will the Minister clear up at least part of the confusion that surrounds his proposals? Although he

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    published figures purporting to show the council tax under a seven-band system, is it not the case that no work on such a system has been undertaken? Is it not the case also that district valuers were asked to provide estimates on the basis of a 14-band system and that the decision was then taken to lop off the top six bands? Why was that done? Does not that decision completely invalidate the Government's figures and show that the unfair and familiar principle underlying the poll tax has been retained? I refer to the principle that the rich should be protected from paying their full whack, while an unfair burden falls on the rest of us.
    Mr. Portillo: We got rid of the unfair principle underlying the old rating system, to which the hon. Gentleman wants to return, whereby the occupants of more expensive properties—even if they had modest incomes—were expected to pay limitless sums towards local government. The hon. Gentleman also wants sole occupants to pay as much as multiple-occupancy households. That was a major unfairness under the rates system, and we are not prepared to return to it.
    The hon. Gentleman has been barking up the wrong tree for some time. We devised a system that appeals to the British public as being fair, because it dispenses with the extremes of the rating system. We prefer to base a system on 1991 values, whereas the hon. Gentleman wants to use 1973 values.

    Council Tax
    Mr. Teddy Taylor: To ask the Secretary of State for the Environment what will be the consequences of the distribution of Government grant of the council tax proposals; and if there will be any significant alteration in so far as it relates to Southend-on-Sea.
    The Parliamentary Under-Secretary of State for the Environment (Mr. Robert Key): Grant will be distributed so as to enable authorities to finance spending at a standard level, by levying standard taxable amounts determined by the Secretary of State. Authorities will be compensated for differences in their expenditure needs and for any variations in their taxable capacity. No major changes are proposed to the current system of standard spending assessments.
    Mr. Taylor: Is my hon. Friend aware that there was public rejoicing in Southend-on-Sea this year, after years of battling to get rid of the terrible safety net, which forced the people of Southend-on-Sea to subsidise other councils? Is he further aware that my right hon. Friend the Member for Southend, West (Mr. Channon) and I and all the people of Southend-on-Sea would be very unhappy if that wretched safety net were reintroduced? Is there any truth in the unique revelation appearing in The Scotsman that Jacques Delors could stop local government reforms by virtue of his latest directive?
    Mr. Key: I am grateful to my hon. Friend for the opportunity to congratulate the electors of Southend-on-Sea on their sensible decision in last Thursday's council elections. Transitional help will continue to be available for households, and we have no proposals to reintroduce area protection grant. My hon. Friend may have been referring to the transfer of undertakings directives, which place a new employer into the shoes of the old employer in respect of dismissals and other aspects of an employee's
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    terms and conditions of employment. If that is the case, those directives apply both to the private and public sector and would have no special effect on local authorities.
    Mr. Channon: Is my hon. Friend aware that the proposed council tax arrangements set out in recent consultative documents would mean that, in future, nine out of 10 households in Southend-on-Sea are likely to pay even less than they do now? It is already a low figure because Southend-on-Sea is a prudent local authority. Does my hon. Friend share my belief that that is why the Conservatives enjoyed such excellent results in the local elections and why the Liberals were routed?
    Mr. Key: I well recall my happy visit to Southend-on-Sea not long ago. My right hon. Friend is right to point out that, had the council tax been up and running this year, a couple living in a house of average value in Southend-on-Sea would have paid £276, as opposed to a community charge of £416.
    Mr. Dalyell rose——
    Mr. Speaker: Order. I will call the hon. Member, but I remind him that we are discussing Southend-on-Sea, not Linlithgow-on-Sea.
    Mr. Dalyell: Up the road from Southend-on-Sea is Heveningham hall. Does the Minister know who owns it? As it is the subject of a grant—the word "grant" appears in the original question—can the Minister assure the House that it is not owned by the Iraqi Government?
    Mr. Key: The hon. Gentleman will know that there has been substantial correspondence on that issue. I shall look into the question and write to the hon. Gentleman.
    Mr. Burns: To ask the Secretary of State for the Environment what representations he has received about the proposed council tax.
    The Secretary of State for the Environment (Mr. Michael Heseltine): The Government's council tax proposal has been widely welcomed by hon. Members and by those involved in local government. I look forward to receiving detailed responses to the consultation exercise now under way.
    Mr. Burns: Will my right hon. Friend forgive me if I gently chide him for that reply? The reason is that my right hon. Friend seems not to have included in the representations that he received the thousands of voters in Chelmsford who voted against the Liberal Democrats and voted a Conservative council into Chelmsford, overturning the Liberal Democrat council because they support and like the council tax that my right hon. Friend proposes.
    Mr. Heseltine: Having given my hon. Friend's question due consideration, I certainly forgive him.
    Mr. McCartney: Would the Secretary of State like to make a further visit to Wigan to explain to electors why the rate of council tax to be levied there is double the rate that will be levied in the Conservative borough of Trafford? In Wigan we will have the highest rate levy of all 10 districts in Greater Manchester. When people in boroughs such as Wigan will have to pay twice as much in council tax as those in a borough such as Trafford, does not that show that something is seriously wrong with the calculations?
    Mr. Heseltine: I do not think that I need to go to Wigan to explain the consequences of having a Labour authority in Wigan and a Conservative one in Trafford.
    Mr. Norris: There is no doubt that in my constituency of high-valued properties, the overwhelming majority of constituents will most certainly pay far less under the new council tax than they were paying under the old rating system and that the tax is warmly welcomed in that regard. I suggest that there is one point on which I would invite my right hon. Friend to keep his options open—the question of an additional band at the bottom of the scale, at around £20,000, to take account in my constituency of those who live in mobile homes and other low-cost accommodation, who are often the least fortunate. I suggest that there should be an additional band at the top of the scale at about £250,000, because at present those who live in areas such as mine on the fringes of London frequently find that a value of £160,000 on their property does not mean that they are especially rich.
    Mr. Heseltine: Of course, I understand my hon. Friend's point. It has been made by other people. One must consider the banding arrangements in the context of the sums of money that separate one band from another. It is the Government's view that, having considered the various permutations, the seven-band arrangement with which we have come forward is appropriate.
    Mr. Gould: As the Minister for Local Government and Inner Cities could not answer the question about the six missing bands, perhaps the Secretary of State could try to clear up another matter of confusion. What will be the basis of valuation? Will it be capital valuation, without any conditions—as the Secretary of State said—or will other factors be taken into account, as the Minister of State said on Radio 4, or does confusion continue to reign?
    Mr. Heseltine: The only confusion is in the mind of the hon. Gentleman because every time that we answer the question he asks it all over again. The fact is that we have come forward with seven bands. We made it absolutely clear, both in advance of our announcement and subsequently, that we considered a number of other options, but we came to the view that the seven-band option was the most appropriate. That remains the position. As for the broad issue of the valuation process, we also explained that. Whereas the Opposition are in favour of capital values, rental values and building and repair costs as a basis for valuation—whatever that may mean—we believe in capital values, and we are consulting on that basis.
    Mr. Gould: So the Minister of State is wrong.
    Mr. Heseltine: My hon. Friend the Minister is not wrong. If people wish to suggest to us specific areas where capital values need modification, we shall consider them. Local government may well produce examples that need specific examination. As we are designing a tax for local authorities to administer and collect, the appropriate way forward is by consultation and not by imposition.

    Council Services
    Mr. David Evans: To ask the Secretary of State for the Environment which councils have privatised the most services.
    Mr. Heseltine: My Department does not collect this information. There has been a substantial shift of work to private contractors as a result of the compulsory competitive tendering legislation. In addition, a number of local authorities have gone further, on a voluntary basis, in using private contractors to provide services on their behalf.
    Mr. Evans: Does my right hon. Friend agree that it was Conservative local authorities that led the way on competitive tendering? Westminster, Wandsworth and Southend-on-Sea have provided better services. Is not it true that those authorities had the lowest community charge? Was not it the Labour party that was dragged screaming into the 20th century when it refused to accept the privatisation of services? Lambeth is one example, with its high community charge and rotten services. Does my right hon. Friend intend to extend competitive tendering to other services?
    Mr. Heseltine: My hon. Friend is correct. The journey to competitive tendering began in 1980 and continued throughout the 1980s. It is also true that the benefits to the local community—higher quality of service at a lower cost—are to be seen significantly in Wandsworth and Westminster. It is a matter of conjecture whether the Labour party has actually got to the 20th century, kicking and screaming or not.
    Mr. Skinner: Despite the hoo-ha about the privatisation of services, is the Secretary of State aware that last Thursday the electors of Britain spoke about that matter and all the other Tory policies? In Bolsover the last four Tories, and the last Liberal Democrat as well, were swept aside. Of the 92 clubs in the Football League, only three are in areas where the local authority is controlled by the Tories. The red flag is flying over Blackpool, Brighton, Plymouth and other seaside resorts.
    Mr. Heseltine: The only overwhelming conclusion to be drawn from last Thursday's elections is that the Labour party would not have secured enough votes to form a Government if there had been a general election.
    Mr. Squire: I shall revert, if sadly, to the original question. Does my right hon. Friend agree that the Labour party's commitment to abolish compulsory tendering at the insistence of the National and Local Government Officers Association and the National Union of Public Employees is a bad deal for consumers and users all over the country and gives the lie to any suggestion that it has forgotten its bad old ways of union-controlled party policies?
    Mr. Heseltine: My hon. Friend is right. That is just one more example of why, if the Labour party ever achieved power, it would give us worse services at a higher cost.

    Local Government
    Mr. Barron: To ask the Secretary of State for the Environment if it is his intention to create additional parish or town councils outside London; and if he will make a statement.
    Mr. Key: Under current legislation we may consider whether to create additional parish and town councils outside London in the light of recommendations from the Local Government Boundary Commission. In the context

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    of the proposals in our recent consultation document on the structure of local government in England, the Government believe that there may be a case for considering whether to enhance the role of parish councils, especially if a new unitary authority were to cover a wide area.
    Mr. Barron: Has the Minister considered receiving direct representations from parishioners about parish councils? In Maltby, South Yorkshire, where I live, the district council consistently votes against our having a parish council, although many people in the parish believe that we should have one.
    Mr. Key: I believe that 90 per cent. of the hon. Gentleman's constituency has parishes. In our consultation paper, we specifically invite representations, and we shall be glad to receive them from his constituents.
    Mrs. Peacock: While my hon. Friend listens to representations on parish councils, will he also listen to representations from my constituents about splitting the metropolitan authority of Kirklees, which provides lousy, inefficient and costly services?
    Mr. Key: I am grateful to my hon. Friend for giving me the opportunity to say that it is clear that Labour-controlled authorities have a worse record than Conservative-controlled authorities. However, we do not now intend to alter the structure of the existing unitary authorities.
    Mr. Bellotti: I am sure that the Minister will wish to join me and other hon. Members in congratulating all those victors in town and parish elections last Thursday, including the 17 in Polegate town council, in my constituency, all of whom are Liberal Democrats. Will he assure the House that the current consultations will not affect the delay which may occur in the transfer of responsibilities for community care to local authorities, which the Government's programme shows is aimed for April 1993? Will he further assure the House that the finance to enable local authorities to plan for that transfer will be re-examined?
    Mr. Key: I am glad to reassure the hon. Gentleman that the community care programme is proceeding on time However, I have to commiserate with him on his party's dismal performance in my constituency, where the independents are now the largest opposition, as opposed to the Liberal Democrats.
    Sir Dudley Smith: Is my hon. Friend aware that until my right hon. Friend the Secretary of State came to office there were rumours that parish councils and town councils might be abolished? What he has said today is very welcome indeed, because there is a general feeling throughout the country that town councils provide an essential element in local government in that they are local.
    Mr. Key: My hon. Friend is absolutely right. Although it is true that parish and town councils have comparatively small environmental powers, we recognise that loyalty to parish and town councils is extremely strong and we wish to ensure that their voices are heard properly.
    Mr. O'Brien: The Minister's reply to my hon. Friend the Member for Rother Valley (Mr. Barron) did not answer the question. Will the hon. Gentleman explain
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    what the Government plan to do or what recommendations they will make to redress the mismatch between parish and town councils, particularly in the metropolitan districts? As the survey carried out by Aston university and the consultative documents do not address the real problem in metropolitan districts, will the Government take action to ensure that it will be resolved?
    Mr. Key: I assure the hon. Gentleman that before taking action we shall consult properly. That is precisely why we invited consultation. I was glad that the hon. Member for Rother Valley (Mr. Barron) agreed that that was a sensible way forward. Of course, there are difficulties with parish and town councils. In addition, only about 50 per cent. of the country is parished. There are problems and that is why we are consulting on them.
    Mr. Burt: Will my hon. Friend assure us that he does not intend to create any unnecessary and expensive regional bodies which cut right across the public desire to have decisions taken locally, in contrast with Labour party's policy which would bring back those regional bodies? Does he share the concern of my constituents who last week voted Conservative in a 17 per cent. swing from Labour to Conservative and thus backed and supported the Government's policy to say no to unnecessary regional bodies?
    Mr. Key: Yes, I can give my hon. Friend that assurance. We have no plans to introduce regional government. Of course, my hon. Friend is absolutely right. The number of votes cast in the north-west show a remarkable improvement in support for the Conservative party.

    London Docklands Development Corporation
    Mr. Spearing: To ask the Secretary of State for the Environment when he expects to receive the next annual report of the London Docklands development corporation.
    Mr. Portillo: I look forward to receiving the annual report from London Docklands in July.
    Mr. Spearing: Does the Minister agree that the last annual report of the LDDC shows much more concern for the needs of developers than for those of local people? Is he aware that most of the £1.8 billion allocated to rail transport has been used to benefit developers and that the LDDC is not supporting the London borough of Newham's petition for a proper interchange between three new railways at Canning Town? Would it not be a pity if the design defects of underground stations built in the west end at the beginning of the century were replicated in the east end at the end of the century?
    Mr. Portillo: I do not want to get drawn into the detail of the station, but the LDDC is a development corporation and it has not supplanted the local authorities, which retain their responsibilities. The LDDC has done a tremendous amount of work with local authorities and other bodies on projects which benefit the community. It has spent about £100 million over the past three years on community projects. It will spend about £87 million over the next three years on community projects and it has made agreements with boroughs such as the London

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    borough of Newham on the construction of houses and a series of projects on education and training which will benefit local people. That is an extremely fine record.
    Mr. Summerson: The LDDC has a good record of making use of vacant derelict land. Does my hon. Friend agree that other authorities should follow the example set by the LDDC and use their vacant derelict land, thus reducing the pressure to develop green field sites?
    Mr. Portillo: Indeed. The London Docklands development corporation has already reclaimed 600 hectares of derelict land—that sounds like quite a lot to me—and has a remarkable record. I wish that other local authorities would follow the LDDC's lead. We set up that corporation precisely for the purpose of bringing about regeneration and it is succeeding extremely well.

    "This Common Inheritance"
    Mr. Kirkwood: To ask the Secretary of State for the Environment how many of the objectives listed in the White Paper "This Common Inheritance", have so far been achieved; and if he will make a statement.
    The Minister for the Environment and Countryside (Mr. David Trippier): In the seven months since the publication of "This Common Inheritance", we have made substantial progress on some 100 of the commitments and proposals that it contained. Many of these were set out in my announcement on 26 March this year. The Government remain committed to the integration of environmental concerns into the whole range of their activities, both in the United Kingdom and internationally. Colleagues in charge of Departments throughout Whitehall are working constructively to press home the White Paper initiatives and to keep up the impetus for progress in the future.
    Mr. Kirkwood: Will the Minister confirm that one of the main aims of the White Paper was to set statutory water quality objectives? Is he aware that that commitment was first made in 1987 when the National Rivers Authority was set up? It was repeated when the Water Bill was enacted and has now been restated in the White Paper. Despite that, statutory water quality objectives have yet to be set. As we discuss the matter this afternoon, raw sewage and industrial effluent are being discharged into our water courses and rivers. Is not it scandalous that it has taken the Government all this time to set out those objectives?
    Mr. Trippier: I totally reject all that the hon. Gentleman has said. His references to legislation omitted the Environmental Protection Act 1990, which also set out water quality objectives. Such objectives are set by the National Rivers Authority in compliance with European directives, which we must implement. As I have stated repeatedly on the Floor of the House, by 1997 we shall be the first member state of the European Community to achieve 100 per cent. compliance with the bathing water quality directives. That is incredible progress.
    Mr. Forman: Was not one of the most important objectives of that excellent White Paper that those sectors of British industry involved in pollution abatement and control should expand as quickly as possible, particularly into the export market? What progress has been made in that direction with the encouragement of the Government?
    Mr. Trippier: Enormous progress is being made, particularly in water consultancy. As my hon. Friend suggests in his question, there is an enormous amount of business to be secured for British industry in work abroad, not least in central and eastern Europe. A new technology scheme has been introduced by my Department in conjunction with the Department of Trade and Industry and that is proving enormously successful. However, we still need more British companies to come forward to explain what they can do to share their expertise and technology with other countries who need it.
    Mrs. Ann Taylor: Is not the real problem that the White Paper lacks any real objective, timetable or overall strategy? If we are to tackle the environmental crisis that we are facing, is not it about time that the Government started to give a lead? Does the Minister realise that it is no use the Secretary of State making the kind of statement that he made yesterday about regulating for higher standards or telling industry to be more aware and concerned about the environment when the Government are putting the interests of electricity shareholders before the interests of the environment?
    Mr. Trippier: I should point out to the hon. Lady that, prior to the reversal in fortunes for the Conservative Government which we all know took place about a few months ago, there were two principal areas in which the Government led the Labour party. One was defence—not surprisingly—and the other was the environment. That should make the hon. Lady hang her head in shame. There is a stark contrast between this Government's record and that of the last Labour Government, who did next to nothing. We have introduced the Water Act 1989, which has been widely welcomed, and the Environmental Protection Act 1990 to give us the toughest regulatory regime in Europe. We introduced a White Paper setting out our programme for the next 10 years. The Labour party is absolutely nowhere on that issue: we have taken the high ground.

    Waste Recycling
    Mr. Amos: To ask the Secretary of State for the Environment what progress he has made in encouraging the recycling of waste materials.
    Mr. Trippier: The Environmental Protection Act 1990 requires all waste collection authorities to prepare recycling plans. We shall be issuing guidance tomorrow on how to draw up those plans for consultation. We shall also announce details of the distribution of £12 million of supplementary credit approvals to enable local authorities td invest in recycling. That will add significantly to measures already in place to encourage recycling.
    Details will be placed in the Library.
    Mr. Amos: I am grateful to my hon. Friend for that encouraging reply, but will he have further discussions with local councils to set up schemes, in particular for the individual household waste collection of newspapers, glass bottles and tin cans, which would not only be good for the environment, but would help solve the growing litter problem? Will he join me in congratulating two schools in my constituency, Hexham middle school and Corbridge middle school, on the excellent work that they have done in increasing public awareness about the matter?
    Mr. Trippier: With regard to my hon. Friend's latter question, I am happy to congratulate the schools to which he referred and I hope that he will convey those congratulations to them at the earliest opportunity.
    With regard to my hon. Friend's first question, we have already been a partner in an experiment that has been running in Sheffield, which is now well known as "recycling city", and that experience has been replicated elsewhere. The scheme has been successful in that there have been doorstep collections and waste has been split up so that it can be recycled. Activity in this area will be stimulated by the new recycling credits scheme that we hope to announce within the next two months.
    Mr. Tony Banks: Since we are talking about waste material, how many tonnes of paper were used and how many trees were sacrificed through the scrapping of all the poll tax forms because of Government changes? As it looks as though there is still a great deal of confusion surrounding the council tax, will the Minister recommend to local authorities that they print the new council tax forms on recycled paper or, perhaps, rice paper so that it is more palatable for Ministers when they have to eat their own words?
    Mr. Trippier: I assure the hon. Gentleman that the new council tax proposals will use less paper than the community charge proposals.
    Mr. Mans: Does my hon. Friend agree that, contrary to the comments of the hon. Member for Dewsbury (Mrs. Taylor), my hon. Friend's remarks show that the Government's recycling policy has clear objectives? Will he go further and ensure that recycling takes place in Government Departments other than his own and in the House of Commons?
    Mr. Trippier: I am grateful to my hon. Friend for giving me the opportunity to say that all Government Departments should set an example and follow that given by the Department of the Environment. I understand that the Services Committee of the House has introduced an option whereby Members of Parliament can choose whether to use recycled paper, so I hope that the vast majority of, if not all, Members of Parliament will take the option of using recycled paper.

    Rented Properties (Rural Areas)
    Mr. Ashton: To ask the Secretary of State for the Environment if he has any new proposals to provide additional properties for rent in rural areas.
    The Parliamentary Under-Secretary of State for the Environment (Mr. Yeo): We have taken a variety of measures over the last three years to boost the supply of low-cost housing in rural areas. We have substantially increased public resources through the Housing Corporation for new investment by housing associations, raising the target for the development of new subsidised housing under their special rural programme to 2,250 a year by 1993–94. We recently announced an extra £50 million of credit approvals for rural local authorities for a new programme of low-cost housing and we have amended planning guidance to permit development of low-cost housing for local needs on small sites not otherwise designated for housing.
    Mr. Ashton: Is the Minister aware that his variety of reasons sounds like waffle? All that he can manage is the provision of 2,000 extra houses in rural areas, despite the fact that thousands have been sold to council tenants and councils have been prevented by him from replacing them. There is now a massive shortage of council rented tenancies for manual workers, particularly people who work in such places as farm factories or local garages. This is turning the countryside into dormitory suburbs for yuppies. Manual workers, including the lower working class, just cannot afford to pay the prices that houses are fetching. Previously, when tenants died, houses became available. When will the Minister ensure that large numbers of council houses are built in villages so that people may have decent places to live?
    Mr. Yeo: As we are within 14 months of a general election, it is most timely that the House has been reminded of the Labour party's underlying hostility to the Government's policy on the sale of council houses. From what the hon. Gentleman has said, it is clear that his mind is still set in the ways of the 1940s. He sees local authorities as the monopoly providers of accommodation for renting. We wholly reject that solution. We are determined to see a substantial increase in the private rented sector and I hope that the hon. Gentleman will persuade his colleagues to support us in that important objective. We are also providing the Housing Corporation with substantially increased resources—rising from just over £1 billion last year to well over £2 billion a year in three years' time—to expand very substantially the provision, through housing associations, of subsidised accommodation for renting. I am glad to be able to say, that, in the hon. Gentleman's constituency alone, the Housing Corporation is spending £1.3 million in the current year on the provision of another 40 units.
    Mr. Gill: Although the additional £50 million in the current year is most welcome, I hope that my hon. Friend can assure the House that there will be similar provision in future years so that local authorities and others engaged in the provision of affordable housing in rural areas may have an ongoing programme. It is extremely difficult to generate programmes at very short notice.
    Mr. Yeo: I share my hon. Friend's concern about the need to provide an adequate supply of affordable housing in rural areas. We are pleased with the results so far of the £50 million credit approvals that we have provided for the current year. Obviously we shall keep an eye on the situation. We are determined to ensure that all rural areas will get a fair share, whether through local authority credit approvals or through the Housing Corporation. As I said, the corporation is building up its programme. Over the next three years, including the current year, housing associations will build more than 6,000 units in very small villages.
    Mr. Battle: How will local authorities in rural areas that have no housing—all their houses having been sold off—fulfil their statutory obligation, under the Housing (Homeless Persons) Act 1977, to house the homeless? How can that obligation possibly be fulfilled when there are no council houses?
    Mr. Yeo: A number of schemes are available to local authorities. I draw the hon. Gentleman's attention to the end of my original answer, where I referred to the fact that

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    local authorities may now introduce schemes in respect of land not otherwise designated for housing, in which case the land component in the total cost of a house is almost entirely eliminated. In many areas, Iandowners are coming forward with offers of land and it is up to the local authorities to respond.
    Mr. Walden: Does my hon. Friend agree that houses for renting or for sale should not be constructed at the expense of the environment? In the light of yesterday's published estimates of future aggregate demand, will he look urgently at the possibility of encouraging substitutes? If what is going on is allowed to continue, constituencies like mine will look like a lawn after the moles have been at it.
    Mr. Yeo: I know of my hon. Friend's close interest in this subject and I am glad to be able to tell him that I entirely share his concern that the proportion of recycled and secondary aggregates that are used in all forms of construction should be substantially increased.
    Mr. Soley: Bluster is not going to get the Minister anywhere. Can he confirm that the Association of District Councils, which is Conservative controlled, has consistently told the Government that selling council houses without replacing them—the Labour party's view is that they should be replaced—is leading to a catastrophic shortage of rented accommodation in rural and urban areas? Why does he think that Conservative councils in rural areas have got it so badly wrong and he has got it right?
    Mr. Yeo: The House must have listened carefully and in vain for any hint in the hon. Gentleman's question that he supports the policy of selling council houses. It is perfectly open to housing authorities in rural areas to meet needs in the ways that I have outlined; by co-operating with the housing association movement; by taking advantage of our off-site plan policy so that low-cost housing can be provided at prices that are affordable both for sale and for rent; and through the judicious granting of planning permissions to the private sector, which is also ready and willing to help meet the need.

    Council Tax
    Mr. Peter Bottomley: To ask the Secretary of State for the Environment by how much the council tax would be reduced if Greenwich received the same amount per head for social services and for other services as (a) Wandsworth and (b) Lewisham.
    Mr. Portillo: Neither Lewisham's nor Wandsworth's standard spending assessment would be appropriate for Greenwich, as each has different social and demographic characteristics. Greenwich could reduce its bills under the council tax by reducing its spending, which exceeds standard spending assessment by a larger percentage than any other inner London borough.
    Mr. Bottomley: Does my hon. Friend accept that it is Greenwich council's fault that it lost £2 million on its direct labour organisation and that it is the only council in the country which has met the capping criteria every single year, but that it is not the council's fault that the expenditure needs assessment works against its interests?
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    Will my hon. Friend or his officials meet officers from Greenwich, with me, to discuss some of the implications of what is outside Greenwich's control?
    Mr. Portillo: I do not believe that the standard spending assessment works against Greenwich's interest. I remind my hon. Friend that, for example, Greenwich receives much more for education than does either Wandsworth or Lewisham. However, I am willing to discuss with my hon. Friend and representatives of the council the standard spending assessment. If I receive an invitation from him or from the council I shall be happy to join them in a meeting.

    Farm Shops
    Mrs. Gorman: To ask the Secretary of State for the Environment whether he has any plans to make farm shops liable to uniform business rate.
    Mr. Key: Farm shops are, and have always been, liable to non-domestic rates.
    Mrs. Gorman: Even though my constituents and those of my hon. Friend the Member for Basildon (Mr. Amess) gave overwhelming support last week to the Government's new policies on local taxation, with an 8 per cent. swing to the Conservatives wiping out a long-standing majority for Labour on Basildon council, thus reducing it from the Arsenal to the Accrington Stanley——
    Mr. Speaker: Order. Could we relate this to farm shops?
    Mrs. Gorman—nevertheless the greengrocers of my constituency are concerned that while they pay the uniform business rate, farm shops do not. Unless my farmers, who are extremely versatile, have taken to growing bananas, pineapples, oranges and kiwi fruit, there is a case for an even playing field to be created for those who sell vegetables all over the country.
    Mr. Key: I am grateful to my hon. Friend for giving me the opportunity to congratulate her electors on a sensible decision last Thursday. My hon. Friend is absolutely right; we wish to see the market operating on, perhaps, a level turnip field. Of course, farmers pay rates not only on farm shops but on agricultural buildings used for the storage of fruit and vegetables grown elsewhere, or for the storage of intervention board surplus grain or skimmed milk. Where produce is sold at the farm gate, the local Inland Revenue valuation officer may make an assessment for rates. A permanent stall situated at the entrance to a farm, used on a regular basis for the sale of farm produce, might be regarded as rateable.
    Mr. Corbett: Will the Minister confirm that under the proposals for the council tax there are no plans to exempt farm shops from paying some form of rates? Will he also acknowledge that in scores of small businesses families who live above the shop and at the moment pay the poll tax upstairs and the uniform business rate downstairs would be exceptionally angry if there was any hint of exemption for farm shops?
    Mr. Key: I reassure the hon. Gentleman that there are no plans to alter the rating of agricultural premises. We looked at the non-domestic rating system in the first part of our review of local government structure and finance

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    and decided to retain the principle of the uniform business rate. That does not mean that we are wedded to every detail of the existing business rating system. We are certainly prepared to listen to those who wish to suggest improvements, but we do not envisage any major changes.
    Mr. Lord: Is my hon. Friend aware of the immense pressures on farm shops and on all village shops for a series of reasons? Is he further aware that often the people who depend most on those shops are the elderly and those without transport who cannot travel to supermarkets to get goods at cheaper prices? When looking at these matters, will he do all that he can to ensure that we do not pile any more burdens on small shops in rural areas?
    Mr. Key: Yes, of course, I shall be delighted to ensure that we give due consideration to important sources of community focus in rural areas. My hon. Friend will acknowledge that it was the revaluation process that many small businesses, and village shops in particular, found difficult rather than the tax itself. If the reform had not been introduced, the small business community would be carrying a burden in excess of £1 billion extra under the old rating system.

