Commons Sitting of 7 July 1992

Preamble
The House met at half past Two o'clock
PRAYERS
[MADAM SPEAKER in the Chair]
PRAYERS

  PRIVATE BUSINESS
  GREATER MANCHESTER (LIGHT RAPID TRANSIT SYSTEM) (No. 4) BILL [Lords]
  As amended, considered; to be read the Third time.
  PRICE'S PATENT CANDLE COMPANY LIMITED BILL [Lords]
  As amended, considered; to be read the Third time.
  GREATER NOTTINGHAM LIGHT RAPID TRANSIT BILL
  Ordered,
  That the Committee on the Greater Nottingham Light Rapid Transit Bill have leave to visit and inspect the site of the proposed works, and any sites which have been proposed as alternatives, provided that no evidence shall be taken in the course of such visit and that any party who has made an appearance before the Committee be permitted to attend by his Counsel, Agent or other representative.—[The Chairman of Ways and Means.]

Oral Answers to Questions
  EMPLOYMENT

    Industrial Action
    Mr. Day: To ask the Secretary of State for Employment what measures the Government are considering to enable action to be taken against unlawful industrial action.
    The Minister of State, Department of Employment (Mr. Michael Forsyth): We intend to give people who are denied goods or services because of unlawful industrial action a new right to go to court to have it stopped.
    Mr. Day: Does my hon. Friend agree that the measure to which he referred will greatly improve industrial relations in this country? Does he also agree that it will help us to attract even more inward investment into this country?
    Mr. Forsyth: I agree with my hon. Friend. The effect of our step-by-step approach to the reform of industrial relations has seen this year the lowest number of days lost through strike action ever recorded. My hon. Friend is right to highlight the importance of that in respect of inward investment. We in this country enjoy 62 per cent. of United States investment into the European Community and more than 40 per cent. of Japanese investment. That is a testimony to the success of the Government's policies in that area.
    Mr. Ashton: Is the Minister aware that if the French Government had taken the lorry drivers to court, they would be out on strike for another week? Is he aware that unofficial action is best settled by negotiations and not by the kind of violence that we saw during the miners' strike, the poll tax riots in Trafalgar square and the incidents that we saw at Wapping? Negotiation is the best way to settle any industrial dispute.
    Mr. Forsyth: The hon. Gentleman will be aware that the law in France is, in many respects, far tougher than the law in this country. He must not tempt me down that path. I agree with him that negotiation is always the best way to resolve disputes. They should not result in industrial action. The success of the Government's policy has been to avoid industrial action by creating a climate in which the unions have been given back to their members and are no longer subject to the whims of the trade union barons from whom the Labour party seems keen to distance itself.

    Skillcheck Scheme
    Mr. Hawkins: To ask the Secretary of State for Employment what progress has been made with the skillcheck scheme.
    The Parliamentary Under-Secretary of State for Employment (Mr. Patrick McLoughlin): The consultative document, which the White Paper "People, Jobs and Opportunity" promised, has been issued and will he discussed with representatives of training and enterprise councils and other interested parties in the next month.
    Mr. Hawkins: Does my hon. Friend agree that in addition to the progress of the skillcheck scheme, it is right to welcome the development of the national training targets as an example of the combination of thinking from training and education leaders and business leaders in the community? The achievements of those targets is well worth while and will be helped by the development of training agencies such as Beneast in my constituency.
    Mr. McLoughlin: We are doing a considerable amount to encourage the attainment of those targets. My hon. Friend rightly identified the importance that the Government attach to them. They are not Government targets, but they are targets to which we subscribe.

    Training Expenditure
    Mr. Alan W. Williams: To ask the Secretary of State for Employment what is the Government's expenditure on training for 1992–93.
    Mr. McLoughlin: The Government expect to spend £2·7 billion on training, enterprise and vocational education in 1992–93.
    Mr. Williams: Will the Minister comment on the report in The Sunday Times that the Government, because of their problems with public expenditure, are considering scrapping payments of up to £35 a week to young people on the youth training scheme?
    Mr. McLoughlin: The hon. Gentleman should not believe everything that he reads in The Sunday Times.
    Sir Dudley Smith: Is it not a fact that, irrespective of expenditure, the quality of training has improved immeasurably in the past five years?
    Mr. McLoughlin: I am grateful to my hon. Friend. He is quite right. We attach great importance to training and to the results that people who take training courses achieve at the end of them. Obviously, we must ask a number of questions. I am satisfied that youth training fulfils an important role for young people.
    Mr. Steinberg: Is the Minister aware that, this year, Durham training and enterprise council has invested about £1 million and at the same time has drastically cut training for special needs? Does he agree that that is absolutely disgraceful, and will he make representations to Durham 'TEC to put that right?
    Mr. McLoughlin: I know that Durham TEC will meet its youth training guarantee, and the Government are determined that that should be done. It is for a local TEC to decide its operation. If the hon. Gentleman has a specific complaint, obviously I will look at it and take it up with the relevant TEC.

    Employment Action
    Mr. Clifton-Brown: To ask the Secretary of State for Employment what support the trade unions are offering in the employment action programme.
    Mr. Michael Forsyth: I regret to say that the Trades Union Congress voted last September to oppose employment action. [Interruption.] That is a programme
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    which helps the unemployed to maintain their skills while undertaking temporary work which is of benefit to the whole community.
    Mr. Clifton-Brown: Is my hon. Friend aware that progress by the National Association of Local Government Officers and other unions is destroying employment action projects in Cirencester and Tewkesbury? Does he agree that the Opposition's criticisms would be better directed at their trade union friends and not at the Government, who are fully committed to doing everything that they possibly can to create as many jobs as possible?
    Mr. Forsyth: I was aware of the difficulties that have been created with Gloucestershire county council in respect of programmes under employment action. I hope that the whole country will have heard Opposition Members' cheers at the decision by the TUC to boycott a programme which is geared to helping people who are unemployed and helping communities by providing projects of that kind. I hope also that Opposition Members will recognise that the Transport and General Workers Union, which sponsors the hon. Member for Sedgefield (Mr. Blair), also voted at its previous conference to boycott youth training and employment training. So let us have no more humbug from Opposition Members that they are concerned about those programmes.
    Mr. Flynn: Does the Minister agree that we had community programmes which provided jobs that were worth while to the community at reasonable wages, then we had employment training, which provided work with no wages but some training, but that employment action is a combination of the worst features of both, combining no training with no wages? Employment action is not a new idea: it is a very old idea—called slavery.
    Mr. Forsyth: That is one of the silliest questions that I have heard in the House. The hon. Gentleman should know that people on employment action are paid benefit plus £10. Exactly the same applies to those on employment training. The hon. Gentleman does a great disservice to the many thousands of people who are engaged in running those programmes to help the unemployed with considerable success and distinction.

    EC Working Time Directive
    Sir Fergus Montgomery: To ask the Secretary of State for Employment what further discussions she has had with her EC counterparts on the proposed 48-hour-week directive.
    The Secretary of State for Employment (Mrs. Gillian Shephard): I last met my European Community counterparts to discuss the 48-hour working week and other matters on 24 June at the Social Affairs Council.
    Sir Fergus Montgomery: Does my right hon. Friend agree that the working time proposals challenge the concept of subsidiarity? Does she intend to challenge that directive in the European Court?
    Mrs. Shephard: The Government have always made it absolutely clear that they see no need for that directive. We do not want that directive. I remind my hon. Friend that

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    there is no directive, but if there should be a directive we would certainly reserve the right to challenge its legal base in the European Court.
    Mr. Stevenson: Is the Secretary of State prepared to tell the House whether she discussed with her counterparts in the European Community the fact that workers in this country who are involved in perfectly legitimate industrial action can be sacked arbitrarily and that this is the only European Community country in which that disgraceful situation pertains? What action is she prepared to take about the situation?
    Mrs. Shephard: It is absolutely clear that such directives, which impose unnecessary burdens on the labour market, are the worst possible solution for employers and employees.
    Dame Elaine Kellett-Bowman: My right hon. Friend is aware that an exellent firm called Celtech in my constituency works four 12-hour day shifts, followed by four days off, followed by four 12-hour night shifts. If the directive came into operation the workers could voluntarily opt out of the 48-hour provision, but could they opt out of the provisions which forbid such long night shifts? That is extremely important. I have spoken to the staff and they like working those hours. They like the system, the industry likes it, and it does a good job.
    Mrs. Shephard: My hon. Friend is right to stress that workers in Britain like the flexibility that our labour market affords them, and that they appreciate the opportunity to work more than 48 hours a week if they so choose. Rest periods and shifts would be controlled by reference periods and there is considerable flexibility therein.
    Mr. Tony Lloyd: After the recent Council of Ministers meeting, the Secretary of State told the world that she had made no concessions, but will she confirm that when the directive comes through it will establish the principle of a 48-hour maximum working week, of minimum rest breaks and of minimum holiday entitlement? In those circumstances, will she respond to the question put by the hon. Member for Altrincham and Sale (Sir F. Montgomery) as to whether she intended to take legal action against the directive? Or is it simply huff and puff?
    Mrs. Shephard: Perhaps I can repeat to the hon. Gentleman what I said as he does not appear to have heard me. There is no directive. I have made it clear, and I make it clear again this afternoon, that we do not see a need for a directive. We do not want a directive. That is still the case. We reserve the right to challenge it, if and when a directive is adopted. Faced with proposals subject to qualified majority voting, which the United Kingdom could not block on its own, we had to do what we could to improve the proposed directive and to prevent its most damaging effects on employers and employees. The hon. Member for Stretford (Mr. Lloyd) and his hon. Friends would welcome those effects. We were successful in improving the directive.
    Mr. Nicholls: Did my right hon. Friend note that it was urged on her a moment ago that it should be impossible to dismiss strikers for being on strike? Will she confirm that that position is so extreme that it was not adopted even by previous Labour Administrations?
    Mrs. Shephard: I agree with my hon. Friend. Indeed, the assertions made by Opposition Members in respect of the directive, other labour market matters and industrial action defy description.

    Wages Councils
    Mrs. Fyfe: To ask the Secretary of State for Employment what are her plans concerning the future of wages councils.
    Mr. Michael Forsyth: The Government have made it clear on many occasions that the wages councils have no permanent place in the labour market.
    Mrs. Fyfe: Are not the Government in fact planning to rid themselves entirely of wages councils? How does the Minister reconcile the withdrawal of such little protection as is afforded by wages councils with the fantastic salaries that the heads of the formerly nationalised industries award themselves? How do those two things combine to achieve a country at ease with itself?
    Mr. Forsyth: The Government's position is clear. Wages should be negotiated between employers and employees, based on productivity, profitability and the firm's ability to provide the wages which are the subject of the negotiation. They should not be set centrally by the Government or Government bodies. The hon. Lady will recall that in the recent general election the Opposition proposed a national wage. They were soundly defeated because most people recognised that it would cost between 1 million and 2 million jobs.
    Mr. Peter Bottomley: Will my hon. Friend confirm that we have not had a national wage? Will he say how many wages councils there are? Has employment increased or fallen in those industries that have given up wages councils? Has he done a survey of small employers, who often find that it is of some help to have wages set by wages councils because it provides a way of finding a just level of pay for their employees'?
    Mr. Forsyth: I shall try to deal with all five questions. There are 26 wages councils. My hon. Friend is right to point to the falling numbers of people employed in many of the wages council industries. Some of them have names which reflect the turn of the century, such as the ostrich, fancy feather and artificial flower wages council. The flax and hemp wages council and others have disappeared. My hon. Friend is right to stress that, for the rest of this century and for the 21st century, the way forward is for wages to be negotiated according to employers' ability to pay, and reflecting local circumstances.
    Mr. Malcolm Bruce: Does the Minister accept that in such areas employers frequently ask that wages councils should be maintained, to protect them from unfair competition as well as to protect their work forces? Would not the Government's determination to retain the right for Britain to have its own labour market conditions ring a little more true to the unemployed and those with poor conditions if there were any evidence that the Government were prepared to do anything to guarantee the rights of the low paid?
    Mr. Forsyth: The Government's record on the low paid is second to none—[Interruption.] We have taken measures through the social security system to maintain

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    the income coming into the family home. If the hon. Gentleman cares to study the facts on wages councils, he will find that many people covered by them are second wage earners. Unemployment is the greatest cause of poverty, and statutory minimum wages destroy jobs and put people on the dole.
    Mr. Patrick Thompson: Is my hon. Friend aware that increasing numbers of employers are becoming more concerned about the operations of the wages councils? Will he also confirm that, in so far as the councils set minimum wage levels, their operations often lead to the destruction of jobs—a fact which seems to have escaped Opposition Members before and since the election?
    Mr. Forsyth: I agree with my hon. Friend. He will recall that when we removed young people from the scope of the wages councils. Opposition Members predicted that it would result in falling wage levels. On the contrary, it has not and there is no evidence to sustain such a view. I repeat the point that I have tried to get across to Opposition Members—there is no point in giving people a minimum wage if the consequence is that they have no jobs.
    Mr. Blair: Will the Minister answer the question put by my hon. Friend the Member for Glasgow, Maryhill (Mrs. Fyfe)? How does he justify abandoning all forms of protection against poverty pay for the 2·5 million people who work in pubs, hotels and shops throughout the country—there are thousands in every constituency—who will lose hundreds of pounds a year and more if wages councils go? How does he justify that, when the chairmen of the utilities that the Government privatised are paying themselves telephone-figure salaries out of monopoly profits while he and his hon. Friends do nothing?
    Mr. Forsyth: The hon. Gentleman is talking poppycock. He knows perfectly well that about two thirds of the people covered by wages councils are paid more than the minimum wage set by those councils. That is an expensive, bureaucratic anachronism, which the Government have made clear has no permanent place in the labour market.

    Employment, Greater London
    Mr. Harry Greenway: To ask the Secretary of State for Employment how many new jobs she estimates have been created in the Greater London area since 1979; and if she will make a statement.
    Mr. McLoughlin: I am afraid that the information that my hon. Friend requests is not available.
    Mr. Greenway: Will my hon. Friend join me in welcoming the 1,000 jobs which will shortly come on stream at the Tesco development on the former Hoover site in Perivale in my constituency'? Will he ensure that the employment services are geared to help people to get jobs on that site, which we have worked so hard for so long to obtain, and elsewhere in my constituency in Ealing and in greater London?
    Mr. McLoughlin: I am pleased to hear of the jobs being created in my hon. Friend's constituency. I assure him that the employment service will do all that it can to help to recruit for that company if the company asks it to do so.
    Mr. Gapes: Does the Minister agree that unemployment in London continues to rise week by week and day by day? Does he accept that the Government are responsible for that? Is it not time that they stopped saying that they can do nothing about it and started to take action to put people back to work?
    Mr. McLoughlin: The Government believe that one way of ensuring that employment rises is to conquer inflation, which we have taken action to do. That follows the point made by the noble Lord Callaghan that high inflation leads to high unemployment.
    Mr. Wilkinson: Does my hon. Friend agree that even more important than curbing inflation—important though that undoubtedly is—is the necessity to get real interest rates down substantially and fast? Will that not be the best help for small, businesses, and the construction industry in particular, to offer the people of London real hope of increased employment, which is so urgently needed in the capital?
    Mr. McLoughlin: My hon. Friend will realise that that is a matter not for me but for my right hon. Friend the Chancellor of the Exchequer. I shall ensure that my hon. Friend's comments are drawn to his attention.
    Mr. McLeish: When will the Government come clean on their employment record? Why, in December 1991, were there 191,000 fewer people in work in Britain than in 1979? More importantly, in the 18 months to December 1991, why did Germany, France, Portugal, Spain and Italy have an employment growth—
    Madam Speaker: Order. The hon. Gentleman should restrict his question to the Greater London area since 1979.
    Mr. McLeish: Why, relative to the employment growth in Germany, Spain, Portugal, Italy and France of 912,000 in 18 months to December 1991, was there a drop in the number of people in employment in London between December 1981 and December 1991? After 13 years, cannot the House and the country expect the Government to be taking employment seriously?
    Mr. McLoughlin: What the Government are not prepared to do is to take lectures or sermons from the Opposition. We put our record to the test not so long ago. The Opposition put their proposals to the test; they were rejected by the electorate and ours were endorsed.

    Training
    Mr. Amess: To ask the Secretary of State for Employment if she will set out her Department's latest training initiative in Essex and Basildon.
    Mrs. Gillian Shephard: The Essex training and enterprise council, with the Government, is playing a major role in helping people in Essex to get and keep their jobs.
    Mr. Amess: Is my right hon. Friend aware that last month I had the honour to open the Basildon job club, which has already been successful in securing jobs for a number of my constituents? Does my right hon. Friend agree that such job clubs have a vital role to play in

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    enabling my constituents who have been long-term unemployed to gain the confidence to return to the job market?
    Mrs. Shephard: I congratulate my hon. Friend on his continuing concern for his now famous constituency, and I am delighted that he had the pleasure and honour of opening the Basildon job club. Job clubs do a very good job in getting people back to work as fast and effectively as possible. Nearly half the people who attend job clubs go from them into employment, and I am glad to say that this year we have 220,000 places in job clubs.
    Mr. Mackinlay: Will the Secretary of State reflect on the fact that the training initiative for Essex will be irrelevant unless she stops the haemorrhaging of jobs throughout Essex? In particular, will she consider the need for training initiatives to meet the redundancies of Marconi workers in Chelmsford and the hundreds of workers facing redundancy at Ford's in Aveley and Dunton? What does she intend to do to stop the unemployment, particularly in Basildon where it has exceeded 160 per cent. in two years?
    Mrs. Shephard: I think that it has escaped the hon. Gentleman's notice, and that of many of his hon. Friends, that the Opposition's economic policies would do nothing but increase unemployment. The only way to create lasting employment is to pursue a policy of low inflation, as this Government are doing.
    The hon. Gentleman asked a specific question about what the Government were doing to help people back into jobs. Obviously, he was not listening to my previous answer, but I shall tell him what we are doing. There are increased targets for the employment service and there are 100,000 more places on employment and training programmes this year than last year, making almost 1 million in all. The effectiveness of the measures described by my hon. Friend the Member for Basildon (Mr. Amess) should also appeal to the hon. Gentleman if he is actually thinking of getting his constituents back to work as quickly and as effectively as possible.
    Dr. Spink: Is my right hon. Friend aware that many people from Castle Point, including many from Canvey island, have to travel to beautiful Basildon to get training and further education? While Basildone does an excellent job for my people, should not provision for those services be made on Canvey island for its people? My right hon. Friend may be aware that there is not a single further education place available on Canvey island.
    Mrs. Shephard: I am delighted to hear my hon. Friend's plea for his beautiful constituency. Until such places are provided, I feel sure that his constituents will benefit from the excellent service described by my hon. Friend the Member for Basildon.
    Mr. Blair: On a point of information, will the right hon. Lady tell us—I believe that her Department now has this information—how many young people in Essex arid in Britain are waiting for a training place?
    Mrs. Shephard: I do not have that information, but I shall remind the hon. Gentleman of the answer that I gave when we last had employment questions. I said that there were sufficient resources to provide youth training places for all young people and that resources need not be a
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    problem to training and enterprise councils. I also said that the machinery for providing those places and for cutting down queues should not fail young people.
    I am delighted to tell the hon. Gentleman that I am today putting into place new measures to establish a national system for monitoring the numbers of young people covered by the YT guarantee and seeking a place on YT. I shall shortly be discussing that matter with TEC representatives.

    Unemployment
    Mr. Denham: To ask the Secretary of State for Employment what action she intends to take to reduce unemployment in the Southampton travel-to-work area.
    Mr. McLoughlin: The employment service in Southampton and the Hampshire training and enterprise council deliver a wide range of employment, enterprise and training programmes to help unemployed people find the best and quickest route back to employment. The latest figures for the Southampton travel-to-work area show that there was a reduction of 298 in the number of people claiming benefit.
    Mr. Denham: Does the Minister accept that during the past three years unemployment in Southampton has risen from 7,400 to almost 13,000 and that there are now 42 unemployed claimants chasing every jobcentre vacancy? Is he aware that according to yesterday's Treasury model forecasts, my constituents can expect unemployment to rise even higher?
    May I assume that the hon. Gentleman would not attempt to cure a migraine with a hammer, and that therefore there might to an outside chance that he will realise that Government policies are creating unemployment, not solving the problem'?
    Mr. McLoughlin: No, I do not accept that. My point was that there was a reduction in the number of people claiming benefit last month. The way to ensure that employment grows is to keep inflation low and not to create artificial barriers to employment—the policy on which the Labour party fought the last election.
    Mr. Milligan: Is my hon. Friend aware that one of the most serious threats to jobs in the Southampton area is the delay in completing the M3 motorway at Twyford down, which has resulted in some of the worst traffic jams in southern England? Is he further aware that if the Labour party had won the election, it would have carried out its commitment to stop all work on that motorway, which would have seriously damaged employment in Southampton?
    Will my hon. Friend convey his view, if it is his view, to our right hon. and learned Friend the Secretary of State for the Environment that that motorway should be completed as soon as possible? Jobs in Southampton are more important than butterflies on Twyford down.
    Mr. McLoughlin: I acknowledge my hon. Friend's point about the importance of infrastructure in serving particular regions. and areas. The former Member of Parliament for Southampton, Itchen, Mr. Christopher Chope, played a leading role in securing the completion of the M3, which is a great credit to him. I will convey the

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    points made by my hon. Friend the Member for Eastleigh (Mr. Milligan) to my right hon. Friend the Secretary of State for Transport.

    16-plus Policies
    Mr. Luff: To ask the Secretary of State for Employment what plans she has to better co-ordinate policies for 16-plus training and education.
    Mr. McLoughlin: The jointly produced White Paper "Education and Training in the 21st Century" published in May 1991 was designed to encourage young people to develop to the best of their ability, remove barriers to opportunity, achieve higher standards and provide more choice. We are making good progress towards those aims.
    Mr. Luff: Pausing only to apologise for the split infinitive in the question in my name on the Order Paper, which I assure my hon. Friend the Minister was not in the question that I submitted to the Table Office, I invite him to congratulate all those in my constituency who have worked so hard to deliver an important part of the Government's plans for the 16-plus age group. I refer in particular to the training and enterprise council, the chamber of commerce and the wider business community. Will my hon. Friend assure me that, in the unlikely event that allegations that the YT guarantee is not being delivered in a particular area are proved to be true, he will make every effort to ensure that the guarantee is forthcoming.
    Mr. McLoughlin: I am grateful to my hon. Friend for the praise that he rightly gives to his local training and enterprise council. I am glad that he has approached it to establish how the guarantee is operating—rather than rely on the scare stories that we often hear from Opposition Members. I assure my hon. Friend that the Government take the YT guarantee very seriously. My right hon. Friend the Secretary of State for Employment has just made an announcement about the way in which we shall monitor the scheme to ensure that it is delivered throughout the United Kingdom.
    Mr. Leighton: Is the Minister aware that 500 young school leavers in the London borough of Newham have no jobs, no training place and no benefits? That is the situation this year, as it was last year—and the same is projected for the future. Will the Minister give that matter his personal attention? Is he aware that his Department has received a letter inviting a Minister to the borough to study the situation on the ground? Will he make a positive response?
    Mr. McLoughlin: I am not aware of the letter to which the hon. Gentleman refers. I will check it out and I hope to respond positively to the hon. Gentleman.
    Mr. Anthony Coombs: Will my hon. Friend confirm that 60 per cent. of young people are staying on at school —the highest ever figure? In my own constituency, the Kidderminster college of further education has seen the number of full-time students rise by 10 per cent. over the past year. Is that not evidence of what occurs when colleges of further education are given greater flexibility and independence from local authorities? Ought we not to pursue that theme, with the support of industry?
    Mr. McLoughlin: I agree. The staying-on level in Hereford and Worcester is 63 per cent., which is slightly above the national average. The increase in the numbers staying on for further education are surely welcomed in all parts of the House.
    Mr. Fatchett: When all the best estimates suggest that the youth training guarantee is not being delivered to between 60,000 and 100,000 youngsters—and for many of them, that means poverty and homelessness—why do the Government not accept the figures and act upon them? Is it because the Minister is ignorant of the facts, or is he simply callously indifferent?
    Mr. McLoughlin: It is because this Minister deals with the facts that he does not recognise the hon. Gentleman's figures. They are bogus and scaremongering. We have made it clear that we want to ensure that the guarantee is met. It is a pity that a number of trade unions and Opposition Members refuse to have anything to do with the youth training guarantee.