    Environmental Assessments
    Ms. Quin: To ask the Secretary of State for the Environment when he next plans to meet his European Community counterparts to discuss proposals for the environmental assessment of policies, plans and programmes.
    Mr. Trippier: The European Commission has not yet formally adopted proposals to require environmental assessment of policies, plans and programmes, but it is a matter which I expect to discuss in due course with my counterparts from other member states.
    Ms. Quin: Would not the draft proposals allow environmental considerations to be built in at every stage of the planning process and much more fully than they are at present? For that reason, will the Government put their weight behind the proposals and ensure that progress is made on them as quickly as possible?
    Mr. Trippier: I could not possibly put my weight behind the proposals as currently constituted by the Commission because they are, in truth, half-baked.
    Mrs. Ann Taylor: Too tough.
    Mr. Trippier: The hon. Lady intervenes to say "too tough". Rather than any commitment in any Labour party document, I can at least see one in the Government's White Paper in September which stated:
    "The United Kingdom is committed to a more systematic approach within Government, to the appraisal of environmental costs and benefits before decisions are taken."
    The proposals suggested by the European Commission are in a mess and the vast majority of the member states accept that. I hope that they will be tidied up so that we can achieve our objectives, which I am sure that the hon. Lady shares.
    Dr. Hampson: My hon. Friend has led a number of construction industry export drives. Before he joins European Ministers, will he talk to the Treasury about the export credits guarantee policy that it pursues and which has put our construction industry at a disadvantage
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    compared with the European industry, to the point that it now seems that the British trade centre in Moscow will be built by the French and the British airport terminal in Moscow by the Italians?
    Mr. Trippier: I shall certainly be happy to raise the matter with my Treasury colleagues.
    Mr. Win Griffiths: Given the Minister's commitment when answering question 7 and again in mouthing platitudes from his White Paper, why cannot he now say that he will endorse the principle of environmental assessment of planning and structure development at the local planning stage so that consideration of environmental matters is built into the system and so that we do not deal with them on an ad hoc basis and often far too late? The Minister should put his commitment where his words are supposed to be.
    Mr. Trippier: The hon. Gentleman's knowledge of such matters, as I discovered again in Committee this morning, shows an alarming gap; perhaps he suffers from delusions of adequacy. He has again revealed that he is unaware that the Government have already accepted the principle of environmental impact assessment. It is there in black and white in the White Paper. We intend to deliver and we are concerned about the detail which would have to come from the European Commission.
    Miss Emma Nicholson: Although I welcome the Government's commitment to a cleaner environment and especially the White Paper, will the Minister confirm that he will do all that he can to ensure a level playing field in Europe? He will be aware of the 1 million mythical olive trees that the common agricultural policy set-aside scheme supports. Can he assure us that there will not be 1 million mythical rivers for which Europe gives clean water grants from money taken out of our pockets? We obey the rules, but Europe often does not.
    Mr. Trippier: My hon. Friend has a very good point, but I should put it in a very different way. On environmental matters covering Europe, we play cricket, but I am pretty sure that others play rugby. Experience teaches me that the position will improve and that there will be a more level playing field after the introduction of the European Environmental Agency. Then we can make fair comparisons, carefully analyse the statistics put to the agency and compare like with like. At the moment, I am not satisfied that we are doing so.
    Mr. Simon Hughes: In the light of the incident off the north Norfolk coast last Friday, will the Minister put on the agenda at the next Council meeting the environmental assessment of the transport by sea of hazardous chemicals? Is he aware that the loss overboard of the ethyl acrylate containers revealed two major defects? First, there is a lack of security in the transport of potentially lethal cargoes which could have a damaging effect on the marine environment. Secondly, once overboard, there was no labelling on the containers, which added to the risk to both marine life and the people trying to find the containers in the difficult waters off that coast.
    Mr. Trippier: One point that the hon. Gentleman mentioned worries me—that the containers were not labelled. However, my understanding of the incident is somewhat at odds with what the hon. Gentleman has expressed to the press and in a letter to the Department of

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    the Environment. Immediate action was taken last Friday. It was confirmed at 3.40 pm that the araldite hardener was no danger to the marine environment and that the other chemicals were only marginally toxic. Neither the hon. Gentleman nor I wishes to mislead the House or indulge in any form of scaremongering which could put the fear of God into many people when it is not necessary. The chemicals were properly stowed in a well-found ship, but the tanks broke adrift in had weather. That can happen and it has happened. So far, according to my right hon. and learned Friend the Secretary of State for Transport and my right hon. Friend the Secretary of State for the Environment, the matter has been dealt with satisfactorily. I shall look into the precise point that the hon. Gentleman makes about labelling and write to him.
    Mr. Favell: As a north-west Member, my hon. Friénd may have read in the local press that the Department of Transport has been reported to the European Commission for failing to obtain an environmental assessment of the impact of the A6 bypass. He will certainly have had experience of driving up and down that miserable road and the traffic conditions on it. When he meets his counterparts in Europe will he tell them that the people of Stockport are well capable of assessing the environmental impact of the bypass and that the European Commission should mind its own bloody business?
    Mr. Trippier: I shall have a careful look at that, but my hon. Friend will forgive me if I do not use such colourful language.

    New Houses
    Mr. Ronnie Campbell: To ask the Secretary of State for the Environment how many new houses for sale he expects will be completed during 1991–92.
    The Minister for Housing and Planning (Sir George Young): The Government do not make forecasts of completions by private housebuilders.
    Mr. Campbell: Is the Minister aware that Blyth Valley borough council in my constituency has accrued £23 million over 10 years through the sale of council houses? Is he further aware that with that money it could have built at least 1,000 houses, but it has built only 290 houses during the whole period? When will the Government start building council houses for the needy and homeless?
    Sir George Young: I hope that the hon. Gentleman recognises that that is £23 million which his local council would not have had if he had listened to Opposition Members. There would have been no right-to-buy receipts to have a debate about. Thanks to the sale of council houses, we have sustained a far higher level of capital expenditure on public sector housing than would have
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    been the case. For the future we look to housing associations, not local authorities, to build affordable homes for rent.
    Mr. John Greenway: Does my hon. Friend agree that the increase in the number of people in Britain who own their homes is one of the greatest achievements of the Government in the past 10 years? Does he further agree that the key to ensuring an adequate supply of new homes in future which people will want to buy and want to rent is to continue the policy of requiring local authorities to put in place statutory local plans which define where the houses shall be built? The release of adequate land is central to the supply of new houses.
    Sir George Young: I am grateful to my hon. Friend. Our planning policies are designed to ensure that there is a five-year supply of land to meet housing needs throughout the country. Through regional guidance and monitoring of the structure of the district plans, it is our aim to ensure that land is available to meet the housing needs of local people.
    Mr. George Howarth: In view of the obvious gaps in the information that is being fed to the Minister about the number of starts in homes for sale, I shall help him. I do not know whether he is aware that, earlier this week, the Building Employers Confederation conducted a state-of-trade inquiry into that subject. Its conclusion was—[HoN. MEMBERS: "Question."] I am coming to the question. Its conclusion was this:
    "We are pleased to see the very slight improvement in the private house building sector. Any real recovery in the housing market still seems to be a very long way off and will depend crucially on further cuts in interest rates and mortgages"—
    Mr. Speaker: Order. Paraphrase, please. Do not quote.
    Mr. Howarth: There is no increase. What is the Minister going to do about that?
    Sir George Young: With house prices stable, with earnings rising between 5 and 10 per cent., and with interest rates falling, the prospects for house buyers and house builders are excellent.
    Mr. Dickens: What is the point in building more and more council houses when, at the moment, half a million council houses stand empty? We were talking earlier about recycling. If local government recycled council houses more quickly when they stand empty for weeks and sometimes months, there would be no problem with the homeless in this country.
    Sir George Young: I am sure that my hon. Friend's words will have been heard throughout the country. The 10 worst local authorities for voids are either Labour or Liberal Democrat controlled.

Bangladesh (Aid)
3.30 pm
The Minister for Overseas Development (Mrs. Lynda Chalker): The cyclone which struck Bangladesh on the night of 29 to 30 April was one of the most serious disasters in the region's history. Eye witness accounts have underlined the scale of the tragedy. The whole House shares in our grief and sympathy for the Bangladeshi people.
Precise assessments have been hindered by the severe damage to communications caused by the cyclone, and by continuing bad weather. Neither international donors nor the Bangladesh Government waited for information before starting relief operations. On 30 April we authorised our high commissioner in Dhaka to spend up to £250,000 on immediate relief needs. This formed part of the £2.5 million initial contribution announced in the House on 2 May by my hon. Friend the Member for Morecambe and Lunesdale (Mr. Lennox-Boyd). On 3 May I announced a further £2 million, bringing our total support for immediate disaster relief to £4.5 million.
A major relief effort is now well under way. Fifteen bilateral donors have offered assistance as well as some international organisations. The British response is one of the first and the largest. The physical difficulties involved are massive. Severe damage extends over an area the size of that part of England south of a line drawn between London and Bristol. Much of it still remains under water. Up to 15 million people have been affected.
The port of Chittagong and its equipment have been severely damaged. Rough seas continue to limit access to the islands, which are hardest hit.
The international relief effort must be co-ordinated and duplication avoided wherever possible. At the request of the Government of Bangladesh the United Nations Development Programme is acting as co-ordinator of the relief programmes of the international donor community. To assist in this task we are meeting the costs of two United Nations disaster relief staff.
British experience with previous disasters in Bangladesh, like the major floods of 1987 and 1988, is that non-governmental organisations, working with the support of the Government of Bangladesh, can operate very effectively providing relief. In the immediate aftermath of the cyclone, the priority has been to move stocks of food, clothing, medicines and shelter already in the country to the disaster zone, and to ensure adequate supplies of clean drinking water.
Of the £3.3 million of bilateral assistance announced last week, some £2.5 million is already being spent through a number of British NGOs and international agencies on food, shelter, clothing and medicines. A further £50,000 has been allocated for urgent medical supplies and water purification tablets, recommended by our medical adviser based in Dhaka. Staff from our irrigation project have already gone to assist local and British NGOs, who, together with UNICEF, are working to secure cleaner water in the affected areas. Our aid vehicles have also been made avilable to transport urgently needed supplies.
We have established an emergency office in Chittagong that is providing on-the-spot assessments. This will promote co-ordination with other agencies and
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Government officials. It is staffed by a highly experienced British aid official who undertook similar work during the 1988 floods.
Some hon. Members have asked why we have not sent boats and helicopters. Our high commissioner in Dhaka is in constant touch with the Bangladesh authorities and other donors. He advises us daily on the most effective uses to which our money can be put, taking into account what is being provided by others. We have just heard that large numbers of boats, including at least 100 collapsible boats provided by Japan following the 1988 floods, are available in Bangladesh. Ten Royal National Lifeboat Institution boats which were donated by Britain in 1988 are being used by the Bangladesh Red Crescent. The high commissioner does not recommend provision of further boats from the United Kingdom. Six Bangladesh Navy ships are engaged in getting supplies to offshore islands. Relief goods are also being transported to Chittagong by rail.
Helicopters clearly have an important part to play as long as large areas remain inaccessible to surface transport. In the first instance this need can most effectively be met by countries within the region. India and Pakistan have already provided some helicopters, and I hope that other neighbouring countries may do likewise.
We are playing a full part in addressing Bangladesh's immediate relief needs as they become known. The co-ordination machinery is in place in Dhaka to try to ensure that all efforts are used to maximum effect and with the minimum duplication. I met the high commissioner of Bangladesh in London yesterday to discuss priorities.
I am pleased to announce that we are making available a further £2 million. This brings our total emergency commitment to date to £6.5 million. The £2 million will cover requests from NGOs for further priority relief supplies and the cost of sending the Royal Fleet Auxiliary ship, Fort Grange, equipped with medical facilities and disaster relief stores and two Sea King helicopters to assist with relief operations.
In the longer term, we have to accept that it will never be possible to protect Bangladesh totally against floods and cyclones, but certain things can be done to mitigate the effects of such natural disasters. The international community is already helping Bangladesh to develop its flood action plan, which includes further measures for cyclone protection. Other rehabilitation and construction needs will be considered once the immediate relief requirements have been met.
Mrs. Ann Clwyd: With such a terrible death toll in Bangladesh, where tens of thousands of lives have been lost and millions of people are without homes, how can the Minister expect us to believe that that is an adequate response to their plight? Welcome as it is, an extra £2 million brings the total to just £6.5 million for what the Minister herself called
"one of the most serious disasters in the region's history."
Ten days after the tragedy, people in Bangladesh are asking, "Where is the help? Why doesn't it come?" They need water, food, medicines and shovels to bury the dead. They need to rebuild their homes and telecommunications system. They need money for cattle, tools and seeds for planting the next harvest. Delivering those is a massive logistical task. It cannot be left to charities. It must be done by Governments, so why has a military operation not been set up?

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Is it not the case that the Minister's Department is virtually paralysed because the value of the aid budget is still 12 per cent. less in real terms than it was in 1979? Why has the Minister consistently failed to get more money from the Treasury? Does the right hon. Lady recall that, when a cyclone swept 1 million lives away in Bangladesh in 1970, a British amphibious squadron was there in just over a week, and the Minister was there in under a week, like the present French Minister?
Two years ago, when Hurricane Hugo hit Monserrat, HMS Alacrity served as a centre of communications. Surely there must be a frigate that could do the same in Bangladesh now from the Gulf—or is it that, because of the high rates charged by the Ministry of Defence for the use of planes, the cost of military operations will decimate the aid budget in a matter of days unless the ODA gets new money? Is that why the Minister wasted 10 valuable days before sending two Sea King helicopters? Why were only two sent, when the high commission says that at least 30 are needed?
The German Defence Ministry recognises the training value of using the military in civilian disasters, and the military training budget bears much of the cost while the aid budget bears only a fraction. Why cannot we do the same? Is it not true that the ODA's disaster unit is totally overwhelmed? Why is the disaster unit tucked away as part of the information unit? Why did the Foreign Office set up a round-the-clock Gulf crisis unit on 2 August with 50 staff, while the ODA's disaster unit has just six officials? Excellent though they are, those six officials are struggling to co-ordinate aid to victims of famine, cyclone and Iraqi persecution.
The Minister stressed the importance of international co-ordination, and said that the United Nations Development Programme is co-ordinating the relief effort in Bangladesh. Can she tell us why the United Kingdom's contribution to the UNDP has been cut by 52 per cent. in real terms since 1979? Bangladesh is one of our largest recipients of bilateral aid. Why has disaster preparedness not played a larger part in our long-term aid? Can the Minister assure us that British aid will be provided for reconstruction over the coming months and for cyclone shelters over the coming years?
Finally, will the Minister recognise that there will be more terrible and unnecessary deaths from cyclones and other disasters unless rich countries such as ours care enough about the poorest people in the world to match the killer winds and waves of Bengal with a hugh global effort to fight poverty and deprivation?
Mrs. Chalker: The extra £2 million that I have announced makes Britain the largest single national donor. I will consider further assistance for immediate relief or, to pick up the hon. Lady's last point, for longer-term rehabilitation as it is needed. In that respect work, has already started.
The hon. Lady asked many questions. The help has been in action since Tuesday of last week. The fact that all the detail has not been available even to me has a great deal to do with the awful problems of communication. It is perfectly true that France and Switzerland have been helping with internal communications, but those are by no means all restored. I received a telegram literally after I walked into the Chamber informing me that the problem of reaching the Bangladeshi people is caused not so much by transport difficulties as by the very poor weather.
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The hon. Lady may not know that a tornado struck north of Dhaka last night and has obviously stretched resources there. When we were in contact with the high commission this morning, I made available a further £100,000 for the immediate needs of the people affected by that tornado.
The hon. Lady went on about the delivery of assistance within Bangladesh. A donor cannot expect to go into a country and act at variance with the Government of that country. One must act through the Government and the non-governmental organisations, and that is exactly what we are doing.
The hon. Lady mentioned a possible ministerial visit. Willing as I am to go, I do not think that that is immediately appropriate. I am thinking carefully about it, but I am anxious not to tie up necessary helicopter transport. Sadly, that is what happened last week when, I am told, three out of four relief helicopters were involved in ferrying visitors around rather than doing their relief job. I will go once the immediate crisis is over, provided that I can do something truly productive.
Rehabilitation and reconstruction are already part of the Bangladeshi flood action plan on which Britain has been engaged for a considerable time. We shall look at the disaster preparedness in such regions, particularly in Bangladesh, with the international agencies, as we started to do last year.
Sir Timothy Raison: I thank my right hon. Friend for the help that she has given in meeting this ghastly tragedy and for the assurance that she will consider making further contributions, which look as though they will inevitably be needed. Is the system of stockpiling that already exists to deal with the recurring crises in Bangladesh adequate? If not, will she assure us that that will be a high priority in future help?
Mrs. Chalker: I thank my right hon. Friend for his comments. Stockpiling of tents, sheeting and blankets must take place in the countries and regions involved. It is not sufficient simply to stockpile in this country as we have done, which has helped us to deal with the three simultaneous crises that we now face as a donor country. It is not sensible to stockpile food which could not be used within a reasonable period because food may not remain suitable for human consumption during that time. But I am told that adequate food is available in Bangladesh and we have made money available to the non-governmental agencies to enable them to buy food in Bangladesh for the people affected by the awful cyclone.
Sir David Steel: The cash and personnel help that the Government are giving is, of course, extremely welcome, but the right hon. Lady will know that six days ago in the House hon. Members from both sides raised the question of the supply of inflatable boats and helicopters. The right hon. Lady has just described the area affected as being equivalent in size to the south of England below the London-Bristol line, including 15 million people. In those circumstances, are not 10 rubber boats and three helicopters pitifully inadequate in comparison with the actual need?
Has the right hon. Lady approached our American allies, who have a large amphibious force in the Gulf which is no longer required there and which could be made available in the bay of Bengal?

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Finally, did I understand the right hon. Lady to say that the Ministry of Defence has sent her Department a bill for the use of RFA Fort Grange? If so, will she send it back?
Mrs. Chalker: I am well aware of the right hon. Gentleman's efforts to keep the needs of the Bangladeshi people in the forefront of the news. We are not just talking about 10 boats; 100 boats are already there from our previous donation. We knew that they were there, but they had to be found by the Bangladeshi people before they could be used. It was far quicker to do that than to send 100 new boats, which would have had to be acquired.
We have said that we will consider further needs, so the right hon. Gentleman need not be in any doubt about our intention to obtain not only a daily report but a many-times-daily report from the people who are there and who can judge far better than I or any other hon. Member what can best be done to help the people most effectively and quickly. I am in touch with other Governments about their plans, and I shall remain so to see what can be delivered quickly to the area. It is important to ensure that the Bangladeshi Government get the help that they can best use, as was done last week.
Sir Richard Luce: I warmly congratulate my right hon. Friend on her prompt action, which is an example to many other Governments. Does she agree that this latest tragedy reinforces the urgent need for some permanent international machinery which can stand ready to advise vulnerable Governments and nations on how to deal speedily and urgently with catastrophes of this kind? Will my right hon. Friend take a lead on that?
Mrs. Chalker: I am grateful to my right hon. Friend. After my visit to Jordan, when we faced the crisis of Asian refugees from then occupied Kuwait and other parts of the region, I started to put work in hand to examine this issue of the international response. The United Nations disaster relief organisation has always been ready to get into situations which these days seem far beyond its capacity. That is why I am discussing with fellow members of the Community and with international organisations how a better immediate international response could be provided. Work has already begun, and I hope that, before too long, other countries will follow our lead in making the same level of response.
Mr. Peter Shore: I thank the right hon. Lady for her swift response to the desire on both sides of the House for a statement today. The House will understand the great logistical difficulties involved in getting help to the remote and damaged areas of Bangladesh, and the problems caused by the breakdown of telecommunications between Bangladesh and this country.
What the Minister has already said makes it clear how crucial is the supply of helicopters. The collapsible boats would be fine in ordinary circumstances, but apparently the bay of Bengal has been so rough that people have not been able to use boats. In fact, many boats were sunk during the cyclone, so helicopters are the only way to bring assistance to the people who have been so badly affected. However, there are only nine helicopters in Bangladesh at the moment—four of its own, three from India, two from Pakistan, and two from Britain. I am delighted that we have sent those helicopters—they will play a crucial role
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—but could we not bring ourselves to make a bigger effort to secure the means to get supplies to the people most in need of them?
Lastly, the House and the country most want to know whether, in reacting to that great and continuing disaster, the Government are clearly committed to sustaining a suitable and adequate response. We should like to hear not only that the right hon. Lady will take action, but that she has the backing of the Chief Secretary to the Treasury and the Chancellor of the Exchequer in meeting the further demands that will certainly be made by the people of that terribly damaged area.
Mrs. Chalker: The right hon. Member is absolutely right to draw great attention to the enormous waves and continuing bad weather conditions in the area, and to the fact that boats there could not operate. We were sorry to note the sinking in the bay of Bengal of a trawler, which I believe was carrying representatives of the non-governmental organisation CARE. We have to consider what is feasible, out there on the water. At the moment, that means making some deliveries by boat and some by helicopter. However, I have been informed that weather conditions have been such that not even helicopters could fly safely into the affected areas.
It is far better to wait—although that is very painful for the people on the ground—than to lose a helicopter, its pilot, and all the medicines aboard. That is why the operation is taking time. I understand hon. Members' frustration that things seem to be taking so long, and I share that feeling, but I must ensure that we continue to be able to look after the equipment that we and other nations supply.
I have been in touch with our chargé in Bangkok to support the request by the Bangladeshi Government to the Thai army for the loan of its helicopters. Those helicopters are nearby in flying terms, and are suitable for operating in the adverse weather conditions that so often exist in that part of the world.
The right hon. Gentleman asked about the support of my right hon. Friends. I assure him that I have the fullest support of the Prime Minister, the Chancellor of the Exchequer, the Chief Secretary to the Treasury and of all the other members of the Cabinet.
Several Hon. Members rose——
Mr. Speaker: Order. I am sure that the whole House is pleased that there is a statement on this important matter today. Will hon. Members ask brief question so that, hopefully, I may call every hon. Member who wishes to put a question?
Mr. Rupert Allason: Given the apparent disagreement among the NGOs, is there not a danger of wasteful duplication? Does my right hon. Friend agree that, in future, more aid should be channelled through the United Nations disaster relief organisation?
Mrs. Chalker: I do not find from my discussions with the non-governmental agencies that they are disagreeing; they are working together extremely well. The United Nations disaster relief organisation simply is not large enough to handle the enormous amount being handled both by British and local NGOs in Bangladesh. We have every reason to be thoroughly proud of what British NGOs and people on the ground are doing.
Ms. Diane Abbott: The Minister will be aware that hundreds of thousands of British citizens have relatives who may have died, been injured or made homeless in this terrible disaster. Could she share with the House what is being done to get information to that community? Is there a helpline that they can ring? Is her Department in touch with their organisations? As she can imagine, today there must be thousands of people, especially in the east end of London, wondering, and wanting information, about their loved ones.
Mrs. Chalker: I am very well aware of that problem. Although I do not have the same size community with roots in Bangladesh in my constituency as the hon. Lady has in hers, I have many connections and friends in the same worried state as I understand her constituents must be in. As I have already outlined, our difficulty is with the telephone lines and the failure to communicate, or even to have registers of where people are. Sadly, the identification of many people who have died is not an easy process. As soon as the Government of Bangladesh can give us information, I know that they will do so, but at the moment it is very difficult. I could not envisage setting up a hot line, because the information that could come in simply might not be accurate in the confusion that still exists in Bangladesh.
Dr. John Blackburn: Would my right hon. Friend pay a warm and generous tribute to the large Bangladeshi community in this country for the aid that they are going to give, and would she support them in their efforts? Secondly——
Mr. Speaker: Single questions, please.
Dr. Blackburn: Well, finally, would my right hon. Friend give special attention in the long term to the importance of restoring Chittagong, which is Bangladesh's only sea port, to bring in aid and support?
Mrs. Chalker: The answer to both my hon. Friend's questions is yes.
Mr. Ernie Ross: What is the Minister doing in the longer term to deal with the problem of poverty which exists in that country—poverty which is accentuated when natural disasters hit Bangladesh? For instance, when this is all over, the clearing up will start. Farmers who have lost all their crops will have to buy in seed again. What efforts is the Minister making, with the Bangladeshi Government, to ensure that those same farmers do not put themselves further into debt by having to purchase the seed that will be required?
Mrs. Chalker: Quite apart from this current disaster we have a £50 million-a-year aid programme with the Bangladeshi people, much of which is delivered through local non-governmental organisations, which are active with the farmers and have helped to set up credit unions and so on. All that will continue. Our immediate efforts must be directed towards the relief of those poor people, on tiny scraps of land, who have very little to eat and have no cover. However, I fully agree with the hon. Gentleman that, in the long term, the supply of seed for planting is important and we shall continue to support the Bangladeshi people in the way that we have done, which helps to alleviate poverty.
Mr. Bowen Wells: I congratulate my right hon. Friend on her prompt, careful and caring reaction to this disaster in Bangladesh. Would she convey to those people in the ODA, the emergency relief organisations and the NGOs the thanks of this House and of all those who are suffering for their hard work over many long hours in response to this disaster? Could she make representations to the Bangladeshi Government that, in the rehabilitation process, people are moved away from the low-lying islands and offshore areas to higher ground?
Mrs. Chalker: I thank my hon. Friend for his tribute to the British NGOs, and especially to the ODA disaster relief unit, which comprises nine, not six, officials and which also has the help of many support staff, senior officials in the Department, the Ministry of Defence and the diplomatic wing officials in the work that we are now doing.
I am well aware that the rehabilitation needs will be very great. However, I do not like programmes of forcible movement unless adequate conditions can be provided. People have to be persuaded to go. I am certain that we shall discuss the relocation of people with the Government of Bangladesh, but it is much too early to say exactly how it could be achieved.
Mrs. Margaret Ewing: The right hon. Lady has rightly placed emphasis on the need for international co-operation and co-ordination in this matter. In that context, what overtures have been made to, and what response received from, the American authorities about the possibility of using the substantial American presence in Diego Garcia, which could be a centre from which aid could come? Will she also tell us when she anticipates that the Fort Grange will reach Bangladesh?
Mrs. Chalker: I hope that the Fort Grange will be in Bangladesh next week, preparing the helicopters as it sails into those waters.
The question of international co-operation—including co-operation with the United States of America and any other country that has bases and likely equipment in the area—is under discussion and being pursued. Therefore, I cannot give the hon. Lady an answer.
Mr. Toby Jessel: Does my right hon. Friend see any risk of an epidemic of cholera in the coming weeks? If so, what is the position with the provision of supplies of cholera vaccine?
Mrs. Chalker: Indeed, cholera vaccine is one of the specific recommendations from the British medical aid adviser in Dhaka. A large quantity of septrin will be sent to Bangladesh, because that drug is not readily available there. We shall also send the other urgently required medical supplies forthwith.
Mr. Max Madden: Has the Minister had cause to reflect on the energy and efficiency with which the British Government mobilised for war in the Gulf, and compared it with their response to the disaster in Bangladesh, which has been so dilatory and gravely disappointing? Why has more money not been made available more quickly? Why have not helicopters, amphibious craft and other equipment been redeployed from the Gulf to Bangladesh? Does the Minister understand that, so far, the Government's performance

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leaves many in this country and in Bangladesh thinking that they are suffering not so much from aid fatigue as from aid paralysis?
Mrs. Chalker: I do not think that the hon. Gentleman was listening to the careful answer that I tried to give his right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) about the weather conditions. In recent days, they have made the use of craft already in Bangladesh impossible. The vehicles to get the goods to the people are available in Bangladesh, but the weather conditions have made the task difficult.
The hon. Gentleman brings totally non-comparable factors into his argument. We are not in a war, as we have recently been, but we are dealing with one of the most severe of natural disasters, to which all countries of the world need to respond. That is why all the partners in the flood action plans, and all the partners in the UN agencies, should be seeking to contribute as much as Britain. If they had all done their bit, the people of Bangladesh would already be in a far better state.
Sir Anthony Grant: Is it not rather sad that such a great tragedy should be the subject of party political claptrap? Is my right hon. Friend aware that she was extremely sensible not to waste resources by swanning off on a personal public relations exercise? She should be congratulated on that.
My right hon. Friend told us that Britain's contribution was the largest. What efforts are being made in the EC to persuade some of our partners to step up their contributions, given that they are so good at sermonising on the subject?
Mrs. Chalker: I am grateful to my hon. Friend for his realism. Our German partners have contributed DM 15 million of assistance. Our Danish partners——
Mr. Robert N. Wareing: That is more than us.
Mrs. Chalker: No, it is not more than us. The hon. Gentleman cannot calculate. At today's rate of exchange, that is £5.068 million. Other countries have contributed various sums, but none as large as Britain's contribution. The French contribution in which my hon. Friend is interested amounts in pounds to £1.18 million only.
Ms. Mildred Gordon: Perhaps the Minister would explain to her hon. Friend the Member for Cambridgeshire, South-West (Sir A. Grant) that the reason why there might be some political divide on the matter is that Opposition Members represent large numbers of constituents with relatives who are suffering. While Conservative Members are busy congratulating the Government, our constituents are extremely worried that comparatively little help has been sent, while there is so much hardware in the Gulf that could be used even in bad weather conditions. What international arrangements are being considered for earlier warnings of possible floods? It happens repeatedly and is obviously an international issue as warnings must come from higher up the Ganges. Other countries must be involved, so that steps can be taken to protect people and to evacuate them in good time.
Mrs. Chalker: The hon. Lady is quite unfair in what she says about my hon. Friends and their relations with
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Bangladeshi friends and constituents. I made it quite clear in answer to a previous question that I have already been in touch with Bangladeshi friends. I am just as concerned as she is, but the reason why I will not throw the British taxpayers' money into an aircraft which cannot get to its destination is prudence—not stupidity or unwillingness but prudence. The money has been put up and we know that we can use it to help the Bangladeshi people, and that is exactly right.
Sir John Stokes: While we are all most sympathetic to the appalling tragedy in Bangladesh and are grateful for the lead that the Government have given, and for the support of other Governments and private individuals to alleviate the suffering there, we must ask ourselves whether we should be discussing the matter as we have no control over it and no responsibilty for it. Furthermore, should we not fix our own agenda in our discussions here, rather than using that fixed by the television companies?
Mrs. Chalker: I can assure my hon. Friend that we do fix our own agenda. However, when so many people are in need, I believe it absolutely right, first, that the world should be told by the media what is going on, and, secondly, that the British Government, in partnership with other donors, should do their best to play their part in relieving the tragedy affecting those people. I and the Government will continue to make sure that that happens. There are tragedies all over the world and whether they are natural disasters or the man-made effects of conflict in places such as Ethiopia and Sudan, we have a moral duty to help the people involved.
Mr. Chris Smith: The Minister should be aware that many of my constituents, all British taxpayers, are deeply concerned, because of their family ties, about the scale of the tragedy in Bangladesh. They feel, as I do, that the British Government's response so far has not shown the necessary urgency or generosity. Will she reconsider the point that has been raised on several occasions about the need for helicopters? Will she give us a guarantee that, if the Bangladesh Government or responsible non-governmental organisations request the assistance of British helicopters, those helicopters will be sent?
Mrs. Chalker: I have already said that the important thing is to get the aid that the Bangladeshi Government can use to its destination as quickly as possible. That was why, yesterday, I made an approach to the Thai Government, knowing that the Bangladeshi Government—[AN HON. MEMBER: "Why only yesterday?"] I was only told yesterday. The Bangladeshi Government had requested nearby helicopters. The point of doing that work in a logical and sensible way is that we do not waste resources and that we get them to the people who need them. There is no lack of urgency in my Department or in the Government. It is a question of what is practical in some of the worst weather conditions ever in the bay of Bengal.
Mrs. Edwina Currie: May I remind my right hon. Friend that many Conservative Members also have Bangladeshi constituents? We commend her for her vigorous and effective efforts to help their relatives. Does she agree that her comparisons with the Gulf war are very useful? It took six months to build up the troops for