    RADAR
    Mr. Tom Clarke: To ask the Secretary of State for Employment when she next expects to meet the Royal Association for Disability and Rehabilitation to discuss the employment of people with special needs.
    Mr. Michael Forsyth: My right hon. Friend or my noble Friend would certainly consider a request for a meeting, but none has been made.
    Mr. Clarke: Should not the Government be using their own initiative and meeting organisations such as RADAR, in which case they would be hearing of people's concerns that every Department, including the Minister's and even the Prime Minister's, is not employing people with disabilities? Is not it disgraceful that this week—the sixth anniversary of the Disabled Persons (Services, Consultation and Representation) Act 1986 being passed —because the Government do not fully implement the Act, people with disabilities are not in responsible positions? May I remind the Government that they are not accepting responsibility for giving jobs to people with disabilities?
    Mr. Forsyth: The hon. Gentleman is being a little unfair, uncharacteristically so. He must not assume that we have to have a meeting with every organisation in order to maintain contact. In fact, I have just received a letter from RADAR in which it raised one or two aspects of help for the disabled which arose from our previous Question Time. The Department maintains a close liaison with such organisations.
    On the hon. Gentleman's second point, he will know from his own work in this field that there are many organisations concerned with the disabled, which are not backward in coming forward with their views and, of course, the Department seeks to respond to them. The current reorganisation taking place in the employment service is designed in part to respond to representations made to us following the consultation paper that we issued recently.
    Mr. Thurnham: Will my hon. Friend bear it in mind that the public sector as a whole is not as good as the

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    private sector at employing disabled people? Will he take specific steps to encourage public sector employers to do better?
    Mr. Forsyth: My hon. Friend has a point. It is certainly true that the public sector has not been as successful as the private sector, but I do not think that there is any room for complacency on either side. The employment service uses whatever mechanisms are open to it to try to encourage more help and support for disabled people, but I am sure that my hon. Friend's point will be borne in mind by the organisations in the public sector that could do better.
    Mr. Worthington: Will the Minister undertake to examine the problem of youth training for those with special needs because the cost of training such people is legitimately high? At present all over Scotland—and, I am sure, elsewhere—there are signs that in future it will not be possible to meet the costs of the youth training guarantee for those with special needs without taking from elsewhere. Will the Minister consider that and ensure that those with special needs are safeguarded?
    Mr. Forsyth: The Government have made the position perfectly clear—the youth training guarantee stands. If the hon. Gentleman knows of specific examples in Scotland where people with special needs or people who are disabled are not having their demands met, he should take them up with the local enterprise companies which are responsible for the delivery of the youth training guarantee. We have made it clear that the youth training guarantee will not fail to be delivered because of a lack of resources. I share the hon. Gentleman's concern that those with special needs should be given priority and should not be left behind. That is reflected in our policies throughout the employment service.

    Overtime
    Mr. Ian Bruce: To ask the Secretary of State for Employment if she will make a statement on the proposed European directive that would restrict the overtime that British workers are allowed to work.
    Mrs. Gillian Shephard: The Social Affairs Council did not reach a common position on the proposed working time directive on 24 June so we do not have a directive. In discussions on the text, the United Kingdom secured all its key objectives, in particular the right for employees to work for more than 48 hours a week if they choose to do so. I made it clear that the United Kingdom continues to have very severe doubts about the directive as a whole and its proposed legal base.
    Mr. Bruce: I wonder whether the next time my right hon. Friend meets her colleagues in Europe she will express my concern that, having been a Member of Parliament for more than five years—[Interruption.]—I have yet to receive a single letter from a single constituent complaining that he has too many hours to work. [Interruption.]
    Madam Speaker: Order. Will the House come to Order? The hon. Gentleman cannot be heard. Even though he has been here five years, he is going to be heard.
    Mr. Bruce: Opposition Members cannot take it, Madam Deputy Speaker.
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    Will the Minister tell her Employment colleagues at the Council of Ministers that although they may be Euro workaholics working well over 100 hours a week each, they are in no position to legislate for people who would like to arrange with their own employers their own hours of work?
    Mrs. Shephard: I shall be pleased to pass on to my European counterparts the concerns expressed by my hon. Friend, who may now find that he receives a letter or two on the issue, and I feel certain that they will be in support of the position taken by the United Kingdom. The number of hours worked by MEPs and MPs would be excluded from the provisions of the directive, should it ever come to pass.

  PRIME MINISTER

    Engagements
    Mr. McMaster: To ask the Prime Minister if he will list his official engagements for Tuesday 7 July.
    The Lord President of the Council and Leader of the House of Commons (Mr. Tony Newton): I have been asked to reply.
    My right hon. Friend the Prime Minister is attending the economic summit in Munich.
    Mr. McMaster: Will the Leader of the House guarantee not to guillotine the Maastricht Bill when it returns to the House for debate?
    Mr. Newton: The Leader of the House will guarantee that the Government will consider all matters carefully before deciding how to proceed.
    Mr. James Hill: Does my right hon. Friend agree that we should pass as quickly as possible legislation dealing with imitation firearms? Is he aware that they are becoming a serious problem for the public, because one can suffer as much trauma and be robbed just as effectively with an imitation firearm as with a real one?
    Mr. Newton: My hon. Friend's concern is shared in many quarters. The Home Secretary is on the Bench beside me and will have heard what has been said.
    Dr. John Cunningham: Does the right hon. Gentleman believe that the Government's moratorium on stamp duty for house purchase has been a success?
    Mr. Newton: I believe that the arrangements brought forward by my right hon. Friend and other colleagues at the turn of the year have materially assisted in reducing the number of repossessions and in bringing about an improvement in the housing market compared with what the position would have been. Frankly, I would find the hon. Gentleman's answer more credible but for the fact that his hon. Friend the Member for Wrexham (Dr. Marek), I understand speaking for the Opposition, described the suspension of stamp duty at the time as a racket and a gimmick.
    Dr. Cunningham: If it has been of material benefit to the housing industry, is it not a fact that when we are in the depths of the worst recession for 60 years, with confidence at an all-time low and the building and construction industry in disarray, this is the last moment to remove any incentive from the desperately needful building sector? As

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    the Government have still not used up all the money that they allocated for the scheme, why will they not concentrate the relief on transactions up to £100,000, thus helping the lower end of the market and first-time buyers? That would be a sensible step to take in the depths of the present awful recession.
    Mr. Newton: The aim of the scheme was to bring forward transactions that might otherwise have been delayed. I believe that it has made an important contribution in doing just that.

    Hastings and Rye
    Mrs. Lait: To ask the Prime Minister if he will make an official visit to Hastings and Rye.
    Mr. Newton: I have been asked to reply.
    My right hon. Friend the Prime Minister is making plans for a series of visits to all parts of the country and hopes to include the south-east among them.
    Mrs. Lait: I thank my right hon. Friend for that reply. I welcome the opportunity of my right hon. Friend visiting Hastings and Rye and hope that he will leave plenty of time to come down the road affectionately known as the snail trail. Will he also visit the Conquest hospital, which is operated by the Hastings and Rother trust, which took its first out-patients yesterday and will take its first in-patients on 20 July? Does he agree that this is another indication that only Conservative health policies deliver health care to the nation?
    Mr. Newton: I am sure that, if he is able to visit my hon. Friend's constituency, my right hon. Friend the Prime Minister will wish to join her in welcoming the opening of the new hospital—and, indeed, in looking forward to phase 2, which is currently under consideration by the regional health authority.

    Engagements
    Mr. Denham: To ask the Prime Minister if he will list his official engagements for Tuesday 7 July.
    Mr. Newton: I have been asked to reply.
    I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Denham: Does the Leader of the House agree that high-rise tower blocks are entirely unsuitable as homes for young children? Does he, like me, regret that, over the past few years, the number of young children trapped in Southampton tower blocks has risen two and a half times, and that hundreds of children will never have a decent home? Does he accept that Southampton council has a lower-than-average number of vacancies and that the number of children who are trapped in a high-rise hell is a direct result of Government policies? Can he offer those children any hope and what action will he take to ensure that they have a chance to live in a house with a garden?
    Mr. Newton: The Government have a range of policies designed to improve the supply of rented accommodation. They are channelling £6 billion into housing associations over the next two years to provide more than 150,000 new homes for rent and low-cost purchase by 1995–96. I very
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    much hope that that will help to solve Southampton's problems, given that the local authority wishes to participate.
    Dr. Hampson: Is my right hon. Friend aware of the growing feeling on both sides of the House that the county hall site would be ideal for the London school of economics? Would it not be poignantly symbolic if the Prime Minister, while he is President of the European Council, assisted in the development on the Thames of a great European university on a scale to rival anything on offer in Paris, rather than allowing a fine building to become a second-rate hotel for Japanese package tours?
    Mr. Newton: My hon. Friend will know that the disposal of county hall is a matter for the London residuary body. It is now up to the LSE to put firm proposals to that body.
    Mr. Cohen: To ask the Prime Minister if he will list his official engagements for Tuesday 7 July.
    Mr. Newton: I have been asked to reply.
    I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Cohen: The Lord President will know that I shall be presenting my Homicide (Defence of Provocation) Bill today. Does he agree that a woman who acts in desperation after suffering sustained domestic violence ought to have recourse to a mitigating plea of provocation? Is not the present law—which has gaoled women such as Sara Thornton and Kiranjit Ahluwalia —unjust, and should it not be changed?
    Mr. Newton: I understand the concern that is felt about the matter, not least because of my past social services responsibilities. I am not sure that the solution is as easy as the hon. Gentleman suggests, but I certainly undertake to bear his points in mind, along with my right hon. Friends.
    Mr. Ward: Is my right hon. Friend aware that thousands of fishermen are demonstrating outside the House today, largely because they fear that the conservation measures required by the EC—which are being dealt with in the House—will not be observed by their counterparts on the other side of the Channel? That has happened many times in the past. Will the Minister of Agriculture, Fisheries and Food look again at ways of preserving our fishing industry?
    Mr. Newton: I assure my hon. Friend that it is no part of the British Government's purpose to introduce what I take to be sensible measures to promote the conservation of fish stocks and the long-term future of the industry, only to see those measures destroyed by the actions of others. My right hon. Friend the Minister will take every possible step to ensure that that does not happen.

    European Community
    Mr. Spearing: To ask the Prime Minister what approaches have been received by Her Majesty's Government concerning reallocation of powers currently the responsibility of the Council of Ministers of the European Community.
    Mr. Newton: I have been asked to reply.

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    The treaty on European union enshrines in Community law the principle of subsidiarity, but the Community should act only when objectives cannot be achieved at the level of individual member states acting alone. The principle should be applied strictly to existing as well as to future legislation. It calls for urgent work on the procedural and practical steps to implement the principle and invites the Commission and the Council to report to the next European Council in Edinburgh. The treaty contains a presumption of action at the national level.
    Mr. Spearing: Yes, but that is answering a question that was not asked. So what is new? Is this not about the possible repatriation of powers? Is it not a fact that President Major as well as President Delors have been in favour of that, or have mooted the possibility? In respect of the President of the Commission, why is it that the Commission must always call the shots? Would it not be an advantage if it reacted only to requests from the Council of Ministers or the Heads of Government and therefore made the whole outfit more intergovernmental than it is already?
    Mr. Newton: With respect to the hon. Gentleman, I think that my answer did address the question that he asked. The plenary session between the United Kingdom presidency and the Commission last week, which I attended, very much addressed precisely that question. The hon. Gentleman will be well aware that plans are in hand to undertake a review of existing legislation before the Edinburgh summit at the end of the year.
    Sir Peter Tapsell: Did my right hon. Friend see certain scholarly articles that were published over the weekend drawing attention to the fact that the word "subsidiarity" is derived from the Latin word "subsidium" which, apparently, is a term of Roman Catholic dogma and that the Roman interpretation of that word is quite different from the Anglican?
    Mr. Newton: Coming from a somewhat mixed religious background, I do not intend to allow myself to be caught up in ecclesiastical controversy.

    Engagements
    Mr. Eastham: To ask the Prime Minister if he will list his official engagements for Tuesday 7 July.
    Mr. Newton: I have been asked to reply.
    I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Eastham: Two weeks ago one of my hon. Friends with a London constituency raised with the Prime Minister the question of the housing crisis. The Prime Minister proceeded to attack local authorities, including Manchester—
    Dame Elaine Kellett-Bowman: Question!
    Mr. Eastham: Why don't you shut up? [Interruption.]
    Madam Speaker: Order. It may be very amusing, but it is a great waste of time when we are nearly at 3.30. Can we hear the hon. Member for Manchester, Blackley (Mr. Eastham) in silence now?
    Mr. Eastham: In responding, the Prime Minister proceeded to attack local authorities, including Manchester, and said that we had empty properties. May I point out to the Leader of the House that we have hundreds of empty properties in Manchester that are dangerous and unlettable but that central Government are not allowing Manchester to borrow money to make those properties habitable? Is it not time that the Government got their spending priorities right and accepted their responsibilities, which clearly they are failing to do now?
    Mr. Newton: The Government have clearly accepted their responsibilities, with the arrangements that they have made concerning approvals for capital expenditure. I hope that Manchester will look carefully at the policy that leads to so many houses being empty.
    Dame Jill Knight: Will my right hon. Friend convey to the Prime Minister the level of public concern over the fact that a professional drug courier should have been protected from police action by hospital staff? Does he agree that drugs constitute an appalling danger, particularly to young people, and that the police ought to be helped, not hindered, in their fight against drugs?
    Mr. Newton: Again, I think that my hon. Friend raises a point which will be of concern to other hon. Members. I have seen reports of the case. Clearly, as I think all hon. Members will agree, it is important to balance a patient's right to medical confidentiality against the safety of the community at large, but this is a very complex area. I understand that the chief executive of the North Staffordshire health authority is seeking an urgent meeting with the chief constable to discuss the confidentiality issue and agree clearer lines of communication.
    Mr. Garrett: To ask the Prime Minister if he will list his official engagements for Tuesday 7 July.
    Mr. Newton: I have been asked to reply.
    I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Garrett: Last year 69,000 families had their homes repossessed. At the moment, 290,000 borrowers are more than six months in arrears with their mortgage repayments. The Government's mortgage rescue scheme has so far managed to rescue 12 home buyers. When will the Government make a serious attempt to help home buyers and borrowers who are in difficulties?
    Mr. Newton: The hon. Gentleman will be aware that the Council of Mortgage Lenders has estimated that as a result of the action taken at the turn of the year some 55,000 repossessions will be prevented this year, and that the Halifax building society reckons that its repossessions are down by about 40 per cent. over the latest six months compared with the last six months of last year. That is substantial progress which has helped many tens of thousands of families.

European Fighter Aircraft
3.30 pm
Mr. Menzies Campbell (Fife, North-East) (by private notice): To ask the Secretary of State for Defence if he will make a statement on the future of the European fighter aircraft in the light of his meeting on 6 July 1992 with the German Defence Minister.
The Secretary of State for Defence (Mr. Malcolm Rifkind): The German Defence Minister visited me in London yesterday. Along with a range of other current topics, we discussed extensively the European fighter aircraft. It was clear that both countries need a new fighter aircraft by around the year 2000, both are looking for something at lower cost than the earlier projection for EFA, and both would like wide European participation.
Herr Riihe said that Germany would not proceed to produce EFA and would like to develop a completely new aircraft. I indicated that, given the investment of some £5 billion by the partners in EFA already, we believed that the best route to a cheaper aircraft was to drive down the costs of the existing design, as otherwise the taxpayers of each country would lose any benefit from the substantial sums already invested. The next step is to consider with the other EFA partners and with industry how we can best take the project forward. We do not face decisions on the production phase until next year.
Mr. Campbell: The right hon. and learned Gentleman's assurance that it is still his view that the United Kingdom will require a new fighter aircraft by the end of the century will be warmly received in all parts of the House. Can he assure the House that the Government will explore every possibility, with or without partners, to see that the United Kingdom embarks upon the production phase of the European fighter aircraft? Will he further assure the House that, if any reduction in cost is to be obtained, it will not be achieved at the expense of the inherent capability of the aircraft?
Mr. Rifkind: I thank the hon. and learned Gentleman for his words of support for the Government's efforts. It is of course our desire that we should continue as part of an effective partnership towards the production phase of this project. In trying to identify ways in which the cost can be reduced, already substantial cost savings have been identified. In addition, it is possible to develop EFA on the basis that each participating country could identify which particular components met its own military requirements. That would mean that significant savings would be available for the country in question.
Sir Geoffrey Johnson Smith: Is my right hon. and learned Friend aware that he has widespread support on both sides of the House for the way in which he has approached this unfortunate affair? Is it not a fact, following his conversations yesterday with the German Defence Minister, that the attitude of Germany is very much conditioned by constitutional restraint and internal political pressure, and that there is an unwillingness to recognise that, since the defence of western Europe relies upon the strength of the NATO alliance, if future threats, which could emanate from outside the traditional areas, are to be met, Germany, along with the NATO alliance, must be faced with the prospect of developing equipment which can face up to those new responsibilities?
Mr. Rifkind: I agree with my hon. Friend. Of course, we recognise that Germany's decision must be based on its own assessment of its military requirements. However, we pay attention to the fact that Germany continues to state that it will need a new fighter aircraft by the turn of the century, and we cannot see how a new aircraft for which no preliminary work would be taken into account could be anything but vastly more expensive than would developing EFA to the production stage.
We also think it appropriate to take into account the fact that, while we share with the German Government a welcome for the enormous changes that have taken place in Europe, and while we recognise the completely different situation that we face with regard to Russia, a decision taken this year or next year with regard to a new fighter aircraft must take into account all the uncertainties that might develop in Europe and throughout the rest of the world over the next 20 to 30 years. That is the kind of time-frame for which the new fighter aircraft will be required, and it is quite clear that at a time when it is impossible to predict what will happen in Moscow next week it would be very unwise to make assumptions as to what might happen over the next 30 years.
Ms. Dawn Primarolo: Has the Secretary of State had discussions with the President of the Board of Trade with regard to diversification plans for the employment of workers who will lose their jobs if the Government decide to pull out of the EFA project?
Mr. Rifkind: We have no plans to pull out of the EFA project, but the hon. Lady is right to make reference to the importance of the industrial implications of EFA. At the moment about 9,400 people are employed in work directly attributed to EFA, and at the peak of production the number will rise to about 27,000. I should emphasise that, so far as the Government are concerned, the primary consideration must be our defence requirements, and not the industrial implications, but obviously it is important that the House and the public should be aware of the industrial aspect as well.
Mr. John Wilkinson (Ruislip-Northwood): I applaud my right hon. and learned Friend for the robust way in which he has endorsed the professional judgment not only of his own air staff but also of the air staffs of the partner nations, which only this spring declared that the European fighter aircraft was the aeroplane best suited to meeting the operational needs of their respective air forces way into the future.
I applaud my right hon. and learned Friend also for his clear view that this aeroplane represents the best investment for the United Kingdom's defence. Will he always see that that consideration is put first? There would be no point in buying any aeroplane that was inferior to those of potential adversaries. That would be the worst possible investment for the United Kingdom.
Mr. Rifkind: I thank my hon. Friend. In our assessment we have been fortified by the views of the Select Committee of the House, which looked into the whole question of whether there were any alternatives to EFA that would represent better value for money, given the very substantial costs involved. The Select Committee unanimously concluded that EFA continues to represent

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the best value for money and the best means of ensuring that the defence requirements of this country will be met for the next generation.
Dr. Gavin Strang: Does the Secretary of State accept that all of us hope that RAF pilots will not see active service in the first half of the next century? However, the Government are responsible for ensuring that if those pilots should see active service it would be in planes giving them a much better than evens chance of survival. I put it to the right hon. and learned Gentleman that it was for that reason that the Luftwaffe supported EFA, and it is for that reason that the British Government must reject an inferior spatched-up European alternative.
Mr. Rifkind: It is certainly our view that the only alternative to EFA capable of meeting our defence requirements would be significantly more expensive. Alternative aircraft would be based on much more primitive technology, and could not begin to compete with the existing Russian aircraft, which are used not only by the Russian air force but also by those countries, such as Iraq and Iran, to which they have already been sold.
Mr. Nigel Evans: Does my right hon. and learned Friend agree that EFA would be the best value for money for Britain, for Germany and for Europe? Does he also agree that, while it is desirable to have the Germans on board for the production of EFA, it would not be essential?
Mr. Rifkind: I thank my hon. Friend for the efforts that he has made, and his membership of the parliamentary delegation that visited Bonn. The Government's view is that the alternative approach recommended by Mr. Rae should not commend itself in this country, in Germany or elsewhere. The smaller version of EFA proposed by Mr. Rühe would involve redesign of the EFA airframe, engine and installed equipment. The work done so far would largely be wasted and the development programme would have to start again. This could delay entry of the aircraft into service by up to eight years. The operational performance of the aircraft would inevitably be substantially inferior to EFA and the cost of changing our minds halfway through the existing project would add at least 20 per cent. to the price that we would all have to pay for the aircraft.
Mr. Bob Cryer: Is it not seriously irresponsible of the Government, knowing the difficulties with the EFA and the likelihood that Germany would drop out, not to prepare plans for diversification from an aeroplane that we now cannot afford to an aeroplane that can be used in civilian service? Would it not be better to scrap the EFA scheme and concentrate on civilian airliners, for which there is a real need but in the production of which we have been left sadly behind? We are now completely dependent on American technology, mostly Boeing aircraft. Is not that unsatisfactory? We have the skill and the ability: should not we use them for peace rather than for this doubtful project?
Mr. Rifkind: The first sign of a possible German withdrawal came only two or three months ago. It is a fitting comment on his perception of these matters that the hon. Gentleman believes that the best way to deal with the challenge from hostile fighter aircraft that we might face over the next 30 years is by developing civil airliners.
Mr. David Sumberg: I congratulate my right hon. and learned Friend on his robust stance on this matter, which has severe consequences for jobs not just in the north-west of England but throughout the country, and not just with British Aerospace but with hundreds of small firms. They wish him well and hope that he will achieve success.
Mr. Rifkind: My hon. Friend is right to say that many thousands of people, not only in this country but in Germany, Spain and Italy, have an equally strong interest in the continuing project to which the House has given its support.
Mr. Tam Dalyell: Is not a critical factor the financial and technical resources of Italy? Before the House comes to a judgment, could we have more information about the attitude of the Italian Government and the Italian Departments of State to this matter?
Mr. Rifkind: I expect to have a meeting with my Italian and Spanish colleagues soon. It is clear that the Italian Government would like to see the project continue. They share with us a desire to see costs significantly reduced, and we shall be working towards achieving that objective.
Mr. Harold Elletson: Did my right hon. and learned Friend make it clear to the German Minister of Defence that Germany's decision to withdraw from this project seriously undermines Germany's credibility as a serious partner in pan-European collaborative projects of this kind?
Mr. Rifkind: While we do not dispute Germany's legal right to withdraw from involvement in the production phase, it is highly unfortunate and disturbing that, with a project that has been making good progress, that is on time and that is intended to produce an aircraft for which all the participating countries have a requirement, Germany should have decided to withdraw, especially when it is not clear to what alternative strategy it is committed.
Mr. Ron Leighton: Will the Secretary of State give us some more detail of what the German Minister of Defence said to him? I saw Volker Rae, whom I know to be a realistic man and the one most likely to be the next Chancellor of Germany, interviewed on British television last night. He was dismissive of the British view, saying that we had not caught up with the debate in Europe. He said that Germany had wanted the plane to fight the Russians, but it was not going to fight the Russians any more. He said that the Germans were putting money into East Germany and Russia and that the plane was intended to fight a very advanced MiG. Instead of putting money into a plane to fight the MiG, the MiG can be purchased at a knock-down, bargain price at the moment—
Madam Speaker: Order. The hon. Gentleman must ask a question.
Mr. Leighton: Why should the money be wasted and not devoted to defence diversification? The EFA will not fly.
Mr. Rifkind: The German position is not that they want to buy Russian MiGs. Instead, they want to begin to design and develop a completely new aircraft. The hon. Gentleman must reflect on the fact that it has taken seven

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years and £5 billion of expenditure to reach the present stage in respect of the development of EFA. It is simply not credible to believe that putting all that on one side and starting again would result in anything other than a massive increase in expenditure for the countries which might become involved.
Mr. Peter Viggers: Does my right hon. and learned Friend agree that the Government face very difficult decisions and that the way ahead is by no means clear? Does he accept that the decision must be based on the defence need, because defence is far too important to be a job creation scheme? Will he undertake that the decisions, when they are taken, will be defence-led and not industry or employment-led?
Mr. Rifkind: Yes, I can give that clear and unambiguous statement. While we are aware of the industrial implications, when one is dealing with a project which is enormously expensive and a significant burden on the taxpayer, it is crucial that we go forward with such a project only if, and for so long as, we are satisfied that it is necessary to ensure the defence needs of this country. It cannot possibly be justified that we should go forward purely for industrial reasons if the defence case was not and did not remain convincing.
Mr. John Home Robertson: I share the Secretary of State's hope that EFA will be constructed, because of the jobs that arc affected in his constituency and in mine at GEC-Ferranti. As Volker Ruhe has said that the Luftwaffe will have to replace its aging Phantoms in the near future, does the Secretary of State believe that Germany is likely to end up buying EFA from Britain, Spain and Italy at a far higher price than it might have had to pay had it remained a participant in the project?
Mr. Rifkind: That is certainly a consequence that cannot be excluded. It was clear from my discussions with the German Minister that the Germans have at the moment no clear idea where they would acquire the aircraft they need. Therefore, if EFA continues without German participation, the Germans acknowledge that they will need a new fighter aircraft and EFA may well become the most attractive option for them. but a more expensive one than if they had not withdrawn from the project.
I must point out that Germany has made it clear that it will continue to pay any outstanding sums due with regard to its commitment to participate in the development project. That means that, even if Germany withdraws from involvement in production, there is a further £ 1 billion which Germany is committed to investing in the on-going development project for EFA. That is an additional reason why I hope that the German Government will give some further thought to whether it is in the interests of their taxpayers to withdraw from the project.
Mr. Winston Churchill: Is my right hon. and learned Friend aware that his staunch championship of the European fighter aircraft will he warmly welcomed by the Royal Air Force, and particularly by the pilots who will be flying that equipment beyond the year 2000? Is it not clear that the House must never let down the very few who man our front-line defences by allowing them to enter future battles—should there be any—with second-rate
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equipment? Furthermore, Europe needs a military fighter aircraft programme. Buying off the shelf from the United States might be a solution in the short term, but in the longer term it would cost us very dear.
Mr. Rifkind: I thank my hon. Friend for his remarks. However, the evidence available at the moment suggests that, even in the short term, buying from the United States would be a more and not less expensive option. I agree with my hon. Friend that, if we expect our fighter pilots to be in combat against enemy aircraft. the least we can do to assist them is ensure that the aircraft in which they fly are at least as sophisticated as those of any enemy that they are likely to face.
Mr. Malcolm Chisholm: Is the Government's support for the European fighter aircraft dependent on the continued involvement of the Spanish and Italian Governments? If those Governments should withdraw their support, what would the Government's view then be? Does the Secretary of State agree that, in the longest recession for 60 years, it is unthinkable that 40,000 defence workers should be thrown on to the dole? Does he agree also that, in the long run, the Government must develop a defence diversification strategy?
Mr. Rifkind: I do not believe that it is the Government's responsibility to tell individual companies that they should diversify into other forms of activity. Many have done so or are doing so. Each company is in the best position to judge what is in its interests. However, I certainly agree with the hon. Gentleman that it is important and desirable to seek a conclusion that enables those countries which are part of the EFA project to continue in the collaboration and thereby ensure that we have the fighter aircraft and maintain industrial capability.
Mr. Michael Colvin: Will my right hon. and learned Friend confirm that there have been too many instances in this nation's military history that have enabled us to judge the importance of air defence and to appreciate the need to have an aircraft of what I would describe as "top gun" capability? Will he confirm that EFA has such a capability? That means that it is able to take out any other aircraft pitted against it at present—perhaps not the F22 of the United States, but that aircraft is not yet flying. Will my right hon. and learned Friend confirm that, in a quest for the cheaper version of EFA, that capability will not be sacrificed?
Mr. Rifkind: I can confirm what my hon. Friend asks. Perhaps the attitude of the House. unlike that of our German colleagues, is influenced by the fact that twice in the past 10 years the Royal Air Force has had to fly in combat and therefore has had to rely on the sophistication and quality of its aircraft in combat. That is a factor that none of us would wish to forget.
Mr. Martin O'Neill: The whole House will agree that we do not want our pilots to go to war or into the air in anything but the most effective aircraft available to us, and at the moment EFA is that only option. Does the Secretary of State agree that the significance of EFA to our aerospace industries is greater than that of any of our partners? Does he accept that the narrowness of our industrial base is such that, unlike Germany, we cannot afford to lose the competitive technological edge which EFA represents?

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Does the Secretary of State accept that the future of our aerospace industries depends to a large extent on revenue raised by the project and that the Government's refusal to fund diversification means that our aerospace industries would need EFA-generated profits to move into non-military civilian activity? Does the Secretary of State agree that the replacement of aging aircraft with anything but that cost-effective European collaborative project will leave us at the mercy of American suppliers?
Mr. Rifkind: The project certainly is of importance to the British aerospace industry, but it is quite clear from their public statements that German and Spanish industries—I have no doubt Italian industries also—attach equal importance to the continuation of the project. There is not a uniform view in Germany. A number of people and indeed the industry itself have made it quite clear that they believe that the current German proposal would be extremely damaging to their own industrial capacity. That is something which should be borne in mind.

BILLS PRESENTED
  HOMICIDE (DEFENCE OF PROVOCATION)
  Mr. Harry Cohen, supported by Mrs. Teresa Gorman, Mr. Bruce Grocott, Ms. Glenda Jackson, Mr. Archy Kirkwood, Mr. David Knox, Ms. Dawn Primarolo, Ms. Jo Richardson and Mr. Nicholas Winterton, presented a Bill to amend the Homicide Act 1957 in respect of the defence of provocation: And the same was read the First time; and ordered to be read a Second time upon Friday 13 November and to be printed. [Bill 53.]
  FIREARMS (AMENDMENT)
  Mr. Bob Cryer, supported by Mr. Dennis Skinner, Mr. Bill Michie, Mr. Max Madden and Mr. Harry Cohen, presented a Bill to amend the Firearms Act 1982 to include blank-firing replica firearms and detailed replica firearms and to render their sale or carrying uncovered in a public place illegal: And the same was read the First time; and ordered to be read a Second time upon Friday 4 December and to be printed. [Bill 55.]

  Hospital Security
  3.53 pm
  Ms. Glenda Jackson: I beg to move,
  That leave be given to bring in a Bill to require persons responsible for hospitals to maintain prescribed standards of security; and for connected purposes.
  The Bill is an attempt to deal with the growing and disturbing trend of violence within our nation's hospitals.
  On 24 May, a constituent, Mr. Graeme Woodhatch, while a patient at the Royal Free hospital in Hampstead and Highgate, was murdered by being shot by a yet unknown assailant. Five hours earlier, in an entirely separate and unconnected incident, a nurse in the accident and emergency department of the same hospital was assaulted. A week later, another nurse in yet another London hospital, St. Thomas's, was knocked unconscious and slashed with a knife. On the very same day, an attempted rape took place at Guy's hospital. Six clays later, the abduction of a newborn baby was foiled only by the prompt action of a porter at the Withington hospital in Manchester, who scared off two intruders.
  The incidents would be terrible wherever they were committed, but they adopt a particularly awful dimension when they are committed in places and against people dedicated to saving life and restoring health, and where the recipients of that care are so especially vulnerable. It is equally terrible that the incidents are by no means new or isolated. In 1986, anxiety about the increasing number of violent attacks suffered by the staff of the then Department of Health and Social Security prompted the convening of the Westminster conference, which in turn gave rise to the Committee on Violence to Staff within the DHSS. The committee, chaired by Lord Skelmersdale, published its findings in 1988. Several recommendations were made: better staff training, installation of video cameras and centralised recording of incidents.
  Most significantly, Lord Skelmersdale commented:
  "Violence must merit a new and high priority, and the provision of extra resources from the centre. Provision of a safe workplace is not seen as an accessory but part of the bedrock of service provision. Ignoring this can, if it becomes significantly serious, lead to an inability to maintain that service."
  As I have stated, that report was published five years ago, but the problems of violence which it underlined have by no means diminished.
  The centralised recording of incidents for which Lord Skelmersdale called is still not in place. Indeed, a report by Dr. Colin MacKay of the Health and Safety Executive revealed that, in one year, in just five health authorities across Britain, almost 2,700 nurses and more than 200 hospital doctors had been attacked or injured and 650 ambulance personnel had been assaulted. Even more disturbing, it has been estimated that only one out of every 20 such incidents was reported.
  This state of affairs simply cannot be allowed to continue. For years, concerned groups and individuals have called for action to combat the growing wave of violence. The Confederation of Health Service Employees, the National Union of Public Employees, the British Medical Association, the Royal College of Nursing, the Royal College of Midwives, and the Police Federation have all communicated their concern that violence in our

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  hospitals is reaching unacceptable levels. Right hon. and hon. Members in this House and in another place have often voiced their concerns.
  It is time that those concerns were finally and properly addressed. It is time that we faced up to the challenge of making our hospitals secure. My Bill proposes a statutory body specifically charged with taking up that challenge. Such a body would have as its task the administration and monitoring of adequate and comprehensive security arrangements within our hospitals. It would be similar in structure and function to the Health and Safety Commission and the Health and Safety Executive. It would comprise representatives of the hospitals, the security sector and local health authorities. It would be independent of the Department of Health but would report and submit recommendations to the Secretary of State.
  The body would have as its primary aim the setting of a national framework within which could be co-ordinated a comprehensive strategy for combating crime, whether against property, patients or staff. It would ensure that such a strategy was consistently updated and maintained. Obviously, many security arrangements are best made at a local level. Hospital managers are undoubtedly best placed to recognise their security needs and solutions. They must have the support of national guidelines to which they can refer. At present, 48 per cent. of hospitals give no security training to any members of their staff.
  The body that I propose would ensure that training for all staff is compulsory, and is effectively and regularly updated. Prevention is by far the best cure. Training staff to predict and recognise dangerous situations would go a long way to ensuring that they do not escalate. At present, safety improvements are implemented in a haphazard manner, as and when resources allow. The body that I propose would be charged with identifying problem areas, formulating solutions and ensuring that the resources required for those solutions are made available.
  It is time for Lord Skelmersdale's recommendations to be fully taken on board. Where there is need, resources must be provided. Hospitals can no longer be forced to choose between employing security staff or buying incubators. The body that I propose would also be charged with the vital task of recording and collecting centrally information on the scale, nature and number of incidents that occur.
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  Apart from the incalculable human costs, conservative estimates put the annual financial loss to the health service through crime at about £600 million. That is equivalent to six new hospitals every year lost through crime. It is clearly unacceptable for a problem of that scale not even to be centrally recorded. The recording of crime must be one of the first steps taken in any battle to conquer it.
  I recognise that the growing menace of crime in our hospitals is not a problem that can be easily solved; nor would I wish our hospitals to become fortresses. A relaxed and open hospital environment is by far the best for rapid and effective treatment and recovery. But neither can we ignore the fact that every day, in virtually every part of the country, crime and violence are already blighting that environment.
  When nurses fear to walk down hospital corridors because of the possibility of attack, and when patients are subjected to violence when they should be receiving care, we fail to keep faith with the most hallowed tenets of our health service and with the dedicated people who continue to work within it. To quote Lord Skelmersdale once more:
  "A safe work place is not an accessory to the health service but a bedrock."
  It is time for that bedrock to be built. It is time for action to be taken to protect our hospitals, those who work in them and those who depend on them. I therefore commend my Bill to the House.
  Question put and agreed to.
  Bill ordered to be brought in by Ms. Glenda Jackson, Mrs. Anne Campbell, Ms. Ann Coffey, Ms. Jean Corston, Ms. Angela Eagle, Mrs. Helen Jackson, Dr. Lynne Jones, Ms. Tessa Jowell, Mrs. Jane Kennedy, Ms. Estelle Morris, Mrs. Bridget Prentice and Mrs. Barbara Roche.

  HOSPITAL SECURITY
  Ms. Glenda Jackson accordingly presented a Bill to require persons responsible for hospitals to maintain prescribed standards of security; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 4 December and to be printed. [Bill 55.]
WAYS AND MEANS

  VALUE ADDED TAX (INQUIRIES)
  Resolved,
  That provision may be made amending section 38A of the Value Added Tax Act 1983 and section 20 of the Finance Act 1985.—[Mr. Nicholas Baker.]

Orders of the Day
  Finance Bill
  Not amended in the Committee and as amended (in the Standing Committee), considered.
New clause 1

  VAT: TIME FOR RAISING AND ANSWERING INQUIRIES
  —(1) In section 20 of the Finance Act 1985 (repayment supplement in respect of certain delayed payments or refunds) after subsection (3) there shall be inserted—
  "(3A) In determining for the purposes of regulations under subsection (3) above whether any period is referable to the raising and answering of such an inquiry as is mentioned in that subsection, there shall be taken to be so referable any period which—

  (a) begins with the date on which the Commissioners first consider it necessary to make such an inquiry, and

  (b) ends with the date on which the Commissioners—

  (i) satisfy themselves that they have received a complete answer to the inquiry, or

  (ii) determine not to make the inquiry or, if they have made it, not to pursue it further,

  but excluding so much of that period as may be prescribed; and it is immaterial whether any inquiry is in fact made or whether it is or might have been made of the person or body making the requisite return or claim or of an authorised person or of some other person."
  (2) In section 38A of the Value Added Tax Act 1983 (interest in certain cases of official error) after subsection (8) there shall be inserted—
  "(8A) In determining for the purposes of subsection (8) above whether any period is referable to the raising and answering of such an inquiry as is there mentioned, there shall be taken to be so referable any period which—

  (a) begins with the date on which the Commissioners first consider it necessary to make such an inquiry, and

  (b) ends with the date on which the Commissioners—

  (i) satisfy themselves that they have received a complete answer to the inquiry, or

  (ii) determine not to make the inquiry or, if they have made it, not to pursue it further,

  but excluding so much of that period as may be prescribed; and it is immaterial whether any inquiry is in fact made or whether it is or might have been made of the person referred to in subsection (1) above or of an authorised person or of some other person."
  (3) Subsection (1) above shall apply where the requisite return or claim is received after the day on which this Act is passed.
  (4) Subsection (2) above shall apply where the claim is received after the day on which this Act is passed.'.—[Sir John Cope.]
  Madam Speaker: With this it will be convenient to consider the following amendments: (a), in line 7, after 'Commissioners', insert
  `, intending to act, with no unreasonable delay,'.
  (b), in line 9, after 'Commissioners', insert
  ',acting with no unreasonable delay,'.
  (c), in line 23, after 'Commissioners', insert
  ', intending to act with no unreasonable delay,'.
  (d), in line 25, after 'Commissioners', insert
  acting with no unreasonable delay,'.
  4.5 pm
  The Paymaster General (Sir John Cope): Following the Keith report, the Finance Act 1985 brought in a package of measures that were aimed mainly at improving compliance by taxpayers registered for VAT in furnishing their returns and payments. It also introduced the so-called "repayment supplement". Under that provision, Customs pays a surcharge if, in a normal case, it takes more than 30 days to process a claim for repayment of VAT.
  The period of 30 days was considered appropriate for Customs normally to process and pay such claims. The period would count from the date of receipt of the claim by Customs until the date on which payment was authorised. Where that exceeded 30 days, a supplement of 5 per cent. of the value of the claim, or £30, whichever was greater, would be and has been paid from that time.
  However, it was also recognised that it was necessary for Customs to have time to undertake other activities during that period, such as making verification inquiries and correcting errors. Where those inquiries were genuinely pursued by Customs, provision was made in section 20(3) of the Finance Act to provide for such periods to be left out of account in reckoning the net qualifying period of 30 days, and therefore deciding whether to pay a repayment supplement. In effect, the clock stops while Customs is making important inquiries to verify the claim.
  Customs has operated on that basis since the repayment supplement regime took effect in October 1986. However, a recent VAT tribunal case, which later turned into a High Court case—the Commissioners of Customs and Excise v. L. Rowland and Company (Retail) Ltd.—has shown that the law as it stands allows Customs to leave out of account only the period from when the query is raised with the claimant until the claimant provides an answer to Customs. The time taken for Customs to consider whether to raise a query with the claimant and the time taken for Customs to consider the answer to that query are not to be allowed within the 30 days.
  The original intention of the repayment supplement was to exert pressure on Customs to improve its efficiency. It was not intended to bring about a reduction of Customs' necessary efforts to protect the Revenue and taxpayers' interests at large, as opposed to the specific taxpayer's interests in the claim. That would be contrary to its responsibilities for the care and management of the tax.
  When Lord Keith originally produced his report, it was suggested that there should be an overall period of 60 days rather than 30 days, to embrace all functions. However, when those proposals were exposed for public consultation, queries were raised and the Government then considered that 30 days, exclusive of the time for reasonable inquiries, would be fairer for claimants, and that is how the law was written. At least, that is how it was intended to be written.
  As I said, the recent case of Rowland and Company has decided that that is not how the law was written. The purpose of the new clause is to make the law clear, as the Government and, I assume, Parliament at the time intended and as it has been operated by Customs in the intervening period. It will give Customs the essential freedom to look into claims for the repayment of VAT before they are paid, to prevent the losses of tax to the detriment of taxpayers generally.