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the Gulf war and more than 30 countries were more than actively involved. Should there not be an international reaction to such disasters, instead of the British Government being well out ahead but leading a somewhat straggling pack?
Mrs. Chalker: My hon. Friend is absolutely right. I thank her for what she said at the beginning of her question. It was notable that we had time—not that we wanted it—to build up our forces and stocks and make the necessary assessments and other preparations to free Kuwait from the invasion of Saddam Hussein and his troops. My hon. Friend is also right to say that more than double the number of countries were involved in the Gulf conflict as have made any attempt to help in the present crisis. We need a better international response but, until we have one, we are pleased to continue to do our best and to take the lead where we can.
Mr. Alan Williams: The Minister says that she has the support of the Prime Minister, the Chancellor and the Chief Secretary. Is the £6.5 million to which she referred—that is only 40p a head for each person affected—new money to her Department or does it come from her existing budget? If it is from her existing budget, is not money being snatched from one area of need to help people in another?
Mrs. Chalker: I assure the right hon. Gentleman that no current aid activity is being displaced or delayed by the £6.5 million expenditure and that £1.2 million of the 10 million ecu aid package announced by the EC and the balance of £5.3 million are from our disaster relief funds. As yet, those funds are uncommitted and are specially kept in the budget. We are well aware of the pressure of having three simultaneous disasters on our hands. I am not afraid to ask for new money when it is necessary but, until I have used my budget, I cannot make as good a case as I can when I have used it. Given the response that I received for £20 million for another disaster last week, I have no doubt that I shall receive an equally generous response from my right hon. Friend.
Mr. William Cash: Did my right hon. Friend hear that there is a great deal of comment about taxpayers' money and Government expenditure on aid? Does she agree that the British Government have done extremely well to be at the forefront of providing that money? However, does she also agree that, although money could be made available through voluntary contributions, it would not be a bad idea for those who can afford it—there may be more such people than realise it—to give as much as 5 or 10 per cent. of their net salary for this month to help the people in Bangladesh and also those in Africa and Iraq?
Mrs. Chalker: I believe that no public are as generous as the British when it comes to giving money for people in need. That is why the British Government have taken measures every year in our budgets to make it easier for people to donate funds, and more beneficial for voluntary agencies to carry out such splendid work. I hope that the British public will respond to the current appeals. The Government will back the people in responding to the needs of those who have been so badly affected overseas.
Mr. Tom Clarke: Does the Minister accept that she is protesting too much to the House and
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not enough to the Treasury? If she is addressing the three areas of crisis that she mentioned, why do we read in this morning's newspapers that undernourished children in Ethiopia are having their supplementary food rations halved because donors have not provided the necessary food? Why could she not answer the simple question that was asked on television last night, about whether Britain has donated the 0.7 per cent. of GNP that virtually every other European country has given? Is she not ashamed that Britain has donated only 0.31 per cent. in the light of the crisis that she has outlined?
Mrs. Chalker: I hope, Mr. Speaker, that you will allow me to respond to the point that the hon. Gentleman raised on the Ogaden, although it lies outside the scope of this statement. I, too, saw with horror this morning's newspaper report about the specific problem in the Ogaden. I gather that it is partly a delivery problem, but we are looking into the matter with the non-governmental agencies, and I shall ensure that the food that we have already put in the pipeline is destined for such districts. That is exactly what the World Food Programme in Addis Ababa is seeking to do at present.
On the hon. Gentleman's other point, which is regularly raised, we have to gain the support of the British people, which now exists, for a higher percentage, and seek to make the aid programme grow in real terms. That is exactly what my predecessors and I have sought to do, and I hope that we will achieve that aim.
Mr. Michael Lord: Is it not the sad truth, which we are all loth to accept, that sometimes the forces of nature are so overpowering that there is nothing that man can do in the short term to combat them? While the hon. Member for Cynon Valley (Mrs. Clwyd), I am sure, cares as much about that as we all do, there is little point in suggesting that we provide shovels to plant seed on ground that is still many feet under water.
I thank my right hon. Friend for her statement to the House, which shows real purpose on the part of the Government. Will she assure us once again that we shall do all we can in the short term and stand ready to give the right help in the right place when it is needed?
Mrs. Chalker: My hon. Friend is right to say that the forces of nature are quite terrifying and cannot necessarily be coped with in the short term. That is why we have been supporting work towards the convention on climate change, under which we hope that all countries will take steps to limit their emissions of greenhouse gases, which cause global warming and make the difficulties experienced by such low-lying districts all the worse. We pledged £40 million in 1990 to help the global environmental facility work, which will help countries such as Bangladesh.
Mr. Jeremy Corbyn: May I reiterate the points made by my hon. Friends about the urgency of the position in Bangladesh, where hundreds of thousands of lives are at risk? While the weather is obviously very bad at present and makes it difficult for helicopters to get through to the offshore islands, that is no excuse for not getting helicopters to Bangladesh so that they can then be used when the weather gets better. Clearly, the Ministry of Defence has at its disposal all the helicopters necessary,

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but they have to be placed in position. Will the Minister make arrangements to get the helicopters there immediately so that the relief aid can be provided?
Mrs. Chalker: I remain firmly convinced that we must work with the Government of Bangladesh on the plans that they are making for the provision of food, medicine and shelter. We shall be guided by the information that we receive from them, and from our aid co-ordinators on the ground. We shall put in all the aid we can, in conjunction with other countries—the problem cannot be left to Britain alone.
Mr. Peter Bottomley: Does my right hon. Frend accept, as my hon. Friend the Member for Hertford and Stortford (Mr. Wells) said, that the staff of the non-governmental organisations and the Overseas Development Administration deserve congratulations for coping with this and the other two great disasters, which are prompting urgent and effective action from private individuals, the national Government and multilateral agencies? Is my right hon. Friend aware that, if she needs to come back to the House for approval for extra money to be added to her budget during the year, she will receive a great welcome from both sides of the House? Other people would like her to be successful in achieving movement towards the 0.7 per cent. of GDP target, preferably in a planned, co-ordinated and urgent approach.
Mrs. Chalker: I am certainly aware of the excellent work of the NGO and ODA staff. I thank my hon. Friend for what he said in the second part of his question, and I am glad that I shall have his support.
Dr. Norman A. Godman: My hon. Friend the Member for Dundee, West (Mr. Ross) made a plea on behalf of Bangladeshi farmers. I should like to make a similar plea on behalf of the fishermen—[Laughter]—the Bangladeshi fishermen—and it is no laughing matter. Many of these people lost their lives along with their boats and fishing gear. With regard to their colleagues who lost boats and gear, will the Minister discuss with her European Community colleagues the urgent need for replacements? Surely, in the maritime communities of the EC, there must be up to 1,000 boats suitable for use by these fishermen, who should not be saddled with heavy loans for the purchase of vessels. The EC and its fishing communities ought to be able to help.
Mrs. Chalker: I certainly note what the hon. Gentleman has said, and we shall consider it. The most important thing is that the Bangladeshi fishermen should be able, when the weather improves, to regain their livelihood. I fully appreciate the importance of the hon. Gentleman's remarks.
Mr. Anthony Beaumont-Dark rose——
Mr. Speaker: Was the hon. Member present for the statement?
Mr. Beaumont-Dark: Yes.
Mr. Speaker: Very well.
Mr. Beaumont-Dark: I understand your resting between questions, Mr. Speaker. Certainly I do so at times.
Does my right hon. Friend agree that, while nature can never be entirely stopped, we can spend money on super-computers and satellites? The better we can forecast tragedies, the better our chance of saving lives. If we could stop nature, we should be better than any god or any David Icke. If money were spent on forecasting, it would help to save human life, which is what we are all most concerned about.
Mrs. Chalker: I fully agree with my hon. Friend about the importance of satellite warning systems. I understand that the people of the area were given two to three days' warning of the cyclone but that, sadly, some of them were unwilling to move.
Mr. George Foulkes: Some could not.
Mrs. Chalker: The hon. Gentleman is absolutely right: some were unable to move. However much satellite warning is given, the machinery has to be in place locally if people are to be able to move; and they have to be willing to move. One cannot make people move, and that can result in great tragedy.
Several Hon. Members rose——
Mr. Speaker: I shall try to call hon. Members who are standing—not those who have been meditating. I hope that questions and answers will be brief, as there is a very heavy day ahead of us. Mr. Nellist.
Mr. Dave Nellist: There is a business motion.
Mr. Speaker: Do not argue, please.
Mr. Nellist: All I said was that there is a business motion.
Did not the Minister see last night's television news, which reported that, according to aid agencies, more than 500,000 people in Bangladesh had lost their lives, and more than 10 million had been made homeless? It has been announced that two additional Sea King helicopters are to be provided, but a total of 11 helicopters is completely pathetic. In the case of the Gulf, a huge task force was mobilised for the sake of oil. In the case of Bangladesh, where there is no oil, all that the Minister can say is that contact with those who have helicopters is under discussion.
Will not the Minister recognise that, if the cycle of drought, flood, famine and cyclones—decade after decade—is to be broken, she and her Department will have to consider not only the removal of poverty from that country but also the solution of the debt problem? The amount of money coming back to the west in this way each year is greater than the amount that goes out to tackle disasters.
Mrs. Chalker: I am glad to be able to say that international concern can be expressed at the long-term consultative group in Paris at the end of this month. The major donor agencies will be able to discuss what might need to be done for the future. I hope that those who estimate that more than 500,000 people have died are exaggerating. The Government of Bangladesh said today that they believed the number to be in the region of 200,000, but it will be quite some time before we know.
Mr. Simon Hughes: Whatever the figures, the Minister will accept that the disaster for Bangladesh is worse in terms of deaths, disease and homelessness than the events in Kuwait and Iraq over the last year. Given that, may I put it to her that the House and, I believe, Bangladeshis, wherever they are in the world, expect Britain, because of our historic ties with that country, to lead the mobilisation of the western world to go to the rescue of Bangladesh now? We have the capacity to do so. The west has the ships, the aircraft, the helicopters, the personnel and the skill to do so. Next week will not be soon enough.
Mrs. Chalker: If anyone has lost a loved one in a disaster, or has someone crippled by disease, for that family and that person that is the deepest tragedy. Whatever the total numbers, if we add them up across the whole world, it is a sad world in which we live. I hope that the efforts that we are already making to mobilise the western world will succeed, but I repeat that Britain is playing its part and will go on doing so. What I want is support from our partners and others who can also contribute and not leave it all to Britain.
Mr. Keith Vaz: The Minister has acknowledged the contribution made by members of the Bangladeshi community in Britain. She will know of initiatives in various cities by the Bangladeshi community. One problem is co-ordinating such initiatives. Can she offer any assistance to the various groups, such as Indian restaurants run by Bangladeshis in Manchester, who do not know where to send their contributions? Should it be done through the high commission for Bangladesh or through her Department?
Mrs. Chalker: I think that the best thing is to make the contributions to the aid agencies which are already working in Bangladesh. Concern, Save the Children Fund, CARE Britain, the Catholic Fund for Overseas Development. Y-Care, and, I believe, Christian Aid and Action Aid have already set up operations. In addition, the British Red Cross has put money into the Bangladeshi Red Crescent. All those organisations are worthy of support. Those who wish to donate should donate cash to those organisations, because many of the goods which are needed by the people are available locally in the region. Putting cash into the region is helpful to it, as the hon. Gentleman understands. That is better than sending goods which may or may not be suitable in Muslim communities.
Mr. Chris Mullin: I accept that the Minister and her Department are doing the best they can in the face of the great series of tragedies, within the constraints of Government policy. Does she find it as distasteful as I do, when turning on the television at night, to see desperate, starving people and, often in the same bulletin, to see her parliamentary colleagues calling for tax cuts, tax cuts, tax cuts? Will she accept that many people in my constituency, and no doubt many who support her party, would willingly pay higher taxes if they could be sure that the money would be used to help the people in the desperate situation that we see on television every night?
Mrs. Chalker: One reason that this Government have made sure that it is easier for people to give has been their willingness to forgo tax so that people may donate to worthwhile causes. I can think of no more worthwhile causes than the people who are suffering from the
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Bangladeshi floods, the people suffering in Africa and the people suffering from the Iraqi invasion of Kuwait and from the penalisation of Kurdish people in Iraq. They are all worthy causes. Of course, there are many more besides.
Mr. Harry Barnes: The ODA is trying to deal with three major disasters. I understand that it deals normally with about 90 disasters a year. It does not have the resources to handle all that. There are six officials in the disaster unit; I believe that the staff have been increased because of the Kurdish problem. The ODA needs more resources from the Treasury. Only in that way can we begin to handle the problems as they should be handled.
Mrs. Chalker: To correct the hon. Gentleman, there are nine officials and their support staff. [An HON. MEMBER: "For how long?"] There have been nine officials for some weeks. We have been drawing on our professional advisory resources, on senior officials, on the Ministry of Defence and on the diplomatic wing, as I made clear in answer to an earlier question. We are coping very well, but the pressure is great. I am deeply grateful to my staff, many of whom have been working enormous hours, all weekends and all hours of the night. They deserve the House's congratulations, not some of the more mean-minded comments that I have heard over the past two weeks.
Mr. D. N. Campbell-Savours: Should not the ludicrous procedure whereby the Ministry of Defence invoices the Overseas Development Administration for the use of military equipment be terminated immediately? What possible justification can there be for taking money out of the ODA's stretched budget and putting it into the Ministry of Defence's budget? How can the Minister possibly justify that? Will she terminate it immediately?
Mrs. Chalker: I would that I could change all the things that the hon. Gentleman thinks desirable and, even better, those which I think desirable, as quickly as he makes the case for doing so. It is right that we should calculate the proper cost, but I am looking for ways to assist our relief efforts. We find it most convenient on some occasions to use the Ministry of Defence and, on others, to use private chartered aircraft to carry our goods where they are needed.
Mr. Bob Cryer: In the longer term, will the Government organise trips by contractors to Bangladesh—as they have done to Kuwait—to ensure that, in the future, there are adequate flood defence measures—or at least an attempt to provide them—so that such a tragedy is unlikely to be repeated? Will the Government provide real money for such facilities?
They could perhaps think of using the ability, technology and techniques of workers in this country to preserve and develop lives in Bangladesh instead of pouring away £10,000 million on Trident nuclear weapons. Most people recognise that the priority of preserving life is better than the preparation for destruction.
Mrs. Chalker: I have been very pleased to acknowledge the work of British engineering firms, consultants and others in the Bangladesh flood action plan work, which has now been going on for some time. We have always supported British companies in doing that work, and we

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shall continue to do so. I hope that the action will provide work for people in this country, but I cannot deny that I believe that it is absolutely right that, where British companies can do good work abroad, they should be helped to do so and should be given the contracts in order for them to gain work so that people in this country may have employment.
Mr. Eddie Loyden: It appears from the view expressed by some Conservative Members that they doubt the Government's responsibility. Does the hon. Lady agree that some countries, especially this one, exploited Bangladesh to create their wealth over the years? Therefore, does she agree that there should be no consideration of limited aid to Bangladesh at this time?
Mrs. Chalker: I get the firm impression that the hon. Gentleman is living in the past. Bangladesh is a very poor country, and it has always been poor. Year after year, this country has sought to help Bangladesh. Our annual aid programme is £50 million, and this year our aid to Bangladesh is already much higher, because we shall continue to help that country once the flood waters have subsided.
Mr. Tony Banks: In an earlier reply, when comparing the Government's response in Kuwait to their response in Bangladesh, the Minister said that we were not at war. Many of us think that we should be at war—at war against poverty and against disasters in areas such as Bangladesh. As such disasters are, tragically, likely to continue to occur around the world, could we not benefit from the peace dividend by converting a significant proportion of our armed forces into a disaster response force? The forces have the material and the skills which could be put to such great use in a disaster area such as Bangladesh or elsewhere.
Mrs. Chalker: I thought that the hon. Gentleman was already aware that we had increased our poverty alleviation measures throughout the world and intend to continue to do so. No one could be more grateful than I to the British officers and men who work in various places in the world to alleviate the awful problems that countries face. They do not work only in the well publicised and sudden disasters: British troops go anywhere and everywhere to help when they are needed.
Mr. Dennis Skinner: Is the Minister aware that nothing characterises the Government more than their attitude to war, their patriotism and jingoism and their attitude to the starving thousands and millions throughout the world? Would not she be better displaced today and on other occasions when there is a need for Government money if the budget had been increased to 0.7 per cent. of GNP? Is it not a fact that we live in a society based on the entrepreneurialism of the Tories, in which Gazza can be sold for £8.5 million while we have a paltry £6.5 million for the Bangladeshis?
Mrs. Chalker: I am glad to say that I have no responsibility for Gazza. I do not intend, in the hon. Gentleman's word, to be displaced. Some of the best
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entrepreneurs among many of my friends and acquaintances have come from southern Asian countries such as Bangladesh, India and Pakistan. They are among the best entrepreneurs we have.
Mr. Tam Dalyell: May I ask the Minister a question of which I gave her office notice this morning, about the long term, and especially about the flood action plan to which she referred in her statement? What consideration is being given to the effects of global warming on the snows? Will she call into her office Dr. Houghton and Dr. Keith Browning of the Meteorological Office for a considered opinion about the effects of the Kuwait oil fires which are apparently affecting the snows of the Himalayas? We read this morning that the effect has now reached as far as west China. She should ask about the effect on the Bangladeshis of what happens in the upper areas of the great rivers.
Mrs. Chalker: I know that the hon. Gentleman agrees with me that Saddam Hussein's action in setting fire to the oil wells of Kuwait was environmental vandalism of the worst order. I cannot predict with any certainty the environmental consequences for the Indian sub-continent or wherever else there may be difficulties. However, I assure the hon. Gentleman that we are studying the emerging scientific work with great care. The immediate priority for my Department is to bring urgent relief to those affected by the awful cyclone and the continuing bad weather, but I shall ensure that our chief natural resources adviser is made fully aware of the hon. Gentleman's question and that we use all the information available to us from scientific sources to pursue the matter.
Mr. Harry Ewing: Last but not least, Mr. Speaker. I am grateful to you for leaving me until last. I usually walk up and down the stairs to my office three times a day for exercise but the exercise that I have had in the past hour and 10 minutes will save me the trouble today.
Will the Minister allow me the pleasure of simplifying her statement for her? One hour and seven minutes into answering questions on her statement, all that she has announced is a miserable, inadequate £2 million additional money for the NGOs and an extra two helicopters some time next week. Everything else is under discussion. That reflects the level of the Government's concern about the plight of the Bangladeshis. Will she answer the question put to her by the right hon. Member for Tweeddale, Ettrick and Lauderdale (Sir D. Steel) on behalf of the Liberal Democrats? Has the Ministry of Defence sent to her office an account for the use of the vessel that is to go to Bangladesh? If it has, does she support the transfer of overseas aid to the defence budget?
Mrs. Chalker: I will use overseas development resources to help the people of Bangladesh. I shall use not only what has already been announced and what was announced last week and today, but any other resources that are necessary.
The hon. Gentleman does not understand—I do not blame him for that—the way in which Government financing and accounting works. If the hon. Gentleman believes that the resources of one Department are just handed over to another, he is much mistaken, and he would have been mistaken in his own Government, in which he served for a while. The resources that are

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necessary for the Bangladeshi people will be provided, but they must not be provided just by the British people; they must be provided by the whole international community.
Mr. George Foulkes: Is the Minister aware that we are disappointed that many of the questions asked last Thursday have still not been answered today, nearly a week later? I refer to questions about the deployment of the Royal Navy and the Royal Marines with sophisticated communications, helicopters and boats, as requested by the Government of Bangladesh, as a Tory Government did in 1970 in response to a similar disaster. It is no use hiding under the excuse of the weather, because, in another area last week, the Minister blamed the European Community and she had to confess her error on that as well.
Will the right hon. Lady admit, as many of my right hon. and hon. Friends have said today, that the charge that the Ministry of Defence makes would devastate an already inadequate ODA budget? Will she now stand up with some courage at the Dispatch Box and say that she will get the Chancellor—at least she will ask the Chancellor—to agree the additional funds to the ODA to cover the cost of all necessary military personnel and equipment to deal with this emergency?
As you know particularly, Mr. Speaker, we have a special responsibility to Bangladesh as a Commonwealth country to lead the aid effort. We have not just a. moral responsibility to act both speedily and generously, but, following the elections in February, which I had the privilege of attending, a responsibility to underpin the democracy that now exists in Bangladesh.
Mrs. Chalker: Nobody is more glad than I that Bangladesh now has a democracy. We obviously must help the Government of that country, who are very new and very inexperienced, to carry through the work that they are seeking to do. That Government obviously have no experience of disaster co-ordination, but their army has, and that is why it has now been called in to play a central role in alleviation.
I am, and hope I always will be, a realist about what can be done. I believe that more resources are necessary in these exceptional circumstances, but, however helpful he might think his comments are, the hon. Gentleman must leave to me the approaches that I have made, and continue to make, for the resources that I need to carry out my job efficiently.

Points of Order
4.42 pm
Dr. Norman A. Godman: On a point of order, Mr. Speaker. I seek your guidance on a serious and perplexing matter relating to European Community Standing Committees A and B. I am deeply concerned about those Committees and, inter alia, their modus operandi. This morning, European Community Standing Committee B was adjourned after about 16 minutes—the Minister may confirm that—among some confusion and irritation felt by Committee members. The Chairman of the Committee, my hon. Friend the Member for Cumbernauld and Kilsyth (Mr. Hogg), with characteristic courtesy and good sense, agreed to the adjournment of the Committee.
The irritation this morning was caused by, among other things, the dismally late production of the documents that were to be considered by Committee members. Growing anger and concern are being felt by the permanent members of European Community Standing Committee B about the way in which it is treated in terms of, first, the disgracefully short notice of its meetings and, secondly, the unacceptably late production of the documents.
In addition, I am given to understand that Standing Order No. 102 governing such Committees is to be changed, with no consultation whatsoever with the permanent members of the Committee. You know, Mr. Speaker, that those Committees are engaged in very important work—the consideration of draft directives, regulations and other paraphernalia flowing from Brussels. We deserve at the very least some guidance on this disquieting matter.
Mr. Speaker: I am well aware that documents were not available this morning. I have allowed the hon. Gentleman to raise his point of order at some length, because it is important that the matters that he raised are on the record for the Leader of the House to deal with tomorrow, as they are matters for him. Does the Minister wish to say something?
The Parliamentary Under-Secretary of State for Industry and Consumer Affairs (Mr. Edward Leigh): Perhaps it might help the House if I explain what happened and the circumstances. The explanatory memoranda from the Department were made available to the Vote Office when they were published last October and February.
Last week, the report of the Select Committee was delivered to the European unit of the Department of Trade and Industry on Friday. On the next working day, which was Tuesday morning, those papers were delivered to the parliamentary unit at 10.45. There were 100 documents to be photocopied, and they were photocopied. They were delivered to the Hallkeeper's Lodge at 1.15. Those who delivered them were assured by those who work in the Hallkeeper's Lodge that they would be put on the letter board, and I am assured that they were put on the letter board. Therefore, those documents were available to hon. Members by lunchtime yesterday.
If there has been any fault, I am entirely responsible, and I apologise to the House. I have given instructions that in future, even if reports or documents are late coming from Select Committees, the DTI should deliver its

743
documents to hon. Members a full five working days before the Committee meets. I apologise to the House. I am responsible, not my officials.
Mr. Patrick Nicholls: On a point of order, Mr. Speaker.
Mr. Speaker: Not the same point of order?
Mr. Nicholls: My point of order concerns your responsibility for the accuracy of our proceedings, Mr. Speaker. It arises out of early-day motion 775, which is entitled "Alternative to Council Tax" and sets out the inadequacies in Labour's plans. Today's Votes and Proceedings state that 53 of my hon. Friends have also signed it. The difficulty is that the list now includes also the name of the hon. Member for Bradford, West (Mr. Madden).
The implications of that are really quite difficult. If the hon. Gentleman now wants to join myself and my hon. Friends, it may be the start of a long overdue process of conversion. Having seen the hon. Gentleman perform in the House over a number of years, I doubt whether he has undergone a conversion. I think that he has probably been slightly careless in signing early-day motions.
The problem is that we know from the proceedings in the House yesterday that you were able to quote for us from "Erskine May" and point out that, in normal circumstances, obvious mistakes can be corrected. One must simply assume that the addition of the name of the hon. Member for Bradford, West is an obvious mistake. The difficulty is that that view may not have any consensus within the House, because we know that the hon. Member for Copeland (Dr. Cunningham) has been complaining loudly about any change to the record whatsoever.
Is there any consensus about what should be done? Have we any way of finding out whether the hon. Gentleman is a convert to the cause or, in the interests of ensuring that the record stays how Opposition Members want it to stay, should it remain as a standing reproach to the hon. Member for Bradford, West?
Mr. Speaker: I have had no intimation from the hon. Member concerned that he has complained about this matter. It may be a mistake; it may not. No doubt we shall hear that tomorrow.
Mr. Dave Nellist: On a point of order, Mr. Speaker. Have you had any intimation from the Department of Trade and Industry or from the Ministry of Defence that they would have wished to have made a statement this afternoon on the news that emerged after 12 o'clock this afternoon, the latest time for raising Standing Order No. 20 debates, that Rolls-Royce is to axe a further 3,000 jobs in Coventry, Bristol, Derby and elsewhere?
I realise that it is possible—I shall try to do so tomorrow—to raise with the Leader of the House the possibility of a debate on this matter, but thousands of anguished families throughout the country will be worried about why those Departments are not at least liaising with that company to talk about diversification and the guaranteeing of jobs, particularly on the day when we hear how air transport is sorely needed all over the world to cope with disasters. Have those Departments approached you, Mr. Speaker, about making a statement to the House about those disgraceful redundancies?
Mr. Speaker: I understand that this news broke after 12 o'clock, which is when I consider such matters. I have not had any information since that time. I suggest that the hon. Gentleman raises this matter at business questions tomorrow, when I am sure that he will get an answer; what he has said will undoubtedly be reported to the Leader of the House.
Mr. Max Madden: On a point of order, Mr. Speaker. I understand that, during my brief absence from the Chamber, a Conservative Member with nothing better to do drew attention to the fact that my name appears on early-day motion 775. I am pleased to inform you that that was a mistake and that the Table Office is kindly making arrangements to withdraw my name.
Mr. Speaker: I am not surprised to be given that information.