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  The House will be aware that the whole structure of VAT, particularly the fact that we have a zero rate on a wide range of items, means that repayment is a large feature of VAT. Many traders never actually pay VAT. They are registered for it and they receive repayments each month because essentially they are in a zero-rated business.
  Customs receives and processes almost 2·5 million claims for VAT repayment each year, with an overall value of some £23 billion in tax. The repayment of tax is therefore an important matter; hence the importance of the repayment supplement. More than 90 per cent. of the claims are authorised for payment within 10 days of their receipt at the VAT central unit in Southend, which handles the administration for Customs and Excise. That reflects both an efficient system and a high desire to act promptly in the interests of claimants.
  Less than 2 per cent. of all claims need further inquiries before verification of repayment, and that is when the clock stops for a time during the 30-day period. Those are the claims which carry the greatest potential risk to the Revenue, which is why it inquires into them—and it is the inquiry time referrable to those cases for which the amendment seeks to provide.
  At the same time, we were anxious to ensure that, while there is the necessary protection for the Revenue, the individual claimants and taxpayers should be in a fair position vis-a-vis Customs and Excise. Apart from the new clause, Customs and Excise is producing a code of conduct relating to its processing of claims for repayment. It will say how claims are received and dealt with and the points at which the repayment supplement clock stops and starts.
  In particular, the code will describe how, on stopping the clock while verification inquiries are under way, due regard is given to any unreasonable delay that might occur. It will also make more visible the safeguards that are built into the system to ensure that such time will count against Customs and towards the 30 days that would qualify a claimant for repayment supplement.
  Mr. A. J. Beith: If 30 days must be defined more generously to give Customs reasonable time to deal with these matters, is not seven days a little unreasonable for everybody involved to digest the new clause and to determine whether it will work satisfactorily?
  Sir John Cope: I agree, but I shall return to that point.
  Apart from the code of conduct—this is relevant to the right hon. Gentleman's point—Customs and Excise is already undertaking a review of the repayment supplement regime to determine whether changes should be recommended in addition to the introduction of the new clause. As before, there will be a full consultative process, starting, I hope, in September or October, at a similar time to the production of the code of conduct, with the aim of reaching conclusions before the end of the year. Customs will also be seeking time further to strengthen its procedures.
  Mr. John Watts: As there has not been an opportunity for consultation on the new clause, is my right hon. Friend prepared to consider consultation on the code of practice when it is published? If there are helpful
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  suggestions from those interested in these matters, they might then be taken into account in a way that they cannot be in the consideration of the new clause.
  Sir John Cope: Yes, Customs will discuss the draft code of practice with those with whom it is in touch, but initially there will not be public consultation. The idea is to publish the code of practice as soon as possible, together with the review, so that both can be considered together. If necessary, the code can be modified subsequently.
  As both the right hon. Member for Berwick-upon-Tweed (Mr. Beith) and my hon. Friend have said, we tabled new clause 1 quickly, in response to the High Court case. That was important, because substantial repayments are involved. It is also right, however, to proceed with the code of conduct and the review, to give an opportunity for further comment.
  4.15 pm
  The new clause continues the existing practice into the future. We must also consider whether we ought to seek to give the new clause retrospective effect, so that the procedure followed by Customs and Excise since 1986, when the repayment supplement was introduced, can be retrospectively endorsed. We decided not to do that, because it would be inappropriate. Instead, we are accepting the High Court's interpretation of the law in respect of retrospective claims and claims made up to the date that the Bill receives Royal Assent in a few days' time.
  The recent High Court judgment will be applied retrospectively. Customs and Excise will publicise the conditions that must be met to qualify for the new repayment supplement under the new interpretation, and will invite traders to apply for such repayments. Claims will have to be considered right back to the days when the supplement was first introduced, in 1986. That is a considerable administrative task that will take some time to complete, but it is right that it should be undertaken.
  There will be some cases which have not come to full effect in the tribunal or the courts, as the Rowland case has, but which are nevertheless pending. They are easy to spot and to deal with. There will be other cases that Customs does not know about, where we shall have to rely on traders to submit claims. We will publicise as much as possible the opportunity to make claims under the new provision, so that we can put right any payments and bring them in line with the High Court's interpretation.
  I hope that the House agrees, given the large sums of money involved, that we are right to move quickly, and not retrospectively to appeal against the High Court judgment of the law as it was first formulated in 1985. I commend new clause 1 to the House.
  Dr. John Marek: I sympathise with the plight of the Paymaster General, in that an unfavourable judgment was made against him, and there is perhaps a case for acting quickly to put matters right—especially as the Finance Bill is before the House. Among the representations I received, however, is one from the Institute of Directors. I will quote from a letter dated 7 July that it sent to the Paymaster General:
  "Indeed, when the New Clause was drawn to the attention of the Joint VAT Consultative Committee yesterday afternoon, Customs were unable to comment on the grave concern raised immediately by the business and professional representatives, because they said that they could not pre-empt your statement"
  that is, the Paymaster General's statement—

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  "in the House".
  As the right hon. Member for Berwick-upon-Tweed (Mr. Beith) implied, time has not been allowed for debate and careful consideration.
  Although there has been a problem as a result of the recent court case, the Opposition believe that the new clause swings the balance very far in the direction of Customs and Excise and that Customs and Excise will be able to decide almost as it wishes when the clock will stop and when it will start ticking again.
  The Opposition raised the issue in a previous debate on 16 May 1991 in Standing Committee B. During our deliberations on clause 16, entitled "Interest of Overpayments etc.", I said:
  "I do not say that Customs and Excise would deliberately take weeks or months over an investigation, but this is not a perfect world. No interest would be paid while an investigation was in hand. There should be a clear provision as to the date from which interest should be paid. If Customs and Excise has received money from a taxpayer which earns interest in a bank, why should that interest be kept if there was an error?"—[Official Report, Standing Committee B, 16 May 1991; c. 67.]
  During the passage of the Finance Bill in 1985, Mr. Barney Hayhoe, who I think was the then Financial Secretary, said during a debate on clause 20:
  "if we get it wrong one year, and experience shows that changes are needed, we can seek to put it right the following year. Indeed, large chunks of each year's Finance Bill put right the mistakes or errors of judgment of our predecessors." —[Official Report, Standing CommitteeB, 21 May 1985; c. 185.]
  If so, this is a considerable error and misjudgment, because it will cost about £100 million or £150 million for the past six years. The new clause should be got right in the first instance. I do not pretend that the Opposition's amendments (a) to (d) would put it right, but they would redress the balance which favours the Customs and Excise should the clause be passed unamended. They would impose a requirement on Customs and Excise not to act with unreasonable delay. It would have to be expeditious and not say that it might want to institute an inquiry so the clock should be stopped. It does not even have to tell the person into whose accounts it is inquiring whether it has stopped the clock.
  Under the new clause, the Government are aggregating to themselves all the power to be master and disposer of the issue. The Opposition believe that that is wrong and that the customer, client or person who pays value added tax should know that his or her affairs were to be run properly, that any investigation would be undertaken expeditiously and that there would be no unreasonable delay.
  There are other issues which should be explored, but I want to be expeditious myself. If there is not to be 30-day statutory period, why should it not be 40 or 50 days? The subject should be discussed with the various interests involved. There should be a review and a right of appeal, but the new clause makes no such provision. We cannot discuss all the issues on Report, but they should be discussed with the interests involved.
  I accept that it is not of the Government's making that the court case happened so recently, but because it did happen so recently, the issues have not been discussed with the appropriate interests. Perhaps it would be best for the Government to withdraw the new clause, and bring back later an agreed statutory instrument, if that is possible. As it is, they will have to pay claims for five years. If the
  196
  Government were to withdraw the new clause, and if there were general agreement between the industry and the Government, the Opposition would expedite the progress of any legislation which would have to be introduced.
  However, that is unlikely to happen, and the Opposition believe strongly that, if accepted, amendments (a) to (d) would go some way towards redressing the balance which undoubtedly needs to be redressed in favour of the consumer, customer or person who pays VAT.
  Mr. Michael Stern: I can best put the clause in context by contrasting it with what would be the position the other way round. If I, as a VAT payer. was due to pay some VAT and informed Customs and Excise that I was doubtful about the amount, or indeed about the legality, of my liability and I therefore wished to stop the clock for an indeterminate period while I investigated whether there was a liability, I can imagine the size of the raspberry that I would get from Customs and Excise.
  There has always been a disparity between the right of the taxpayer to receive compensation for the fact that his money is being held by the Treasury, and the duty of the Treasury to compensate the taxpayer for the fact that his money is being held. That disparity is being strengthened, and even made wider, by the clause.
  The Paymaster General referred to substantial sums at stake in the clause. I hope that he will be more specific. We are not talking about the overall cost of repayment supplement in relation to VAT overpayments. We are talking about the cost of repayment supplement which is currently payable because Customs and Excise has not made inquiries and has delayed matters beyond 30 days. In all other cases, the clause will not affect the issue. How much does my right hon. Friend believe will be saved by rushing through the clause, when the process of consultation which he is proposing, and which is welcome, for the latter part of the year would enable a fairer and less disputed clause to be introduced?
  My right hon. Friend referred to a recent legal case as being the occasion for the clause. It is fair to point to tribunal decisions which were reported last year and which should have given an indication of the need for further legislation. I refer my right hon. Friend in particular to the decision concerning Anthony Albert Aston under the reference MAN/90/499 in VAT Tribunal Decisions. In that case, a claim was made by Customs and Excise that it should not have to pay repayment supplement because it had spent some months investigating whether it had ordered a cheque to be issued. Rightly, that claim was objected to by the tribunal. May we be assured that the new clause, and code of conduct resulting from it, would not give rise to the denial of repayment supplement in a case such as that?
  The review of the working of the clause will be welcome. After all, as the hon. Member for Wrexham (Dr. Marek) said, in a minority of cases it will be open to Customs and Excise to be judge and jury in its own cause. I hope that, as part of the review, an option to be considered will be a return to the Keith recommendation of an absolute time limit—of 60 days or what other time may be considered appropriate—within which no repayment supplement will be paid and after which repayment supplement will automatically be paid. By that means, the taxpayer will at least know where he stands.
  Mr. Beith: We are faced with a paradox. The provisions that we are discussing relate to Customs and Excise taking too long to deal with complaints from taxpayers and needing the capacity to adjust the start and stop of the 30-day period to avoid being landed with repayments. Yet that part of Customs and Excise concerned with the introduction of legislation can work to a far stricter timetable. Indeed, there does not appear to be any time limit on that. Within 20 days of the High Court decision, it saw to it that a new clause was slapped on the Order Paper, and seven days later we are debating it. That is well within the 30-day limit. Perhaps that section of Customs and Excise could transfer some staff to the department that deals with VAT payers' inquiries. That would ensure that they were all dealt with within 30 days, and the clause would not be needed.
  We are witnessing an incredible amount of haste. That haste is justified by the Paymaster General on the basis that tremendous sums of money are involved. But our understanding, from Customs and Excise information, is that the vast majority of cases are considered within 10, not 30, days. Surely only a small minority of VAT cases will risk falling foul of the procedure if the new clause is not accepted.
  As was pointed out by the hon. Member for Wrexham (Dr. Marek), various bodies, including the Institute of Directors, are extremely concerned about the way in which the matter has been handled. The institute writes:
  "We can understand that Customs should find the decision in the Rowland case unpalatable, but we regard it as totally unacceptable that the Government should table a New Clause … on the 1 July Order Paper a mere 20 days after the High Court decision and without any kind of prior warning for the Report Stage debate today 7 July. This is exactly the sort of practical matter which does not involve large sums of revenue but which requires detailed consultation with the representative bodies of taxpayers and their professional advisers."
  4.30 pm
  The Law Society has made similarly strong representations. In the society's opinion, the proposed new legislation will render it unlikely, in most cases in which Parliament thinks it appropriate for Customs and Excise to pay repayment supplement or interest, that that supplement or interest will be paid. That is partly because it would always be open to Customs and Excise to claim that, in its opinion, an inquiry was necessary, even if it subsequently changed its view and decided not to make any inquiry into the claim. Another reason is the fact that, although a taxpayer may have provided complete and satisfactory answers, time will start running only once the Commissioners have satisfied themselves that they have received a complete answer to the inquiry. The inquiry may have to be taken all the way up the line to headquarters; all kinds of factors may have caused problems.
  Many people who deal with such matters on a day-to-day basis feel that the new clause is not urgently needed. They believe that it will cause severe difficulties, and that it may well defeat Parliament's intention of providing restitution for the taxpayer in cases that have involved unnecessary delay. The Paymaster General tried to offer a way out by telling us that a code of conduct was being produced, but I gather that even that will not be subject to consultation initially, so that it can be implemented quickly.
  The fact that the code of practice is being produced at the same time as the review implies that, once the review
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  begins, the code of conduct already brought in will fall to be considered along with the new clause as a whole. That is a rather backwards way of dealing with the matter, and I do not think that the Paymaster General has convinced us that the present scale of risk to the Revenue justifies such proceedings.
  Sir John Cope: Both the hon. Member for Wrexham (Dr. Marek) and the right hon. Member for Berwick-upon-Tweed (Mr. Beith) referred to the letter from the Institute of Directors, which mentioned the speed with which the new clause had been tabled. I gave the reasons for that earlier.
  Let me reassure the right hon. Member for Berwick-upon-Tweed that I did not table the new clause in a half-hearted way. I consider it an important measure: some £30 million a year would be involved without it. At yesterday's meeting with the Institute of Directors and others, Customs and Excise found themselves in a slight difficulty. They had a good idea of what I was likely to say today—particularly about the code of conduct and the review, which we have been discussing ever since the High Court case. Indeed, we had discussed our possible course of action to some extent before the completion of that case. We were able to move as quickly as we did partly because of contingency planning. I hope that the House will consider that wise, in the circumstances.
  The Customs and Excise officials were unwilling yesterday to pre-empt what I would tell the House. The House has a right to know things, and sometimes becomes rather upset if they are leaked rather than presented to it first. It is a difficult balance to achieve immediately before a ministerial statement, although in many cases we are keen to consult widely, and usually do so.
  Dr. Marek: I understand that, but can the Minister say something about the review and whether he will try to reach an agreement with the industry and the interests involved about how Customs and Excise will stop and start the clock? If he could assure the House that the review would take these matters into consideration in order to arrive at least at an unofficial method of procedure to be followed by Customs and Excise that was satisfactory to the interests involved, it would go a long way towards helping hon. Members on this side of the House and, I suspect, a lot of Conservative Members.
  Sir John Cope: Yes. I mentioned earlier that claims are initially sent to the VAT central unit in Southend. During the initial checking process, some of the claims—about 2 per cent.—are selected for further inquiries. The rest have a smoother passage. If the VAT central unit decides to make further inquiries, they may be inquiries either with the local VAT office—that is, local to wherever the trader happens to be—or with the Customs and Excise investigation branch or an outside agency. It is at that point that the clock stops. It is when the points that have been raised that cause the clock to stop in that way have been cleared up that the clock restarts.
  A number of hon. Members have suggested that there is no way in which Customs and Excise is accountable for its management of this system. From time to time it has to justify to the VAT tribunal, to Members of Parliament and, through Members of Parliament, to the parliamentary Commissioner its actions in this respect. Customs and Excise is, therefore, subject to the checks that I have just mentioned.

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  My hon. Friend the Member for Bristol, North-West (Mr. Stern) is concerned about the disparity between the taxpayer and Customs and Excise. If the taxpayer has reasonable excuse which Customs accepts, the clock stops for the taxpayer, too. My hon. Friend asked whether there should instead by an absolute timetable of 60 days or another period, as was originally suggested by the Keith committee. That is one option. Nevertheless, if we can arrive at a code of conduct and if the results of the review are satisfactory to most people who are involved, I think that the 30-day period, plus a clock-stopping system that is generally acceptable, is the best approach. That is the way that I should prefer to approach it, if possible. I accept, however, that it may not be easy to achieve.
  The right hon. Member for Berwick-upon-Tweed criticised the order of events. I accept his criticism in some respects. I refer to the timing of the Finance Bill relative to the timing of the High Court case. We thought that the High Court case would not be heard until the autumn, but, somehow or other, the High Court succeeded in clearing its in-tray faster than it normally does and got round to it. It seemed to me that it would be wrong not to use the opportunity that that presented in the interests of taxpayers at large—that is to say, of revenue to the Government.
  The code of conduct will to some extent be an interim one while the review takes place. I have no doubt that we shall want to refine it in some ways, or certainly consider doing so, during the review process.
  I have some information on the tribunal case to which my hon. Friend the Member for Bristol, North-West referred. That case had to do with the actual date of payment; it was not a reasonable time inquiry. The case was not appealed by Customs and Excise, which might have to consider appealing if there were another similar case. But I do not think that it is on all fours with the case with which we are dealing in this new clause.
  My hon. Friend the Member for Bristol, North-West also asked about the cost. The cost would be about £30 million a year if we did not pass the new clause.
  Incidentally, the Institute of Directors also drew attention to the fact that the clause inserts into the Finance Acts similar provisions about the stopping of the clock in interest cases. That is dealt with in the second part of the clause. These cases are related to official error. It is, of course, a much smaller matter, because it is a question of interest at an annual rate for a few days while the clock is stopped. However, I think that it is sensible to keep the wording of the two parts of the Finance Acts in line with one another, and that is why we have introduced the second part of the new clause, which I commend to the House.
  Dr. Marek: I listened with interest to the Paymaster General who made some encouraging noises to the effect that there will be a review and a code of conduct. I know that he will carry out that review to the best of his ability and I hope that he will try to reach agreement with the interests involved. It is a matter which we can come to again on next year's Finance Bill; there is no problem about that. We will have to keep an eye on it.
  I had intended to ask my hon. Friends to support me in the Division Lobby, because we believe that there is an important principle at stake here, but I think that we should be charitable to the new clause. We shall wait and
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  see what happens, reserving our right to come back to the matter on the Finance Bill in a year's time; and we shall not press our amendments to a Division.
  Question put and agreed to.
  Clause read a Second time, and added to the Bill.

New clause 2

  INHERITANCE TAX AND ACCESS
  `The following section shall be inserted after section 230 (acceptance of property in satisfaction of tax) of the Inheritance Tax Act 1984—
  "230A.—(1) The provisions listed in subsections (2) and (3) below shall not apply unless the conditions set out in subsection (4) below are met.
  (2) The provisions referred to in subsection (1) above comprise the following sections of this Act—

  (a) section 230 (acceptance of property in satisfaction of tax)

  (b) section 231 (powers to transfer property in satisfaction).

  (3) The provisions referred to in subsection (1) above also comprise section 26A (potentially exempt transfer of property subsequently held for national purposes, etc.) of this Act if any transfer is an exempt transfer under section 26A only by virtue of the phrase '(b) has been disposed of in pursuance of section 230 below'.
  (4) The conditions referred to in subsection (1) above are that any property that would, apart from this section, be dealt with under the provisions listed in subsections (2) and (3) above must

  (a) if consisting of property other than land, be available for public viewing free of charge at regular intervals and for periods of reasonable duration throughout the whole of the year;

  (b) if consisting of land, be available for reasonable public access free of charge on clearly defined access routes or rights of way throughout the whole year.

  (5) Without prejudice to the generality of the words in subsection (4) above, property other than land shall not be regarded as available for public viewing at regular intervals and periods of reasonable duration throughout the whole year unless these periods total at least 52 days in each and every continuous twelve month period, commencing the first twelve month period for these purposes no later than a date fifteen months after the date of the Board first accepting property in satisfaction of tax in anticipation that the conditions referred to in subsection (4) above will be met.
  (6) Property shall not be regarded as meeting the conditions set out in subsection (4) above unless full details of the public access are readily available, and the Board is empowered by this subsection to set out such criteria as it sees fit for this test to be met.
  (7) This section shall apply in relation to all acceptance and transfers of property after 30th June 1992.".'.—[Mr. Chris Smith.]
  Brought up, and read the First time.
  Mr. Chris Smith: I beg to move, That the clause be read a Second time.
  The new clause deals with what are known as conditionally exempt transfers. They represent a procedure under the Inheritance Tax Act 1984, which originated in the Finance Act 1976, where relief, originally from capital transfer tax but subsequently from inheritance tax, is given where works of art or areas of land of special quality remain in the ownership of the original owners in return for their agreeing to maintain the land properly and provide public access to either the land or the works of art.

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  Substantial sums of money are involved. In relation to land, the latest information that we have been able to obtain from the Treasury is that there has been a total of 149 cases since 1983 of access agreements over land being made to escape inheritance tax or capital transfer tax, and that the cost to the Exchequer has been between £5 million and £10 million in each year. So we are talking about something like £100 million in a 10-year period.
  Mr. Andrew F. Bennett: Can my hon. Friend give one or two examples of where this has occurred throughout the country? These figures sound impressive and I should like to know where I can walk now, as a result of this measure, where I could not walk before.
  Mr. Smith: My hon. Friend, who is well known in the House for his support for the work of the Ramblers Association and for issues of access to the countryside, puts his finger precisely on the problem.
  We know of one specific instance, which has been publicised, and I will come to that in a moment. But, apart from that, there is no public information about where the access has been provided. Indeed, in the parliamentary answer that I obtained from the Treasury on 2 June, which told me that there had been 149 cases of access granted and that this had cost £5 million to £10 million a year over the 10-year period, when I asked as part of my question where this access had been made available, the answer from the Financial Secretary was:
  "I regret that statistics of new public footpaths and permissive paths, or of land over which there is a right to roam, resulting from conditional exemption are not available."—[Official Report, 2 June 1992; Vol. 208, c. 399.]
  We are talking about public money forgone—£100 million over a 10-year period—yet, even from the Treasury, which has granted the relief from inheritance tax, or from any other Government Department, information about where the public access is available is simply not available.
  4.45 pm
  The situation with regard to works of art is similar, although the amounts of money involved are even greater. My hon. Friend the Member for Carlisle (Mr. Martlew) has been pressing this matter for some time. He was told, in a parliamentary answer just a few days ago, that the average amount of inheritance tax relief in return for supposed access to works of art has been £70 million per year over the past 10 years.
  In all, therefore, we are facing expenditure from the public purse, effectively, of some £800 million over 10 years, in return for supposed access to areas of landscape quality and superlative works of art.
  I have no objection to the principle of relieving inheritance tax in return for gaining public access to important parts of our countryside and important works of art, but the additional access that is given in return for inheritance tax relief must be clearly available and information about it must be readily to hand.
  I believe that even the Economic Secretary realises this, because, in Committee a week or two ago, in the debate on some of the changes to inheritance tax which the Government are bringing in in rejecting our argument that the Government were being foolish with regard to areas of
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  high-quality landscape, in going for 100 per cent. agricultural inheritance tax relief, thereby skirting round the present system of 50 per cent. tax relief with the possibility of 100 per cent. relief in return for conditions, the Economic Secretary said:
  "It is a more profitable line of inquiry to consider whether conditional exemption agreements are working properly in relation to signposting and so on than it is to explore whether sufficient land is being entered into such arrangements." [Official Report, Standing Committee B, 30 June 1992; c. 419.]
  Those are the words of the Economic Secretary himself.
  It seems to us that the agreements are not working properly. Our new clause seeks to set very clearly on the statute book the requirement that agreements must work properly if inheritance tax relief is to be gained. The new clause provides that information about the rights of access that exist must be made readily available to the public, and it requires that access be free of charge. In relation to land it requires that access must be available throughout the year, and in relation to works of art it requires that reasonable access must be available at least 52 days in every year, on a regular basis such as a day a week.
  I want to discuss access to land. Perhaps I should own up to a keen personal interest, as I have roamed the wild and remote parts of our country and hope to be able to do so for many years to come. Public access to land is extremely important. If access is available to the public but no one knows where it is, what is the purpose in having it? There is only one publicly documented case, to which I shall refer in detail in a moment. For the past few years details are supposed to have been lodged with the Central Council of Physical Recreation. On being asked about the matter, the council told us that no details of any arrangements had been lodged in the past few years. We know that in 1990–91 there were 17 cases of the granting of access, and that in 1991–92 there were 16, yet these were not recorded with the CCPR as they should have been.
  I appreciate that there is an Inland Revenue rule about the secrecy of the affairs of individual taxpayers. But we are not asking how much relief, in terms of money, has been granted in individual cases; we are asking simply where access has been granted in return for relief.
  Mr. Bennett: I understand the taxation principle, but does my hon. Friend accept that if, for example, a farmer in the Peak district enters into an access agreement with the national park, people can find out how much money is involved and can judge whether it represents value for those being provided with extra access? Surely there ought to be some relationship between the sums of money forgone in tax—the amounts appear to be huge—and the number of acres of land or miles of footpath secured. I understand the argument for confidentiality in respect of individual cases, but the House ought to know whether the Government are getting value for money.
  Mr. Smith: My hon. Friend is absolutely right. A few weeks ago I asked a question about the number of acres that had been made available for the right to roam, the number of additional miles of footpath had been made available, and the overall cost in each year. The answer was that no information was available. But the provision of that information would not contravene the Inland Revenue's secrecy rules.
  There is an additional problem. The Government seem to believe that where access is made available some sort of additional right is granted if the access is by rights of way