Asylum Seekers and Refugees
4.50 pm
Mr. Jeremy Corbyn: I beg to move,
That leave be given to bring in a Bill to amend the law to facilitate the safe entry into the United Kingdom of asylum seekers and their families; to provide a right of appeal against refusal of entry, and a right of independent representation; to make administrative provision for the resettlement of asylum seekers, refugees and their families; and for connected purposes.
The Bill would change the way in which asylum seekers and refugees are dealt with in this country. They are not well dealt with now and it is time to change our approach to them.
The 1951 convention on refugees, which was agreed at Geneva in July 1951, defines a refugee as
"someone who, owing to a well-founded fear of being persecuted for reasons of race, religion, nationality, membership of a political social group, or political opinion is outside the country of his nationality and is unable or, owing to such fear, is unwilling to avail himself of the protection of that country."
That was what was agreed after the second world war about those seeking political asylum. Since then, the issue has grown in importance throughout the world. Much of what is written in the newspapers deliberately exaggerates the number of cases in this country in which political asylum is being sought. However, like other European countries, I believe that this country deliberately tries to foist the refugee problem on to other much poorer countries. The largest number of refugees are not in western Europe, but in the poorest countries, such as India, Jordan, Mexico and other places near to considerable conflict.
In the past 11 years, there have been 83,000 applications for political asylum in this country, of which only 13,000 have been granted, with 17,000 being given exceptional leave to remain, which is a sort of halfway house. At least 15,000 applications for political asylum are outstanding.
The purpose of my Bill is to alter the procedures in order to speed them up and to make the system much fairer. The current law on immigration and refugees is unfair and contrary to the general principles of English law in that it has a presumption against rather than in favour of the applicant, as is the case in civil or criminal law.
The Bill has three main proposals. The first is the creation of a refugee protection agency, which would have the job of deciding requests for refugee status, of ensuring that the people carrying out the interviews are properly trained in psychological as well as normal interviewing techniques, and of providing independent interpreters to undertake the translation of the interviews. All decisions would have to be conveyed in writing to the applicant within three months of the initial application. At present, many applications take several years, which often means great hardship for the applicant and his or her family who are often unable to come to this country to join the applicant.
The Bill's second proposal is the creation of a refugee review board, which would hear all appeals before anyone could be removed from this country. A majority of the board's appointed members would have to make a decision against the applicant being granted refugee status for there to be any decision against the applicant. At the board, any applicant would have the right to legal aid. Again, the decision would be taken within three months.
746
If the board were in operation now, last week's disgraceful incident involving a Zairean refugee could not have occurred. Despite representations from my hon. Friend the Member for Islington, South and Finsbury (Mr. Smith), that refugee was bundled out of the country and is now back in Zaire. We do not know his fate.
There was another scandalous case not long ago in which a Kurdish person from Turkey, Shiho Iyuguven, was denied the right to asylum in this country and was subsequently removed, despite strong representations from myself and many others. That applicant refused to go and subsequently took his own life in a horrific and successful suicide attempt at Harmondsworth detention centre. Those are just two of the many cases in which people have been removed from this country against their will and are put in considerable danger if they return to the country from which they came. If they go to a third country, their families are often put at considerable risk of retribution from the oppressive regime that they sought to leave.
The third part of my Bill provides for the introduction of a charter of rights for asylum seekers and refugees in this country. The decision on whether someone should be admitted to this country is that of central Government. Nobody seeks political asylum lightly. Nobody leaves his own country lightly, even if running away from considerable danger. We have a responsibility to treat the people who are admitted into this country humanely and decently. I find it sad when highly motivated groups of people from Somalia, Zaire, Iran, Iraq and central and south America find that, having sought asylum here, they are unable to work because no decision has been made on their right to work. They also find great difficulty in getting housing and are allowed to receive only 90 per cent. of the income support or social security benefit for which they have applied.
My proposed charter of rights would include a right to housing and education and access to the social services. It would also place a responsibility on central Government to ensure that sufficient resources are given to the predominantly inner-city local authorities that are doing their best to provide the necessary services to support people who have sought political asylum. There is something wholly wrong when people who have fled in fear of persecution end up begging for support from churches and charities simply to make ends meet when, as other European Governments have accepted, it should be the responsibility of central Government to provide the local authorities with the necessary finance so that they can provide the housing and education that are so valuable and necessary for those who have sought political asylum.
The charter of rights would also provide for the right of family reunion. Nothing can be more devastating than family separation. Last Friday an asylum applicant from Somalia visited my surgery. He was desperate with worry and concern about his family because he does not know where they are. He is having great difficulty communicating with them and it is unsafe for him even to write to them because of the retribution that might be meted out. He is the sort of person whose family should have the right to come to this country so that they can join him in some safety.
We live in an age when, tragically, racism and xenophobia are on the rise again in Europe. I have a feeling that the Government's approach to this matter, through the Trevi group, which we set up to deal with

747
terrorist attempts throughout Europe but which has now turned itself into a secret organisation dealing also with immigration and refugee policy, has been to agree to adopt a refugee policy in Europe that relies on the lowest common denominator and tries to push the refugee problem elsewhere—never mind the fact that European countries have consistently supported the oppressive regimes, such as that in Iraq, which have forced many people to seek political asylum in the first place. The 1990 Dublin convention is also unfortunate because it exempts people's right to apply to the European Court of Human Rights for justice in cases where they have been denied the right to political asylum.
My Bill also seeks to amend the Immigration (Carriers' Liability) Act 1987, a disgraceful piece of legislation which seeks to fine carriers for bringing into this country people who are not subsequently legally admitted. Last year £6 million was collected in fines under that Act. It means that people seeking political asylum have to pay extortionate air fares to cover the fine that the carrier has to pay if those people are not subsequently admitted to this country. I have met people from Turkey who have encountered that.
That militates against legitimate seekers of political asylum. I pay a warm tribute to the churches and voluntary organisations which have done so much to support people seeking political asylum in this country. I mention especially the Joint Council for the Welfare of Immigrants and its general secretary, Ann Owers, and the British Refugee Council, and Jessica Yudelivich who provided much of the information that forms the basis of the Bill.
Nobody in this country has ever woken up in the morning to a military coup or has had his family taken into custody. No one has ever found himself in the position of having no rights of free expression or movement. No one has ever had to leave Britain, probably never to return. We have a responsibility to recognise that those who suffer such fates and who seek political asylum receive justice when they seek safety in this country.
Mr. Gerald Howarth rose——
Mr. Deputy Speaker (Sir Paul Dean): Does the hon. Gentleman seek to oppose the motion?
Mr. Howarth: I do indeed, Mr. Deputy Speaker. I oppose the Bill with some hesitation because the House was kind enough last week to give me leave to introduce my National Enterprise (Reconstruction) Board Bill.
The whole premise of the measure is to make it easier for yet more foreigners to be admitted for settlement in our overcrowded kingdom. Its other premise is that the Government are lacking in humanity and are mean. The nation and the Government have no need whatever to be ashamed of their performance in this area because we have an honourable record of responding to the needs of others. Those of us who have been in the Chamber for the past one and a half hours heard my right hon. Friend the Minister for Overseas Development set out at length Britain's response to the latest natural disaster in Bangladesh. As she said, we are among the first and largest donors and that is indicative of the measure and nature of our response.
748
There are many other examples showing the support that the United Kingdom, its people and its Government have given to others in need in recent years. The Government have put our forces at the disposal of relief organisations in countries such as Ethiopia which have suffered from famine. Our people have dug deeply into their pockets and I am sick and tired of listening to Opposition Members constantly urging people to give more while they do nothing. The Opposition do not dig into their own pockets but they constantly ask the Chancellor to do something, as though he had money of his own upon which he could draw. The Chancellor can draw only upon our money.
A further example of the United Kingdom's humanity was the admission of the Ugandan Asians when they were being persecuted by Idi Amin. Vietnamese boat people have also been admitted and the House recently sanctioned a measure to allow 50,000 Hong Kong Chinese to settle in the United Kingdom. That worthy record shows that over many years the Government have responded sympathetically, often in the face of opposition from our people who resented some of the measures.
Let us look at our record on the acceptance of asylum seekers. In 1987, 460 were accepted. In 1988 the figure was 970 and in 1989 the number accepted for settlement had risen to 3,000. Between 1979 and 1989 some 34,000 people were allowed to stay in this country and a further 17,800 were allowed to remain here under exceptional leave arrangements.
It is a matter of great concern that applications are rising alarmingly. In 1989 there were 15,500 applications and I understand that last year, for which no official figures are yet available, there were getting on for 30,000 applications. That is 20 times the number of people who applied in 1979. Opposition Members should not lecture us about humanity, because our record in these matters is good.
We deplore the Governments and systems of government in many countries and, since the demise of the much-maligned great British Empire, most countries probaby fall into that category. Under the inspiring and determined leadership of my right hon. Friend the Member for Finchley (Mrs. Thatcher), this country became a place to which people from all over the world wished to beat a path. [Interruption.] That is because of the liberal regime that operates here, and the freedom of expression that Opposition Members seek to deny me. This is a great country to which people from all over the world are anxious to come. However, these overcrowded islands simply cannot become some kind of safe haven for the world's opposition parties. It is enough that it harbours its own Opposition.
We owe it to our constituents to take their concerns into account. There is no point in Opposition Members wearing their hearts on their sleeves and engaging in the sanctimonious humbug that has emanated from the Opposition all afternoon. The money that is sought is that of our constituents. Opposition Members who visit working men's clubs and pubs will find that people are perfectly prepared to pay into voluntary funds organised by the relief agencies. However, they resent Opposition politicians taking money out of their pockets and preening themselves on how concerned and caring they have been.
We cannot be expected to sort out the consequences of everyone else's civil wars, corruption and socialist economic mismanagement. However, the Bill must be seen

749
in the wider context of immigration policy generally. That was mentioned by the hon. Member for Islington, North (Mr. Corbyn). The Bill is Labour's Trojan horse by means of which they want to effect a policy of uncontrolled immigration, trading on the good will of the British people to accommodate those who have found affliction and oppression abroad.
There is deep resentment in my constituency about a story which appeared last week about an Asian family with seven children who arrived here knowing just one word of English—house. They were instantly housed ahead of people, taxpayers, who had been on the housing list for many years. Labour's policy is to encourage such immigration. [Interruption.]
Mr. Deputy Speaker: Order. The hon. Gentleman is entitled to express his view.
Mr. Howarth: A fine cartoon by Jak in the Evening Standard found its way to the Express and Star in my area. It shows an Asian family queuing at the immigration desk and uttering three words in English—"G band house"—reflecting the new council tax arrangements. During the last Labour Government's five years of office about 250,000 new Commonwealth citizens were admitted to the United Kingdom for settlement. That was about 50,000 a year. Under this Government the figure has fallen in the last five years to an average of about 23,000—less than half the rate that prevailed under the last Labour Government.
The Conservative party and the Government have a firm and fair policy on these matters, which include the question of asylum seekers. Labour's policy would pave the way for a massive influx of immigrants. The Bill is part of that process and should be rejected.
Question put, pursuant to Standing Order No. 19 (Motions for leave to bring in Bills and nomination of Select Committees at commencement of public business):—
The House proceeded to a Division—
Mr. David Ashby (seated and covered): On a point of order, Mr. Deputy Speaker. Is it in order for hon. Members to stand in the Lobby, shouting abuse at the hon. Members as they go in to vote saying, "This way for the racists. All the racists go in here."? Would it not be right for the Serjeant at Arms to tell the hon. Member concerned to eject himself and get away from there?
Mr. Deputy Speaker (Sir Paul Dean): It is certainly not in order for hon. Members to shout abuse at each other. I hope that, if that has been occurring, it will cease forthwith.
Mr. Ashby: Further to that point of order, Mr. Deputy Speaker. Should not someone tell that hon. Member to stop and eject him, because his abusive behaviour is interfering with voting? Will you, Mr. Deputy Speaker, arrange that?
Mr. Deputy Speaker: If that has been happening, I hope that the hon. Members involved will take note that from the Chair I have strongly deprecated such conduct.
Mr. Ashby: Further to the point of order, Mr. Deputy Speaker. The problem is that hon. Members in the Lobby cannot hear what you are saying. They are in the Lobby stopping people from voting and it is still going on.
Mr. Deputy Speaker: I understand that what I have said from the Chair has, in fact, been conveyed to those hon. Members.
Sir Bernard Braine(seated and covered): Further to that point of order, Mr. Deputy Speaker. I have been an hon. Member for more than 40 years and I have never before witnessed the sort of behaviour that has been taking place for some time during this Division. It was threatening in character, abusive, and it might have confused hon. Members coming in to vote. In that respect I support my hon. Friend the Member for Leicestershire, North-West (Mr. Ashby). It is no use expressing an opinion from the Chair that cannot be heard by the offenders. I hope you, Mr. Deputy Speaker, will instruct the appropriate Officer of the House to call upon the hon. Member involved to desist.
Mr. Deputy Speaker: I understand that there has been no physical obstruction in the Division Lobbies. That is my concern from the Chair. I repeat that if there has been verbal abuse, it is grossly out of order and I strongly deprecate it.
Mr. Ashby: Further to the point of order, Mr. Deputy Speaker. I understand that the hon. Member for Coventry, South-East (Mr. Nellist) did not just say, "This way racists"; he also said, "Pick up your legs and goosestep in" and other phrases of that sort to hon. Members who wish to vote freely. Would it not be right for you to call that hon. Member to order and to explain himself? I see that he is entering the Chamber. It is disgraceful.
Mr. Deputy Speaker: There is nothing further I can do at this stage. The doors have now been locked, but it is exceedingly important in this place that we observe restraint in our language and in our conduct.
Mr. Ashby: Further to that point of order, Mr. Deputy Speaker. Would it not be proper to ask the hon. Member to apologise for his obstructiveness? Should we not have an apology for his misconduct?
The House having divided: Ayes 116, Noes 73.

Division No. 137]

[5.08 pm

AYES

Abbott, Ms Diane

Cunliffe, Lawrence

Adams, Mrs Irene (Paisley, N.)

Dalyell, Tam

Allen, Graham

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

Archer, Rt Hon Peter

Dixon, Don

Ashdown, Rt Hon Paddy

Doran, Frank

Barnes, Harry (Derbyshire NE)

Dunnachie, Jimmy

Barron, Kevin

Eastham, Ken

Battle, John

Evans, John (St Helens N)

Beith, A. J.

Ewing, Harry (Falkirk E)

Bellotti, David

Ewing, Mrs Margaret (Moray)

Benn, Rt Hon Tony

Fearn, Ronald

Bradley, Keith

Fisher, Mark

Bray, Dr Jeremy

Flynn, Paul

Buckley, George J.

Foot, Rt Hon Michael

Caborn, Richard

Foulkes, George

Campbell, Menzies (Fife NE)

Fraser, John

Campbell, Ron (Blyth Valley)

Fyfe, Maria

Campbell-Savours, D. N.

Godman, Dr Norman A.

Carlile, Alex (Mont'g)

Golding, Mrs Llin

Carr, Michael

Gordon, Mildred

Clarke, Tom (Monklands W)

Graham, Thomas

Clelland, David

Grant, Bernie (Tottenham)

Cohen, Harry

Griffiths, Nigel (Edinburgh S)

Corbett, Robin

Hardy, Peter

Corbyn, Jeremy

Haynes, Frank

Crowther, Stan

Heal, Mrs Sylvia

Cryer, Bob

Hinchliffe, David

751

Hoey, Ms Kate (vauxhall)

Nellist, Dave

Hogg, N. (C'nauld & Kilsyth)

O'Hara, Edward

Home Robertson, John

Parry, Robert

Hood, Jimmy

Patchett, Terry

Howarth, George (Knowsley N)

Powell, Ray (Ogmore)

Howells, Dr. Kim (Pontypridd)

Primarolo, Dawn

Hoyle, Doug

Reid, Dr John

Hughes, John (Coventry NE)

Robinson, Geoffrey

Hughes, Robert (Aberdeen N)

Rogers, Allan

Hughes, Roy (Newport E)

Ross, Ernie (Dundee W)

Hughes, Simon (Southwark)

Ruddock, Joan

Illsley, Eric

Salmond, Alex

Johnston, Sir Russell

Sedgemore, Brian

Kirkwood, Archy

Sheerman, Barry

Leighton, Ron

Sheldon, Rt Hon Robert

Lestor, Joan (Eccles)

Shore, Rt Hon Peter

Livingstone, Ken

Short, Clare

Lofthouse, Geoffrey

Sillars, Jim

Loyden, Eddie

Skinner, Dennis

McAvoy, Thomas

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

McCartney, Ian

Steel, Rt Hon Sir David

McFall, John

Steinberg, Gerry

McKay, Allen (Barnsley West)

Stott, Roger

McLeish, Henry

Turner, Dennis

McMaster, Gordon

Vaz, Keith

Madden, Max

Wallace, James

Mahon, Mrs Alice

Welsh, Michael (Doncaster N)

Marshall, Jim (Leicester S)

Wise, Mrs Audrey

Meale, Alan

Young, David (Bolton SE)

Michie, Bill (Sheffield Heeley)

Michie, Mrs Ray (Arg'l & Bute)

Tellers for the Ayes:

Moonie, Dr Lewis

Mr. Tony Banks and Mr. Peter Hain.

Mullin, Chris

NOES

Adley, Robert

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

Aitken, Jonathan

Buck, Sir Antony

Allason, Rupert

Budgen, Nicholas

Arbuthnot, James

Butler, Chris

Arnold, Jacques (Gravesham)

Carlisle, John, (Luton N)

Arnold, Sir Thomas

Clark, Rt Hon Sir William

Aspinwall, Jack

Coombs, Simon (Swindon)

Banks, Robert (Harrogate)

Cran, James

Beaumont-Dark, Anthony

Dickens, Geoffrey

Beggs, Roy

Dicks, Terry

Bevan, David Gilroy

Dover, Den

Blackburn, Dr John G.

Dunn, Bob

Braine, Rt Hon Sir Bernard

Durant, Sir Anthony

752

Evennett, David

Nelson, Anthony

Favell, Tony

Neubert, Sir Michael

Fox, Sir Marcus

Nicholls, Patrick

Fry, Peter

Porter, David (Waveney)

Gale, Roger

Powell, William (Corby)

Glyn, Dr Sir Alan

Riddick, Graham

Goodhart, Sir Philip

Ross, William (Londonderry E)

Grant, Sir Anthony (CambsSW)

Shaw, Sir Giles (Pudsey)

Greenway, Harry (Ealing N)

Smith, Tim (Beaconsfield)

Gregory, Conal

Speed, Keith

Grylls, Michael

Stewart, Rt Hon Ian (Herts N)

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

Taylor, Ian (Esher)

Hicks, Mrs Maureen (Wolv' NE)

Thompson, D. (Calder Valley)

Janman, Tim

Thornton, Malcolm

Jessel, Toby

Townend, John (Bridlington)

Johnson Smith, Sir Geoffrey

Vaughan, Sir Gerard

King, Roger (B'ham N'thfield)

Walden, George

Knapman, Roger

Watts, John

Knight, Dame Jill (Edgbaston)

Wells, Bowen

Lawrence, Ivan

Wheeler, Sir John

Marshall, John (Hendon S)

Wiggin, Jerry

Maxwell-Hyslop, Robin

Mitchell, Andrew (Gedling)

Tellers for the Noes:

Morris, M (N'hampton S)

Mr. Gerald Howarth and Sir John Stokes.

Mudd, David

Neale, Sir Gerrard

Question accordingly agreed to.
Bill ordered to be brought in by Mr. Jeremy Corbyn, Mr. Max Madden, Mr. Dave Nellist, Ms. Diane Abbott, Mr. Chris Smith, Mr. Tony Banks, Mr. Harry Cohen, Mr. Andrew F. Bennett, Mr. Bernie Grant, Ms. Mildred Gordon, Mr. Keith Vaz, and Mr. Brian Sedgemore.

Asylum Seekers and Refugees

  ASYLUM SEEKERS AND REFUGEES BILL
  Mr. Jeremy Corbyn accordingly presented a Bill to amend the law to facilitate the safe entry into the United Kingdom of asylum seekers and their families; to provide a right of appeal against refusal of entry, and a right of independent representation; to make administrative provision for the resettlement of asylum seekers, refugees and their families; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 17 May and to be printed.
  [Bill 154.]

Orders of the Day

  Finance Bill
  (Clauses 14, 21, 22, 23, 24, 31, 77 and Schedule 14)
  Considered in Committee [Progress 7 May.]
  [MISS BETTY BOOTHROYD in the Chair]
  5.20 pm
  Sir William Clark: On a point of order, Miss Boothroyd. I want to raise a matter that I believe affects the constitutional behaviour of the House. It is obvious from the events surrounding the presentation just now of a private Member's Bill that anything that occurs outside this Chamber is not within the purview of the Chair. We have seen today a violation of the procedure of the House, whereby an hon. Member stood outside either the Ayes or the Noes Lobby, exhorting right hon. and hon. Members to vote this way or that way in a very offensive manner. Something should be done to prevent right hon. and hon. Members from being subjected to that kind of behaviour by someone who does not really believe in democracy.
  Several Hon. Members rose——
  The Second Deputy Chairman of Ways and Means (Miss Betty Boothroyd): Order. I will take no further points of order on that matter. A number were raised earlier. Mr. Speaker will be made fully aware of what took place, and if he has anything to report to the House, he will do so tomorrow.

Clause 31

  RELIEF
  5.22 pm
  Mr. Nicholas Brown: I beg to move amendment No. 14, in page 21, line 14, leave out '1992' and insert '1991'.
  Unemployment is rising, the economy is in recession and our trading relationships with our European partners require our economy to be as strong and competitive as theirs. In those circumstances, it is right for us to discuss education and training. It may be commonplace to say that this country's greatest single asset is the skills and abilities of its people, but I predict that over the next decade that will become even more self-evident.
  In a timid but nevertheless welcome way, the clause acknowledges the need for education and training. It will allow people to claim tax relief for course fees, assessment, and regulation costs for properly accredited vocational training. It requires a claimant to be a United Kingdom resident who is undertaking a course without any public financial assistance or other type of tax relief to help with its cost. Companies have always been able to obtain tax relief for providing training, and the clause is designed to allow individuals who incur expenses to do the same.
  I shall leave to one side for the moment the issues that we want to explore with the Government on other amendments. As far as it goes, clause 31 is welcome—so welcome that our amendment is intended to make the tax
  754
  relief begin this tax year rather than in 1992, as the Government intend. I understand that the cost of the change that we propose would be about £15 million, although I suspect that it might turn out to be less.
  I can think of only three possible objections to our proposal. First, it might be argued that the MIRAS-type arrangements that are supposed to accompany the tax relief cannot be put in place in time. That does not seem to be an insuperable reason for not granting the relief now. It would be possible, by deduction or set-off, to give taxpayers the relief at the end of the tax year.
  Secondly, it might be suggested that the regulations for those not liable for tax, but who would nevertheless be able to take some advantage of the scheme, would not be in place in time, so that the arrangement could not start in 1991. That does not seem to be an insuperable difficulty, either. I do not think that many people would come into that category. It may be possible to think of examples of people without a charge to tax who would still be able to pay for their own vocational training, but it is hardly likely that there will be many. I am sure that the Inland Revenue would be able to deal with the small number involved.
  The third possible Government objection is that the public expenditure implications of starting the scheme in this financial year rather than the next would be beyond their resources. They may say that they could not possibly spend up to an extra £15 million on training. Such a sum would be slightly more than a quarter of the publicity budget of the Department of Employment, which puts the matter in perspective. We could forgo a little publicity and encourage more training instead.
  The real disagreement between the Government and ourselves is whether, in the present economic climate—with rising unemployment and industry complaining of skill shortages—it is necessary for the future well-being of the economy to make training a priority use of public expenditure. Of course, the costs of the scheme are important, but so is the price of unemployment. It costs the state about £8,000 per annum if a person who could be economically productive is kept unemployed.
  The costs of our declining international competitiveness are important, too. I welcome the present direction of trade agreements, but they mean that over the next decade our ability to compete internationally is bound to become even more important. To forgo training in those circumstances seems foolish.
  Other important costs are those that skill shortages cause British employers, who will rightly argue that skill shortages are not easily met in the short term. It is a privilege of speaking from the Opposition Front Bench to be able to draw on examples from one's own community. There could be no more pertinent example than that offered by Tyneside, where my constituency lies. It is an area noted for its skilled work force. The skills there have been accumulated over generations because of the presence of the shipbuilding and heavy engineering industries. Those industries have endured an enormous, and probably permanent, shake-out, in employment terms, in the past decade. Alongside that, no region has suffered more from persistently higher than average levels of unemployment. Yet, in spite of that residue of highly skilled manual workers on Tyneside, employers are complaining of skill shortages. The high unemployment rates that the Tyneside community is still enduring are composed of unskilled workers more than any other single element.

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  The Swan Hunter shipyard is a good example, as it is not always easy for that major employer on Tyneside to find people to fill skilled vacancies. That might surprise Conservative Members, in view of the shake-out in the shipbuilding and engineering industries, but it is the case. There is a waiting list of about 2,000 people for the occasional unskilled job at that workplace. Those circumstances will be mirrored throughout Tyneside and if they are mirrored there, where there is a residue of skilled labour, how much more likely are they to be reflected in other parts of the country?
  5.30 pm
  The Government have got their priorities wrong. They are estimating negative growth in the economy for the next year. By implication at least, the Government are saying that, given the country's growth rate, unemployment will be a problem. Therefore the Government should be in a position to do something about it.
  The something that they have done is to cut expenditure on training. That is not a minor point of detail which divides us, but an issue of principle. The Labour party's view is that expenditure on education and training will be crucial to our position in the international trading community in the next decade and will be a necessary element in pulling this country through the recession.
  Mr. Nigel Forman: I am most grateful to the hon. Gentleman, whose speeches I always enjoy—especially the witty parts. Could he enlighten the House still further on his party's policy in this matter? He has just begun to talk about it. I seem to recall that his right hon. and learned Friend the Member for Monklands, East (Mr. Smith) said that the increased expenditure on education and training which the Labour party hopes for would essentially be financed by borrowing rather than by taxation. Is that still the case? Has the hon. Gentleman made any estimates of the effect on interest rates, were that to happen?
  Mr. Brown: Investment in training has to be a priority for the economy. Before the last Budget we did something that Oppositions do not normally do. I am sure that the hon. Gentleman is aware that we set out our own proposals for the Budget. They included the expenditure of about £800 million—if my memory is correct—on training, as well as the training levy; we proposed a 0.5 per cent. levy on the payroll, which we believed would generate more than £1.4 billion. We added the two figures together and said that that amount would be spent on training. Those measures were part of a package presented before the Budget.
  When we come to office we shall have to measure our objectives against the changes that have been made in this year's Budget. We shall not come into office with the tax system that we endured last year or the year before. We shall certainly not be able to go back to where we were in 1979. Therefore, I cannot tell the hon. Gentleman that we will definitely spend X amount and that, whatever the position of the economy, so much must be spent on training; nor can I say that rates of income tax will be Y rather than Z. As the hon. Gentleman knows, it is not my prerogative to do so.
  The Financial Secretary to the Treasury (Mr. Francis Maude): Come clean.
  Mr. Brown: The hon. Gentleman says come clean, but, assuming that there will not be a general election before the next Budget day, which does not seem to be a very safe assumption, will he stand up and say what the basic rate of income tax will be after the next Budget?
  Mr. Maude: I can certainly assure the hon. Member for Newcastle upon Tyne, East (Mr. Brown) that it is our intention to reduce the basic rate of income tax. I take issue with the hon. Gentleman over the fact that he is proposing to spend all that money without giving the slightest indication of where it will come from. The only conclusion we can draw from that is that if the Opposition were elected to government they would increase the basic rate of income tax, as all other Labour Governments have done.
  Mr. Brown: I have this in common with the Financial Secretary—we both have good intentions and we are setting out the direction in which our tax policies intend to travel.
  Mr. Maude: Yours are up and ours are down.
  Mr. Brown: The Financial Secretary says that ours are up and theirs are down and he does not mistake the position, as we see it. We have made it very clear—it is one of the matters that are to be firmly established—that the top rate of income tax under a Labour Government would be 50 per cent. and not 40 per cent. We have said that we intend to introduce a banded system, although we have not said where the bands will sit. Clearly that would impinge upon the prerogative of a Chancellor. We regard the 50 per cent. rate as a firm pledge. Conservative Members argue that that is too much, but Opposition Members view it as trying to arrive at a consensus with top-rate earners. That figure would be the norm, would not move about from year to year, would endure and, in time, would probably be accepted by both Labour and Conservative Governments as a consensus.
  The Financial Secretary has put his finger on the heart of the disagreement between us. Even this Government have benefited from economic growth, and if there are extra fruits to be distributed as a result of such growth, it is our view that the money should be invested in the economy in ways which stimulate further economic growth, especially on training the people of this nation. It should be invested in the work force. As the Financial Secretary has spelt out perfectly fairly, it is the Government's belief that the money should be spent on further direct tax cuts for high-rate and indeed basic-rate taxpayers.
  I hope that the Financial Secretary does not disagree with that explanation, because it is at the heart of the disagreement between us. We think that the position of the British economy requires Government incentives to invest in the supply side. We regard training as a special priority.
  I am surprised that that is thought to be controversial. It can only be thought so in the context in which the Financial Secretary puts it. There is such a breadth of disagreement between us on that matter that I think it will be a fundamental issue on which the next general election will be fought. We believe that a failure to invest could underpin the existing lack of skills and exacerbate the present situation. As a protest, I shall ask my hon. Friends

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  to join me in voting—if the Financial Secretary does not accept this amendment—to bring the starting date for this modest little relief forward to 1991. The Financial Secretary may well say that it cannot be afforded. However, if he says that even that expenditure cannot be afforded he is saying something very heavy about the Government's commitment to training and to expenditure on training.
  Mr. Maude: In moving the amendment, the hon. Member for Newcastle upon Tyne, East (Mr. Brown) has talked as if this measure, in the Budget and now in the Finance Bill, to introduce tax relief for people who pay for their training were the only thing that the Government are doing about training. Clearly that is not so. He has used the debate on this amendment to talk in general terms about training and about what the Government are doing or should be doing and what he believes could be done.
  I shall deal first with the specific issue raised in the amendment—whether the relief could be brought forward a year to the 1991–92 tax year. The date has nothing to do with constraints on public spending. I see no need to apologise for exercising tough discipline on public spending, but that is not the concern in this case. There are overwhelming considerations of practicality.
  One of the most important features of the relief is its delivery at source, which will allow it to extend not only to those who are working and could benefit from a conventional tax relief, but to those who do not have current taxable income. That feature will give the relief greater impact and flexibility. For a variety of reasons, relief at source requires a long run-in period. The regulations will need to be drafted and brought into force. Administrative systems will have to be designed and put in place. Those in colleges and institutions running the scheme will need to know precisely what to do. We are conscious that the providers of training will have some extra administrative work. We intend to consult widely on what would be the best and simplest scheme for them. We are already working hard on that.
  The provision will take time to implement and it would be unrealistic to expect the new relief to begin before April of next year. Even that will impose a strict timetable, but I believe that it can and will be delivered. The delay will allow the accreditation process for the national vocational qualifications and the Scottish vocational qualifications to get further ahead, so that a more comprehensive coverage is available when the relief begins next year. Therefore, the Government are unable to accept the amendment.
  The hon. Gentleman talks as though this were the only measure that we were taking on training.
  Mr. Forman: Is it true that relief at source—which is the method that the Government have sensibly chosen—has the benefit of not discriminating against the self-employed if they wish to take advantage of the arrangements?
  Mr. Maude: Certainly. A person who is self-employed will receive the tax relief at the time of making the payment for training, rather than waiting to obtain it when the final calculation of his tax is made.
  The hon. Member for Newcastle upon Tyne, East talked rather grudgingly about the measure, apparently because it encourages individuals. I do not take issue with what he said about the need to stimulate investment in training, to encourage it and to give incentives. That is precisely what we are doing. The measure provides an
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  incentive for investment in training, including a direct incentive for individuals to provide training for themselves.
  I freely confess that the measure does not form part of a great national scheme. There will not be a huge bureaucratic organisation or a national body to decide who should have what training. It will be for individuals to decide for themselves. That makes the hon. Gentleman uncomfortable. The Labour party's approach to training is based on compulsion. Why else would it propose a payroll levy in which every employer is forced to pay a levy for everyone who is employed, with all the bureaucratic paraphernalia that that would inevitably involve?
  Mr. Brown: The Minister has a right to indulge in attacks on our payroll levy scheme—that is a matter of contention between the parties. He is entitled to make those points, but many employers have welcomed the scheme. Many employers who invest heavily in training will be beneficiaries under the scheme.
  However, the hon. Gentleman is not entitled to say that we have given the substance of the clause a grudging welcome. We have not, but we believe that it is no substitute for a proper commitment to training from the Government. In its own little timid context, the proposal is welcome. It is so welcome that we are trying to introduce it a year earlier. We are not against it, because it helps the individual; I have no quarrel with that.
  5.45 pm
  Mr. Maude: I did not say that the hon. Gentleman was against the measure: I said that he was grudging about it. If describing it as a "little timid" measure is not being grudging, it would be interesting to know what is. That is hardly fulsome, whole-hearted praise. The hon. Gentleman hardly speaks like a man full of enthusiasm for the measure. I stand by what I said, and stand by my view that the Labour party is only interested in compulsion. It is only interested in training if people are made to do things. That is a sort of puritan ethic: it is good only if it is not enjoyable—if it is not what people want to do.
  My mind goes back to the old days of compulsory levies and industrial training boards. There were many bodies, committees and national boards and, in theory anyway, much training was taking place. At the end of it, however, there was no great addition to the nation's stock of skills. We should be considering not how much is put into training, but what extra skills are acquired.
  Mr. Bob Cryer: The Minister is babbling on in a nonsensical way about training. Does he not realise that the compulsory training schemes were introduced by a Conservative Government, not by a Labour Government? Employers' organisations by the score welcomed them. Without those compulsory levies, many employers bitterly criticised those who poached their apprentices and other trained people after they had taken the time and energy to train them. Those employees were simply sucked away. Does the Minister agree with such practices?
  Mr. Maude: I agree with those employers who warmly supported the ending of compulsory levies and the disbanding of the national bodies. In the past decade, the amount spent on worthwhile training for the enhancement of skills has increased dramatically.

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  I am not just referring to public spending, although I point out in passing that, for every £100 spent on training at today's prices by the last Labour Government, £250 is spent now. I am not talking only about that huge two-and-a-half-times increase in public spending on training. What matters more is the money spent by the private sector. Skills for business are what make a difference to the economy. Sometimes, the Labour party talks as though all that was needed was investment in plant, no matter what the plant was. The same applies to training: it does not matter what the skills are. Labour Members think that all that can be stirred together to make a vibrant economy. Anyone who deals with these matters knows that that is not so.
  Dr. Norman A. Godman: Was it not Mr. Robert Carr who introduced the Industrial Training Act 1964, which created the industrial training boards? The Minister should not denigrate those industrial training boards. Some of them provided people, especially young people, with first-class training.
  Mr. Maude: I am sure that some first-class training was provided. The complaint was that skills were not being enhanced under the old compulsory system of training. We now have a system of training delivery which is employer-led, based locally, not nationally, with the emphasis on training and enterprise councils, which have been a remarkable success. They were in operation well in advance of the proposed timetable, and will make a huge difference. The emphasis will be on what comes out at the end.
  The training programmes will focus heavily on qualifications and employment training will focus heavily on getting people jobs. That must be the test of whether training is successful. Youth training should lead to qualifications, and employment training should lead to employment. The funding of training and enterprise councils is designed to fulfil that objective, with a quarter of the funding related to output quality—whether the trainee achieves a job or a qualification.
  Dr. Godman: Will the Minister explain why, when we discuss training, hardly any mention is made of the training needs of employees and of our fellow citizens who suffer from physical and mental handicap? Why are they always at the end of the queue for employment training places?
  Mr. Maude: I do not believe that to be the case. Ample provision for handicapped people is made within the £2.7 billion of public money which is spent each year on training and enterprise. I do not accept for a moment that they are at the end of the queue or that no thought is given to the trainees. The purpose of the measure we are discussing today is to give trainees an incentive to enhance their skills.
  The amount of training being provided is increasing in a way that should win forthright and enthusiastic support across the Chamber. Each year, the private sector spends about £20 billion on training. That is excellent news. The training culture is improving hugely. There is no doubt that, in previous decades, many businesses considered training to be a low priority. We have paid a price for that in the past. There is no doubt that, in the recession in the
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  early 1980s, spending on training by businesses fell. A good many businesses considered training to be dispensable. It is a source of considerable satisfaction that that does not appear to be happening in the current recession, although pressure on businesses' costs is intense.
  The most recent economic situation report by the CBI, published last month, asked how much companies expected to spend on training and retraining in the next 12 months, and whether they expected to spend more, the same or less than they had spent in the past 12 months.
  The outcome was most satisfactory and encouraging. At a time of recession, with intense pressure on costs, 26 per cent. expected to spend more, 49 per cent. expected to spend the same and only 18 per cent. expected to spend less. That means that the attitude toward training in the private sector has improved considerably. When the economy begins to move out of recession, businesses will be very much better placed to recover quickly, and their capacity to produce and to meet renewed demand will be greater than it was in the early 1980s. That bodes well for the future.
  The Government have absolutely nothing to apologise for in their approach to training. Apart from the huge increase in public spending on training and enterprise, there has been an enormous improvement in the quality of training. We should be concerned about the output. What matters is not what the Government put in but what those who undergo the training get out of it. There is no doubt whatsoever about the quality of training.
  I hope that the hon. Member for Newcastle upon Tyne, East will be big enough to accept that the quality of training in Britain is vastly better than it ever has been. With the introduction of the national system of vocational qualifications and the national network of locally based training and enterprise councils, with all their local links and local knowledge of what is needed and what can be provided, the quality of training is continually on the increase. I hope that, just for once, the hon. Gentleman will be big enough to accept that.
  Mrs. Llin Golding: I have a letter from the Staffordshire training and enterprise council saying that
  "it would be failing in its responsibilities to the local community if it did not highlight the fact that its adult training budget is totally inadequate for the current needs of the County."
  I had a meeting with some of the trainees, who are halfway through their training programme and are now going to lose their places and be unable to take part in the vocational training that the Minister is so fond of quoting. What will he do for the people of Staffordshire who are losing out on his training schemes?
  Mr. Maude: The hon. Lady refers to particular circumstances and budgets. I cannot comment on the circumstances of one particular training and enterprise council.
  Mrs. Golding: Why? Is it too trivial?
  Mr. Maude: No. It is not trivial at all, it is a matter of considerable concern, but every organisation paying for training in the public sector is subject to a budget. That is the case under this Government, just as it was under previous Governments.
  It is worth making the point again that the budgets for training are substantially larger than they were under the

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  last Labour Government. For every £100 that the last Labour Government spent on training, we spend £250. I am delighted if many people are seeking training in Staffordshire; those people are very much better placed today than they would have been under the last labour Government.
  Mrs. Golding: The supervisors who have been supervising trainees for many years are losing their jobs in Staffordshire because there is no room for them. Eventually the Staffordshire training and enterprise council will have to spend money on training new supervisors. It is a nonsensical programme and a waste of money.
  Mr. Maude: No doubt the hon. Lady can raise that with the local training and enterprise council.
  Mrs. Goulding: I have.
  Mr. Maude: It is a matter for the TEC how it arranges its affairs locally, and no doubt it will do so.
  Mr. Alex Carlile: We should start by putting the debate into the context of the United Kingdom's appalling failure to train our young people compared with training in other countries. The Department of Education and Science statistical bulletin issued in January 1990 revealed that the United Kingdom has 35 per cent. of its 16 to 18-year-olds in full-time education or training compared with, at the top of the range, 79 per cent. in the United States of America. At the middle of the range France trains nearly twice as many 16 to 18-year-olds. Those statistics show what a long way we have to go to provide a reasonable level of training in Britain.
  The Minister referred to the quality of training provided through the training and enterprise councils. I would be the first to agree with him that some of the training provided by the TECs is of a higher quality than before, and that is certainly to be commended.
  I should like to make a particular point about training in rural areas and the way in which TECs are coping with the requirements placed on them. I have a letter which has been sent out to trainers by the chief executive of Powys TEC, which is based in my constituency. That TEC started with a bang and is already doing good work. One of the problems in rural areas is that many trainees must travel great distances to their traineeships. The public transport—or rather the absence of it—in those areas is such that many trainees cannot take part in such schemes unless they take lodgings during the week.
  6 pm
  A case was brought to my attention last week of a young 16-year-old girl who had taken a training place with a veterinary surgery in a small town in my constituency. She has been working there successfully for five or six months and has been enjoying her training. Last week, she was told by the training agency that managed the scheme that her training would have to finish within seven days because it was no longer possible to meet the cost of her lodging in eastern Montgomeryshire, where she lodged during the week. She could not travel to work every day because her training place was 45 miles from her family home. No public transport was available and she was too young to drive, so there was no way in which the scheme could continue if the training agency kept to its decision.
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  Through the intervention of the chief executive of Powys TEC, that training agency was forced—I use that word advisedly—to change its mind and the girl was allowed to continue her training. That happened because her mother contacted me on the day the decision was made known and I contacted the chief executive on the same day. Action was then taken which many trainees would not have the initiative to take themselves.
  There must be many trainees around the country, particularly in more heavily populated areas, who are losing their training places halfway through. As a result of that case and another which I shall mention in a moment, steps are being taken by Powys TEC to avert such problems in the future. However, just a few weeks ago, training for a number of ladies and, I believe, one man to provide a day nursery in Machynlleth was brought to an end at a stoke—almost without notice. It was summarily terminated after the expenditure of a large sum of money to provide the equipment and decorate the premises where the day nursery was to be situated. This was a much more difficult problem to handle because the training organisation concerned was losing money on the scheme.
  The reaction of the chief executive of Powys TEC, Claire Coates, has been commendable. She has contacted every trainer and urged them to absorb travel and lodging costs where necessary. However, in a letter to them she had to say:
  "In the meantime, travel costs have been included in your contract price which will mean that you are likely to make a loss on some trainees' travel costs and gain…on others".
  If any group of people understands the market and the balance sheet, it is the Government. What proportion of businesses are willing to make a loss on contractual arrangements? Most businesses, particularly small and medium-size trainers, will pull the plug on contractual arrangements on which they are losing money.
  In this instance, it is not merely a matter of a decision not to supply widgets because an organisation cannot make a profit on them or to bring a bus service to an end despite the difficulties that that causes in rural areas. These decisions bring misery into people's lives. I therefore make a plea, on behalf of a rural area, to the Minister to look into the problem and to ask his right hon. and hon. Friends to ensure that training costs in rural areas are fully covered so that we do not run into the problems that were suffered by the young girl whom I mentioned.
  Nevertheless, it is fair to give a measure of welcome to a proposal that encourages training. The Minister will expect me, as a Liberal Democrat from a long Liberal tradition, to welcome a measure that places the initiative in the hands of the trainee and lets the individual say, "I am going to better my prospects by choosing my own training scheme." That is an excellent idea.
  It is also a good idea that, under the simple scheme that is proposed, tax relief at source will be provided. However, it is extremely disappointing—as has been emphasised by the hon. Member for Newcastle upon Tyne, East, (Mr. Brown)—that tax relief will not become available until 1992. Will the Minister investigate whether tax relief could at least be provided in the current financial year on new courses in which new machinery and new office procedures are being set up anyway? Why cannot tax relief be provided at source to new trainees? Surely the Inland Revenue can cope with those administrative arrangements. A Government machine capable of introducing a 2.5 per cent. increase in VAT across the board in just a few

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  weeks should be able to manage the administrative procedure to introduce this new change—at least in part—in less than 14 months.
  Will the Minister explain why the proposal is limited? Why does not it include national vocational qualifications and Scottish vocational qualifications at the highest level? Why does it discriminate against professional qualifications? Will it include relief for distance learning qualifications, such as those provided by the Open university and elsewhere? It should do so but does not.
  The Government's measure may be wise but it is not generous. The cost of relief will be nil in 1991–92—the scheme is not yet effective—and will cost £20 million in 1992–93, including a public expenditure element of £5 million in respect of non-taxpayers. When the NVQs and SVQs are fully developed, the cost is expected to rise to £40 million, including a public expenditure element of £10 million. What is £10 million? How many yards of motorway can be unrolled for £10 million? It can probably be measured in hundreds of yards, but certainly not in miles. Surely the Government can find more than a mile or two of motorway to support training for national vocational qualifications. The Government should be funding training much more generously and considering a far more extensive scheme. There is nothing wrong with requiring companies to provide a small proportion of their payroll to train people between the ages of 16 and 19. We believe that, probably on the basis of asking too few or the wrong people, the Government have grossly overestimated industry's reaction.
  The Government are particularly failing to support training for the unemployed to any reasonable extent, either in this proposal or elsewhere. Unemployment is increasing at an alarming rate. In the past three years, year on year, redundancies have increased. Today, we heard the shocking news that 3,000 people are to be made redundant from the aircraft division of Rolls-Royce. That is but one example of what is happening.
  There is a catalogue of companies that are currently making people redundant. It includes Marks and Spencer and Rolls-Royce, which are at the top of the class in British industry. As an hon. Member from the Labour party said——
  Mr. Ian McCartney: The hon. Member for Makerfield.
  Mr. Carlile: Yes, the hon. Member for Makerfield may have his credit. The hon. Gentleman made a good point when he said that those companies are also major trainers.
  Mr. McCartney: I always do.
  Mr. Carlile: I will not accept that every point that the hon. Gentleman makes is good.
  Major trainers are now making people redundant. This highlights the need for much greater support for training, particularly for those who become unemployed as a result of the Government's economic policies and their failure to introduce a real strategy for manufacturing industry. Last month's trade figures showed beyond doubt that imports are rising relative to exports. That tells its own story.
  In the past, the quality of training schemes provided for the unemployed has not been good, as the poor attendance rates demonstrate. One cannot blame the trainees. If the training programmes were good enough, the trainees would turn up for them in much greater numbers. When
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  unemployment fell and resources were freed, resources could have been used to increase the quality of training; but the Government simply cut the training budget in 1991–92 by £350 million.
  Now that unemployment has begun to rocket again, the Government still continue to make insufficient provision. The recent announcement by the Secretary of State for Employment of another £120 million for the main training schemes operated by the training and enterprise councils not only failed to restore the cuts of last summer and preceding years but failed to allow for the size of the increases in unemployment. That funding failure is especially regrettable when TECs are attempting to establish themselves in the face of many functional difficulties, such as those I mentioned at the beginning of my speech.
  We believe that extra resources should be devoted to starting the transformation of Government training schemes into quality programmes, which would be well regarded by participants and employers alike. The Minister referred to payroll requirements. Employers would not complain if they thought they were getting "value for money"—I believe that the Government understand that phrase. I support schemes that give value for money, as do, I believe, all responsible companies in this country. Many of those schemes could be provided by companies in-house, provided they met the requisite standard. That is the sort of philosophy that should be guiding the financing and devising of training schemes. I fear that, as yet, that philosophy has not led the Government's thinking.
  6.15 pm
  Mr. Tim Smith: I welcome clause 31, which introduces new tax relief for vocational training. It recognises that it is not just the Government and employers who have responsibility for training, but individuals, and that it is right to give individuals some incentive to better themselves. The new tax relief, modest though it may be, is most welcome. I believe that, in future, it may cost more than the Treasury has estimated because there will be a wide take-up as people seek to take advantage of the new relief.
  When I looked at amendment No. 14 I had some sympathy with the suggestion that the relief should be introduced immediately. After all, if it makes sense to introduce a new tax relief, we should make it available to taxpayers and others at the earliest opportunity. However, I understand that if we are to adopt the approach chosen by the Treasury, of allowing people to deduct the tax from payments that they make, it will not be practical to introduce such a change until the beginning of the next tax year. My hon. Friend the Financial Secretary to the Treasury said that adopting that approach would allow non-taxpayers as well as taxpayers to take advantage of the relief. That is welcome and I was interested to hear the hon. and learned Member for Montgomery (Mr. Carlile) say that that part of the proposal will cost £5 million, which is a lot of money. After all, we are talking of £5 million of relief, so that means £20 million of expenditure by individuals with no taxable income. That seems quite a lot of money, and if the Treasury is right, I welcome the fact that people without a taxable income will

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  spend on training at that rate to improve their chances of acquiring taxable income—that is what the proposal is all about.
  Another advantage to the approach adopted by my hon. Friend the Financial Secretary is that relief is available immediately, both to taxpayers and non-taxpayers. It is not necessary for them to pay the fees and then wait for a considerable period before receiving tax relief. The alternative would be simply to make the relief an allowable expense, so that there would either have to be an adjustment to people's PAYE codes, which would be difficult, or people would have to wait until the end of the tax year before they could claim back the money. The Treasury have adopted the right approach, and I note that it has adopted the same one in relation to a number of new tax reliefs. I accept that it means that we cannot introduce the relief until 1992 because we must set in place the necessary arrangements, introduce regulations and ensure that the people to whom the money is being paid are able to get the tax back from the Treasury.
  The hon. Member for Newcastle upon Tyne, East (Mr. Brown) said that we should ask whether training should be a priority for public spending. Earlier this week, I received a leaflet from Battersea Labour party, which stated that the priorities for a Labour Government would be a massive increase in spending on education and training, and on public transport. Leaving aside the question of where the money will come from and other such issues—although it is important to recognise that both those proposals, however commendable, have long lead times in terms of improving the country's economic performance—it is nonsense to say that we can make an investment on day one and achieve economic growth on day two.
  I recall saying in a debate in the House late last year that one reason why the performance of British management had improved during the 1980s was the expansion of university education in the 1960s. There are long lead times on investment in education and training. The Labour party is misleading the country if it is suggesting that the increased investment in education and training will, overnight, lead to an improvement in our economic performance. I am afraid that life is not like that. The hon. Member for Derby, South (Mrs. Beckett) must answer the question: "How does she square that circle?" I think that she and the right hon. and learned Member for Monklands, East (Mr. Smith) have both said on many occasions that their first priorities for public spending would be to increase pensions and child benefit and that all other increases in public expenditure would have to wait until we had improved our economic performance. They tell us that in one breath and then, in the next one, they say that, in order to improve our economic performance, we must have a massive increase in investment in education and training, transport infrastructure and all sorts of other things. Whom are we to believe? Perhaps we shall have a better idea when we have had a chance to read the text of the speech that the Leader of the Opposition is making on this subject today.
  Apparently the right hon. Gentleman will tell us that, under Labour, there would be no tax reductions for five years. He assumes—I hope that hon. Members will note this—that, come what may, we shall have economic growth of 2.5 per cent. per year. Clearly, he has decided in advance how the extra £20 billion of tax revenue generated by the economic growth would be spent.
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  People are naturally very suspicious of the Labour party when it comes to questions of taxation. Indeed, they would do well not to listen to the Opposition. On that score, of course, there is cause for considerable concern, as the Labour party has already told us that it would increase the burden on many taxpayers. But people would do even better to look at the performance of all past Labour Governments, who increased the burden not only on higher-rate taxpayers, but on all taxpayers. In the end, there is only one way in which the extra £20 billion of expenditure to which the Opposition are committed could be funded, and that is by putting an extra burden on every taxpayer.
  Mr. Nicholas Brown: On the question of increasing the tax burden on ordinary citizens, can the hon. Gentleman confirm that the Conservative Government, throughout their time in office, have done exactly that?
  Mr. Smith: What I can confirm is that over the past 12 years the Conservative Government have managed to reduce the standard rate of tax from 33 to 25 per cent. and, at the same time, achieve substantial growth in public spending. That is a very remarkable achievement. At the next election, people will judge the various promises according to past performance.
  Mr. Nicholas Brown: No doubt the hon. Gentleman is aware of the system of indirect taxation, which accounts for part of the tax burden on citizens of average and below-average means. Will he confirm that the Conservative party has increased, rather than decreased, the total tax burden borne by ordinary citizens?
  Mr. Smith: What people will want to consider is net take-home pay. During the Conservative Government's period of office, a married man on average earnings and with two children has seen an increase of more than 30 per cent. in his net take-home pay. By contrast, the performance of the last Labour Government over a period of five years resulted in an increase of just 1 per cent. in the net take-home pay of such a person. What people are concerned about is net take-home pay. That is where the Conservative Government have scored, and where Labour Governments will never score. It is in that context that people will set the speech that, apparently, the Leader of the Opposition is to make today. People have not forgotten what life was like 15 years ago under a Labour Government. It was a very unpleasant experience, and not one which people will want to repeat. The present Government have cut tax and have increased spending.
  Investment in training is another priority for the Labour party, but anyone reading the Labour party document that was published a couple of weeks ago will find that it is full of priorities. There is an endless list of priorities, together with an endless list of new Government bodies to spend the money that implementing them will require. Every priority will involve additional public expenditure, and there will be a new quango to do the spending. On the question of training, it is entirely wrong to assume that quantity is in itself a virtue. The quality of investment is equally, if not more, important. That is a matter upon which this debate ought to focus.
  A better means of securing increased investment in training is to improve the profitability of British industry. Whether we are concerned about fixed investment, about investment in research and development, or about

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  investment in training, the way to achieve increased investment is to increase the profitability of British industry. Over the past 10 years, we have seen a huge increase in industrial profitability and, as a result, a huge increase in retained profits. That is why there has been a better performance in terms of investment in training.
  The CBI forecast figures that have just been given by the Financial Secretary are very encouraging. It is remarkable that, in the middle of a recession, so many companies should contemplate increasing their expenditure on training or, at least, not reducing it. Clearly, when profitability improves next year—as it will—there will be an increase in training budgets. Employer-led training is so much better. The key is to ensure that training is of the kind that employers want, the kind that makes trainees employable. The hon. Member for Greenock and Port Glasgow (Dr. Godman) has talked about the training of disabled people. I agree that that should be no less a priority than is the training of able-bodied people. Indeed, it is a very important aspect of the whole matter.
  Dr. Godman: I cannot speak about the situation in England and Wales, but I can tell the hon. Gentleman that, in Scotland, the numbers and percentages of people with a mental or physical handicap who underwent employment training in each of the past two years were dismally low. Indeed, that was conceded in a recent answer by the Scottish Office Minister who is responsible for industry.
  The Second Deputy Chairman: Interesting as these exchanges are, I must point out that the Committee is dealing with a very specific date, which is mentioned in the amendment. I should like hon. Members to return to that, rather than engage in a general debate on training matters.
  Mr. Smith: I have to accept what you say, Miss Boothroyd, although the debate has ranged very widely. I fully accept that we are discussing a specific tax relief, which involves public expenditure, but hon. Members have been putting that item of public expenditure in the context of the resources committed to training, whether by the Government, by way of taxpayers' money, or by the private sector. Of course, every tax relief has a public expenditure cost. I intended to refer to a particular example of the training of disabled people, but I shall abide by your ruling, Miss Boothroyd, and return to the amendment. Let me say simply that this new tax relief to encourage individuals to better themselves and to enable them to choose training is very welcome, and when it comes into force in 1992 it will be very popular.
  Dr. Godman: I support the amendment, as I believe that it would improve a modest measure. It is surprising that, in relation to training bodies, the Minister should have been so dismissive. I have always regarded the Act that established those bodies as being one of the finest pieces of legislation passed, under the stewardship of Mr. Robert Carr, by the then Conservative Government. It made training provision for very many people. The legislation was passed many years before you, Miss Boothroyd, became a Member of Parliament, and a few years before I came here.
  I do not want to incur your wrath today—or, for that matter, any day—but I have to say that, like the hon. and
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  learned Member for Montgomery (Mr. Carlile), who spoke on behalf of the Liberals, I have reservations arising from the Government's failure to make provision for distance learning. This is particularly regrettable in respect of information technology training, which can be provided by, among various institutions, the Open university.
  Distance learning programmes are very important for would-be trainees in many parts of Scotland, particularly the highlands and islands and the Shetlands. I think that I am right in saying that the Open university has in the Shetland islands alone several hundred students who undoubtedly benefit from its unparalleled teaching.
  6.30 pm
  Can the Minister tell us why Scottish vocational qualifications at the highest level are being excluded? It means that the Scottish higher national diploma is being excluded. I know trainees who are studying for such qualifications. If the amendment were passed, others could benefit.
  I am sorry that there is to be a delay in the introduction of a provision which could help many of my constituents. May I remind the Minister that, according to Government statistics, the unemployment rate in the Greenock travel to work area is 13.5 per cent., which is far above the levels of unemployment in constituencies represented by Conservative Members? It is certainly much higher than the national average.
  When we talk about the training of young people, may I point out to the Committee that just yesterday Kvaerner-Kincaid of Greenock announced the redundancies of more than 100 employees, most of whom are highly skilled engineers, but who include 12 apprentices? When employers engage apprentices to undergo training, they have a moral obligation to ensure that the apprenticeships are completed. Kvaerner-Kincaid is acting irresponsibly, even immorally, in putting the apprenticeships under threat.
  Nothing is worse for a young person of 17, 18 or 19 than to have an apprenticeship disrupted. Where can he go? I say "he" because I am talking about 12 young men who are deeply anxious about their future. What are their prospects if the Norwegian company has its disgraceful way and puts them into the dole queue? I told the chief executive, Mr. Hanna, yesterday that it was a disgraceful state of affairs. If the apprentices are put out of work, it will be nothing short of a scandal.
  My constituency and other areas in the west of Scotland are suffering badly because of the lack of systematic training, particularly in electronics and in information technology. That is a matter for regret. If the Government were to accept the amendment, it would make a modest provision much more sensible for many of the people whom I represent north of the border.
  Mr. Cryer: I want to comment on the Minister's reasons for rejecting our useful and modest attempt to improve the modest provisions of clause 31. The Minister said that there were administrative difficulties because regulations need to be drafted. I am surprised that the Government are admitting that they are introducing primary legislation without a thought for the regulations which will flow from it. According to the Minister, the Government have not troubled to look through the Bill to see what regulations will be needed.

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  The Minister said that there would be enormous difficulties about consultation. The Government use consultation when they want to and dismiss it when they do not. The Minister is contemptuous of training boards. When the clothing industry training board was told that there would no longer be a compulsory levy to fund it, there was no consultation. The Government did not ask members of the board what they would do about providing training in an area where we have to be competitive. They simply said, without consultation, that there would be no levy. The Minister chose his arguments to suit himself. There was no question of consultation.
  I must reiterate my concern about the machinery of government. We have a slapdash Government who do not know what they are doing from one week to the next. They are so dithering in their attitude that they have not gone through the Bill to check what regulations will be needed to enable tax concessions to be made. It is not a question of whether the Government will get the measure through the Committee. They have a majority of 150 so they know that they will get the legislation through.
  The Minister said that regulations will need to be drafted. It would have been prudent for the Minister to ask his officials, when drafting the Bill, to consider what regulations would be needed. Will the regulations be made under the affirmative procedure or will they be less important in the Minister's eyes? Has he made a judgment? Has he decided just to dig out regulations at some time in the future, some to be made by affirmative resolution and some by negative resolution?
  These are important questions, because most provisions are created not by primary legislation but by secondary legislation, through powers delegated to Ministers. Therefore, Ministers should regularly assess the regulations that will be necessary. It is not as though the Treasury is unaware of the need to produce regulations. Even when tax concessions concern other Departments, the regulations have to be drawn up with the consent of the Treasury.
  The Government have rooms full of people dealing with regulations, yet the Minister tries to tell the House that they cannot draft regulations quickly. It is incredible. I will lay a bet with the Minister that there are five times as many people in Government Departments drafting regulations as there are in the emergency unit dealing with relief for the Bangladesh victims. There may even be 10 times more people involved in drafting regulations, because there are only about a dozen officials grappling with one of the biggest disasters that the planet has seen, in which perhaps as many as 500,000 people have been killed.
  The Minister's argument about regulations does not wash; he has used it as an excuse. He could have accepted our amendment, brought forward regulations and introduced the provisions in this financial year. An element of retrospection might have been needed, but I have never been one of those who says that there should be a bar against retrospective legislation under any circumstances.
  The Government want to induce people to enter into vocational education. That is necessary. We are not grudgingly accepting the notion, as the Minister tried to suggest. We are urging the Minister to ask his civil servants to get cracking on the regulations so that the legislation may be brought into operation in this financial year. What could be better? The Minister is getting support for a Bill
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  which is mostly pretty awful, but at least the regulations would help people. We are supporting the Government, but the Minister says no, it is administratively impossible, because the Government have never introduced legislation in 24 hours, never introduced regulations, plonked them before Parliament and brought them into effect during the 40 days within which a prayer can be tabled. We know that that is not true. They have used administrative expediency when they wanted to and when there was the political will to do so. There is not the political will to encourage people to undertake vocational training.
  Why is it especially urgent for people to undertake training? It is urgent because some manufacturing industries are in difficulty, and people might need an additional inducement to encourage them to undertake training in view of the relatively dismal prospects for some of those manufacturing industries.
  Let us take the example of engineering. New car registrations are down by about 20 per cent. The fall in registration in cars manufactured in this country has enormous repercussions. It means that component suppliers such as GKN have shed people and created redundancies because of the downturn caused by the Government's economic policies. The suppliers of steel and tyres and of cloth for the upholstery in cars and other vehicles are all affected by the downturn in demand, which has been created by the Government's blind and foolish ideological adherence to the use of interest rates alone to control the economy. As a result, more people have joined the dole queue. Therefore, there must be some inducements to encourage young people to go into the engineering industry, which is one of our most vital manufacturing industries.
  The inducements should be on the premise that there might be an upturn—not under this Government, but after the next election. With a Labour Government and a decent attitude towards the economy, we shall create jobs, not destroy them. People will then have more confidence, but not at the moment. Therefore, inducements to enter an industry that faces difficulties will be a help.
  The textile industry is important in Bradford. Fourteen thousand jobs depend directly on that industry. It is not an antique industry—it has invested and modernised—but it faces uncertainty, again because of the downturn in demand. There is much short-time working and a continuing trickle of redundancies. I predict that over the next few months mills will close in Yorkshire and the west riding because of the Government's economic policies and also because the textile industry in particular bore much of the burden of the perfectly legitimate sanctions against Iraq. The Gulf war meant that the market diminished in the middle east, which had been a fairly lucrative market for British textile manufacturers.
  People might ask why they should go into the textile industry when it has been contracting for years, and over the past 10 years has lost at least 100,000 jobs in its woollen sector. Why should they go into an industry to learn a craft or a skill only to find that, at the end of the day, they are redundant and that the skill is not required?
  The tax concession is needed now to counteract the economic downturn—the recession or slump—which the Government's policies have introduced once again into our economy.