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  or what are called permissive paths. But rights of way are precisely what their name suggests. They are rights of way, and whether or not a conditionally exempt transfer agreement is entered into, they will remain so for time immemorial. That must be so. No additional right of access can be granted in the case of a right of way. What about permissive paths? Suppose a permissive path is made available so that people may walk in the countryside. In view of the way in which permissive paths work, I fear that the permission could be withdrawn at any time. Therefore, it is simply not good enough to say that access in return for inheritance tax relief shall be over rights of way and over permissive paths. In terms of additional rights for the public, that does not add up to very much.
  I said that I would come to the one specific instance about which we know. I refer to the Bransdale Moor estate in the North York moors. It is known also as the Nawton Tower estate. It is a remote area of moorland of about 15,400 acres and was the subject of a conditionally exempt transfer in 1978. The land in question is owned by Lady Clarissa Collin, who is the granddaughter of the late Earl of Halifax, the Conservative Foreign Secretary from 1938 to 1941. Lady Clarissa Collin entered into a conditionally exempt transfer in 1978. As that took place under a Labour Government, the information was made public. The North York Moors national park, in its information bulletin of the winter of 1978–79, told us exactly what had happened in return for inheritance tax relief for the Bransdale Moor estate. There was an agreement for the maintenance of landscape character; there was a provision that any proposals involving ploughing and reclamation of moorland had to be agreed; there was agreement that there would be a management programme of moor burning; and there was agreement that scientific interest would be looked after. All of that is good conservation management. But, in addition, the undertaking provided that
  "The Trust"—
  that is, the trust of the estate—
  "would agree to ensure that within the context of good estate management and the securing of farming and sporting objectives, there will be reasonable access to members of the public for walking and horseriding."
  The undertaking went on:
  "Public access shall be normally along existing rights of way. The Trust would accept the principle that access off these routes would be permissible".
  There are set out a few conditions about walkers being asked not to leave rights of way during the nesting time in April and May and during grouse shooting in August and September, but otherwise the undertaking says very clearly that access off the existing rights of way shall be permissible. That agreement was signed by Lady Clarissa Collin in 1978 in return for relief from capital transfer tax.
  But what happened in March 1990? Twelve land owners in the North York moors wrote to the national park officer, saying:
  "Access to the highly important and vulnerable upland heather moors must be restricted to an improved footpath system where that is appropriate."
  The signatories included Lady Clarissa Collin. So in 1978 Lady Clarissa Collin entered into an agreement in return for relief from inheritance tax—and the agreement provided that access would be available off rights of way —yet in 1990 she joined other land owners to write to the national park officer saying that access should not be available off the rights of way.
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  What is happening on the ground follows that letter. There is a notice saying that walkers must keep to the established footpaths and there are gamekeepers wandering around to reinforce the message. In other words, in return for being relieved of inheritance tax, Lady Clarissa Collin has given the public nothing. In her letter of 1990, along with others, she was clearly showing her intention to renege on the agreement that she had made in 1978. Our new clause challenges such practices.
  5 pm
  One might ask why this is important. Access to the countryside and enjoyment of the open air are extremely important to millions of our fellow citizens. Back in 1934, G. H. B. Ward, founder of the Sheffield Clarion Ramblers and a fighter, throughout his life, for public access to open country, wrote about this matter, putting it better than any of us ever could. He said:
  "Rambling is also a culture and a craft … an intense love for one's own country, the innermost and the most remote parts of it, the sweetest as well as the wildest, a love for the wind and the rain, the snow and the frost, the hill and the vale, the widest open spaces and the choicest pastoral and arboreal retreats."
  That is what the new clause is all about.
  In 1884, James Bryce, then Member of Parliament for Aberdeen, South, introduced a Bill to provide unrestricted public access to uncultivated mountain or moorland. We have been waiting 108 years for such a measure to pass through the House. I long to see the day when we legislate to ensure that ordinary people can have access to the wide open spaces as of right rather than having to beg and scrape for it. While such a system exists and while we rely on arrangements such as inheritance tax relief to ensure it, we must make sure that those arrangements work properly.
  Let us deal with works of art. If one owns a valuable painting or a piece of sculpture, one can record it as being in one's ownership and, in return for saying that one will grant public access to view the work of art, one can gain relief from inheritance tax. Although there is no list of access to land, there is a list of access to works of art. Held in the Victoria and Albert museum, it runs to 13 files, some of which are an inch thick. There are 10 items on each page and there are probably, although I have not counted them personally, 30,000 to 40,000 items in all. They include paintings, sculpture, furniture and jewellery.
  Last year, three members of the public, one of whom was an Inland Revenue inspector, inspected the list. For each item, there is a rough description, an approximate location and a contact name. Normally, the contact name is a local solicitor or someone of the kind. The Observer, which has been running an admirable campaign on this issue in recent weeks, noted names and tried to contact five of them. Two of the names were no longer the correct contact names and those people could not say who the right person was. One of the names was the correct contact, but had no idea of the procedure to view the item. One other asked for a request in writing and the fifth, who was the owner of the painting in question, said, "Viewing is difficult."
  This is hardly "readily available public access". I understand that some of the owners charge for viewing, and that should not happen. Not only are many of the contacts out of date, but much of the information about the contents of the list is as well. For example, a painting by Miro that is recorded as being in private ownership in

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  Sussex is in the Scottish National Gallery for Modern Art and has been there for some years. These are not minor paintings. They range from paintings by Leonardo to paintings by Picasso, from Turner to Canaletto. They are part of our vital artistic heritage. We should know where they are and how we can go about seeing them because we, the taxpayers, have effectively paid for doing so.
  Arcane and archaic viewing arrangements, inadequate and out-of-date information and no public knowledge at all of land is not good enough. It is high time that we ensured that, where public money is yielded up, proper public access is made available in return. The superb works of art and the finest and most remote of landscapes should be there for the ordinary citizen to enjoy. At heart, that is what the new clause is all about.
  Mr. Paul Tyler: Before most major changes in legislation, we have the most elaborate consultations within and outside the House with national and local organisations. There are Green Papers and White Papers and so on. One of the curious anomalies of the Budget process is that, as soon as the Chancellor goes into Budget purdah, there is no such dialogue. Therefore, it is fair to say that the new inheritance tax exemptions have not been digested anything like as thoroughly as, for example, new legislation setting the framework for agricultural and environmental law or that on recreation.
  Therefore, we find ourselves in the curious situation that the exemptions that we have had since 1976 in several formats have been assumed to continue until the Budget. As soon as the Budget proposed changes, organisations of the stature of the Countryside Commission, English Nature, the Ramblers Association, the Council for the Protection of Rural England, farmers and landowners and their respective bodies in Wales, Scotland and Northern Ireland all wondered what the impact would be on the work that they do on behalf of the Government and the nation.
  It may be that the other Departments that have responsibility in this subject were caught napping as well. When I tabled a question to the Minister of Agriculture, Fisheries and Food last week, his answer was at best a holding one and at worst a neat passing of the buck. He seems to have no view of what the impact of these changes will be either in financial and environmental terms or on farming practice.
  In Committee, the Economic Secretary to the Treasury reassured us. He said that he did not wish to undo all the good work done by successive Governments by the use of exemptions. By inference, we have to take it that he believes that the success of past policies and the continuing success for whole categories of land that will not otherwise be exempt is such that they will want to boast of their success. One wonders how one can boast of success if everything is kept secret.
  It is surely a maxim of Thatcherite economics—if we dare still mention them in this place—that one should know what one is paying for. It is surely a matter for open government that the public, having effectively subsidised a particular asset, should know what they are getting for their money. As the hon. Member for Islington, South and Finsbury (Mr. Smith) said, there are already some curious anomalies. It is possible to obtain some information about works of art that have been subject to the concessions.
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  Today's Hansard contains written answers which include much detailed information about works of art. The information includes reference to:
  "A drawing, 'A wild boar at bay', Frans Snyders (1579–1647)".—[Official Report, 6 July 1992; Vol. 211, c. 21.]
  The written answers contain much detail and a long list. However, there is no schedule showing what areas of the country and great heritage items of landscape and recreational access have been bought with our money. There is obviously a curious anomaly.
  The new clause is obviously very well intentioned and we support it. However, as worded, it avoids the curious problem which we always have to overcome of the criteria by which a judgment should be made—in this case, for reasonable public access. I am not sure that empowering the board of the Inland Revenue is the best way to ensure that the sharpest minds on that particular issue will be used to produce the right criteria.
  The crucial issue in the new clause is the criteria. If the criteria are very detailed, there will be considerable confusion. The issue will be very complex, bureaucratic and possibly litigious because large sums of money will be involved. Whether or not a farmer will receive relief will be of considerable concern to him, his family, his tax advisers and his lawyers.
  For example, over what period would the farmer need to have cared for the land in question and ensured that there was public access before the death that triggers inheritance tax liability? What will be taken as proof? Who is to be judge and jury in the matter? Conversely, if the criteria are very scanty, they could surely be met so easily that the new clause would be worthless.
  We hope that the proposal can be made to work because it is of considerable interest to landowners, to farmers and to the public. In many areas of tax legislation and administrative criteria, there is already a balance which must be struck. We can only hope that the board or professional advisers from the appropriate national statutory bodies can find the right balance.
  We support the new clause and hope that the Government mean what they said in Committee upstairs and in their manifesto about the public interest in future policy for the countryside. We hope that that wider Government interest will prevail against the narrow interests of the Treasury.
  Mr. Clive Betts: I wish to address my comments to tax relief on land. It might seem slightly strange to people with a false impression of the city from which I come and which I have the privilege to represent to learn that, contrary to some opinions, Sheffield contains a great deal of moorland and open countryside of considerable beauty. One third of the city lies within the Peak district national park and rambling is an extremely important local hobby for many people in the city. Much of the land lies within the Sheffield constituencies of Hallam and Hillsborough. As well as having older industrial areas, my constituency contains important areas like the Moss valley which are important to my constituents, as is the whole issue of access to the open countryside.
  The Government might argue that the current arrangements for tax relief on land are not working. They might argue that the expenditure of £5 million to £10 million a year of public money over 10 years, when the public have no details about what land that expenditure

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  refers to and when the supposed benefits of access to the countryside cannot be realised because the public are unaware of that access and to which land it applies, is a waste of public money and cannot be justified.
  It is difficult to understand precisely what benefit the public are receiving. The Government could argue that, as my hon. Friend the Member for Islington, South and Finsbury (Mr. Smith) explained, because some of the agreements apply to permissive paths as well as to public rights of way, the public are not getting a very good deal. The Government could argue that, because the management agreements often relate to the maintenance of land in its existing state rather than to the addition and enhancement of new land and improvements to management services, the public are not getting a very good deal.
  5.15 pm
  The Government may even argue strongly that the whole scheme has been a sham, abuse and waste of taxpayers' money since its inception. Those are reasons not for the Government to change the law as they propose, but for the Government to begin to enforce the provisions properly and to make the information about the agreements open so that the public can receive the benefit of the money that has been expended on their behalf.
  In Committee, the Economic Secretary to the Treasury said that the Government's proposed changes applied only to 25 per cent. of the land in question. Only 25 per cent. of the land would receive 100 per cent. tax relief automatically. For the remaining 75 per cent. to receive 100 per cent. tax relief, the current agreements on access and management would have to apply.
  We must ask whether the Government's proposals will provide equality in respect of that land. I believe that the new clause provides a much better arrangement. The Economic Secretary to the Treasury accepted that there would have been instances in the past when agreements had been reached on access and management of land to obtain the 100 per cent. tax relief. However, according to the Government's proposals, in exactly the same circumstances the tax relief in future will be available automatically without the need for agreements. In other words, because of the timing of the death of the landowner, similar land would be treated in very different ways. There was no proposal to terminate the previous agreements on land even though similar land will be treated differently in future.
  It was accepted that in respect of the 75 per cent. of land for which agreements would still be needed for owners to claim 100 per cent. benefit of tax relief, that land in respect of scientific interest, beauty and benefits of walking over it, would be no different from other land which, in future, will gain 100 per cent. tax relief without the need for agreement.
  There seems to be an inequality of treatment there and between the 25 per cent. of land for which 100 per cent. of tax relief will be available automatically and the 75 per cent. of land for which agreements on management and access will still be required to secure such relief even though there is no difference in scientific interest, beauty and access between those two cases.
  There is a problem. Either the Government are claiming that access and management are not important because tax relief will now be given automatically on some land or, if they are important—and they must be because
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  the agreements are to be maintained for 75 per cent. of the land—how will the Government secure access and proper managment for the 25 per cent. of land unless other inducements and tax reliefs are to be introduced in future at further cost to the Treasury? We pushed that question hard in Committee but we did not receive an answer from the Minister. The matter continues to worry me, and I hope that the Minister will explain why his arrangements are better than the new clause, which would resolve the problem.
  The kernel of the argument is that the Government have not thought through the implications of their proposals. One can understand that some arguments about the need for agricultural holdings to be kept together on the death of an owner are relevant, and why the Government have put them forward. However, they have pushed the arguments without considering the important implications for management and access.
  Whatever happens when we vote on the new clause, the Government must accept that, in respect of agreements that have previously been reached and new agreements that are reached in future, there will still need to be agreements on management, and access information must be made public so that taxpayers will benefit from the considerable sums that they are forgoing.
  Mr. Bennett: I support the new clause. I congratulate my hon. Friend the Member for Islington, South and Finsbury (Mr. Smith) on the new clause, and I congratulate The Observer on its campaign in respect of the issue. I also congratulate the Ramblers Association on its work, particularly its document on public access to the countryside and the inheritance tax. I am not quite so sure whether I should congratulate it on its rather corny title, "Give us Some Quo for Our Quid", but the association still produced a worthwhile document.
  It is absolutely amazing that the Government have not come up with any information about benefits to the public as a result of the tax concession. I hope that the Minister will set out some good examples of areas in which access is working and where people benefit from the provision, otherwise hon. Members will feel that there has been a gross fraud such as that which my hon. Friend described. People were given tax benefits, but they appear not to have given the public any access.
  I am not one of those who believe that we should pay for access. There should be a right to roam on all mountain land, moorland and open land, and there should be no attempt to charge for that. I do not believe that people walking on land cause any problem, therefore there is no justification for a charge. The only reason for making a charge would be to provide extra stiles or, in a few popular areas, to stop erosion. People should be able to roam freely. If we are to pay from the public purse, it is important to produce fairness across the board.
  In large areas of the Lake district and of north Wales, some tenant farmers and owners have always allowed free access. I fear that if those farmers discover that large landowners have been paid to provide what they already provide freely, there will be restrictions on many areas where access is already available. I plead with the Government at least to demonstrate that by making those tax concessions we will have something of outstanding value in return. So far, I can see no evidence of that at all.

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  Instead of improving access, it will be more difficult to achieve in areas in which no one has thought of making charges.
  I press the Minister, if there are to be access agreements and conservation, particularly in areas such as the north Yorkshire moors, to consider the argument that it is far better to let people roam freely rather than encourage them to stay on footpaths. Inevitably, if people must follow footpaths, those footpaths become worn and it becomes difficult for small animals and insects to cross from one side to the other. That does far more damage than allowing people freely to roam across the land. Some landowners represent shooting interests and have fought very hard against the right to roam, but, on conservation grounds, it is far better to let people have open access rather than restrict them to footpaths. In areas in which access agreements have been negotiated, particularly in the Peak district, and where people have roamed freely, there are far fewer problems than in areas where they have been restricted to footpaths, some of which are eroded.
  I strongly support the new clause. I was pleased that my hon. Friend the Member for Islington, South and Finsbury referred to G.H.B. Ward. I was able to go with the ramblers when they dedicated a memorial to Mr. Ward. Admittedly, it was one of those occasions when there was a chance to harangue a large assembly of ramblers. The only aspect that was disappointing was that it was pouring with rain and, in the circumstances, extremely difficult to make a speech. However, Mr. Ward, who was from Sheffield, was a very important fighter for the rights of access.
  I hope that the Minister will assure us that we will have a public statement on what new access is to be created as a result of what payments.
  Mr. Eric Martlew: We are talking about a scandal—giving £800 million of taxpayers' money to some of the wealthiest people in the country. Although I support new clause 2, it is rather generous. History over the centuries has proved that those who have received tax relief have managed to keep all their wealth anyhow. There is a feeling that £800 million could have been better spent. That is the exact amount that is needed to upgrade the west coast main line railway from Carlisle to Glasgow, which would ensure that my constituents had an effective railway service. That might not happen because the money will not be available.
  The scandal is that landowners have received money for very little. I was told in a parliamentary answer that there are six such landowners in Cumbria. Shortly after that, the Government stopped naming counties in which such landowners live. I cannot understand the reason. However, there are six such landowners in the county of Cumbria. We are refused information on who they are, what access is available and how much it costs. We are told that that is because of confidentiality. That is nonsense.
  If those landowners wished to remain anonymous and not have their tax matters discussed, they should not have opted for the tax exemption. They decided that they wanted hundreds of thousands—perhaps millions; we are not to be told—in tax relief from the Exchequer. Surely, by doing that, they forfeited the right to confidentiality. They should have told my constituents, "We have made a deal" —we do not need to know how much it has cost—"for this
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  piece of land, and there is now open access to that land", but that is not the case. It is even worse than that. Not only are the people of the county not told, but representatives of local planning committees and the Lake District planning board—elected representatives—are not told. I recently spoke to the former chairman of the Lake District planning board, Councillor Phizackerley. He had no knowledge that that was happening in the Lake district, even though Lake District national park officers were acting as agents of the Countryside Commission to monitor what was going on. The members of the authority were not told.
  I tabled another parliamentary question on the matter and received an ambiguous answer from the Financial Secretary to the Treasury. He was not telling us anything. The scandal of money for access to land is nothing compared to the scandal of money for access to works of art. Some £700 million has been given in the past decade to various people in return for making their works of art available to the general public. Of course, that is if people can find those works of art. That is not so easy.
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  I went to the House of Commons Library as my first port of call. The Library rang the national art library at the Victoria and Albert museum and was told that information was not available and photocopies could not be made of the records at the national art library. That is nonsensical, because public money is involved and Parliament passed the legislation.
  Then I tried to find the information personally. Last Friday I rang the V and A and was told that, due to staff shortages, unfortunately the library was closed. So I rang on Saturday and was told that, due to staff shortages, unfortunately the library had an extended lunch break and was closed from 12 to 2 pm. As I had tabled a parliamentary question asking the Minister to put a copy of the document in the Library, I decided to sit back and wait until it arrived. Surprise, surprise, I received an answer from the Minister that he would not place the document in the Library on the ground that it was a big book. As it cost £700 million to compile the book, it is no wonder that it is a big book.
  Undaunted, my research assistant went to the V and A today to have a look at the document. She is a former librarian and she was appalled at the state of the document. It is not even indexed. Unless one knows what one is looking for, there is no point in looking at the document.
  Perhaps the position is simply part of a muddle. Perhaps the Government have not taken the matter seriously. But I believe that the Government did not want people to know where to go to see the art treasures. Comments have been made that some well-known parliamentary names from the past appeared in the document. I will not go into those names. [HON. MEMBERS: "Go on."] Hon. Members will have to go and look for themselves. Obviously, names of noble Lords from another place appear in the document.
  Perhaps we have now come to the crux of the matter. The Government have dealt with public access in this way. It is a way of maintaining wealth and power in Britain. We see it in the Chamber and in the other place. But how does that compare with the open government and classless society of the Prime Minister?
  Mr. Geoffrey Hoon (Ashtield): The application of inheritance tax legislation to allow conditionally exempt transfers to attract substantial tax relief is a Kafkaesque exercise in secrecy and obfuscation. Property, land and works of art can be exempted from inheritance tax where undertakings are given which purport to guarantee public access to the property, such as that land should be managed for the benefit of the public and works of art should be available for public view and inspection.
  New clause 2 sets out to define the circumstances in which public access should be made available. It defines what in practice public access should mean. It states, first, that details of access rights should be available to members of the public; secondly, that access should be available on a regular basis; and thirdly, that access should be free of charge.
  New clause 2 will therefore provide a practical guarantee of public access rights. That is not unreasonable because members of the public pay for those rights through the tax system in the form of tax relief and tax forgone. So why should new clause 2 be necessary? As has already been said, substantial sums of public money are involved and between £5 million and £10 million per year are relieved in return for access to land alone. That is about £100 million in the past 10 years. That raises some basic questions about the land. Where is the land? What public access rights have been granted over it? Are they new rights or have existing rights of access been confirmed? Moreover, what is the point of granting rights of public access if no one knows precisely where the land is and which land is being considered?
  Exempt transfers are important because the landowner is required not only to guarantee public access but to keep the land in proper condition. He is required to maintain the land and preserve its character. That is crucial because many of the transfers involve land in areas of outstanding natural beauty and national parks or cover sites of special scientific interest. Again, if no one knows precisely what land is covered, or the nature of the access granted to the public, how is it possible to determine whether the land has been properly maintained or its character properly preserved? It is possible for the landowner to take his tax relief and his money and run to the safety of the badly maintained hills.
  The same principles apply to works of art. To qualify for inheritance tax relief it is necessary to lodge with the Victoria and Albert museum details of the nature of the work of art—whether it is a painting, sculpture or piece of furniture—together with information on how the public can exercise their right of access. Unfortunately, as my hon. Friend the Member for Carlisle (Mr. Martlew) graphically demonstrated, the practical exercise of that right is frustrated by the administrative nature of the system operated at the museum.
  Even though a rough description is required for each work of art, together with its location by county, in practice it is impossible for the public to gain access to a remarkable range of public assets. They include paintings and drawings by Picasso, Leonardo da Vinci, Rembrandt, Rubens, Titian and Hogarth; sculptures by Rodin, Degas and Henry Moore; and thousands of antique rugs, tapestries and items of jewellery and furniture.
  As the Government have made train-spotting so difficult by running down our railways, perhaps I could recommend a new public pastime of public access art-spotting. Treasure hunts are popular at weekends. This
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  would be a real treasure hunt. People would be able to draw up lists of property that they had spotted. I am sure that enterprising publishers could publish helpful guides such as "I Spy a Masterpiece".
  Mr. Ken Purchase: Would not we need to know which land we could cross on the treasure hunt before we could find the works of art?
  Mr. Hoon: That would be part of the challenge. Indeed, it would require only a modest addition to new clause 2 to make the treasure hunt competitive. if we knew how much tax had been forgone, points could be awarded according to the value of the pieces of art spotted by enterprising members of the public. The more valuable the item, the more tax relief, and the more points would be awarded. I am confident that the Secretary of State for National Heritage will seize on that modest suggestion and that the ministry of fun will encourage it as part of its attempt to encourage public access to our national heritage.
  It follows from what I have said about both land and works of art that land and property owners are technically in breach of the law. They are certainly in breach of the spirit, if not of the letter, of the law. Given that, under the rules, a property owner forfeits the right to tax relief if the land or property is no longer available to the public, clearly he or she should, in such circumstances, be liable to repay the tax forgone.
  Perhaps the Government might like to tell us precisely how many tax inspectors are deployed to ensure public access to the works of art or pieces of land in question. I suspect that the Government might be embarrassed by the modesty of their answer to that question. Yet, taxpayers are carefully followed up by tax inspectors, and small businesses face questioning by tax inspectors. I wonder whether the Treasury, which oversees the deals, is allowing substantial amounts of money to escape the Revenue, without a proper investigation into the right of public access.
  I recommend new clause 2 to the House. Is it so unreasonable to ask the Government to ensure in practice the largely theoretical rights of public access, enshrined in the tax legislation? That is the purpose of new clause 2. and it is difficult to understand why the Government should resist it.
  Mr. Alan Milburn: The new clause seeks to put to rights a clear abuse of the tax system. The lax operation of the law puts the interests of the very wealthy —landowners and owners of great national treasures—above those of the public. It confers privileges on the owners of land and art treasures, without any payback for the taxpayer—the people who financed the privileges out of their pockets in the first place. To coin a phrase from The Ramblers, the law is supposed to give the taxpayer
  "Some quo for its quids."
  In return for offering public access to land or works of art, an owner can keep it and be relieved of inheritance tax. All that costs a pretty penny. My hon. Friend the Member for Islington, South and Finsbury (Mr. Smith) said that it is costing the taxpayer and the Exchequer about £10 million per year for land, and my hon. Friend the Member for Carlisle (Mr. Martlew) said that costs for art treasures are way in excess of that figure, at about £70 million per annum.
  Normally, we are not privy to the deals negotiated between the Exchequer and owners of land or art