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  6.45 pm
  It makes more sense to give tax concessions now to encourage people to go on a training course than to spend the money on the dole queues. Although Ministers are shy about telling us the cost of the dole queues, they cost between £20,000 million and £25,000 million a year in unemployment payments, various other benefits and loss of tax revenue. The Minister can correct me and give an accurate Treasury figure, but it is far better to start this year with the modest tax concession outlined in the amendment to encourage people to go into training rather than for the Government to shrug their shoulders and say, "It is administratively impossible—we can't do it now," while the dole queues grow ever longer.
  The Minister mentioned the cost of training in relation to Government expenditure. I should like to probe the figures a little further. He said that the Government were already spending that sort of money, so the amendment was not necessary. If the Government are so concerned about training, I wonder whether the figures that he gave for Government expenditure on training include expenditure on the skill centres. I presume that the tax concession would be available to an individual who decided that he wanted to go on a course at such a centre, but what has happened to the skill centres?
  The Minister may not be aware—as he is from the Treasury, he should be—that the centres were a nationwide network run by the Department of Employment to provide training, but what did the Government do? They advertised them for sale, saying that they were making a loss, that they were not effectively run—although the loss was not so big—and that something had to be done about them.
  It was strange that the Government sold the centres—in fact, they did not sell them but gave them away—to the people who were already in charge of running them at a loss. I wonder whether that money is incorporated into the Government's figures. The Government gave the new concern not only about £100 million, but the freehold. The new concern—Astra Training Services, in the main—has been busy closing down the centres, sacking people and diminishing training opportunities. It has sacked about 500 people—the Minister can correct me if he has up-to-date figures. It has been one of the biggest rip-offs of the privatisation procedures, and they have all been rip-offs of the taxpayer to some extent.
  As the Minister knows, the sale is being investigated by the Public Accounts Committee. I hope that its report will be produced pretty speedily, because we are dealing with a huge gift of money to Astra Training Services and with the three civil servants who got into the Minister's good books, pulled out a plum and said, "What a good boy am I." That is an Elizabethan poem based on the corruption of Government in that era. The amount of money that would be provided by the tax concession is peanuts compared to the amount of money that the Government squandered on Astra Training Services and on giving away the freehold of important training facilities and sites.
  I hope that the Minister has a few answers, that he will rise to the occasion and say that the Government have many facilities and lots of skilled draftsmen for regulations, that they will draw up plans and regulations, send round a circular and ensure that the minor tax concession is introduced in this financial year. The Minister has the opportunity to do that and to do a bit for people who want to take advantage of training. We
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  encourage him in that, and I hope that he will accept the amendment. My guess is that he will not, but people who are looking for training will know where the real concern for training lies—not with the Government, but with Labour. We want an early opportunity in government to put our plans into action.
  Mr. Peter Hain: The Financial Secretary sought to deflect criticism of the Government's measure by saying that it was not all that the Government were doing on training. That is a statement of the obvious. But the proposed £20 million in tax relief on training costs is a drop in the ocean compared with the £245 million that has been cut from employment training and youth training this year. It is a tiny droplet compared with the £1.5 billion cut from public spending on training during the five years from 1987 to 1992.
  The Government's proposal does not even begin to address the skills gap in Britain. In particular, it does not address the dilemma and the problems faced by women trainees. Women should be a prime target for any training scheme, especially in view of demographic trends which are causing a shortage of adult men and making it necessary to bring more women into the labour market. Many women do not have the qualifications to take advantage of the jobs that companies need to fill. Others who would like to return to the labour market after a period of caring for dependants but need to top up their skills to take advantage of opportunities are unable to do so. The measure does not even begin to address that problem.
  Under the clause, there will be a deduction on the basic rate of tax, so those who pay a higher rate of tax will receive much greater relief. As women represent a small proportion of those in the higher tax bands, almost no women will benefit. In addition, the tax deduction will be available to non-taxpayers only in the form of a reduction in the cost of their training place. Many women who are on low pay cannot afford the massive cost that is often levied for a place on a training scheme.
  The main beneficiaries of the proposal will be people who are already in work. They will be mainly professional people. Not many will be women and few will be low-paid workers. That should be considered against the background of the overall impact of the proposal. It is a molehill of a measure compared with the mighty mountain of the skills crisis in industry and across the economy. At present, 60 per cent. of trainees emerge without any qualifications and two thirds of our work force have had no training in the past three years. Many have had no training in their entire working lives.
  The Financial Secretary referred to the rosy picture painted by the Confederation of British Industry by drawing selectively on its forecasts. I invite him to come back into the real world. For example, in west Wales, training places have been halved through the measures taken by the Government in the past year. One example is at a successful company called Kenyons in the town of Pontadarwe in the Neath constituency, which has trebled its turnover in the past two years. It builds industrial refrigeration plants and provides building services. It is a skilled engineering company employing 500 people in that part of the world. It is just the sort of company that we should encourage. In the past few months, its youth

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  training places have been cut from 90 to 70, despite the fact that the company had the places and people wished to fill them. The funding was cut by 20 places.
  Only after the managing director created merry hell, as he described it, was the company able to win from the local training authority an additional 10 places. Similarly, employment training places in that company were cut from 30 to 18. Again, that opened up a skills gap even though the company had the opportunity and the desire to fill it. All that is in an area where we desperately need engineering skills in order to compete with foreign companies, which are rapidly taking over our markets. I have been approached by business men in Neath who want to provide places for computer training, which is desperately needed in our information technology society. The funding for those places is not available.
  Several of my hon. Friends mentioned the lack of training opportunities for people with special needs. Training places for people with special needs have also been cut. All in all, the measure does not address the real world. The £20 million tax relief for training which is being provided one way or another should be compared to the £1.1 billion of tax subsidies for personal pensions last year and the incitement to contract out of the state earnings-related pension scheme in the form of a £6 billion tax subsidy. The £20 million does not even begin to measure up to the needs of our economy.
  The £20 million can also be compared to the tax subsidies to encourage people to take more and more shares and invest more in equities; yet in the past 10 years it has been highly profitable for individuals to invest in shares. People have received an annual gross return of 19 per cent. on their investments. Why is money spent in that direction when it should be spent on funding the training that we so desperately need?
  The Financial Secretary complained that the Labour party's policy was one of compulsion. That is not the case. The Government have abandoned their responsibilities for training and their duty to fund and provide the training opportunities so desperately needed in the economy. The Government have washed their hands of those responsibilities. The Labour party says that the Government should fulfil their responsibilities and duties to people who want to train to fill the skills gaps that are appearing everywhere. The Financial Secretary appeared to suggest that he would leave it all to the private sector. But almost universally the private sector is not filling the skills gap. I would ask why the directors of large companies pay themselves 22.7 per cent. increases in their remuneration when they are not providing the funding for training places that we need?
  The hon. Member for Beaconsfield (Mr. Smith) childishly suggested that we claimed that we could accomplish overnight the training revolution that is needed in Britain. No one claims that. The Labour party has never maintained that that would be the case, but we are saying that the Government are paying lip service to addressing the skills desert in society. People see, even if Ministers do not, that the Conservative party is a party of quick buck predators devouring our skills base as they asset-strip the economy. Labour is the party of enterprise and industry which is prepared to invest in skills for a strong economy.
  Mr. Maude: This short debate has been essentially about the proposal in the Finance Bill to introduce tax
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  relief on vocational training for individuals. The debate has ranged more widely than that, into training in general, and I welcome that.
  The hon. Member for Bradford, South (Mr. Cryer) spoke as if the administrative difficulties of putting the scheme into place this year were pure fabrication and a figment of our imagination. He talked as if in the Government there was a sort of regulation factory—if one pressed a button, out would come a set of all-purpose regulations to fit any set of circumstances immediately. However, we are introducing a new scheme which must work. Nothing like it has been done before. The scheme must be relatively as simple as possible for training providers to operate. It must not impose too great a compliance burden on them.
  It is important that we should get the regulations right, so that the system works in the best way possible. It would be dead easy to produce very quickly regulations which were wrong. I prefer to make sure that we get things right and that training providers have the time to set their systems in place and operate them. There is no doubt that to apply the system in this way—tax relief at source—places a burden on training providers. That is part of the price for what everyone has accepted to be a worthwhile measure.
  As I said at the outset, the reason for deferring the implementation of the scheme until next year is that we are anxious to get it right and do not want to introduce it in a way that would be impossible for training providers. In those circumstances, I am not able to accept the amendment.
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  Several points, including those raised by the hon. Member for Greenock and Port Glasgow (Dr. Godman), related to the ambit of the measure—which vocational qualifications would be within it. That is the subject of a further amendment that we shall debate before long, and I shall deal with it then. However, I shall now deal with the specific point that the hon. Gentleman raised about higher national diplomas. Most higher national diplomas—this applies particularly to England and Wales; I cannot say whether it applies to the same extent to Scotland—would be at level 4 and therefore included within the ambit of the provision. Perhaps we can deal with that matter in a little more detail in the context of a later amendment.
  The hon. Gentleman talked about the provision of training for people with disabilities. Training and enterprise councils are obliged to provide suitable training which meets the needs of local employers and local people, which of course includes those with special training needs. Performance-related funding for this year will reward training and enterprise councils for achievement of employment outcomes for people with special training needs, including people with disabilities. It is by no means the case that people with handicaps are at the end of the queue, with no consideration being given to their needs.
  Mrs. Golding: Will that include adult low achievers, many of whom in my constituency have lost their places midway through their training programmes?
  Mr. Maude: The hon. Lady will understand that that is not something for which I have direct ministerial responsibility. I imagine that it includes people in those

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  circumstances, but it will be for my right hon. and learned Friend the Secretary of State for Employment to provide detailed answers.
  The hon. and learned Member for Montgomery (Mr. Carlile) and the hon. Member for Greenock and Port Glasgow referred to distance learning. Distance learning will be included if it leads to a national vocational qualification at levels 1 to 4.
  The hon. and learned Member for Montgomery made much of the relatively low financial cost of this measure—almost as though that were something that the Government could automatically increase to make it a bigger and more spendid programme. I am bound to say that it is not a cash-limited programme. The figures in the Red Book—the "Financial Statement and Budget Report"—simply reflect the best estimate of demand for tax relief under the scheme. My hon. Friend the Member for Beaconsfield (Mr. Smith), who is unable to be present because of an obligation elsewhere, believes that the cost could be more because demand would be greater. That may be the case, but it is simply an estimate of what demand is likely to be.
  A number of other hon. Members referred slightingly to the cost. The hon. Member for Neath (Mr. Hain) described it as a molehill or a drop in the ocean. I am not sure whether he also said that it was chickenfeed, but someone has described it as chickenfeed. Of course, in the context of the entirety of the Government's training programme and training strategy, it is a relatively modest measure. It is not meant to be the kingpin of the exercise.
  As I said, the Government are spending £2.7 billion overall, which is two and a half times as much as was spent on training in 1979. In that context, the measure is relatively modest—I make no apology for that—but it is particularly valuable because it places the emphasis on individuals' choice, encourages them and provides a direct incentive to enhance their skills.
  In those circumstances, I am confident that the Committee will warmly support the measure and accept that it is not possible to bring forward its implementation in the way that has been suggested, for reasons which are good and will be understood.
  Mr. Nicholas Brown: I welcome you to the Chair, Mr. McWilliam. It is a great pleasure for me not only to see you in the Chair but to hope that it means that you will follow our deliberations Upstairs as well. It would be a great pleasure for me if a fellow Member of Parliament for Tyne and Wear joined me in the early hours of the morning as we considered the Finance Bill.
  If you join me and the Financial Secretary for breakfast on Wednesday and Friday mornings during the passage of the Finance Bill, you may find the Financial Secretary a hard man to help and a hard man to please. Yesterday, he complained that I was smiling and nodding as he was speaking, and today he complains that I am grudging and curmudgeonly in my welcome for the clause. There is nothing grudging in our welcome. Most certainly, we are not opposed to it, because it gives some choice to those who are fortunate enough to be able to take advantage of its provisions. Those arguments are not the basis of our reservations.
  I notice that, in defending the Government's case, the Financial Secretary came up with his version of events
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  under the previous Labour Government. That is becoming commonplace. The Conservative party is not willing to have the events under the previous Labour Government taught as history in schools, but nevertheless it turns up time after time as fiction in our debates.
  As my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman) rightly pointed out, circumstances were quite different under the previous Labour Government. We had training boards, apprenticeships, a manufacturing base and a balance of payments in equilibrium—things that we do not see nowadays. I was saddened to hear what my hon. Friend had to say about the very last of Britain's marine engineering industry. I followed the slow retreat of that industry from Wearside to Tyneside and then up to my hon. Friend's constituency. It is very sad to hear of the plight of young apprentices.
  Dr. Godman: It is not just a matter of job losses in such a highly skilled sector. The decision announced yesterday could lead to the end of the building in the United Kingdom of slow-speed marine diesel engines—in other words, no building of diesel engines for merchant ships in the whole of the United Kingdom.
  Mr. Brown: I am grateful to my hon. Friend. I am aware of the extent of the tragedy to which he refers, which is why I made a special point of mentioning it.
  My hon. Friend the Member for Bradford, South (Mr. Cryer) picked up the Minister on his main excuse for not accepting the help that we offer him—that it is difficult to make regulations. Are regulations required? Clause 31(2) states:
  "The payment shall be deducted from or set-off against the income of the individual for the year of assessment in which it is made; but relief under this subsection shall be given only on a claim made for the purpose, except where subsections (3) to (5) below apply."
  Clause 31(4) states:
  "An individual who is entitled to such relief in respect of a payment may deduct and retain out of it an amount equal to income tax on it at the basic rate for the year of assessment in which it is made."
  Surely the clause does not require further regulations. It would, of course, be desirable from the taxpayers' point of view if a MIRAS-type arrangement were in place, but that is not necessary. Under the clause, it would be possible to make a start this year. The argument about the technical difficulties and about the need for regulations is so much bunkum. In any case, what does the Minister expect the initial take-up to be?
  My hon. Friend the Member for Neath (Mr. Hain) made a very good point about the difficulties of those who would not have a charge to tax, many of whom would be women, but who might nevertheless want to take advantage of the relief. I find it difficult to accept that many citizens would be in that position—that many people would not have a charge offsetable against tax but nevertheless would have enough money to sustain the financial burden of undertaking such a course.
  Having said that, however, and having done my very best to help the Minister, the real issue that divides us is not the clause, or even the Minister's unwillingness to accept our modest amendment, which has been tabled with entirely helpful intentions; our real quarrel with the Government is their failure to establish the properly funded training programme that is so necessary for the country. It is for those reasons that I seek to put our amendment to the vote.
  Question put, That the amendment be made:—
  The Committee divided: Ayes 172, Noes 223.

  Division No. 138]

  [7.11 pm

  AYES

  Abbott, Ms Diane

  Hardy, Peter

  Adams, Mrs Irene (Paisley, N.)

  Hinchliffe, David

  Allen, Graham

  Hoey, Ms Kate (Vauxhall)

  Archer, Rt Hon Peter

  Hogg, N. (C'nauld & Kilsyth)

  Ashdown, Rt Hon Paddy

  Home Robertson, John

  Banks, Tony (Newham NW)

  Hood, Jimmy

  Barnes, Harry (Derbyshire NE)

  Howarth, George (Knowsley N)

  Barron, Kevin

  Howell, Rt Hon D. (S'heath)

  Battle, John

  Howells, Dr. Kim (Pontypridd)

  Beckett, Margaret

  Hoyle, Doug

  Beggs, Roy

  Hughes, John (Coventry NE)

  Beith, A. J.

  Hughes, Robert (Aberdeen N)

  Bell, Stuart

  Hughes, Roy (Newport E)

  Bellotti, David

  Hughes, Simon (Southwark)

  Benn, Rt Hon Tony

  Illsley, Eric

  Bermingham, Gerald

  Ingram, Adam

  Blair, Tony

  Janner, Greville

  Bradley, Keith

  Kennedy, Charles

  Bray, Dr Jeremy

  Kirkwood, Archy

  Brown, Gordon (D'mline E)

  Leadbitter, Ted

  Brown, Nicholas (Newcastle E)

  Leighton, Ron

  Brown, Ron (Edinburgh Leith)

  Lestor, Joan (Eccles)

  Bruce, Malcolm (Gordon)

  Lewis, Terry

  Buckley, George J.

  Livingstone, Ken

  Caborn, Richard

  Livsey, Richard

  Callaghan, Jim

  Lofthouse, Geoffrey

  Campbell, Menzies (Fife NE)

  Loyden, Eddie

  Campbell, Ron (Blyth Valley)

  McAllion, John

  Campbell-Savours, D. N.

  McAvoy, Thomas

  Canavan, Dennis

  McCartney, Ian

  Carlile, Alex (Mont'g)

  Macdonald, Calum A.

  Carr, Michael

  McFall, John

  Clarke, Tom (Monklands W)

  McKay, Allen (Barnsley West)

  Clelland, David

  McKelvey, William

  Clwyd, Mrs Ann

  McLeish, Henry

  Cohen, Harry

  Maclennan, Robert

  Corbett, Robin

  McMaster, Gordon

  Corbyn, Jeremy

  McNamara, Kevin

  Crowther, Stan

  Madden, Max

  Cryer, Bob

  Mahon, Mrs Alice

  Cunliffe, Lawrence

  Marshall, David (Shettleston)

  Davies, Rt Hon Denzil (Llanelli)

  Marshall, Jim (Leicester S)

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

  Martin, Michael J. (Springburn)

  Dixon, Don

  Meacher, Michael

  Dobson, Frank

  Michie, Bill (Sheffield Heeley)

  Doran, Frank

  Michie, Mrs Ray (Arg'l & Bute)

  Duffy, A. E. P.

  Morris, Rt Hon A. (W'shawe)

  Dunnachie, Jimmy

  Mullin, Chris

  Dunwoody, Hon Mrs Gwyneth

  Nellist, Dave

  Eastham, Ken

  O'Brien, William

  Evans, John (St Helens N)

  O'Hara, Edward

  Ewing, Harry (Falkirk E)

  Orme, Rt Hon Stanley

  Fatchett, Derek

  Parry, Robert

  Faulds, Andrew

  Patchett, Terry

  Fearn, Ronald

  Pendry, Tom

  Field, Frank (Birkenhead)

  Pike, Peter L.

  Fisher, Mark

  Powell, Ray (Ogmore)

  Flannery, Martin

  Primarolo, Dawn

  Flynn, Paul

  Randall, Stuart

  Foot, Rt Hon Michael

  Redmond, Martin

  Foster, Derek

  Reid, Dr John

  Foulkes, George

  Richardson, Jo

  Fraser, John

  Robertson, George

  Fyfe, Maria

  Robinson, Geoffrey

  Galloway, George

  Rogers, Allan

  Garrett, John (Norwich South)

  Ross, Ernie (Dundee W)

  Godman, Dr Norman A.

  Ross, William (Londonderry E)

  Golding, Mrs Llin

  Rowlands, Ted

  Gordon, Mildred

  Ruddock, Joan

  Gould, Bryan

  Salmond, Alex

  Graham, Thomas

  Sedgemore, Brian

  Grant, Bernie (Tottenham)

  Sheerman, Barry

  Griffiths, Nigel (Edinburgh S)

  Sheldon, Rt Hon Robert

  Hain, Peter

  Shore, Rt Hon Peter

  778

  Short, Clare

  Walley, Joan

  Skinner, Dennis

  Warden, Gareth (Gower)

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

  Wareing, Robert N.

  Snape, Peter

  Welsh, Michael (Doncaster N)

  Soley, Clive

  Williams, Rt Hon Alan

  Spearing, Nigel

  Winnick, David

  Steel, Rt Hon Sir David

  Wise, Mrs Audrey

  Steinberg, Gerry

  Worthington, Tony

  Stott, Roger

  Wray, Jimmy

  Straw, Jack

  Young, David (Bolton SE)

  Taylor, Mrs Ann (Dewsbury)

  Turner, Dennis

  Tellers for the Ayes:

  Vaz, Keith

  Mr. Frank Haynes and Mr. Jack Thompson.

  Wallace, James

  NOES

  Adley, Robert

  Durant, Sir Anthony

  Aitken, Jonathan

  Dykes, Hugh

  Alison, Rt Hon Michael

  Eggar, Tim

  Amess, David

  Evennett, David

  Amos, Alan

  Fallon, Michael

  Arbuthnot, James

  Favell, Tony

  Arnold, Jacques (Gravesham)

  Field, Barry (Isle of Wight)

  Arnold, Sir Thomas

  Finsberg, Sir Geoffrey

  Ashby, David

  Fishburn, John Dudley

  Aspinwall, Jack

  Forman, Nigel

  Atkinson, David

  Fowler, Rt Hon Sir Norman

  Baker, Nicholas (Dorset N)

  Franks, Cecil

  Beaumont-Dark, Anthony

  Fry, Peter

  Bendall, Vivian

  Gale, Roger

  Bennett, Nicholas (Pembroke)

  Gardiner, Sir George

  Benyon, W.

  Gilmour, Rt Hon Sir Ian

  Bevan, David Gilroy

  Glyn, Dr Sir Alan

  Biffen, Rt Hon John

  Goodhart, Sir Philip

  Blackburn, Dr John G.

  Goodlad, Alastair

  Body, Sir Richard

  Grant, Sir Anthony (CambsSW)

  Bonsor, Sir Nicholas

  Greenway, Harry (Eating N)

  Boscawen, Hon Robert

  Gregory, Conal

  Boswell, Tim

  Griffiths, Peter (Portsmouth N)

  Bottomley, Peter

  Ground, Patrick

  Bottomley, Mrs Virginia

  Grylls, Michael

  Bowden, A. (Brighton K'pto'n)

  Hague, William

  Bowden, Gerald (Dulwich)

  Hamilton, Hon Archie (Epsom)

  Bowis, John

  Hamilton, Neil (Tatton)

  Boyson, Rt Hon Dr Sir Rhodes

  Hampson, Dr Keith

  Brandon-Bravo, Martin

  Hannam, John

  Brazier, Julian

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

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

  Hargreaves, Ken (Hyndburn)

  Buck, Sir Antony

  Haselhurst, Alan

  Budgen, Nicholas

  Hayes, Jerry

  Burns, Simon

  Hayhoe, Rt Hon Sir Barney

  Burt, Alistair

  Heathcoat-Amory, David

  Butler, Chris

  Hicks, Mrs Maureen (Wolv' NE)

  Carlisle, John, (Luton N)

  Higgins, Rt Hon Terence L.

  Carrington, Matthew

  Hind, Kenneth

  Carttiss, Michael

  Howarth, G. (Cannock & B'wd)

  Cash, William

  Hughes, Robert G. (Harrow W)

  Chalker, Rt Hon Mrs Lynda

  Hunt, Rt Hon David

  Channon, Rt Hon Paul

  Hunt, Sir John (Ravensbourne)

  Chapman, Sydney

  Hunter, Andrew

  Chope, Christopher

  Hurd, Rt Hon Douglas

  Churchill, Mr

  Irvine, Michael

  Clark, Rt Hon Sir William

  Jack, Michael

  Colvin, Michael

  Janman, Tim

  Coombs, Anthony (Wyre F'rest)

  Jessel, Toby

  Coombs, Simon (Swindon)

  Jones, Robert B (Herts W)

  Cormack, Patrick

  Key, Robert

  Couchman, James

  King, Roger (B'ham N'thfield)

  Cran, James

  Knapman, Roger

  Critchley, Julian

  Knight, Greg (Derby North)

  Currie, Mrs Edwina

  Knight, Dame Jill (Edgbaston)

  Curry, David

  Knowles, Michael

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

  Leigh, Edward (Gainsbor'gh)

  Davis, David (Boothferry)

  Lennox-Boyd, Hon Mark

  Day, Stephen

  Lester, Jim (Broxtowe)

  Dickens, Geoffrey

  Lightbown, David

  Dicks, Terry

  Lloyd, Peter (Fareham)

  Douglas-Hamilton, Lord James

  Lord, Michael

  Dover, Den

  Luce, Rt Hon Sir Richard

  Dunn, Bob

  Lyell, Rt Hon Sir Nicholas

  779

  McCrindle, Sir Robert

  Roberts, Sir Wyn (Conwy)

  MacKay, Andrew (E Berkshire)

  Roe, Mrs Marion

  Maclean, David

  Rossi, Sir Hugh

  McLoughlin, Patrick

  Rost, Peter

  McNair-Wilson, Sir Michael

  Rowe, Andrew

  McNair-Wilson, Sir Patrick

  Rumbold, Rt Hon Mrs Angela

  Madel, David

  Sackville, Hon Tom

  Mans, Keith

  Sainsbury, Hon Tim

  Maples, John

  Shaw, David (Dover)

  Marshall, John (Hendon S)

  Shaw, Sir Giles (Pudsey)

  Martin, David (Portsmouth S)

  Shelton, Sir William

  Mates, Michael

  Shephard, Mrs G. (Norfolk SW)

  Maude, Hon Francis

  Shepherd, Colin (Hereford)

  Maxwell-Hyslop, Robin

  Shepherd, Richard (Aldridge)

  Meyer, Sir Anthony

  Shersby, Michael

  Miller, Sir Hal

  Skeet, Sir Trevor

  Mills, Iain

  Smith, Sir Dudley (Warwick)

  Mitchell, Andrew (Gedling)

  Speed, Keith

  Mitchell, Sir David

  Speller, Tony

  Moate, Roger

  Spicer, Sir Jim (Dorset W)

  Montgomery, Sir Fergus

  Spicer, Michael (S Worcs)

  Morris, M (N'hampton S)

  Squire, Robin

  Morrison, Sir Charles

  Steen, Anthony

  Morrison, Rt Hon Sir Peter

  Stevens, Lewis

  Moss, Malcolm

  Stokes, Sir John

  Mudd, David

  Tapsell, Sir Peter

  Neale, Sir Gerrard

  Taylor, Ian (Esher)

  Needham, Richard

  Tebbit, Rt Hon Norman

  Nelson, Anthony

  Thompson, D. (Calder Valley)

  Neubert, Sir Michael

  Thompson, Patrick (Norwich N)

  Newton, Rt Hon Tony

  Thornton, Malcolm

  Nicholls, Patrick

  Townend, John (Bridlington)

  Nicholson, David (Taunton)

  Tredinnick, David

  Norris, Steve

  Viggers, Peter

  Onslow, Rt Hon Cranley

  Walden, George

  Oppenheim, Phillip

  Waller, Gary

  Patnick, Irvine

  Wardle, Charles (Bexhill)

  Pattie, Rt Hon Sir Geoffrey

  Watts, John

  Pawsey, James

  Wells, Bowen

  Porter, Barry (Wirral S)

  Widdecombe, Ann

  Porter, David (Waveney)

  Wiggin, Jerry

  Powell, William (Corby)

  Wilkinson, John

  Price, Sir David

  Winterton, Mrs Ann

  Raison, Rt Hon Sir Timothy

  Winterton, Nicholas

  Redwood, John

  Younger, Rt Hon George

  Rhodes James, Robert

  Riddick, Graham

  Tellers for the Noes:

  Ridley, Rt Hon Nicholas

  Mr. John M. Taylor and Mr. Timothy Wood.

  Ridsdale, Sir Julian

  Question accordingly negatived.
  Mr. Nicholas Brown: I beg to move amendment No. 16, in page 21, line 27, at end insert
  '; provided that subsection (1)(d) above shall not apply so as to deny relief under this section for the excess (if any) of the payment over the amount of public financial assistance which the individual either has received or is entitled to receive at the time the payment is made'.
  The amendment and amendments Nos. 15 and 17, which we shall debate later, explore matters of detail in clause 31, the principles of which we have already debated. Will it be possible to make some concession to those who wish to take advantage of this relief and who receive some assistance from public funds? The circumstances that I specifically envisage are those in which some assistance from public funds is provided but the assistance is not up to the value of the tax relief. I do not propose that tax relief should be granted on that proportion of expenditure that is assisted from public funds. However, I should be interested to hear the Financial Secretary's view about providing tax relief on the balance because, given the nature and size of some awards, such a situation could arise, and it seems against the spirit of the legislation to disadvantage someone in that position.
  Mr. Maude: The amendment would allow trainees in receipt of direct assistance also to get relief for any part of the cost for a qualifying course which was not covered by that assistance. The main financial help for people undertaking vocational training is provided by their employers who, typically, meet the whole cost so that the trainee has nothing to find. Generally speaking, there is no tax penalty for such support, provided it is totally related to the current job, as it normally would be.
  Many other trainees can benefit from a variety of Government programmes carefully designed and targeted at specific groups. Young people benefit from youth training and training vouchers and those who have been unemployed for a long time benefit from employment training. The new relief provided by the clause contrasts with both state and employer funded training in being aimed at those people who embark on vocational training on their own initiative and at their own expense. Such people would include mothers who wanted to return to the job market after having families or someone in work who wanted to retrain for a different career.
  Acceptance of the amendment would mean that those who receive public support for undertaking qualifying courses, but only such courses, would get a double amount of help. The clause simply aims to ensure that everyone who embarks on a course for a national vocational qualification can get some help. We shall look carefully at the schemes of public financial support to be included in the Treasury regulations, by virtue of which relief would not be available. When we frame those regulations, I shall take careful account of views that have been expressed. Essentially, the matter can be dealt with in the context of the regulations to be issued on the clause, and I invite the hon. Gentleman to withdraw his amendment.
  Mr. Nicholas Brown: I am grateful to the Minister. It is not our intention, through the amendment, to give people twice the help that they would otherwise receive, and I do not think that the amendment is framed in that way. It is our intention to allow someone who has had some help from elsewhere to claim tax relief on the remainder of his expenditure. I am grateful to the Financial Secretary for taking that issue on board and agreeing to look at it when the regulations are being drafted. That was a helpful assurance and I beg to ask leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Mr. Nicholas Brown: I beg to move amendment No. 15, in page 22, line 12, after 'entitled', insert
  '; provided however that no tax shall be required to be so accounted for to the Board by the person to whom the payment was made if that person can show (i) that he took all reasonable steps to satisfy himself that the individual in question was entitled to relief under this section and (ii) that at the date the payment in question was made he had complied with any obligation imposed on him by any regulations made under section (32) below'.
  This is an exploratory amendment designed to discover whether the Financial Secretary, when he drafts the regulations, will safeguard the position of colleges that have acted in good faith, but which could find themselves laid open to a charge if they have been duped by a student who has not acted in good faith.
  It seems unfair that an obligation to the Exchequer could fall on a college in those circumstances and the amendment will cover that point. The amendment sets out some conditions. It is not sufficient for a college to say that

  781
  it has acted in good faith; it must be able to demonstrate it. If the Financial Secretary says that the point will be dealt with in the regulations, I shall be satisfied.
  7.30 pm
  Mr. Maude: I assure the hon. Gentleman that the concern expressed in the amendment, though understandable, is unnecessary. The regulations seek to protect training providers from having to repay any relief at source granted to a person who did not qualify for relief if the training provider took reasonable steps to satisfy himself that the relief was legitimate.
  The regulations will be aimed primarily at trainees who, after beginning a course, have their fees repaid to them. Equally, it is the case that the subsidy should be repaid to the Exchequer, and I do not think that the hon. Gentleman would quarrel with that.
  There would be no requirement on the person granting the relief at source to undertake any arduous checking of claimants, and we would not expect those providing training to compensate the Revenue for false claims made by trainees. I hope that that covers the hon. Gentleman's point.
  Mr. Nicholas Brown: The Financial Secretary's remarks entirely satisfy me. I beg to ask leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Mr. Nicholas Brown: I beg to move amendment No. 17 in page 22, leave out lines 36 and 37.
  It is nice to learn from the Financial Secretary that the regulations are a little further advanced than my hon. Friend the Member for Bradford, South (Mr. Cryer) might have thought when he contributed to an earlier debate.
  Amendment No. 17 explores two slightly different matters. The first is the failure of the Government's scheme to offer tax relief at the highest levels offered by the two vocational training councils. I have received a letter—I expect that other hon. Members will have received similar correspondence—from the Chartered Association of Certified Accountants asking why clause 31 does not make relief available for all levels of training, including that leading to professional qualifications. The association is not the only group to have raised this point. The Financial Secretary mentioned it earlier and I refer to it in a neutral way because it needs to be clarified. The amendment is a probing one to seek such clarification.
  My second point is one of detail and I am sure that the Financial Secretary will be able to satisfy me on it. It has been suggested to me that tax relief at the lower level might be clawed back or denied if a student went on to the higher levels of vocational training which do not attract tax relief. I suspect that it is not the Government's intention to claw back or deny such relief, but I hope that the Financial Secretary will set the matter straight.
  Dr. Godman: Earlier the Financial Secretary gave some details of the English qualifications that the clause covered. Will he assure me that he will seek to determine the likely effect on the equivalent Scottish qualifications by approaching his ministerial colleagues at the Scottish Office in the usual way? I do not want to see Scottish students or trainees disadvantaged in any way vis-à-vis their English counterparts. I should be grateful if the Financial Secretary, perhaps at a later date, could give me that assurance.
  Mr. Tim Smith: The hon. Member for Newcastle upon Tyne, East (Mr. Brown) asked about professional qualifications and I too received a letter from the Chartered Association of Certified Accountants. I do not know what the situation is now, but when I qualified as an accountant many employers paid for training. However, my employer did not, and I had to pay for my training out of my taxed income. I am not asking for retrospective legislation to cover my case 21 years ago, but there is a case for extending tax relief to students who have to pay fees out of their taxed income.
  Mr. Maude: I am grateful for the way that the points have been raised. The hon. Member for Newcastle upon Tyne, East (Mr. Brown) is right to say that the matter has aroused some interest and I am glad to have the opportunity to deal with it.
  The hon. Member for Greenock and Port Glasgow (Dr. Godman) was concerned that the Scottish qualifications included in the scheme should be on all-fours with the English and Welsh ones. I cannot imagine that that will not be the case, but I will ensure that my right hon. Friend the Secretary of State for Scotland is aware of the hon. Gentleman's point. If necessary, we shall clarify the matter.
  The hon. Member for Newcastle upon Tyne, East asked about the possible clawback if a trainee moved from level one to level five. I can assure him that that would not happen.
  Let me explain why we have chosen to include simply qualifications from level one to level four. National vocational qualifications and Scottish vocation qualifications will cover a wide range of vocational skills across most industrial groups, based on employer-defined standards of competence and performance. That will mean that the schemes are flexible and that the qualifications will be properly targeted. That will guarantee the success of the qualifications.
  The structure of both schemes is to have qualifications that extend to jobs at all levels within particular industries. Level one covers most manual work and similar skills for each kind of job and level four broadly applies to supervisory middle management and technical skills. Levels two and three will obviously fill the gap between the two in a progressive way. The range of vocational training that the relief will support is quite wide. We hope that by April 1992 about 70 per cent. of the relevant qualifications will be in place and that the accreditation task up to level four will be substantially complete by the end of 1992.
  Level five will in due course cover the very highest levels of vocational training. They will extend to senior managerial skills and to professional and degree level qualifications. We carefully considered including the new level five within training relief, but decided not to do so for a number of reasons.
  First, there is little criticism of our performance in vocational training at that level. British professional skills are internationally recognised as being of the highest quality. Secondly—and I say this with some diffidence in view of the personal experiences of my hon. Friend the Member for Beaconsfield (Mr. Smith)—those who embark on training at that level can readily reap the personal financial reward for their investment in human capital. Therefore, they have less of a claim on the support of

  783
  taxpayers. However, that may not apply to those who abandon their professional calling to enter the more doubtfully rewarding profession of politics.
  The third, purely practical, reason is that there are no level five qualifications currently in existence. The National Council for Vocational Qualifications and Scotvec are still discussing with professional and other bodies how best such qualifications might best be brought into the scheme. By restricting relief to levels one to four, we are concentrating resources on practical and supervisory skills, which is where the main criticisms of our current performance are directed, and where help and encouragement are needed.
  Mr. Nicholas Brown: I am grateful for the Financial Secretary's assurance that tax relief given at the lower level of training will endure if a student advances to a higher level, and for the hon. Gentleman's reply to my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman).
  On the more vexed question of exclusions at the highest level, in the light of the Financial Secretary's explanation, I believe that the Bill should proceed as drafted. If it is found that the hon. Gentleman's explanation has not stood the test of time, we can return to the issue in a future Finance Bill. I beg to ask leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Clause 31 ordered to stand part of the Bill.

Clause 21

  MARRIED COUPLE'S ALLOWANCE
  Mr. Chris Smith: I beg to move amendment No. 18, in page 15, line 40, at end insert—
  '(3) Subsection (2) of section 257B of that Act shall cease to have effect after the year 1990–91; subsection (1) shall have effect for 1991–92 and subsequent years as if it read
  "(1) Where a man is entitled to relief under section 257A for any year of assessment, he may transfer to his wife the whole or any part of the relief to which he is so entitled; and where such a transfer is effected, he shall cease to be entitled to a deduction from his total income for that year of the amount transferred and his wife shall be entitled to a deduction from her total income for that year of that amount";
  and subsection (3) shall have effect for 1991–92 and subsequent years as if after "relates", there were added
  "(aa) shall specify the amount of relief which is to be transferred to his wife.".'.
  Clause 21 freezes the married couple's allowance at the current level of £1,720 per year for the financial year 1991–92. Only last June, the then Chancellor of the Exchequer, who is now Prime Minister and who I suspect exerted some influence over the contents of the Bill before us, said in a speech to Welsh Conservatives that Labour's proposals in relation to the allowance were especially malign, and reserved for special attack and venom any proposal to freeze it.
  Ten months later, the self-same Government, now led by the self-same person, are proposing precisely to freeze the married couple's allowance. It therefore comes as something of a surprise to my right hon. and hon. Friends
  784
  and myself to find that a Government who were excoriating such a proposal only a few months ago are now including it in the Finance Bill.
  The married couple's allowance should really be called the married man's allowance in another guise. Under section 257(1)(a) of the Income and Corporation Taxes Act 1988, which was brought in as part of the Finance Bill 1988, the allowance initially goes to the husband and can only be transferred to his spouse with his consent. Even then, only that part of the allowance that the husband himself cannot use may be transferred—only that portion that he cannot set against his own taxable income. The transfer of the allowance from the husband to the wife can be done only in very limited circumstances, where the husband's taxable income is not sufficient for him to be able to make use of the allowance in its entirety.
  7.45 pm
  That makes a mockery of any pretence that there is independent taxation of husbands and wives. It makes a mockery also of the allowance's description as a married couple's allowance. It is directed primarily—and for the majority of taxpayers, entirely—at the husband and not at the couple. That can lead to discrimination against the wife in cases where there is no specific agreement between the couple as to who might make best use of the allowance.
  The allowance may also discriminate against a couple where different rates of marginal tax are paid by the husband and the wife. If the wife is paying at a higher rate than the husband, yet it is only he who can offset the married couple's allowance against income, the couple will lose, whereas they would not if the wife could offset at least part of the allowance against her income.
  The current operation of the married couple's allowance is not good for equity, fairness, or the dignity of wives in the taxation system. Independent taxation is a mirage. For three years in succession, we have sought to press on the Government a change in the way in which that allowance is applied.
  Mr. Tim Smith: How can the hon. Gentleman assert that independent taxation is a mirage when, for the first time, married women are being sent tax returns?
  Mr. Smith: That may be so, but most married women still cannot make any use of the married couple's allowance, which makes nonsense of any claim of truly independent taxation.
  We acknowledge that an amendment that sought to put into effect the full import of our proposals would not be in order. In an ideal world, we would like to see the married couple offered a choice of how they apportioned their allowance. If they wanted to apportion it entirely in the name of the husband, or in that of the wife, or if they preferred to split it in any way between them, they would be able to choose to do so.
  Failing agreement between the two parties about the proportion that should go to each, we should like an automatic equal apportionment between them. That would be a sensible approach, which would preserve the principles of independence and would benefit a small number of people who are disadvantaged by the way in which the present system operates.
  However, within the terms of the Bill we cannot frame an amendment to put that into operation, because it would increase the tax liability of a limited number of men, and it would therefore be out of order within the terms of this

  785
  Committee. Therefore, we have drafted what I would describe as a second-best proposal, which forms the content of amendment No. 18.
  The amendment goes some way to redress the problem of the present married couple's allowance and would allow it to be freely transferable, with the husband's agreement, whether he could have used it or not. That is the key change as, at present, it is freely transferable from husband to wife only with the husband's consent and if he is unable to make use of it. We are lifting that restriction. Under this amendment, if the husband wished—whether or not he were able to use the allowance—it would be possible for him to transfer it to his wife. That is fairer than the present position, and that is why we have tabled the amendment.
  Having explained why we tabled the amendment, two further matters arise in connection with this amendment and this clause which ought to be named. First, when the Chancellor announced in the Budget that he was going to freeze the married couple's allowance for this year, he said that he would use the money to extend other forms of support to families and children.
  "more should be done to help families with children. I propose to use the resources released by not increasing the married couple's allowance for that purpose."—[Official Report, 19 March 1991; Vol. 188, c. 179.]
  Note carefully the words:
  "use the resources released by not increasing the married couple's allowance."
  That brings £360 million in revenue to the Exchequer in 1991–92. In 1992–93, it will bring in £490 million.
  In return, the Chancellor made some modest increases in child benefit, but they amounted to a cost of £220 million only to the Exchequer, which leaves a substantial surplus of revenues from the freezing of the married couple's allowance.
  As far as I can tell, those substantial extra revenues have fallen into a black hole, and have not been used for child or family support. The Chancellor should have used the entirety of the money that the Exchequer raised by freezing the married couple's allowance to support families with children in other ways. We have long held the view that support for child benefit is by far the most effective means of targeting help to families with children.
  It is sad that the Chancellor did not live up to his statement in the Budget and use the entirety of the revenue open to the Exchequer as a result of that change to help families with children. He should have done so, he said he was going to do so, but he did not. That is a failure on his part. Later, it would be useful to hear from the Minister of State what will be done with the extra money which falls to the Exchequer as a result of this clause.
  I mentioned child benefit, and it is important to view the measures in this clause and the proposal contained in our amendment against the background of what is happening to that benefit. It is a tax-free cash benefit, paid per child, per week, directly to the person responsible for the child or children—usually directly to the mother. It was introduced in 1977, replacing child tax allowance and family allowance. Child benefit is universal, and is paid regardless of income or capital.
  In Britain, 6.7 million families receive child benefit for 12 million children, at an annual cost to the Exchequer of £4.6 billion. The take-up rate is 98 per cent. Quite clearly, it is the best way to assist families on low incomes with children.
  Child benefit was frozen at £7.25 per week in September 1987 by the then Chancellor, the right hon. Member for
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  Blaby (Mr. Lawson), until April 1991, when the Government granted a £1 per week increase to the first child, taking the benefit for them to £8.25 per week. The rate for subsequent children remains frozen at £7.25 until October of this year.
  In his Budget statement in March 1991, the Chancellor announced that the rate for the first child would increase by another £1 to £9.25 in October. The rate for subsequent children would increase by a miserable 25p per child.
  In his Budget statement, the Chancellor also promised to start uprating child benefit in line with inflation from April 1992. However, child benefit is still below what it should have been if it had been uprated in line with price increases since April 1987, when it was frozen. If that had been the case, the value of child benefit for each and every child would now be £9.55 per child per week. Even for the first child, the value is short of that amount from October this year, and the value for subsequent children is substantially short of the amount that it should have been.
  One of the immediate acts of a Labour Government will be to fulfil our pledge to uprate child benefit in full to the value to which it ought to have been uprated to account for the rise in prices since 1987. That would be a more substantial way to assist families with children than anything that the Government have done in recent months or years, even after considering the repentance in the Budget and in the Chancellor's statement.
  The Government are accruing extra income to the Exchequer by the change that they are making in clause 21. They are not devoting the entirety of that income to the purpose for which it was supposed to be used. They are using only a portion of it to increase child benefit, and they could have used more.
  In tabling the amendment, we are doing two things. First, we are drawing attention to the inadequacies of the present arrangement for the use of the married couple's allowance, and to the unfairness of that arrangement; we are seeking to make it fairer, and to offer couples at least some choice in how the allowance is apportioned. Secondly, we are drawing attention to the fact that the Government should be offering families with children much more support. In freezing child benefit and then neglecting to uprate it properly, the Government have failed Britain's families. Opposition Members will continue to remind them of that during the coming weeks and months.
  8 pm
  Mr. A. J. Beith: I shall be brief, because I know that the Minister of State wishes to speak. Let me put it on record, however, that my party shares the objectives of Labour's amendment—and shares even more emphatically those of the amendment that Labour Members would have tabled had that been in order. Indeed, we tabled such an amendment; and it is intriguing to note that an amendment along the same lines was debated last year, but somehow slipped through the net. The objective that we share is, of course, to make independent taxation genuinely independent.
  Mr. Nicholas Brown: I know that the hon. Gentleman has strong views about whether amendments are in order. Given what he said to my hon. Friend the Member for Derby, South (Mrs. Beckett) in yesterday's debate, I hope that he will make fulsome apologies for having enabled an

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  amendment that was out of order to be deemed in order last year. The strictures that he applied to the Opposition were, after all, very severe.
  Mr. Beith: I shall do nothing of the sort. It was Labour's amendment that was found to be in order last year, and it is the Labour amendment that has turned out to be out of order this year. I shall not stray too far from the subject of our present debate; let me point out, however, that my criticism last night related not to whether the amendment was technically in order, but to the confusion that was apparent in the setting out of its objectives. It also related to the failure of the hon. Member for Derby, South (Mrs. Beckett)—the spokesman for the official Opposition—to explain how her party could achieve two objectives at once without adding up the cost of both.
  Happily, that does not apply to amendment No. 18. We agree—I hope—that we want to secure genuinely independent taxation that will not depend on the husband's choosing to transfer allowance that he does not require, but will allow each partner to obtain the maximum benefit from his or her share. The current procedures do not allow that. As the arguments advanced in support of them have been largely technical, I should like to think that the Government really wish to achieve the objective of the amendment, and that they will continue to try to do so. Indeed, I rather hope that the Minister of State—who, I am sure, takes a personal interest in the matter—will tell us that the Government are still trying to achieve that aim of genuinely independent taxation and genuinely divisible married couple's allowance.
  I am glad that you called me before you called the Minister of State, Mr. McWilliam, because I want to underline the question put by the hon. Member for Islington, South and Finsbury (Mr. Smith): what is the future of the married couple's allowance? Do the Government intend to phase it out and let it wither on the vine by not increasing it in line with inflation year by year; or is that simply a short-term treatment?
  The failure to index the allowance has released considerable sums, more of which could have been devoted to child benefit. Is it the Government's policy to use more and more of the savings obtained from not indexing the married couple's allowance to fund child benefit improvements? If it is, we can support them in that objective, but so far the position is unclear. The Minister would do us a service if she set out the Government's policy on both the future of the married couple's allowance and the extent to which the savings to the Exchequer will be devoted to child benefit. She should also continue to try to find a mechanism to achieve the objective of the amendment.
  Mr. John Battle: I wish to make a small but, I hope, important point about child benefit and about whether people will actually receive the proposed increase.
  On Second Reading, the Chief Secretary to the Treasury said:
  "perception is lagging behind reality".—[Official Report, 30 April 1991; Vol. 190, c. 179.]
  I sometimes feel like turning that phrase the other way round, and suggesting that reality—in terms of tax and benefits—often lags behind public perceptions.
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  Many people believe, deep down, that they will receive £140 off their next poll tax bill when it arrives some time in June, as a result of the proposed changes. In fact, we know that that applies to only 40 per cent. of people; but that did not prevent Conservative candidates in the local elections from putting out leaflets suggesting that every person in the country would receive a cheque for that amount, as if it would be signed by the Secretary of State for the Environment himself.
  That is manifestly not the truth; and exactly the same is happening in regard to child benefit. When we consider one benefit, we must also consider its interaction with others. The increase in child benefit has been sold as a great bonus; the brakes are off and, we are told, every family will gain. Will the Minister confirm, however, that the effect of that increase will be rubbed out by the impact of the Government's freezing of single-parent benefit? Lone parents must be among the poorest groups in our society, especially when they have no opportunity to work—or, if they have, can work only in part-time and, usually, low-paid work. Some must stay at home with their children. When the freezing of the single-parent benefit is put together with the increase in child benefit, the result will be that such people will not receive the extra money that the Government are promising.
  This is another classic case of the Government's giving out what they nowadays call a "headline" figure—that usually means a figure that they hope will make the headlines in a newspaper or on television—which does not represent money in people's pockets. What has been given with one hand has, effectively, been taken away with the other.
  If the Government had done the decent thing, they would have uprated child benefit properly. Then we would not have had to witness the farce of the Government's playing with the language in the last Conservative manifesto, in which we were told that the benefit would be uprated "as now". That meant that it would remain "as now" on the day of the last general election. No uprating took place until the public put pressure on the Government to take the brakes off and begin to uprate the benefit in line with inflation—and they are not there yet.
  I hope that, next time, the Government's promises will be listened to carefully. What has happened to child benefit is, in my view, an illustration of what the Government do. They make a promise and wrap it up in language, and people think that they will receive the money; but, when they work out the details, they find that they have been short-changed.
  The Minister of State, Treasury (Mrs. Gillian Shephard): I appreciate the aims of the amendment—and those of the "non-amendment", if I may use EC parlance. I must admit that I have some sympathy with those aims. The amendment is similar in some respects to one that was considered in Committee last year. My right hon. Friend the present Chancellor of the Exchequer expressed his sympathy with what that amendment sought to achieve, but felt unable to accept it and others because, in his view, the benefit would not be commensurate with the cost. The hon. Member for Islington, South and Finsbury (Mr. Smith) has given some idea of what his amendment aims to achieve and of the complications that might ensue.
  There were three reasons for my right hon. Friend's decision last year. I think that it is worth repeating them, because they apply, to a greater or lesser extent, to any

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  proposal to make the present arrangements more flexible. My right hon. Friend said that the present straightforward system might he made more complex. He did not want many more people to have to fill in tax returns, and to have to deal with the Inland Revenue, which would place increased burdens on both sides. He also felt that there should be no reduction in the privacy that husbands and wives enjoy under the present system
  The amendment that we are discussing raises similar concerns. The concerns might not matter and the cost might be worthwhile if many people were better off as a result. But the amendment would not have that effect because it would enable fewer than 50,000 people, or about 1 per cent. of the total, to arrange their tax affairs in such a way as to reduce the wife's higher rate tax liability. No other couples would be better off in cash terms as a result of the new transfer option offered by the amendment.
  It is possible for a husband and wife to run their financial affairs separately now. That is why we were the first Government to treat a married woman as a fully independent taxpayer under the new system of independent taxation. I realise that, although a couple might not benefit financially from being able to split the married couple's allowance, they might consider it the right thing to do as a matter of principle. That point was made in the amendment and by the hon. Member for Berwick-upon-Tweed (Mr. Beith).
  In considering the present amendment we have to look at the principle—which I agree is important—and the practicalities. I believe that the considerations are outweighed by the practical disadvantages of the proposed amendment. The main advantage of the present system is that it ensures that the married couple's allowance is given initially to the partner who is most likely to be able to use it effectively—the husband. That minimises the need for transfer, so it is a cost-efficient way of giving relief to married couples. Of course that is not popular with everyone. Some people do not like it because they would gain more by a different set of rules and others do not approve of it as a matter of principle.
  I assure the Committee that the Government have considered carefully on several occasions various options for making the rules more flexible for transferring the allowance. However, we have always come up against the fact that the benefits to be gained from a change are not sufficient to justify the upheaval.
  Last year my right hon. Friend the Chancellor of the Exchequer explained some of the disadvantages of that option. I shall briefly repeat his explanation. Eighty per cent. of taxpayers are dealt with through pay-as-you-earn. The amendment would entail moving away from a system whereby 80 per cent. of these taxpayers do not make tax returns and do not deal with the Inland Revenue but are covered by PAYE. From a practical point of view the amendment could be regarded as a retrograde step. If the amendment were accepted, married couples would have to be informed about the new options and given the opportunity to choose them. The Inland Revenue would have to ensure that the husband's and wife's tax offices, which deal with each other only occasionally under independent taxation, made the necessary adjustments to their records. Procedures would have to be set up to deal with couples who wanted to change their decision later because during the year their income turned out to be more or less than they had expected. That would carry a cost in
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  extra staff and extra worry about the options for millions of married couples whose tax affairs are now straightforward.
  Although the amendment is not exactly the same as those that were tabled last year, the intention is the same, and I must reach the same conclusion as my right hon. Friend did last year. I certainly admit quite freely that the present system is not perfect, but in practical terms it is the best possible solution.
  The hon. Member for Islington, South and Finsbury raised some specific matters including the apparent discrepancy of £140 million between the yield from freezing the married couples' allowance and what is being spent on the increase in child benefit from October this year.
  I know that the hon. Member for Leeds, West (Mr. Battle) will understand that the social security system is a great ship of the state and it takes time to get new systems into place and that 7 October is the earliest date on which the additional increases in child benefit can be paid. There is generally a six-month lead time before social security changes can be implemented and from that day all families with children will receive a further £1 a week for the first eligible child and 25p a week for subsequent children. To that extent, the hon. Member for Islington, South and Finsbury is correct that there is a discrepancy of £140 million, but I ask him to regard the Budget as a total package. Of course the £140 million is within all the measures included in this year's Budget. Next year, however, the cost of introducing the increases in child benefit will be accounted for by freezing the married couples' allowance. I ask the hon. Gentleman to accept that, here again, there was a practical difficulty.
  8.15 pm
  The hon. Member for Berwick-upon-Tweed asked about the Government's future intentions for the married couple's allowance. He asked whether the freeze was the first step towards its abolition. He reads far too much into a decision that was taken in an economic situation which called for a tight Budget this year to direct scarce resources towards families with children. It reflects the Chancellor's priorities this year. As the hon. Gentleman knows, all the allowances are reviewed each year in the run up to the Budget and considered in the light of the economic circumstance then prevailing.
  The hon. Member for Leeds, West asked about the freeze on one-parent benefit. Lone parents already have the £1 increase in child benefit for the first child. One-parent benefit has been frozen, but that freeze is fully offset in income support. The level of one-parent benefit is subject to review by my right hon. Friend the Secretary of State for Social Security each year. The hon. Gentleman will understand that, although it is a matter for my right hon. Friend the Secretary of State for Social Security, important improvements for lone parents are on the way in the child support Bill which will come to the House next month.
  The hon. Members for Islington, South and Finsbury and for Leeds, West asked about the freezing of child benefit in the past. I remind them and the Committee that the resources from the freezing of child benefit were used for other social security priorities. Annual spending on poorer families has increased by £500 million since 1988

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  and the resources released by the freezing of child benefit during that period were in part directed to helping poorer pensioners.
  Mr. Battle: Is it not true that the increase in money to the poorest was used in housing benefit as their rent went up, so in effect it was a subsidy to the housing system?
  Mrs. Shephard: No, I do not agree with that. The hon. Gentleman knows perfectly well that there were enhanced arrangements for people on income support and family credit which accounted in part for the £500 million. I remind him that the overall spending on families with children is higher now than it would have been had child benefit been regularly uprated since 1988. As we have been talking about the prosperity of families, I remind the Committee that the take-home pay of families on half the average wage has gone up by 29 per cent. under the present Government compared with 4.2 per cent. under Labour and that of the average family with two children has gone up by nearly 37 per cent. compared with a measly 0.6 per cent. under Labour. I think that families know where their best interests lie.
  Mr. Chris Smith: I should begin by welcoming the Minister of State to our proceedings on the Finance Bill as the clause that we are discussing is her first segment of the Bill. I also welcome some of her remarks. She said that she had some sympathy with the aims of our amendment, that she regarded the principle enshrined in it as important and that only practicalities outweighed it in her mind. In another part of her speech, she said, quite correctly, that the present married couples' allowance system is not perfect.
  I welcome all those statements. It is a pity that, although the Government support the principle of making the married couples' allowance a joint decision between husband and wife rather than an automatic accretion to the husband's tax relief, they do not carry their sympathy into legislation.
  The Minister of State said that the cost next year of the commitment to child benefit would use up more of the amount raised by freezing the married couple's allowance,
  I do not think that it would use up all of it. If I am incorrect, I shall happily give way to the Minister. The figures in the Red Book do not seem to indicate that, even then, it would use up all of it.
  Mrs. Shephard: The hon. Gentleman is right to say that there is a minor difference between the two figures. I say "minor" within the context of the Government's whole public expenditure budget, which is enormous—amounting to some £50 million. Given that we are talking about next year, and given the difficulty of predicting the number of children who will qualify for child benefit, the discrepancy should be regarded as just that. It may be ironed out by the birth rate next year.
  Mr. Smith: I am glad that the Minister of State confirms that there will be a shortfall in the use of the money for child benefit next year. Although £50 million may be a minor amount in terms of the overall public budget, I should prefer it if £50 million had been used to support children through child benefit rather than simply being swallowed up by the Exchequer.
  The Minister of State also argued that our amendment, which would allow the husband to transfer the married couples' allowance to the wife if he so wished, would
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  benefit financially only 1 per cent. of tax-paying couples. I accept that only a small number of people would benefit financially from such an arrangement, but the point of the amendment is that not only financial benefit but the principle of choice is at stake. A couple should jointly determine what happens rather than having the Exchequer determine by fiat that the whole amount will go to the husband. The amendment is not just about financial gain but is about equity of treatment between husband and wife within the taxation system.
  We believe that the principles that we have adumbrated in relation to the amendment and the clause still stand. The Government's praying in aid of practical difficulties has not stopped them dreaming up systems of local government finance and all sorts of other mechanisms to penalise people. Praying in aid practicalities in defence of doing nothing on a basic principle that is right does not wash. However, because of the Bill's strictures, we could not put forward in its entirety the proposal that we should have liked to make on the married couples' allowance. Our amendment is therefore very much second best, and although it would be a small step in the right direction, it would not be right to push it to a vote. However, I hope that we can return to the matter on a future occasion. Therefore, I beg to ask leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Clause 21 ordered to stand part of the Bill.

Clause 14

  BAD DEBTS
  Mr. Chris Smith: I beg to move amendment No. 19, in page 11, line 18, after 'one year' insert
  'and after "elapsed" there shall be added ", or the company or individual liable to pay any outstanding amount of the consideration has become insolvent and (except where paragraph 10(1A)(B) below applies) the person has submitted a claim in the insolvency for the oustanding amount of the consideration.
  (1A) a company becomes insolvent for the purposes of this section if:

  (a) it goes into liquidation in the United Kingdom or the Isle of Man at a time when its assets are insufficient for the payment of its debts and other liabilities and the expenses of the winding up;

  (b) a person who has been appointed in Great Britain to act as the Administrator or Administrative Receiver issues a certificate of his opinion that, if it went into liquidation, the assets of the company would be insufficient to cover the payment of any dividend in respect of debts which are neither secured nor preferential; or

  (c) a composition or scheme proposed by the Directors is approved under Part I of the Insolvency Act 1986. (1B) An individual becomes insolvent for the purposes of this section if:

  (a) in England and Wales he is adjudged bankrupt, a deed of arrangement is made for the benefit of his creditors, a composition or scheme proposed by him is approved under Part VIII of the Insolvency Act 1986 or, after his death, his estate falls to be administered in accordance with an order under Part XV of the Act;

  (b) in Scotland, sequestration of his estate is awarded, he signs a trust deed for his creditors or, after his death, a judicial factor is appointed under section 11A of the Judicial Factors (Scotland) Act 1989 to administer his estate;

  (c) in Northern Ireland he is adjudged bankrupt, a deed of arrangement is made for the benefit of his creditors, a resolution of his creditors is approved by the court under section 5 of the Bankruptcy

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  Amendment Act (Northern Ireland) 1929 or, after his death, the court makes an order for the administration in bankruptcy of his estate; or

  (d) in the Isle of Man, he is adjudged bankrupt, a deed of arrangement is made for the benefit of his creditors or, after his death, the court makes an order for the administration in bankruptcy of his estate,".'.