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  treasures. The Observer has managed to track down the only case where a known sum of money has been attached to access to land. The land is owned by the Duke of Devonshire—a man who is not known to be short of a bob or two. He owns the Bolton abbey estate in the Yorkshire dales. According to The Observer, negotiations are under way at this moment with the Treasury and with the Countryside Commission. It is understood that the Duke of Devonshire is demanding about £12 million in return for keeping open existing public rights of way—they are not new rights of way. The taxpayer and the Exchequer are expected to pay £12 million for the privilege. The Economic Secretary has an opportunity to confirm whether that is the case and how the negotiations are progressing.
  It is as well to remember that the Government are anxious to damp down public expenditure, to ensure that we get good value for money and that the taxpayer gets a good deal. I wonder whether the Economic Secretary will confirm that he thinks that the deal being concluded with the Duke of Devonshire fits all those criteria. I think that it probably does not.
  In the past decade, handouts from the Exchequer have cost approximately £800 million. Before too long we shall hit the magic figure of £1 billion. As my hon. Friends know only too well, £1 billion is equivalent to ½p on the standard rate of income tax. We are paying through the nose to maintain the privileges of wealthy landowners and the owners of art treasures. Perhaps that would not be so bad if the public were getting some value for money, or at least some knowledge of value for money, but clearly they are not.
  5.45 pm
  The law states that when inheritance tax relief is given, full details of access rights must be readily available to the public. We know, from contributions from the Opposition Front Bench and from my other hon. Friends, that those details are simply not forthcoming. We know that a substantial amount of land—about 315,000 acres—is covered by such arrangements, including many sites of outstanding beauty or of special scientific interest. They are the jewels in the crown of this country. and the lax operation of the present tax laws means that those 315,000 acres are being subsidised out of the public purse for the private use of the wealthy.
  The public, who are supposed to be the direct beneficiaries of deals concluded between the Exchequer and landowners and owners of art treasures, arc being kept in the dark about where they can exercise the rights being bought on their behalf. Worse still, as my hon. Friend the Member for Islington, South and Finsbury said, there is clear evidence that there has been direct infringement of some deals. If anything, the situation is even worse as regards art treasures. When The Observer contacted the National Art-Collections Fund, which helps museums to buy works of art, and the Museums Association, the umbrella body dealing with museums, neither knew of the existence of the register of works of art kept at the Victoria and Albert museum.
  As we have heard from some of my hon. Friends, the works concerned are treasures indeed. One such work, Canaletto's view of Old Horseguards, was recently bought for the nation for £10 million. It was previously on the
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  register, although few people have seen it. The owner, Viscount FitzHarris, had avoided paying inheritance tax on it amounting to about £4 million at today's prices. The public got a raw deal and I suspect that Viscount FitzHarris got a good deal.
  Who does all that benefit? It certainly does not benefit the taxpayer or the Exchequer, the rambler or the art lover. Their rights of access are denied to them, yet we are talking of national treasures which the public have effectively funded. The sole beneficiaries are the very wealthy.
  If the Government fail to accept the new clause, which brings public rights out into the open, and defines access in precise terms, we shall be left with the impression that Ministers are more concerned to protect the interests of the very rich than those of the public or the taxpayer. However, that should come as no surprise to my hon. Friends. After all, for about 13 years it has been Conservative party policy to defend the interests of the very wealthy against those of the public in general. I do not say that from any party political or prejudiced point of view, as my hon. Friends will know.
  The Financial Secretary, who sadly is absent, told one of my hon. Friends on 29 June that the principal beneficiaries of income tax reductions from 1979 have been those earning more than £80,000 a year. That small group of just 150,000 people gained some £7,200 million in income tax cuts—an average of some £46,000 each per annum. By contrast, the 3 million people who earned less than £5,000 per annum received a total reduction, thanks to income tax cuts, of just some £500 million—a paltry £150 a year each. As always happens under the Conservative party, the gainers have been the most privileged in our society and the losers have been the least privileged.
  It is time that the Government accepted that they should govern in the interests of everyone, not just a tiny few. After all, in recent months we have heard many claims by Conservative Members about the need for a classless society and open government. The Government have an opportunity to demonstrate both their commitment to a classless society and to open government by ending what has become a racket in inheritance tax exemptions and by accepting new clause 2.
  Mr. Peter Mandelson: It is difficult to understand why the Government might resist the new clause, because it does not alter, but, rather, strengthens the principle that underpins inheritance legislation and assists in enforcing the conditions that the Inland Revenue seeks to oppose. Moreover, the Government should not resist the new clause on grounds of effectiveness and efficiency. It is obviously of wide benefit to the people whom we represent and would not cost the Treasury a penny to implement.
  If the new Secretary of State for National Heritage were present, he would probably embrace the new clause enthusiastically because it goes to the heart of the role that the Prime Minister has given him. In one deft move, its acceptance would help to tear away the dust sheet from significant parts of our national heritage and allow the padlocks to be removed from areas of scenic beauty and hitherto unexplored delights in our countryside. The acceptance of the new clause and the more efficient operation of that part of inheritance tax would lift the Heritage Secretary's horizons considerably. Rather than

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  seeking new photo opportunities for himself, which seems to be what his new post has consisted of so far, it would enable him to create new opportunities for the people of this country to enjoy the national heritage, which the Minister has been appointed to serve.
  There has never been disagreement about the objectives and virtues of the relief from inheritance tax. Those objectives are to open up what has hitherto been hidden and provide access to what has been closed or at least unknown or undiscovered in the past. The objectives have never been questioned by Labour or Conservative Governments. The new clause deals with the lack of diligence in the operation and application of the provisions and the lack of thoroughness in extending the benefits of the inheritance tax relief provisions to the public at large. Because of that lack of diligence and thoroughness in the provisions' implementation and operation, a good and fair system has gone badly wrong. Indeed, that fair and reasonable system to defray inheritance tax, which was meant to operate in the public interest, has instead turned into a racket and a rip-off.
  The lack of diligence and thoroughness with which the provisions have been implemented has resulted in such abuse of the system and generated such contempt for the authorities that, were it present in the operation of the social security system of welfare benefits, it would produce howls of outrage and demands for a crackdown from Conservative Members.
  Recently I was subjected to an intervention by the hon. Member for Welwyn, Hatfield (Mr. Evans), who asked the Secretary of State for Employment whether she planned to act against what he termed "social security scroungers". He said in his characteristically unattractive—some would say obnoxious—way:
  "Is she aware that many of the long-term unemployed are layabouts? They should have to do community work before receiving benefit. The taxpayers are sick and tired of financing these layabouts."—[Official Report, 9 June 1992; Vol. 209, c. 139.]
  Why should not the same standards that apply to those who enjoy benefits from the social security system also apply to those who are considerably better off and enjoy similar benefits from relief in the operation of inheritance tax?
  I am reminded of a story that appeared a couple of weeks ago in The Sunday Times by Mr. Andrew Grice, political correspondent and respected member of the reporting staff in the House. He said that the Secretary of State for Social Security was going to order a crackdown on dole fleecers.
  Why do the Government operate double standards? If the report is accurate and the Social Security Secretary is preparing to order a crackdown on dole fleecers, why should not the same standards be applied to those getting away with an abuse of the inheritance tax system? They are enjoying the benefits and relief to which they are entitled under the legislation to which the new clause refers, but are not giving back what they are obliged to return under the agreement that they have reached. What is the difference? What is regarded as an abuse of the social security system is treated with a benign shrug in the case of inheritance tax and the relief that is offered to people to defray it.
  The harsh punishment that many would like to see given for what they call "scroungers" should not be blindly ignored in the case of rich landowners and art collectors who are taking advantage of the relief under inheritance
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  tax law. Is that not a clear example of double standards'? Are not the Government saying that the rich should be given more while the poor should have it taken away?
  Abuse of the system allows the well-off, with land and priceless artefacts, to hold on to their wealth without subsequently meeting the obligations into which they have freely entered.
  However, for those without such land and artefacts. the abuse of the system denies them access to what it is their right to view, to walk upon or otherwise to enjoy. It is not hard to understand why the system is going wrong and why it is open to such abuse when, upon the death of an enormously rich person, his heirs seek to defray tax payable on the estate by exploiting the available relief.
  6 pm
  Let us consider the interesting and purely theoretical case of Princess Diana and the Spencer family treasures. What alternative is there to those treasures coming under the hammer to pay the huge death duties that arose upon the tragic death of Princess Diana's father, Earl Spencer'? The new Lord Spencer inherited not just an earldom, but the need to find £4 million out of the estate to pay the death duties. The new lord inevitably wants to retain as much of his inheritance as possible. Some people might argue that those magnificent treasures should instead pass in their entirety into public ownership for the benefit of the nation.
  To defray those death duties, it is open to the new earl to negotiate a conditionally exempt transfer. That would enable him to keep the treasures in his ownership—his exclusive private ownership—but in exchange he would have to provide assured public access so that those treasures could be viewed by members of the general public. That is the principle at the heart of the provision that is addressed by the new clause.
  In the words of the Ramblers Association, there must be a public quo in return for the earl's quid. Instead, we have what my hon. Friend the Member for Ashfield (Mr. Hoon) described as a treasure trail, but with almost no clues available to enable members of the public to embark on the treasure hunt with any reasonable expectation of success, so that they might view and enjoy treasures that remain in private ownership but which, under the operation of the legislation, are meant to be available for the enjoyment and satisfaction of ordinary members of the public.
  I do not doubt the earl's good intentions, but just consider the hoops through which members of the public must go to view the pictures, the furniture and the artefacts —the priceless, stupendous treasures—in the great Spencer collection. My hon. Friends the Members for Islington, South and Finsbury (Mr. Smith) and for Carlisle (Mr. Martlew) have already referred to the hoops, hurdles and obstacles that any member of the public might have to go through, over or under to have sight of treasures that are available for public viewing.
  Mindful of the fact that the Bill and its prolonged proceedings—in which I have been pleased to play some little part over the past almost incalculable number of weeks—are coming to an end, I thought that I might spend my weekend near my constituency walking through scenes of great beauty near Hartlepool in the county of Cleveland.
  As has already been said, there is no point going to the Countryside Commission, to the Central Council of

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  Physical Recreation or to the Ramblers Association because none of them can tell me what rights of way, what sights of scenic beauty or what natural landscapes I can enjoy under the provisions of our legislation near to my home in my constituency of Hartlepool—because there is no land, there are no walkways and there are no scenes of beauty recorded by any of those organisations that would enable me to make my choice.
  In the absence of a nice walk, I thought that I might instead use the time available to me, after we have completed a successful constituency barbecue that is to be held this weekend, looking at some nice pictures—
  Mr. Tony Banks: Are there any spare tickets?
  Mr. Mandelson: Yes, there are spare tickets.
  I thought that I would look at some nice pictures and some nice furniture. Like my hon. Friend the Member for Carlisle, I asked my office to contact the Victoria and Albert museum and the national arts library. However, the problem is not that there is any dearth of pictures, artefacts or fine pieces of furniture listed in the locality —on the contrary, as my hon. Friend the Member for Islington, South and Finsbury said, there are between 30,000 and 40,000 such objects, pictures and items of fine furniture from which I could select; the problem is that they are not broken down geographically. I would have to pore through thick books listing between 30,000 and 40.000 items before I could come upon that picture, that fine piece of furniture, that treasure located near Hartlepool that I might visit this weekend after the completion of my constituency barbecue.
  The practical problem is that what is available is not accessible; what is listed is impossible to divine in any simple, practical way that would allow ordinary members of the public, or even ordinary Members of Parliament celebrating the conclusion of the Finance Bill, to benefit from the sight and enjoyment of those items that are listed by the Victoria and Albert museum.
  I hope that, in responding to the debate, the Economic Secretary will reflect on the strength of argument that has supported the promotion of the new clause. It is needed to ensure that full details of art and land are readily available to the public, that access to them is free, and that such access is either regularly available during the year in the case of art, or permanently available in the case of land. The new clause is a practical, sensible proposal and I hope that, on reflection, the Economic Secretary will be minded to accept it.
  Mr. Tony Banks: I hope that the constituency barbecue of my hon. Friend the Member for Hartlepool (Mr. Mandelson) is enormously successful. The only thing that he did not tell us was the price of the tickets.
  Mr. Mandelson: They are £4 each.
  Mr. Banks: That is an excellent bargain. I hope that anyone within a coach ride of Hartlepool will find his way to the barbecue.
  My hon. Friend is lucky to have rural idiocies to enjoy in his constituency at a weekend. I do not have very much in the London borough of Newham. Last Sunday we had a walk along the northern sewer outfall—[Laughter.] I knew that hon. Members would laugh, but it is quite beautiful if one likes sewers. It is a grassed-over embankment and it is pleasant to walk along it. When I
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  think of all the wealth and opportunity that some have in our society and then see the deprivation that so many of my constituents have to endure, it is easy to become angry. I could never believe that a scheme that allows people to set aside their tax liability by pledging paintings and land while continuing to enjoy them is anything but a total con. It is an absolute rip-off. The obstacles that are placed in the way of the public when they want to see such treasures make it an absolute sham.
  I am deeply grateful to my hon. Friends the Members for Carlisle (Mr. Martlew) and for Islington. South and Finsbury (Mr. Smith) for bringing that abuse to the public's attention. It has been going on for years, but until someone tells us about it, we remain ignorant.
  Few people in Newham have hereditary land and artefacts of great beauty that they can pledge to the nation to avoid taxation. They have nicked a few in their time, but have never been able to offset them against tax because the Inland Revenue is not too enthusiastic about the acquisition of property in that manner. The people of Newham cannot take advantage of the scheme, so it makes them feel that much more cheated.
  The more that I think of the scheme, the more monstrous it becomes—the idea that people can say, "I will set these paintings against my tax liability, but continue to keep them." What if I were to tell the Inland Revenue," I know that I owe you some money. I will leave it in the bank so that you know that it is there—but you cannot have it." That would never be allowed. It might be a nice try, but one would not be permitted to get away with it.
  Artefacts represent accumulated wealth that should be taxed. Many of those wonderful items and much of the land were originally stolen—given away by kings and queens to acolytes who had done them a favour. We all know the favours that used to be done for kings and queens.
  Mr. Patrick Cormack: Is the hon. Gentleman aware that in the 1970s, when the now Lord Healey proposed a wealth tax, there was an outcry in all parts of the House? It was realised that it would lead to treasures leaving the country, and the opposition was such that Lord Graham of Edmonton, as he now is, presented to this House an all-party petition signed by more than 1 million people. The all-party arts and heritage group was formed at that time, and claimed the allegiance of right hon. and hon. Members in all parts of the House—as it still does. For once, the hon. Gentleman has got it wrong.
  Mr. Banks: Well, there you go. I remember Denis Healey, as Chancellor of the Exchequer, saying that he would squeeze the rich "until the pips squeak". That is one of my favourite political sayings. I looked forward to that, but unfortunately it did not happen. I ask the hon. Member for Staffordshire, South (Mr. Cormack), for whom I have great respect, how anyone could take land out of the country. One cannot pick up 3.000 prime acres and ship them abroad. Not even the hon. Member for Staffordshire, South, for all his ingenuity, could do that.
  Mr. Cormack: I remind the hon. Gentleman that a country house, with its parklands and treasures, must be sustained by income from some source—and in many cases the income comes from the land.
  Mr. Banks: I take the hon. Gentleman's point, but he was saying that valuables should not be shipped out of the country. I merely mentioned land as an example. However, the hon. Gentleman is on to something. To answer his point, I would like to be set up a national register of all items of heritage of great value that belonged to the nation. An export embargo should be placed on them so that people would not be allowed to ship them out of the country. Export licences are required in respect of some items designated as being of considerable artistic merit. A national register would prevent items from being disposed of by an individual, who may often have acquired them by some nefarious means in the first place.
  I support the new clause, but I would like a Labour Government to commit themselves to getting rid of a tax loophole which is available to only a few privileged people, and which is obviously abused. The new clause attempts to end that abuse, and I hope that the Minister will see his way clear to accepting it.
  6.15 pm
  The Economic Secretary to the Treasury (Mr. Anthony Nelson): It has been an interesting debate, and I have taken in a positive spirit many of the contributions made by Opposition Members on the subject of conditional exemption, which I will address later. I am, however. presented with a genuine dilemma. I do not mean to criticise the Opposition, because I am sure that their new clause was intended to do as they said, but in fact it has nothing to do with conditional exemption; it concerns gifts in lieu. I will try to respond, but as a matter of form perhaps the hon. Member for Islington, South and Finsbury (Mr. Smith) will agree that it would be more appropriate for me to answer specific points about the new clause, which is interesting in itself.
  The only relevant comments on new clause 2 were made by my hon. Friend the Member for Staffordshire, South (Mr. Cormack) in his short intervention, when he gave the background to the in-lieu provisions. If the House is agreeable, I will make an initial reply to the points raised by the new clause, and then deal with conditional exemption.
  The clause seeks to restrict the provisions for the acceptance of works of art and land in lieu of inheritance tax to qualifying property to which the public will be given access free of charge. In the case of land, free public access would he required throughout the year. In the case of other property—mainly works of art—free public access would be required for at least 52 days in each 12-month period.
  The acceptance-in-lieu scheme provides an effective means for museums and galleries throughout the country to acquire pre-eminent works of art and other objects. The special price paid for acceptances in lieu on behalf of museums or galleries will be less than the market value of the object, and the funds that are available for acquisitions by those bodies can therefore be used to buy more objects than in the open market. The scheme helps to protect our national heritage and to retain important works of art in the United Kingdom, as my hon. Friend the Member for Staffordshire, South said. It has enjoyed broad cross-party support. All acceptances in lieu are announced in reply to parliamentary questions.
  The majority of acceptances in lieu are allocated to museums and galleries. Over the past five years, the
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  amount of inheritance tax satisfied by acceptance in lieu of works of art and other objects was £31·9 million. About 96 per cent.—some £30·5 million of that—related to items that were allocated to museums and galleries open to the public. Many are open all year round, and all of them are open for more than the 52-day minimum referred to in the new clause.
  Some—but not all—of those museums and galleries charge for admission. The decision on charging is for the board of the trustees of the individual institution, and the Government neither impose nor prohibit the introduction of admission charges. It would not be practicable for a museum or gallery that charges for admission to allow free access to one or two items that had been accepted in lieu of tax.
  The reason for allocating an item accepted to a particular museum or gallery will sometimes be that it will augment an existing collection of similar items. It would therefore not be desirable to display the accepted item in some free-access room separate from the rest of the collection.
  The Government are committed to maintaining their support for national museums and galleries while at the same time encouraging them to develop greater independence and self-reliance. It would he wrong to force a museum or gallery that received a work of art under the acceptance-in-lieu scheme to change its charging policy in the way that new clause 2 suggests.
  Mr. Cormack: Will my hon. Friend confirm that some in-lieu items are in National Trust properties or even in private properties which are open to the public?
  Mr. Nelson: That is certainly the case, but they are always well known cases and, as I said, they are subject to a parliamentary reply. Such matters are in the public domain.
  A small number of acceptances of works of art and other objects are left on display in situ in their previous location. Public access is available to these items for not less than 30 days a year. Since 1980, 20 items have been accepted in situ, 15 in privately owned houses open to the public. The average opening period of these properties is 130 days a year, far in excess of the minimum requirement of 52 days proposed in this clause. In addition, a number of in-situ items historically associated with a property are in National Trust hands. These houses usually open from April to October, and a small number throughout the year. The owners of these properties will generally charge a reasonable entry fee which, in most cases, will be used to meet costs of public access and help towards the maintenance and preservation of the property. It would be unrealistic to suggest that these charges should be waived for at least 52 days of the year where an acceptance was made after 30 June 1992.
  The acceptance-in-lieu scheme has mainly been used for works of art and other objects in recent years and little land has been accepted in lieu. Where land is accepted, it would be wrong to prescribe, as suggested in this new clause, a simple and all-embracing rule for all categories of land. The degree of access must depend on the property in question: what might be appropriate for open land will not be reasonable, for example, in the case of land immediately surrounding a house where access at night might have to be restricted. Even where land is open, it is accepted only if it has some special quality—in particualr, that includes

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  land which is important for nature conservation. Access to such land has to be managed, which means balancing the access objective and the benefits of preserving its special characteristics. We aim to ensure the widest possible enjoyment of properties accepted in lieu of tax, but we will not achieve this by imposing an across-the-board condition to all land accepted.
  Buildings and land do not maintain themselves. It has long been the practice to make a reasonable charge for admission to some buildings and land to help to meet the costs of maintenance. This is true whether the land is publicly or privately owned or placed with a charitable trust.
  For the reasons that I have set out, I consider that there is already a high level of public access to items which have been accepted in lieu and that this new clause would be unlikely to add to the availability of public access to future acceptances in lieu. In the case of land which is protected for nature conservation purposes, the unrestricted access proposed could be positively damaging.
  If you will permit me, Mr. Deputy Speaker, I shall comment on what I readily acknowledge to be the related issue of conditionally exempt lands and items. The issue was raised in a different way in Committee and has been commented on more widely this afternoon. In his advocacy of public rights of access, the hon. Member for Islington, South and Finsbury was prosaic, a virtue which accords not only to his colleagues. There is a general welcome for the maintenance, improvement and increase of public rights of access where that is feasible and desirable.
  However, it is important to answer the hon. Gentleman's question about the cost of conditional exemption since it has been in existence. The annual cost of conditional exemption from inheritance tax and capital transfer tax of works of art alone is estimated to have averaged about £70 million from 1983–84 to 1991–92. There are sometimes significant fluctuations in the estimated cost from year to year.
  The 1991–92 cost was £20 million, but the 1990–91 cost was £160 million. The annual cost of conditional exemption for land and buildings is estimated to have averaged £5 million to £10 million from 1984 to 1992. If one adds the two figures together and multiplies them by eight, one arrives at the figure of £800 million which has been mentioned and in a further two years—bringing the period to 10 years—the figure would be pressing the £1 billion mark.
  At least one hon. Member—it may have been the hon. Member for Darlington (Mr. Milburn)—referred to the equivalent cost of income tax. He said that it amounted to the equivalent of ½p on the rate of income tax. Of course, numerically that is correct in any one year, but we are talking about relief over a 10-year period, whereas ½p would raise £1 billion a year, so the two are not strictly comparable.
  The hon. Member for North Cornwall (Mr. Tyler) asked how the criteria for relief would be determined. I acknowledge that that is an important issue. The hon. Member was referring not specifically to conditional exemption, but, I think, to the enhanced reliefs for inheritance tax purposes provided in the Bill.
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  The tax authorities already have to make a judgment about what properties fall into the various categories for the higher and lower rates of inheritance tax relief, and, of course, that will not change. In future it will, as before, be a matter of fact as to what amounts to an agricultural holding in possession and whether it attracts the full 100 per cent. rate of inheritance tax relief to be passed on as a family farming business from one generation to another. There may be problems and there may be contested assessments of whether such relief applies, but there will be no new problems because the existing definitions will continue to obtain.
  The hon. Member for Sheffield, Attercliffe (Mr. Betts) also raised that issue today and in Committee. He asked, among other things, what incentives there were for access to the prospective 25 per cent. of lands which it is estimated is not now likely to claim conditional exemption but which will instead claim the full 100 per cent. relief. It is acknowledged that in granting that enhanced relief for certain businesses there will be a disincentive—or less of an incentive—for some landowners to enter into conditional exemption agreements. Yes, that is the case, but the original fear was that it would be such a disincentive that there would be virtually no new conditional exemption agreements.
  I hope that in Committee and in the House we have been able to reassure people that a substantial amount of lands will still have a very positive incentive to go into conditional exemption agreements because they will effectively obtain 100 per cent. relief from inheritance tax, whereas if they did not go into conditional exemption agreements they would be liable for a lower rate of only 50 per cent. relief, or for none at all.
  The hon. Member for Attercliffe was right to say that there is still a proportion of land—prospectively 25 per cent., and I stress that it is only prospectively—which will not now go into conditional exemption and will not be available for public access as it might otherwise have been. In terms of quantity, that will not be as material as the benefits which will accrue to the businesses and farming businesses of lands which are, after all, handed on.
  Much of the land that we are discussing, which will qualify for 100 per cent. relief, will be family-owned farming businesses where a large part of the land is, by its nature, farmed and therefore cannot be roamed across. Where there are rights of access to it, there are likely to be public rights of way which will continue to exist. While conditional exemption was in the past a valuable relief, the new 100 per cent. relief from inheritance tax will also be substantial. In many cases—probably the overwhelming majority of cases—there will still be public rights of way over such lands. They cannot be regarded in the same way as unfarmed heritage lands which simply would not be open to inspection by the public.
  Mr. Betts: Has the Minister considered the possibility of treating differently different types of land which, under the proposals, will automatically get 100 per cent. exemption? Ordinary farming land may acquire exemption and automatically gain 100 per cent. relief. Would it be possible for SSI land to be treated in such a way that 100 per cent. exemption from tax would apply only if some form of agreement were reached?
  6.30 pm
  Mr. Nelson: That possibility was raised in Committee. We resist the idea because it would draw an arbitrary and improper distinction between certain lands which could qualify for the same amount of relief. It would mean, in effect, that a hill farm which had no special heritage value might, as a going family concern, be entitled to the full 100 per cent. inheritance tax relief, while another farm which had heritage features would not obtain that status without a condition being placed on it.
  The hon. Gentleman may be in favour of that—indeed. other Opposition Members have spoken, some passionately, in favour of linking access to relief—but we have not sought to do that, and to the extent that it exists, it is provided through the conditional exemption and the in-lieu provisions. They are substantial and, as has been acknowledged. they have brought much land, chattels and items of heritage to the public for inspection.
  We believe that it would be wrong to create such a distinction through conditionality on certain pieces of farming land and not on others. They are both farming, going concerns— businesses—to which we are trying to give relief. It would be wrong to give it in one case with substantial conditions attached and not to do so in the other.
  The hon. Member for Denton and Reddish (Mr. Bennett) challenged me to give examples of conditional exemption. He knows well that I cannot do that, not because I do not wish to do so, but because I am not allowed to do so. The principle of confidentiality in Inland Revenue matters is absolute. It is an extremely important principle for the protection of the public that they should know that their affairs with the Inland Revenue are confidential.
  I shall explain why, in respect of items that are made conditionally exempt, that is known and is public. The crucial difference is that it can be at the choice of the individual, because other options are open to him to obtain conditional exemption for a work of art, other than it being placed on the list. There are other ways by which he can continue to make it available, in a conditionally exempt property, for inspection to which the public already have access. It is important to maintain the fundamental principle that there should continue to be confidentiality in Inland Revenue matters.
  Mr. Bennett: I question whether the Minister's logic stands up. Is there a difference between a piece of landscape and a picture? I accept that the person with a picture has a choice; he can go for exemption, after which conditions apply. Similarly, the person with a landscape has a choice. He can sell the piece of countryside to raise money to pay the tax. It seems ridiculous to have what is an obscure list of pictures, yet it is claimed that there cannot be a list of pieces of land to which the general public are supposed to have access. How on earth can the general public benefit if they do not have the access details?
  Mr. Nelson: The hon. Gentleman is right in his final point, and I concur with the sentiments that he expresses, but I invite the House to draw a distinction between the issue of access—on which we can have a positive discussion about what improvements might be sought—and the separate issue of the confidentiality of dealings
  224
  with the Inland Revenue. It is not necessary to break that relationship of confidentiality to have, and improve, access. They are separate matters.
  One is sometimes driven to the suspicion, as Opposition Members press the matter, that they are really talking about the identification of accumulated wealth and the circumstances of individuals—[Interruption.] I am pleased if their reception of that statement means that I am wrong. Opposition Members—the hon. Member for Hartlepool (Mr. Mandelson) was vitriolic about it—do not like accumulations of wealth. They want all such matters to be exposed.
  The question of access is a different matter, and if we want to improve access for the public to heritage lands, buildings and works of art, let us try to improve the mechanisms to make that possible. But that does not require breaking confidentiality with the Inland Revenue.
  Mr. Mandelson: I assure the Minister that I am not motivated by greed. I am motivated by a desire to see everyone, no matter how big or lowly, not given opportunities to cheat the public purse or wider public interest in disreputable and unlawful ways.
  I ask the Minister the question that I had intended to put to him: how would he square his commitment to increase information to facilitate the access that he believes is so important with maintaining the principle of confidentiality which he believes must be upheld?
  Mr. Nelson: I shall suggest some ways in which access can be improved, and discussions are taking place about that. But we need not disrupt the basic principle to which I referred—[interruption.] I shall return to the subject, but I am anxious to comment on other important matters to which hon. Members have referred.
  The hon. Member for Denton and Reddish asked where the public benefit was in the relief. The public benefit in the inheritance tax relief in the Bill is not directed principally to the access of the public. It is directed mainly to the integrity and prosperity of family businesses and agricultural farming units. The judgment of the Government—opposed by Opposition Members, who voted against the clause—is that there is economic and employment benefit to be derived from the integrity of passing on from one generation to another the aggregation of businesses and of working family farming units.
  The hon. Member for Denton and Reddish also asked about the ability to roam freely, and I appreciate the sentiments that drove him to ask that type of question. The Inland Revenue takes expert advice from amenity bodies, local authorities and others concerned in setting up management agreements for such land with a view to ensuring that environmental management and access schemes have the proper balance of access for the public, with the right to see and roam but also to conserve the environment. I contest whether it is always better to allow people freely to roam rather than to keep to footpaths.
  The hon. Member for Carlisle (Mr. Martlew) referred to the Lake district and the identity of landowners there. I do not know which of us has walked more miles in the paths of Wainwright throughout the Lake district, but I have never found much difficulty there in gaining access to outstanding lands, though that is due more to the national parks than to conditionally exempt arrangements. For the

  225
  same reasons that I gave to the hon. Member for Denton and Reddish, we must bear in mind the issue of confidentiality.
  The hon. Member for Carlisle asked why his local councillors did not know about such matters. In the overwhelming majority, if not all, of cases, local authorities would be taken into consultation with the Countryside Commission and others on the management agreements that are set up to provide access. The planning committee ought to know about that. It is for the committee to determine the way in which the information is treated. It is unlikely, however, that all council members will know such confidential details.
  Mr. Martlew: The information given by the Countryside Commission to the Lake District special planning board was so vague that the officers of the board believed—correctly or otherwise—that they could not pass it on to members. I tabled a question on the matter to the Financial Secretary, who answered it in a very ambiguous fashion. Is the Economic Secretary telling us that members of local councils' planning committees and national park authorities can be told the details of such agreements?
  Mr. Nelson: I am saying that local authorities are involved, and have information about land that will be subject to management agreements. I cannot speak in detail about the specific constituency points raised by the hon. Gentleman, but, if he would care to write to my hon. Friend the Financial Secretary or to me, we should be delighted to follow up his comments.
  The hon. Gentleman complained about not being able to obtain information from the Victoria and Albert museum list. He complained about the state of documents, and about the lack of an index. I have taken his complaints on board, and I shall deal with the V and A list in more detail shortly.
  The hon. Member for Ashfield (Mr. Hoon) asked how many tax inspectors were employed to ensure compliance. As I have already made clear, others are responsible for compliance with the management and access agreements, but the Inland Revenue must ensure that those arrangements are monitored effectively. We are satisfied that they are being examined as they should be, but it is not the Revenue's direct responsibility to ensure compliance with such argeements, except in the case of works of art.
  The hon. Member for Darlington complained that relief was being granted to the rich, while others were receiving no privileges. He described the position as a racket, and raised questions about the Duke of Devonshire and his estates. I cannot comment on such matters, but I assure the hon. Gentleman that public rights of way cannot be removed under the agreements with which we are dealing.
  As I said earlier, the hon. Gentleman's comments raised doubt about his motivation. It was not clear to me whether he was in favour of extending or of curtailing such reliefs. He seemed to have grave misgivings about the whole basis of conditional exemption. He nods, suggesting that he does not like conditional exemption—unlike most hon. Members, who have called for its extension and the provision of access in other ways. The hon. Gentleman will have to resolve that problem with his hon. Friends.
  226
  In a characteristically colourful intervention towards the end of the debate, the hon. Member for Newham, North-West (Mr. Banks) talked of wealth and plunder. Perhaps he, like his hon. Friend the Member for Darlington, feels that no relief should be provided for such purposes. Presumably he would have applied the same principle to the GLC silver: banning exports of all such objects would be right up his street.
  I promised to mention the conditional exemption arrangements relating to the Victoria and Albert museum list. Let me make it clear that works of art that are granted conditional exemption must be made available for viewing by the public. That can be done by displaying them either in a privately owned house or in a room that is open to the public. Publicity about the object may then be included in any general publicity. Alternatively, the owner can arrange for the object concerned to be on long-term loan to a public collection—again, publicity may be included. A third option is to allow public viewing by appointment, and to lend the object to a public collection on request.
  Availability for viewing is publicised by means of an entry in the register of conditionally exempt property, which is held by the national art library in the Victoria and Albert museum—the V and A list. Copies of the list are also available in Edinburgh, Cardiff and Belfast. The register is available for inspection by members of the public. Entries in it describe the object, and provide information about the county in which it is located; they also give the name and address of a contact who can arrange viewing. In many cases, the contact will be an agent. That is an important way of providing the owners of the property with some security: the inclusion of a name other than theirs is entirely for security reasons.
  The existence of the V and A list is known to art scholars and researchers, but other members of the public may well be unaware of it. Recent articles in The Observer will have helped to increase awareness, and I welcome that; but I reject the criticism in the articles, which suggest that the system of allowing public access to conditionally exempt items is deeply flawed. The V and A list allows interested members of the public to arrange appointments to view such works of art, thus providing reasonable public access. I urge any member of the public who consults the register and encounters difficulty in contacting the person whose name is shown on the register, or who considers that unreasonable conditions are being placed on any appointment to view, to write to the Inland Revenue's capital taxes office with details. If reasonable public access is being denied, the capital taxes office will attempt to correct the position. If that is not feasible, a deferred inheritance tax charge will be raised on the owner, based on the current value of the object. That is a considerable penalty for those who fail to comply with the conditions.
  6.45 pm
  Let me tell the hon. Member for Islington, South and Finsbury that the Government feel that there is scope for improving publicity for the V and A list and some of the more important items on it. The Inland Revenue, with the Department of National Heritage, is considering what can be done in that regard. In particular, they are examining the scope for regular press releases about additions to the list, and increasing awareness of the list among museum and gallery curators. The latter option could lead to feature articles about some items, with wider circulation.

  227
  The review is at an early stage, and I cannot announce any decisions now; but I am sure that the House will welcome that intitiative.
  I assure the hon. Member for Islington, South and Finsbury that, in discussions with officials, I have posed many of the questions that he and his hon. Friends have raised about the working of the arrangements. I, too, believe that improvements can be made, but the way in which to achieve that is to consult the parties and authorities concerned. In that way, it will be possible to make improvements that will match the mood of the House.
  Mr. Martlew: How does the existence of the list in the Victoria and Albert museum help my constituents., who live more than 300 miles away? Consulting it involves a round trip of 600 miles, and then the place may turn out to be closed, as it was last week. When will there be real public access for people all over the country? After all, the vast majority of people do not live in London. Why have the Government refused to place a copy of the list in the House of Commons Library? That is disgraceful. Why can it not be photocopied?
  Mr. Nelson: I am not at all sure that the V and A list would be a best seller in the House of Commons Library. As I told the hon. Gentleman earlier, however, copies exist elsewhere—in Edinburgh and Cardiff, for instance. It is not intended to be a secret document, and, if there is a better way of promulgating the informaiton, we shall try to adopt it.
  For all the reasons that I have given, I do not believe that even Opposition Members will wish to support the new clause, which refers to an entirely different matter. I believe that a warm and general welcome should be given to the assurances that I have provided, and to our genuine intention to improve access arrangements.
  Mr. Chris Smith: We have got something out of the Government: they have acknowledged that the viewing arrangements at the Victoria and Albert museum are inadequate and need to be examined, and that awareness of the availability of access to works of art needs to be increased.
  We have heard of the potentially tough penalties that will be imposed on someone who has claimed relief but who does not provide for public access. All that is welcome. The fact that the Minister said that he was approaching the matter in a positive spirit is also welcome. However, I am afraid that the spirit was not positive enough.
  The Minister was wrong on one or two points. He was wrong when he claimed that our new clause simply addresses the question of in—lieu gifts. He has obviously not looked carefully enough at subsection (3). The new clause clearly applies to conditionally exempt transfers. That has been the nub of our debate. The Minister was also wrong when he said that Opposition Members were —I think I quote him correctly—calling for an extension of conditional relief. None of us is calling for that. What we want is to get something for conditional relief, and the "something" that we want is public access.
  Mr. Cormack: There is public access. Will the hon. Gentleman be a little careful about what he is doing? The policy for preserving the heritage of this country has been evolved with the help of Members in all parts of the House.
  228
  Many members of the hon. Gentleman's own party have played a distinguished and constructive part in evolving that policy. The right hon. Member for Ashton-under-Lyne (Mr. Sheldon), a former Treasury Minister, is in the Chamber. He was immensely helpful when we had a Labour Government in the 1970s. We have a bipartisan policy. The National Heritage Memorial Fund and all the strands in that policy have been built on all-party support. I implore the hon. Gentleman not to wreck it for the sake of a cheap laugh.
  Mr. Smith: I am afraid that that remark was unworthy of the hon. Gentleman, for whom I have considerable respect on many of these matters. I do not demur from what he says about the importance of ensuring that works of art of great quality are kept in this country and about the need to ensure that our tax provisions and our public policy are framed accordingly. However, where inheritance tax relief is made available in return for ensuring that works of art are kept in this country, we believe that there should be reasonable and genuine public access to view those works of art. It is a simple point. In no way does it destroy the consensus to which the hon. Gentleman referred.
  The Minister acknowledged the disincentive effect of the new 100 per cent. agricultural relief, for which provision is made in the Finance Bill. He said, however, as though it were a great concession, that there would still he public rights of way across that agricultural land. But there would still be public rights of way whether or not relief was given, whether or not the Finance Bill goes through, whether or not the provisions of the new clause are put into effect. There is no great Government concession. A public right of way is a public right of way, and ever shall it be so.
  The Minister also referred to the register in the Victoria and Albert museum. We welcome the fact that there are copies of the register in Edinburgh, Cardiff and Belfast. Why, then, is it impossible to place a copy in the Library of the House of Commons? If it is possible to make copies available for three other locations, why is it impossible to make a fourth copy available for the Library?
  Mr. Tony Banks: Can my hon. Friend give the House a clue as to where these additional copies are in Edinburgh and Belfast? They are big cities. We should be able to narrow it down a bit.
  Mr. Smith: I should have to yield to the Minister in order to provide my hon. Friend with that information, but the Minister does not appear to be leaping to his feet to tell us. Perhaps we shall be able to pursue the matter further in the next few days by means of a parliamentary question.
  Apart from the fact that there ought to be a copy of the register in the House of Commons Library, why are we unable to go to the Victoria and Albert museum and make photocopies from the register? Why do we have to sit there and write down anything that we wish to copy from it? Why is the register not regularly updated? Why are half the contact names in the register out of date? Why is the register not properly indexed, which would enable us to look up what works of art are to be found in Cumbria or in the vicinity of Hartlepool? All those questions need to be addressed in the Minister's review.
  The heart of the debate is about public information and proper public access. When pressed, the Minister said that

  229
  he could not give examples of areas of land where access had been made available. He said that he was not allowed to do so because of the principle of confidentiality. Breathtakingly, he went on to say that this was for the protection of the public. No person who enters into a conditionally exempt transfer is forced to do so. It is his or her choice to take up that opportunity. In return for taking it up, that person commits himself or herself to make access available.
  None of us asks for details of the inheritance tax relief that any individual has secured in return for a specific agreement. All that we are asking for is information about where the access is available. That does not breach any tax confidentiality. All it does is to tell us what the benefit is to the public.
  Welcome though some of the Minister's points may be, I am afraid that the concessions that he has given are far too few. Unless the new clause is passed, we shall still forgo £110 million or more every year in Exchequer income, in return for very little. There will be no information on what areas of land have been made available for public access. Inadequate and out-of-date catalogues of access to works of art will remain. Lady Clarissa Collin will continue to tell people that they cannot roam freely on her land on the North Yorkshire moors. The new clause is about public access to our heritage and our landscape. That access is not properly available at the moment. I commend the new
  clause to the House.
  Question put, That the clause be read a Second time:—
  The House divided: Ayes 263, Noes 308.

  Divsion No. 53

  [6.57 pm

  AYES

  Abbott, Ms Diane

  Campbell, Ronald (Blyth V)

  Adams, Mrs Irene

  Campbell-Savours, D. N.

  Ainger, Nick

  Cann, James

  Ainsworth, Robert (Cov'try NE)

  Chisholm, Malcolm

  Allen, Graham

  Clapham, Michael

  Alton, David

  Clark, Dr David (South Shields)

  Anderson, Donald (Swansea E)

  Clarke, Eric (Midlothian)

  Anderson, Ms Janet (Ros'dale)

  Clarke, Tom (Monklands W)

  Armstrong, Hilary

  Clelland, David

  Ashton, Joe

  Clwyd, Mrs Ann

  Austin-Walker, John

  Coffey, Ms Ann

  Banks, Tony (Newham NW)

  Cohen, Harry

  Barron, Kevin

  Connarty, Michael

  Battle, John

  Cook, Frank (Stockton N)

  Bayley, Hugh

  Cook, Robin (Livingston)

  Beckett, Margaret

  Corbett, Robin

  Beith, Rt Hon A. J.

  Cousins, Jim

  Benn, Rt Hon Tony

  Cox, Tom

  Bennett, Andrew F.

  Cryer, Bob

  Benton, Joe

  Cummings, John

  Bermingham, Gerald

  Cunliffe, Lawrence

  Berry, Roger

  Cunningham, Jim (Covy SE)

  Betts, Clive

  Cunningham, Dr John (C'p'l'nd)

  Blair, Tony

  Darling, Alistair

  Blunkett, David

  Davidson, Ian

  Boateng, Paul

  Davies, Bryan (Oldham C'tral)

  Boyce, Jimmy

  Davies, Rt Hon Denzil (Llanelli)

  Boyes, Roland

  Davies, Ron (Caerphilly)

  Bradley, Keith

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

  Brown, Gordon (Dunfermline E)

  Denham, John

  Brown, N. (N'c'tle upon Tyne E)

  Dewar, Donald

  Burden, Richard

  Dixon, Don

  Byers, Stephen

  Dobson, Frank

  Caborn, Richard

  Donohoe, Brian

  Callaghan, Jim

  Dowd, Jim

  Campbell, Ms Anne (C'bridge)

  Dunnachie, Jimmy

  Campbell, Menzies (Fife NE)

  Dunwoody, Mrs Gwyneth

  230

  Eagle, Ms Angela

  Lynne, Ms Liz

  Eastham, Ken

  McAllion, John

  Enright, Derek

  MacDonald, Calum

  Etherington, William

  McGrady, Eddie

  Evans, John (St Helens N)

  McKelvey, William

  Ewing, Mrs Margaret

  Mackinlay, Andrew

  Fatchett, Derek

  McLeish, Henry

  Faulds, Andrew

  McMaster, Gordon

  Field, Frank (Birkenhead)

  Madden, Max

  Fisher, Mark

  Mahon, Alice

  Flynn, Paul

  Mallon, Seamus

  Foster, Derek (B'p Auckland)

  Mandelson, Peter

  Foster, Donald (Bath)

  Marek, Dr John

  Foulkes, George

  Marshall, David (Shettleston)

  Fraser, John

  Marshall, Jim (Leicester, S)

  Fyfe, Maria

  Martin, Michael J. (Springburn)

  Galbraith, Sam

  Martlew, Eric

  Galloway, George

  Maxton, John

  Gapes, Mike

  Meacher, Michael

  Garrett, John

  Meale, Alan

  George, Bruce

  Michael, Alun

  Gerrard, Neil

  Michie, Bill (Sheffield Heeley)

  Gilbert, Rt Hon Dr John

  Michie, Mrs Ray (Argyll Bute)

  Godman, Dr Norman A.

  Milburn, Alan

  Godsiff, Roger

  Miller, Andrew

  Golding, Mrs Llin

  Mitchell, Austin (Gf Grimsby)

  Gordon, Mildred

  Moonie, Dr Lewis

  Graham, Thomas

  Morgan, Rhodri

  Grant, Bernie (Tottenham)

  Morley, Elliot

  Griffiths, Nigel (Edinburgh S)

  Morris, Rt Hon A. (Wy'nshawe)

  Griffiths, Win (Bridgend)

  Morris, Estelle (B'ham Yardley)

  Grocott, Bruce

  Morris, Rt Hon J. (Aberavon)

  Gunnell, John

  Mudie, George

  Hain, Peter

  Mullin, Chris

  Hall, Mike

  Murphy, Paul

  Hanson, David

  Oakes, Rt Hon Gordon

  Hardy. Peter

  O'Brien, Michael (N W'kshire)

  Harman, Ms Harriet

  O'Brien, William (Normanton)

  Harvey, Nick

  O'Hara, Edward

  Henderson, Doug

  Olner, William

  Hendron, Dr Joe

  Orme. Rt Hon Stanley

  Heppell, John

  Patchett, Terry

  Hill, Keith (Streatham)

  Pendry, Tom

  Hinchliffe, David

  Pickthall, Colin

  Hoey, Kate

  Pike, Peter L.