  Clause 14 relates to the recovery of bad debts on which value added tax has been paid to Customs and Excise. It reduces the waiting period for recovering such VAT from two years to one year. The issue is important because it affects substantially many businesses, especially smaller businesses. However, many traders in the smallest category of businesses, with a turnover of under £300,000, use the cash accounting mechanism for paying VAT, which becomes payable to Customs and Excise only when it is received by the trader rather than when the invoices are issued. The cash accounting system gets round the problem of bad debts altogether. The companies that use that system are unaffected by the clause.
  However, other traders must pay the VAT to Customs and Excise as they issue invoices to their customers. lf they never receive the VAT from the customer, they can eventually reclaim it from Customs. Until 1990, they could reclaim it only if the customer could be proved to be insolvent. As a result of the change introduced in the Finance Act 1990, they were allowed to reclaim it if they had written off the debt in their own books and if the debt was over two years old and had not been paid. That helped some traders but disadvantaged others, for example, if the customer who owed the VAT went rapidly into liquidation but the trader then had to wait for two years before he could recover the uncollected VAT.
  In our debates on last year's Finance Bill, we argued that the Government's proposal was unfair. We tabled amendments that sought to allow the old and new reliefs to run in parallel, so it would then be a case either of a period having elapsed without the debt being paid or of the company that owed the debt becoming insolvent and, as a result, the relief being triggered. We suggested that those measures could run side by side and that that would solve the problem. As an alternative, we proposed that the two-year period should be reduced to one year, thus relieving hard-pressed traders and reducing the number of cases where the old system would have given relief before the new system came into operation.
  It is worth examining exactly what happened during the passage of last year's Finance Bill, because the Government's behaviour on the specific issue of bad debts was instructive. When we debated the measure in Committee on the Floor of the House, the Government clearly said that they believed that there was some merit in our argument for a shorter time period than the two-year one. The then Economic Secretary to the Treasury, who has subsequently risen in the ranks to become the Government Chief Whip, said:
  "Our judgment was that two years is an appropriate period of time to elapse before a company decides that a debt cannot be recovered."
  8.30 pm
  The then Economic Secretary said that he was aware of the arguments that we and others, including some of his hon. Friends, had been mounting. He continued:
  "I have concluded that there may be scope for further improvement to the scheme. We shall be examining that possibility between now and Report stage."—[Official Report, 15 May 1990; Vol. 172, c. 812.]
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  That welcome sign of movement on the Government's part came about last May. But in July last year, when we debated the Bill on Report, there was no sign in the amendments of any extra relief on the bad debt issue. Our proposal for a reduction in the time period from two years to one year was nowhere to be seen. Having given a sign that they were likely to see fit to bring forward some further improvement to the Bill in May, the Government reneged on that commitment when we discussed the Bill on Report in July.
  The then Economic Secretary also spoke in the debate on Report. He said that he did not believe that it was right to go for a shorter period and stated:
  "In the past two months, we have given careful consideration to whether we could justify a further change, but we have come to the conclusion that we could not."—[Official Report, 16 July 1990; Vol. 176, c. 797.]
  Having reached that conclusion on 16 July last year, the Government came forward in this year's Budget and Finance Bill debate to say that they were wrong all along. They have, in effect, accepted the arguments that we mounted in Committee and on Report during the passage of last year's Finance Bill and have introduced precisely the proposal that we made in Committee to reduce the qualifying period for relief from two years to one—that is welcome.
  Our amendment seeks to draw the Government just a little bit further along the road to provide relief to hard-pressed traders. The U-turn that they have made on the issue of the time period—agreeing to reduce it from two years to one year—should be accompanied by the additional provision that, if a company becomes insolvent within that one-year period, the VAT bad debt relief should be immediately claimable, rather than the claimant having to wait the full year.
  We believe that that proposal is important for two reasons. First, the rate of company insolvencies and liquidations is currently running at a record level. Some 24,442 firms failed in 1990 in Britain and, in the first quarter of this year, the numbers were up by almost 70 per cent. on the equivalent period for last year. Peat, Marwick, McLintock has estimated that there will be five times as many receiverships in 1991 as there were in 1988. Therefore, the problem of firms going bust and, as a result, being unable to meet their VAT debts to other traders is bound to increase. While the provision of a reduction to one year in the time period is welcome, the introduction of an alternative, parallel system of being able to claim the relief when an insolvency occurs would bring extra relief.
  The second principal reason for the amendment is that cash flow problems often catch out companies, especially small ones, and force them to close earlier than was, perhaps, economically necessary. We propose the amendment in order to assist the cash flow position of traders who have already paid VAT to Customs and Excise but have not received it from the person to whom they sold the goods or services. If the company owing VAT goes into liquidation three, four or five months after the VAT was paid to Customs and Excise, there will be a further seven, eight or nine months to wait before the VAT can be reclaimed—that makes a seven to nine months delay in the cash flow represented by that VAT payment.
  Our proposal would directly assist the cash flow problems of such companies by enabling them to claim the VAT relief immediately upon the liquidation of the person or company owing the money. Therefore, we believe that

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  our measure will enable the Government to go further than they have. We welcome the fact that they have now seen the light and accepted this year what we were urging on them last year. However, we wish that they could go a little further and ensure that the "payable on liquidation" system that was in place could run in parallel with their new provision to improve the system further and assist businesses, especially smaller ones, even more than the new clause does.
  Mr. Beith: This useful amendment addresses the particular problem of insolvency. We all welcomed the introduction of the VAT bad debts provision and sought to extend it last year. We have all welcomed the shortening of the period to one year, as announced in the Budget statement. All that is the tip of the iceberg of the bad debt problems affecting small businesses. We believe that many more steps should be taken, including the sort of measures for interest provisions for bad debts supported by some of the Government's own Back Benchers. Bad debts cause severe problems for small business men and women and, with the VAT man on their back as well, they should be afforded any possible relief from bad debt problems that they ought not to be bearing. Therefore, the Government's decision to shorten the time period is most welcome.
  I am glad that the amendment addresses the insolvency problem and I hope that the Minister will be reasonably sympathetic towards it. I hope that she will also realise that, within the purview of her Department, there are other issues affecting small businesses to address. The Government should recognise responsibility for those problems relating to debt, as they presided over the recessionary climate in which those debts arose. I hope that the Minister will be sympathetic to that problem.
  Mrs. Gillian Shephard: The hon. Member for Islington, South and Finsbury (Mr. Smith) has given us some background to clause 14 and the amendment. He said, as did the hon. Member for Berwick-upon-Tweed (Mr. Beith), that in 1988 there was a comprehensive review of the arrangements for the relief of VAT on bad debts. During that review, the views of professional and business organisations were sought. The review recommended a change from the old, restrictive system, dependent only on the formal insolvency of the debtor, to a new, comprehensive scheme, providing relief on all bad debts, subject to elapsed time and write-off in the trader's accounts.
  When last year's Finance Bill was debated in the Committee of the whole House and the House, one of the main concerns expressed centred on the effect of the two-year waiting period. During the year there have been representations from professional and business organisations, as well as individuals, to the effect that the waiting period is too long and that, at a time of recession, the cash flow problems thus caused are onerous. I began to wonder whether the hon. Member for Islington, South and Finsbury too would be begrudging, but he welcomed the reduction of the waiting period to one year. It was precisely because of the concerns that had been expressed during the year that my right hon. Friend the Chancellor of the Exchequer introduced the provision to reduce the period. That reduction should help to meet the concern and the criticisms that have been expressed.
  Mr. Chris Smith: I hope that, in the point that I am about to make, I shall not appear grudging. During the
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  passage of last year's Finance Act, people involved in business and industry up and down the country, as well as Members of Parliament, made innumerable representations about the two-year period that the Government then proposed. The Government considered the matter carefully for two months. Why, after their careful consideration, did they fail to accept that one year would be better, whereas this year they have felt able to accept the case that we made then? Why have they changed their minds?
  Mrs. Shephard: I thought I had made it clear that the representations continued during the year. The Government and the customs authorities have listened, and have responded by introducing these changes.
  The old, very restricted scheme allowed relief only on the formal insolvency of the debtor. At the centre of all argument for the extension of relief is the feeling of injustice on the part of a supplier who has to pay tax on a supply for which there is no prospect of payment. That is very well understood. Indeed, that theme was consistent throughout the consultative exercise before the 1988 bad debt review. Many trade associations criticised the inadequacy, the ponderous nature and the unfairness of the old arrangements. It is clear that, on grounds of equity, there are no strong arguments for defending the restrictiveness of the insolvency-based arrangements. The new, comprehensive scheme greatly widens the scope by providing relief on many more debts. It extends relief to the very many cases in which debtors, over a long period, refuse to pay or pay only token amounts, or simply vanish. The new scheme removes a legitimate and long-standing grievance, and, together with the halving of the waiting period now proposed, will provide an immediate boost—estimated at £340 million in 1991–92—to the cash flow of business.
  At the time of the 1988 review, detailed consideration was given to a dual scheme of bad debt relief, and the concept was rejected. Let me outline the main reasons. First, there was the problem of accounting arrangements. There would be a need for voluminous regulations and instructions to cover all contingencies, and an attempt to minimise the dangers of double claiming would be both burdensome and intrusive to business. Let me give an example. The two schemes do not match in every respect. They do not match in clawback. There is no clawback under the formal insolvency scheme, but there is under the new scheme. If that were left unaltered, it would advantage one type of debtor over another. If clawback were extended to the existing insolvency scheme, it would lead to quite a nightmare changeover, in which claims to liquidators under the new scheme would be tax-inclusive, whereas those under the old scheme would be tax-exclusive.
  I know that the hon. Member for Islington, South and Finsbury is aware that the introduction of regulations—after the contribution of the hon. Member for Bradford, South (Mr. Cryer) I hardly dare utter that word—to cope with this kind of problem would be difficult. The existence of a dual scheme, governed by complex regulations, would be wide open for double claiming—either accidental, by traders not unnaturally confused, or, more worryingly, deliberate, by unscrupulous traders. It would be all too easy to claim once, when the debtor became insolvent, and again when the elapsed time criterion had been met. There is also the question of controlling the system. Any VAT

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  system has to he both fair and convenient to operate, not only to business but to the Customs authorities. When one looks at the problems of controlling a dual scheme—complex to operate, and open to abuse—it becomes clear that the control problems would be formidable. We estimate that we should need 150 to 200 extra VAT control staff just to police a dual scheme. I am sure that most hon. Members agree that that would not be a very productive use of resources.
  8.45 pm
  Perhaps our overwhelming reason for not supporting the amendment is that our consultations with business and industry have revealed that the main support for a dual scheme resulted from the waiting time of two years. Indeed, at a recent meeting with the Customs authorities, the CBI said that it would not be interested in a dual scheme if the waiting period were one year. There were other representations to the same effect. The reduction to one year has gone a long way towards meeting the problems expressed by representatives of trade and industry.
  The hon. Members for Islington, South and Finsbury and for Berwick-upon-Tweed mentioned current problems of companies and other businesses, including insolvency and cash flow. In that regard, I should remind the Committee that this year's Budget injected £750 million into business. Many of the Budget measures were designed to help cash flow—the reduction in corporation tax; the extension of the carry-back period for losses from one year to three years; the deregulatory measures; the 40 per cent. increase in VAT threshold; the possibility of quarterly PAYE and national insurance returns for small businesses to help 700,000 firms; and the extension of simplified accounts. The Budget, of which this clause is a part, went a very long way to help companies and other businesses with the problems that they currently face.
  Mr. Chris Smith: I immediately acknowledge that the reduction from two years to one year goes a long way towards meeting the problems that people in business identified when the two-year period was introduced last year. That is precisely why we urged this course on the Government last year. Their repentance is a year late, but, none the less, welcome. The Minister dwelt on the benefits of the new system, but failed to recognise that it has disadvantages where liquidation occurs within a few months of the payment of VAT to Customs and Excise.
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  That raises a very genuine problem. I agree that there may not now be as much pressure for a parallel scheme of this kind as there was last year, when the period was two years, but insolvencies that occur within a very short period of the payment of VAT present serious problems. I hope that the Government will consider whether such a parallel scheme could be implemented. We may even find another case of the repentance that we have seen this year. Of course, it will be a different Government of another party who will introduce next year's Bill.
  The Minister referred to practical problems. She talked about the complexity of the clawback system and about the dangers of double claiming. We accept that there might be practical difficulties, but they would not be insurmountable. When something is worth doing, it is worth overcoming practical difficulties to do it. None the less, I hope that, in respect of this issue, we shall be able to proceed by means of consensus rather than confrontation.
  It is a matter to which I hope the Government will pay continuing attention. If it becomes identified during our further deliberations on the Bill that business is unhappy without the parallel provision of an insolvency trigger for VAT bad debt relief, I hope that the Government will consider an amendment even at the 11th hour.
  With that hope and with the wish to proceed by consensus if possible, I beg to ask leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Clause 14 ordered to stand part of the Bill.
  Bill (Clauses 14, 21, 22, 23, 24, 31 and 77 and Schedule 14), reported, without amendment; to lie upon the Table.

  CIVIL JURISDICTION AND JUDGMENTS BILL [LORDS]
  Not amended (in the Standing Committee), considered.
  Motion made and Question, That the Bill be now read the Third time, put and agreed to.
  Bill accordingly read the Third time, and passed, without amendment.

  AGRICULTURE AND FORESTRY (FINANCIAL PROVISIONS) BILL
  As amended (in the Standing Committee), considered.
  Motion made and Question, That the Bill be now read the Third time, put and agreed to.
  Bill accordingly read the Third time, and passed.

  Roads (Western Isles)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Greg Knight.]
  8.51 pm
  Mr. Calum Macdonald: Good communications are the key to economic progress. That is especially true the more remote and peripheral people are from the core, and therefore especially true in the Western isles. We need good communications both between us and the mainland, cut off as we are by the waters of the Minch, but also internally, between the various islands of the Hebridean chain.
  The Western Isles council currently maintains a roads network of approximately 740 miles of adopted road, of which only 155 miles are of double track width. The remaining 585 miles are single-track and of extremely sub-standard foundation and alignment. That presents a huge problem for the development of good communications, and is therefore a major impediment to economic progress in the islands. I accept that it cannot all be tackled overnight or even over the next decade, and I want to make a plea this evening for a focused effort to tackle one crucial part of that road network, the main road running north and south through the Western Isles, which I shall refer to as the spinal route.
  The spinal route runs from Ness in Lewis to Leverburgh in Harris; and then from Newton in North Uist to Ludag in South Uist, and from Eoligarry to Castlebay in Barra. Upgrading would ensure a good north-south road linking the island chain, serving the most populated areas in the Hebrides, including all five of the mainland ferry terminals. The strategic nature of the spinal route for future economic development and inter-island as well as mainland communication means that the benefits of upgrading will be widely spread and provide maximum value for money.
  I do not propose to dwell on the inadequacies of the present road. The Minister is familiar with the islands from the days when his family used to own a sizeable chunk of them, and he and his brother were themselves familiar sights, tramping through the heather in their kilts. He knows full well the deplorable condition of the road network in the islands, particularly in the Uists, as do the officials from the Scottish Development Department who visited the islands last year to make a special report on this issue. To refresh his memory, however, I have provided him with some photos to peruse. What they depict are not isolated tracks in the most remote parts of the islands but sections of the main spinal route, the main economic thoroughfare of the Hebrides over which all trade and commerce have to pass.
  Why is the road network so bad? Most roads in the Western isles have been developed from rough footpaths to cart tracks and then to vehicular carriageways by means of various layers of clay, stones and rocks being placed one on top of the other, with no attempt to remove the underlying layers of peat which, in places can be up to 3 m thick. That results in a road which floats on a peat foundation and which is therefore prone to excessive shrinkage, expansion and consequent deformation under even moderate traffic. In addition, climatic conditions contribute to extensive cracking and rutting.
  I am assured by the engineering department of the Western Isles council that, if assessed on mainland criteria,
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  over 50 per cent. of the island network would be classified as failed. In consequence, maintenance cycles have to be more regular on the islands than is the mainland norm. The problem, caused by inadequate peat foundations, is exacerbated by the roads being single-track, so large wheel loads in particular get concentrated in the same ruts.
  That is the historial background to the problem. But over the past decade, the increasing tempo of trade by fish farming, agriculture under the programme of the Industrial Development Board and fishing has led to increased heavy lorry traffic on the roads. It is estimated also that the introduction of roll-on/roll-off ferries has led to a further 37 per cent. increase in heavy vehicles on island roads. Finally, thanks in large part to better promotion of the islands by Caledonian MacBrayne and by the tourist authorities, regular travelling tourist traffic and traffic from the ordinary travelling public has also increased enormously in the past decade.
  There is no sign of a reduction in the trend. Indeed, if anything, it is expected to intensify with the construction of the Skye bridge with which the Minister will be familiar, and the hoped-for development of a vehicular ferry link across the sound of Harris. With a major multinational even now applying for planning permission to excavate an estimated 10 million tons of material annually from a new super quarry at Lingerbay, the heavy traffic pressure on the fragile and inadequate road network will continue unabated.
  The local authority is working hard to upgrade the spinal route. One must remember that the first problem facing the local authority after local government reorganisation in the early 1970s was to establish vehicular links to all the permanently inhabited islands in the Hebrides. With the completion of the Vatersay causeway, that ambition has been realised. Since 1983, the Western Isles council has been devoting the bulk of its transport capital consent to upgrading the islands' single track roads. But such is the poor nature of those roads and the high cost of bringing material on to the isles that to upgrade a mile of road costs approximately £500,000. At the present rate of progress, therefore, with the existing capital consent, it will take until the year 2025 just to upgrade the main spinal route.
  When he has studied the figures, and the case made by the islands council, I am sure that the Minister will agree this is simply unacceptable. It is a disgrace that a region of Scotland, considered sufficiently distinct and self-contained to merit its own separate local government, should look like entering the 21st century with its main north-south commercial road still single track in large parts. Surely it is a modest enough ambition for the spinal route to be fully double-tracked by the year 2000. My constituents do not ask for dual carriageways, they do not ask for motorways, they do not even ask to be latched on to the official trunk road network in Scotland. All they ask for is an end to the age of the passing place on the main public thoroughfare connecting all the outer islands.
  There are those, of course, who still have the temerity to argue that we ask for too much and who like to point out that expenditure per head is higher in the islands than the Scottish average. But, of course, that is necessarily so, because there are more miles of road per capita in the islands than the Scottish average. In any case, per capita comparisons are entirely the wrong way to look at the matter.

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  Roads are one of the basic services provided by Government. In this, they are like education, health and social security. It would be unacceptable to argue that people living in the Scottish islands should expect significantly lower quality schooling, much poorer medical care or less social security provision than people elsewhere in Scotland. The Government rightly accept that they have a duty to provide a similar quality of provision across Scotland in all these areas. So it should be with roads and communications, a responsibility of Government so basic that even Adam Smith acknowledged it.
  I therefore urge the Government to look hard at the case which the Western Isles council will be making this summer in its transport policy programme for 1991–95 and to adopt it as their target that the main spinal route through the Western Isles be upgraded to basic double-track standard by the year 2000—that is by the end of this century. That target is realistic, achievable, eminently reasonable and long overdue. I commend it to the Minister.
  9.1 pm
  The Parliamentary Under-Secretary of State for Scotland (Lord James Douglas-Hamilton): I welcome the fact that the hon. Member for Western Isles (Mr. Macdonald) has raised the subject of roads in his constituency. I have a great affection for the whole of Scotland, but especially for the Western Isles. Their outstanding beauty is so striking that it reminds me of the words of the Canadian Boating song:
  "From the lone schieling of the misty Island
  Mountains divide us, and the waste of seas,
  Yet still the blood is strong, the heart is Highland
  And we in dreams behold the Hebrides."
  For my part, as a Scots lowlander, I have many extremely happy memories of the Western Isles, which have some of the most magnificent scenery in the world, a scenery which more and more tourists are in the process of discovering. Indeed, many more tourists will go there once the Skye bridge is built in the years to come. All that will have implications for the employment prospects and for the way of life of the islanders.
  I have listened carefully to everything that the hon. Gentleman said, and I congratulate him on the way in which he put his arguments. I realise that people in the Western Isles are concerned with the down-to-earth practicalities of life, so I am glad to say that I essentially agree with the case that the hon. Gentleman advanced on behalf of his constituency. I am sympathetic to his cause, which is to put an end to passing places, as I was to the building of the Vatersay causeway. We shall study the photographs that he has provided, the points that he has made and, of course, the transport policy programme of the Western Islands council as soon as it has been submitted.
  Let me start by summarising the position on resources. With the exception of small amounts of capital expenditure which some authorities are able to finance from current revenue, capital expenditure which local authorities spend on roadworks must be covered by capital consents issued by the Secretary of State under section 94 of the Local Government (Scotland) Act 1973. Of the £160 million capital consents issued under section 94 to Scottish regional and islands councils for expenditure on roads and
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  transport in 1991–92, £5 million was allocated to the Western Islands council. Several points are worth emphasising about that £5 million figure.
  First, on an expenditure per head of population basis, the Western Isles figure, £161, is more than five times higher than the average figure for Scotland as a whole, which is £31. Secondly, on the perhaps more appropriate comparison basis for a thinly populated rural area, the Western Isles allocation per kilometre of local road length, at £4,226, is also substantially higher than the Scotland figure of £3,311. Thirdly, the Western Isles' £5 million final allocation for 1991–92 was increased from the previous provisional figure of £4.8 million. That increase was made at a time when the resources available for capital allocations generally were severely limited. We were able to increase the allocation this year in this way, although four of the nine regions, and both the other islands councils, received no such increase. That is evidence of our concern about the position in the Western Isles and of our commitment to ensuring that resources are channelled where they are most needed.
  The statistics that I have just quoted show objectively that we accept many of the points that the hon. Gentleman has made, and demonstrate our commitment to take action to overcome the particular problems in the islands. But the Scottish Office's practical concern has also been shown by the strenuous efforts that officials in the Scottish Office Environment Department have taken to apprise themselves of the particular conditions which apply in the Western Isles and the work which the Western Isles islands council is doing to meet the most pressing needs.
  Last August, the Scottish Office's director of roads visited the islands, as the guest of the islands council, to inspect the authority's road network at first hand. This followed on a tour of inspection the previous year by a senior member of the roads directorate staff. In October 1990, the head of the Scottish Office's transport and local roads divisions also visited the islands, again on a visit kindly arranged by the islands council. I must at this point express my warmest thanks to the council, first for making the three visits possible, and secondly for ensuring that all the officials concerned were able, during intensive programmes, to see the full range of the problems facing the authority and the work done to overcome them. I know that these senior officials were able to penetrate parts of the road network which they normally would be unlikely to reach. I should also like to thank Convener Donald Macaulay for his personal welcome to me last summer, which was greatly appreciated.
  I agree with the hon. Member for Western Isles that the Western Isles council faces particular difficulty in maintaining its roads. The main concerns are the proportion of single-track roads in the network, the high proportion of roads which are founded on peat, and the damage being caused to those roads as a result of the significantly increased volume of heavy goods vehicle traffic, and the weight of the vehicles using the roads.
  From this point of view, the considerable improvement over the past 10 years in the ferry services provided by Caledonian MacBrayne Ltd. from the mainland to the Outer Isles has been a mixed blessing. Substantial levels of investment in new linkspans and new larger vessels to provide roll-on/roll-off ferries has brought about a significant change in the traffic levels and weights using roads which, anywhere else in Scotland, would not be looked on as acceptable.

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  On all occasions when Scottish Office officials have visited the islands, they have been very impressed by the programme of maintenance and improvement planned and being carried out by the islands council engineering team. We recognise that a substantial part of the council's road system runs beside the coast or through inland lochs with long causeways. Those sections of road are prone to damage in the storm conditions which are common in the islands and thus impose an additional burden on maintenance resources. The high proportion of single-track roads results in the speed of traffic being reduced, in an increased risk of accidents, in higher vehicle operating costs, and in access difficulties for large and heavy vehicles.
  But the main difficulty, as I understand it, is that heavy vehicles which use roads floated on peat cause extensive cracking and rutting of the flexible road pavement. Such defects are expensive to repair, and the repairs need to be carried out very frequently. With the new roll-on/roll-off facilities at Castlebay, Lochboisdale, Lochmaddy and Tarbert as well as Stornoway, and with recent important commercial developments such as fish farming—which the hon. Gentleman mentioned—generating additional traffic, the proportion of heavy goods vehicles using both the primary and secondary routes on the islands has increased markedly. Even allowing for the larger lorries having more axles, a 38-tonne lorry causes over 40 times more damage than an eight-tonner.
  The ideal solution to these peat-related problems would be to reconstruct the road network completely, particularly the main strategic roads. The peat foundation would be dug out and replaced with rockfill or other suitable material. Where that has been done, the resulting rebuilt roads require significantly less expenditure on repairs or improvement, as well as offer a much more acceptable ride for vehicles. When using roads in the Western Isles, one does not need to be an engineer to know whether the road is solidly based or floating on peat.
  In the long run, the council and the Scottish Office accept that reconstructing roads on a hard base is undoubtedly the value-for-money approach to road engineering on the islands. The difficulty, however, is that such wholesale rebuilding of such an extensive network of roads would be prohibitively expensive. It would be quite out of line with the level of resources available now or likely to be available in the foreseeable future. The work therefore cannot be carried out overnight, or even over a few years; it has to be a very long-term programme. That is because the depth of peat on which the roads are floating in some areas is very considerable, and substantial excavation or use of considerable volumes of imported material would be required. What is necessary in the short term, and what the islands council is doing with considerable success, is to target the resources available to priority areas.
  Hand in hand with carrying out major improvements such as rebuilding sections of road on a hard base, the council must maintain the other peat-based roads and ensure that the network condition overall is not allowed to deteriorate. Scottish Office officials were extremely impressed by the way in which the council has been programming, designing, constructing, maintaining and improving its road schemes. The council took a policy
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  decision in 1985 that it would devote resources available in four years out of every five single-mindedly to maintaining and improving its primary road network.
  In the fifth year, it has concentrated its resources on the top priority minor schemes. The effectiveness of a small operation with two or three engineers properly overseeing the work being done in detail has been very evident. I believe that the council has recently been able, for example, to procure 6 m two-track new road for about £0.5 million per mile and has completed at least 50 per cent. on Lewis and Harris and about 20 per cent. on the southern islands. That is a very competitive rate compared with elsewhere in Scotland, and it represents excellent value for money.
  Road engineers on the council recognise that, even now, with the increased traffic levels that I have already described and the further increases which improved services may bring, the flows on the islands roads are and will be extraordinarily low. For example, fewer than 1,000 vehicles per day use the main inter-island route. The council is using modern highway design standards with the fullest permitted deviations for reasons of environment and economy, and without any question of reducing road safety. The islands council has recently built several new single-carriageway improvements on roads with low traffic. The engineers take a pragmatic approach to the use of design standards and are prepared to lower the standards without significantly reducing safety, enforced by reasons of topography, property or economy. That can result in reducing the sheer size of earthworks to a more sympathetic scale.
  The Scottish Office roads directorate has congratulated the islands council on its approach, and considers that mainland authorities can learn much from that pragmatic approach to the design of low-traffic roads, including low cost, a good safety record and aesthetic appearance.
  Let me refer, however, to matters financial rather than technical. I was very pleased that the Scottish Office was able to find additional resources in 1989–90 and 1990–91 to enable the Western Isles council to build the Vatersay causeway. The full cost of that project—£3.7 million, including additional reconstruction and resurfacing work on a number of single-track roads on Vatersay—was covered by additional capital allocations in those two years. That ensured—we believe this to be extremely important—that the rest of the council's roads programme was not prejudiced. Moreover, 50 per cent. of the eligible costs of the new causeway were met by grant from the European regional development fund, and a further 25 per cent. from the Scottish Office. The new causeway, opened last November, is real evidence of the Scottish Office's commitment to the promotion of development in rural and island areas, and to the maintenance of populations.
  I know that, in the longer term, the council will want to consider whether it would be cost-effective to build causeways or bridges to the islands of Berneray, Eriskay and Scalpay. These possible projects, which would inevitably involve substantial expenditure, add to the pressure on resources available. The council must also consider investment in ferry services within the resources allocated to it. Inevitably, therefore, the council will have to take decisions on priorities in the light of the finance that is likely to be available.
  I have acknowledged the problems facing the islands council, the impressive work being done by the council's

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  staff to stretch the resources available to achieve maximum value for money, and the islanders' aspirations for the future.
  I recognise that, at the present rate of investment, it may take more than 30 years to complete the work required on the inter-island main route, but I must emphasise that there is no bottomless bag of resources from which roads and transport expenditure, however systematically and efficiently organised, can be funded. The Government's policies are designed to create the conditions necessary for sustained economic growth. This necessarily involves restraining public expenditure to assist in the fight against inflation. We must therefore look at priorities for public expenditure across all services and in all areas very closely indeed.
  My right hon. Friend the Secretary of State each year reaches a view on what proportion of the total resources available in the Scottish block can be devoted to different services. Roads and transport needs must be considered against other services such as education, social work, health and housing. Of the funds he decides to allocate to roads and transport, my right hon. Friend then has to determine how much should be issued to each authority. He is guided in this exercise by the transport policies and programmes documents drawn up by authorities, by their financial plans, and by such other information as my be available. We shall, in due course, study with great interest
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  the council's proposals. Information may also come from reports of officials' visits to the authorities or from additional information submitted by the councils themselves.
  It was because the Secretary of State had information from a variety of sources on the clear priority needs for investment in the Western Isles that he was able to agree to increase the Western Isles' final allocation for this year. The percentage increase was higher than for all but one other council in Scotland. That council was Tayside where resources were exceptionally required to replace the flood-damaged Caputh bridge.
  I congratulate the hon. Gentleman on the able way in which he has presented his case on behalf of his constituents. I promise him and the Western Isles council that we accept that there are particular problems in the Western Isles. On behalf of the Secretary of State and the Scottish Office, I give the undertaking that the needs of the Western Isles will be carefully, seriously and sympathetically considered against the claims of all other authorities. I am grateful to the hon. Gentleman for having drawn these matters to our attention tonight and for submitting additional evidence, which we shall study with the utmost care.
  Question put and agreed to.
  Adjourned accordingly at eighteen minutes past Nine o'clock.