  Home Robertson, John

  Pope, Greg

  Hood, Jimmy

  Powell, Ray (Ogmore)

  Hoon, Geoff

  Prentice, Ms Bridget (Lew'm E)

  Howarth, George (Knowsley N)

  Prentice, Gordon (Pendle)

  Howells, Dr. Kim (Pontypridd)

  Prescott, John

  Hoyle. Doug

  Primarolo, Dawn

  Hughes, Kevin (Doncaster N)

  Purchase, Ken

  Hughes, Robert (Aberdeen N)

  Quin, Ms Joyce

  Hughes, Roy (Newport E)

  Radice, Giles

  Hughes, Simon (Southwark)

  Randall, Stuart

  Hutton, John

  Raynsford, Nick

  Jackson, Ms Glenda (H'stead)

  Redmond, Martin

  Jackson, Ms Helen (Shef'ld, H)

  Reid, Dr John

  Jamieson, David

  Robertson, George (Hamilton)

  Janner, Greville

  Robinson, Geoffrey (Co'try NW)

  Johnston, Sir Russell

  Roche, Ms Barbara

  Jones, Barry (Alyn and D'side)

  Rogers, Allan

  Jones, Jon Owen (Cardiff C)

  Rooker, Jeff

  Jones, Ms Lynne (B'ham S O)

  Rooney, Terry

  Jones, Martyn (Clwyd, SW)

  Ross, Ernie (Dundee W)

  Jones, Nigel (Cheltenham)

  Rowlands, Ted

  Jowell, Ms Tessa

  Ruddock, Joan

  Kaufman, Rt Hon Gerald

  Salmond, Alex

  Keen, Alan

  Sedgemore, Brian

  Kennedy, Charles (Ross, C & S)

  Sheerman, Barry

  Kennedy, Ms Jane (L'p'l Br'g'n)

  Sheldon, Rt Hon Robert

  Khabra, Piara

  Shore, Rt Hon Peter

  Kilfoyle, Peter

  Short, Clare

  Leighton, Ron

  Simpson, Alan

  Lestor, Joan (Eccles)

  Skinner, Dennis

  Litherland, Robert

  Smith, Andrew (Oxford E)

  Livingstone, Ken

  Smith, C. (Isl'ton S & F'sbury)

  Lloyd, Tony (Stretford)

  Smith, Rt Hon John (M'kl'ds E)

  Llwyd, Elfyn

  Smith, Llew (Blaenau Gwent)

  Loyden, Eddie

  Snape, Peter

  231

  Soley, Clive

  Wardell, Gareth (Gower)

  Spearing, Nigel

  Wareing, Robert N

  Spellar, John

  Welsh, Andrew

  Squire, Rachel (Dunfermline W)

  Wicks, Malcolm

  Steinberg, Gerry

  Williams, Rt Hon Alan (Sw'n W)

  Stevenson, George

  Williams, Alan W (Carmarthen)

  Strang, Gavin

  Wilson, Brian

  Straw, Jack

  Wise, Audrey

  Taylor, Mrs Ann (Dewsbury)

  Worthington, Tony

  Taylor, Rt Hon John D. (Str'gf'd)

  Wray, Jimmy

  Thompson, Jack (Wansbeck)

  Wright, Tony

  Tipping, Paddy

  Young, David (Bolton SE)

  Trimble, David

  Turner, Dennis

  Tellers for the Ayes:

  Tyler, Paul

  Mr. Eric Illsley and

  Wallace, James

  Mr. Thomas McAvoy.

  Walley, Joan

  NOES

  Adley, Robert

  Coombs, Simon (Swindon)

  Ainsworth, Peter (East Surrey)

  Cope, Rt Hon Sir John

  Aitken, Jonathan

  Cormack, Patrick

  Alexander, Richard

  Cran, James

  Alison, Rt Hon Michael (Setby)

  Currie, Mrs Edwina (S D'by'ire)

  Allason, Rupert (Torbay)

  Curry, David (Skipton & Ripon)

  Amess, David

  Davies, Quentin (Stamford)

  Ancram, Michael

  Davis, David (Boothferry)

  Arbuthnot, James

  Day, Stephen

  Arnold, Jacques (Gravesham)

  Deva, Nirj Joseph

  Arnold, Sir Thomas (Hazel Grv)

  Devlin, Tim

  Ashby, David

  Dickens, Geoffrey

  Aspinwall, Jack

  Dicks, Terry

  Atkinson, David (Bour'mouth E)

  Dorrell, Stephen

  Atkinson, Peter (Hexham)

  Douglas-Hamilton, Lord James

  Baker, Rt Hon K. (Mole Valley)

  Dover, Den

  Baker, Nicholas (Dorset North)

  Duncan, Alan

  Baldry, Tony

  Duncan-Smith, Iain

  Banks, Matthew (Southport)

  Dunn, Bob

  Banks, Robert (Harrogate)

  Durant, Sir Anthony

  Bates, Michael

  Eggar, Tim

  Batiste, Spencer

  Elletson, Harold

  Beggs, Roy

  Emery, Sir Peter

  Bendall, Vivian

  Evans, David (Welwyn Hatfield)

  Beresford, Sir Paul

  Evans, Jonathan (Brecon)

  Bitten, Rt Hon John

  Evans, Nigel (Ribble Valley)

  Blackburn, Dr John G.

  Evans, Roger (Monmouth)

  Bonsor, Sir Nicholas

  Evennett, David

  Booth, Hartley

  Faber, David

  Bottomley. Peter (Eltham)

  Fabricant, Michael

  Bottomley, Rt Hon Virginia

  Fairbairn, Sir Nicholas

  Bowden, Andrew

  Fenner, Dame Peggy

  Bowis, John

  Field, Barry (Isle of Wight)

  Boyson, Rt Hon Sir Rhodes

  Fishburn, John Dudley

  Brandreth, Gyles

  Forman, Nigel

  Brazier, Julian

  Forsyth, Michael (Stirling)

  Bright, Graham

  Forth, Eric

  Brooke, Rt Hon Peter

  Fowler, Rt Hon Sir Norman

  Browning, Mrs. Angela

  Fox, Dr Liam (Woodspring)

  Bruce, Ian (S Dorset)

  Fox, Sir Marcus (Shipley)

  Budgen, Nicholas

  Freeman, Roger

  Burns, Simon

  French, Douglas

  Burt, Alistair

  Fry, Peter

  Butcher, John

  Gale, Roger

  Butler, Peter

  Gallie, Phil

  Butterfill, John

  Gardiner, Sir George

  Carlisle, Kenneth (Lincoln)

  Garel-Jones, Rt Hon Tristan

  Carrington, Matthew

  Garnier, Edward

  Carttiss, Michael

  Gill, Christopher

  Cash, William

  Gillan, Ms Cheryl

  Chaplin, Mrs Judith

  Goodlad, Rt Hon Alastair

  Churchill, Mr

  Goodson-Wickes, Dr Charles

  Clappison, James

  Gorst, John

  Clark, Dr Michael (Rochford)

  Grant, Sir Anthony (Cambs SW)

  Clarke, Rt Hon Kenneth (Ruclif)

  Greenway, Harry (Ealing N)

  Clifton-Brown, Geoffrey

  Greenway, John (Ryedale)

  Coe, Sebastian

  Griffiths, Peter (Portsmouth, N)

  Colvin, Michael

  Grylls, Sir Michael

  Congdon, David

  Hague, William

  Conway, Derek

  Hamilton, Rt Hon Archie

  Coombs, Anthony (Wyre For'st)

  Hamilton, Neil (Tatton)

  232

  Hampson, Dr Keith

  Monro. Sir Hector

  Hannam, Sir John

  Montgomery, Sir Fergus

  Hargreaves, Andrew

  Moss, Malcolm

  Harris, David

  Needham, Richard

  Haselhurst, Alan

  Nelson. Anthony

  Hawkins, Nicholas

  Neubert, Sir Michael

  Hayes, Jerry

  Newton, Rt Hon Tony

  Heald, Oliver

  Nicholls, Patrick

  Heathcoat-Amory, David

  Nicholson, David (Taunton)

  Hendry, Charles

  Nicholson, Emma (Devon West)

  Heseltine, Rt Hon Michael

  Norris, Steve

  Hicks, Robert

  Onslow, Rt Hon Cranley

  Higgins, Rt Hon Terence L.

  Oppenheim, Phillip

  Hill, James (Southampton Test)

  Ottaway, Richard

  Hogg, Rt Hon Douglas (G'tham)

  Page, Richard

  Horam, John

  Paice, James

  Hordern, Sir Peter

  Patnick, Irvine

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

  Patten, Rt Hon John

  Howell, Rt Hon David (G'dford)

  Pattie, Rt Hon Sir Geoffrey

  Howell, Ralph (North Norfolk)

  Pawsey, James

  Hughes Robert G. (Harrow W)

  Peacock, Mrs Elizabeth

  Hunt, Rt Hon David (Wirral W)

  Pickles, Eric

  Hunt, Sir John (Ravensbourne)

  Porter, David (Waveney)

  Hunter, Andrew

  Portillo, Rt Hon Michael

  Jack, Michael

  Powell, William (Corby)

  Jackson, Robert (Wantage)

  Rathbone, Tim

  Jenkin, Bernard

  Redwood, John

  Jessel, Toby

  Renton, Rt Hon Tim

  Johnson Smith, Sir Geoffrey

  Richards, Rod

  Jones, Gwilym (Cardiff N)

  Riddick, Graham

  Jones, Robert B. (W H'f'rdshire)

  Rifkind, Rt Hon. Malcolm

  Jopling, Rt Hon Michael

  Robathan, Andrew

  Kellett-Bowman, Dame Elaine

  Roberts, Rt Hon Sir Wyn

  Key, Robert

  Robertson, Raymond (Ab'd'n S)

  Kilfedder, Sir James

  Robinson, Mark (Somerton)

  Kirkhope, Timothy

  Roe, Mrs Marion (Broxbourne)

  Knapman, Roger

  Rowe, Andrew (Mid Kent)

  Knight, Mrs Angela (Erewash)

  Rumbold, Rt Hon Dame Angela

  Knight, Greg (Derby N)

  Ryder, Rt Hon Richard

  Knight, Dame Jill (Bir'm E'st'n)

  Sackville, Tom

  Knox, David

  Sainsbury, Rt Hon Tim

  Kynoch, George (Kincardine)

  Scott, Rt Hon Nicholas

  Lait, Mrs Jacqui

  Shaw, David (Dover)

  Lang, Rt Hon Ian

  Shephard, Rt Hon Gillian

  Lawrence, Sir Ivan

  Shepherd. Colin (Hereford)

  Legg, Barry

  Shepherd. Richard (Aldridge)

  Leigh, Edward

  Sims, Roger

  Lennox-Boyd, Mark

  Skeet, Sir Trevor

  Lester, Jim (Broxtowe)

  Smith, Sir Dudley (Warwick)

  Lidington, David

  Smith, Tim (Beaconsfield)

  Lightbown, David

  Soames, Nicholas

  Lilley, Rt Hon Peter

  Speed, Sir Keith

  Lloyd, Peter (Fareham)

  Spencer, Sir Derek

  Lord, Michael

  Spicer. Sir James (W Dorset)

  Luff, Peter

  Spicer, Michael (S Worcs)

  Lyell, Rt Hon Sir Nicholas

  Spink, Dr Robert

  MacGregor, Rt Hon John

  Spring, Richard

  MacKay, Andrew

  Sproat, Iain

  Maclean, David

  Squire, Robin (Hornchurch)

  McLoughlin, Patrick

  Stanley. Rt Hon Sir John

  McNair-Wilson, Sir Patrick

  Steen, Anthony

  Madel, David

  Stephen, Michael

  Maitland, Lady Olga

  Stern, Michael

  Malone, Gerald

  Stewart, Allan

  Mans, Keith

  Streeter, Gary

  Marland, Paul

  Sumberg, David

  Marlow, Tony

  Sweeney, Walter

  Marshall, John (Hendon S)

  Tapsell, Sir Peter

  Marshall, Sir Michael (Arundel)

  Taylor, Ian (Esher)

  Martin, David (Portsmouth S)

  Taylor, John M. (Solihull)

  Mates, Michael

  Taylor, Sir Teddy (Southend, E)

  Mawhinney, Dr Brian

  Thomason, Roy

  Mayhew, Rt Hon Sir Patrick

  Thompson, Patrick (Norwich N)

  Mellor, Rt Hon David

  Thornton, Sir Malcolm

  Merchant, Piers

  Thurnham, Peter

  Milligan, Stephen

  Townend, John (Bridlington)

  Mills, Iain

  Townsend, Cyril D. (Bexl'yh'th)

  Mitchell, Andrew (Gedling)

  Tracey, Richard

  Moate, Roger

  Tredinnick, David

  Molyneaux, Rt Hon James

  Trend, Michael

  233

  Trotter, Neville

  Whittingdale. John

  Twinn, Dr Ian

  Widdecombe, Ann

  Vaughan, Sir Gerard

  Wiggin, Jerry

  Viggers, Peter

  Wilkinson, John

  Waldegrave, Rt Hon William

  Willetts, David

  Walden, George

  Winterton, Mrs Ann (Congleton)

  Walker, Bill (N Tayside)

  Winterton, Nicholas (Macc'f'ld)

  Waller, Gary

  Wolfson, Mark

  Ward, John

  Wood, Timothy

  Wardle, Charles (Bexhill)

  Yeo, Tim

  Waterson, Nigel

  Young, Sir George (Acton)

  Watts, John

  Wells, Bowen

  Tellers for the Noes:

  Wheeler, Sir John

  Mr. Tim Boswell and

  Whitney, Ray

  Mr. Sydney Chapman.

  Question accordingly negatived.

New Clause 3

  STAMP DUTY (TEMPORARY PROVISIONS) (EXTENSION)
  '.—Section 1 of the Stamp puty (Temporary Provisions) Act 1992 shall be amended, by leaving out the words "20th August 1992" in subsection (2)(b) and inserting the words "31st March 1993.".'.—[Dr. Marek]
  Brought up, and read the First time.
  Dr. Marek: I beg to move, That the clause be read a Second time.
  The Opposition have taken the Government at their word in respect of the Stamp Duty (Temporary Provisions) Act 1992 and now propose extending the exemption from stamp duty on the purchase of homes until March 1993. We had a trailer at Prime Minister's Question Time this afternoon. I did not get to the Chamber until about two minutes after the Leader of the House, on behalf of the Prime Minister, quoted me as having said that this legislation was a racket and a gimmick. I certainly remember saying that it was a gimmick—it was an election gimmick—but not that it was a racket. If any Minister can find the report of my words, I shall be delighted to hear exactly what I said.
  It is possible that this was a genuine attempt by the Government to intervene in the market with a view to encouraging recovery from recession. If so, the Government ought to accept our new clause. If they do not accept it, we can conclude only that the Act was a gimmick for election purposes, an expedient from a Government who knew that it would not have any effect in the event of our failing to move out of recession.
  7.15 pm
  The reality is that we are not recovering from recession. That being the case, and as the purpose of the legislation, which was to give the economy a kick start, has not been fulfilled, what objection can there be to extending the exemption until 31 March 1993? That is a simple question to which I hope we shall get a favourable reply.
  On 20 January 1992 Opposition Members said that the Bill would provide little help, that there were better ways of spending money to assist the manufacturing and construction industries. We said that capital allowances could be used and, above all, that lower interest rates would be a significant advantage. But the Government are not taking any of these steps. For a number of years we have looked in vain for Government intervention in the market to get us out of recession. The Act to which I referred amounted to Government intervention in the
  234
  market, and if it was not just a gimmick we should be able to regard it as an attempt to get the economy back on its feet.
  But the Ernst and Young Item Club, which published a forecast yesterday, now expects the gross domestic product to shrink by a further 0·6 per cent. this year. It says that this forecast is gloomier than most recent City predictions. That is very poor. The Chancellor of the Exchequer said that the economy would bounce back to a level of 1 per cent. growth this year, having contracted by 2·5 per cent. in 1991. In the Budget, he forecast that the economy would expand by 3 per cent. in 1993. Patently that is not happening. If there is to be a further contraction of 0·6 per cent. this year, as the Ernst and Young Item Club has predicted, we have a serious situation in which none of us can take any pride.
  We must all agree that something has to be done. The return of consumer confidence is an absolute prerequisite. If the extension of stamp duty exemption that we seek were granted, and if it were to give the housing market a kick start, the whole economy would benefit. When people move into new houses, construction is not the only industry to benefit. New carpets, refrigerators and beds are needed, and the whole engine of the economy benefits. That is why the Opposition regard this as a very important proposal.
  In an interview with David Frost on TV-am on 24 July 1991, the Chancellor of the Exchequer, referring to the recovery, said:
  "It may be slow at first. It will begin probably in the housing market. These arc just vague stirrings, but the signs are there."
  Recently the Evening Standard published a long list of the Chancellor's sayings about stirrings and green shoots. I expect that hon. Members know most of them by heart, but as no doubt the House wants to make progress I shall not quote any of them. I do not think that the stirrings or signs to which the Chancellor referred in his interview with David Frost existed. He may have been right when he said that the housing market might be one of the engines of recovery upon which other recovery would depend. It is a year since he made that statement, and unfortunately house prices have continued to fall. The latest Halifax price index shows that house prices fell by 0.5 per cent. in May. They are now 6·2 per cent. lower than they were a year ago.
  It may be said that the Opposition are proposing that the Government give money away liberally. Yes, this measure will cost money and the Opposition, as I said in January, believe that the money could be better spent on getting the economy working again. However, as the Government are not prepared to entertain any of our ideas on how to do that which we have put forward over a number of years, the Opposition are left with no alternative but to support the Chancellor's initiative.
  The Stamp Duty (Temporary Provisions) Act 1992 could easily be extended to the end of this financial year. It could be paid for by further postponing the exemption of duty on share transactions. That has already been done once and could easily be done again for another six months if the Government did not want to increase the PSBR. That is already £28 billion, and could be £30 billion soon, which is almost 4 per cent. of GDP, so I have every sympathy with the Government if they do not want to increase the PSBR.

  235
  There is no need to do that. I do not know whether TAURUS—the transfer by automated registration of uncertified stock—will be ready by next April, but another six months will not do any harm. If there were a choice between spending the money on the abolition of duty on share transactions and on giving further relief on stamp duty on house transactions, the Government should spend money on the latter.
  In January and February, when the Bill was going through the House, we said that we thought it was an electoral gimmick with which the Government were fishing for votes. This evening, the Government have a chance of proving the Opposition wrong by admitting that we are still in recession and that the other aspects of the recessionary cycle have not changed and by agreeing to continue the exemption. If they did that and accepted the new clause, I would pay full tribute to them.
  Mr. Tony Marlow: I am grateful to the Opposition for tabling the new clause and allowing us to debate this important issue. However, it is absurd that, having said recently that exemption is a gimmick. they should now feel that it is not a gimmick and should want to table a new clause to extend it.
  In Northampton we have the Carlsberg brewery, which claims that its beer is probably the best in the world. We also have Wilcon, a well-known company, which is probably the best house builder in the country. It knows a thing or two about house building and has been successful for a long time, and is probably more successful than anybody else at the moment. Life in the building industry in general is not easy. There are two deductions to he made from that.
  When I was at Cambridge university, I read engineering, and there were about 135 of us in the engineering department, one of whom had a rather disgusting beard, wore a CND badge and was obviously harking mad. All the rest had short hair and were decent. beer-drinking, women-chasing, rugby-playing, Conservative-voting undergraduates. What was true of the engineering department of Cambridge university is true, man and boy, or the building industry. It is not just that they do not read The Guardian—they have never heard of it. They are Tory voters to a man.
  This is not a point that I am concerned about, but I suggest that the Government take it on board. There is distress in the building industry. It does not matter if industries come and go—some industries grow, other industries come up afterwards, disasters occur, bankruptcies take place and it is all part of the general gaiety of the economy. However, by and large, all these people vote Conservative.
  The second point—I think it is important even if the Government do not—concerns the green shoots of recovery. Of course they are there for everybody to see, provided that one looks carefully, has a magnifying glass, and is an optimist. I am sure that they must be there. The Government wish to get the recovery moving more quickly, so they made this concession in the Budget. It was wise of them to do so. The Government will agree that it has had an effect. Houses that would not otherwise have been bought have been bought. Therefore, it has had a positive impact on the housing market and the building industry. It may be that we have not moved very far forward, but without the exemption we might have moved backwards.
  236
  Everybody knows that there are two house buying periods a year. First, when the daffodils come into bloom and the spring starts, people start to think of moving house.
  Mr. Tony Banks: And of other things in the hon. Gentleman's case.
  Mr. Marlow: It takes one to know one.
  In most springs, there is an upsurge in the housing market. Then people go away for their summer holidays, come back in September and have a second bite of the cherry. That is the second time in the year when the housing market is active.
  I know that the Government have two cases against the extension. The first is that it will cost money. That is a bad argument, and I hope that my hon. Friend the Minister does not adduce it. One may not get the revenue from stamp duty because people are not paying it, but by buying houses people generate activity. As the hon. Member for Wrexham (Dr. Marek) said, they buy carpets and equipment. Those green shoots will start thrusting through, the economy will start moving more quickly, there will be more tax revenue, and the Department of Social Security will spend less money. What might be lost from tax revenue could be gained by growth in the economy.
  There is a good argument. That is, if the Government give an exemption with a time bar and then keep extending it, people will feel that, with one shove or push, the whole structure will come caving in and the Government will give in again. I can sympathise with the Government on that. However, they should extend the exemption until the end of the year. Such a concession would put into people's mind the message, "Buy while stocks last". If the exemption continues until December, it will improve the second house-buying period of the year. People will feel more impelled to buy than they might otherwise. They will feel that if they do not get on with it now, they will have to pay more later. It will give the boost to the housing market that my right hon. Friend the Chancellor suggested that it would when he introduced the measure in the Budget. The moratorium should be taken on until the end of the year. The housing market and the economy need a boost. The moratorium is part of the boost that would help us to move more quickly out of recession.
  7.30 pm
  If the moratorium proves that assistance, it will not make it more difficult for the Government to lower interest rates—something that we all want. It is not valid for the Government to argue that they cannot reduce interest rates because they would be forgoing the income from stamp duty if they extended the moratorium.
  The concession should continue until the end of the year. The housing market should not be depressed; it should be helped. People should be helped in the second buying period of the year to bring their purchases forward. That would help the Government and the country as the economy would be moving once more.
  Mrs. Barbara Roche: Anyone who looks at the housing market in London, and anyone who, like me, is trying to sell a house and buy another one, would not believe that green shoots are sprouting as though springtime—although it is summer now—is about to arrive in the housing market. It is a

  237
  desperate time in London for people who are anxious to buy houses. Many of those people are first-time buyers, and they are essential to ensure that the housing market picks up.
  Figures released today by the Association of London Authorities show that first-time home buyers in London will be particularly hard hit when the Government's eight-month stamp duty moratorium ends on 19 August. Higher house prices in London and the south-east mean that only 6 to 8 per cent. of first-time purchases in the region fall below the £30,000 stamp duty threshold compared with 22 per cent. nationally. The average amount paid in stamp duty in the region is higher because it is levied as a percentage of the purchase price. These figures are devastating news for Londoners who will look with absolute dismay at the Government position this evening.
  My hon. Friend the Member for Wrexham (Dr. Marek) was right to question the Government's motives and the timing of the moratorium when the stamp duty proposal was introduced to the House. He said:
  "If a general election were not to be held in the next four months, the Government would have shed crocodile tears and Ministers and the Prime Minister himself at Prime Minister's Question Time would have said that nothing could be done about house repossessions."—[Official Report 15 January 1992; Vol. 201, c. 1064.]
  Given the background, the difficulties and the moratorium on stamp duty, the housing market will face worse straits if the concession is removed.
  Many things need to be done for housing. There should be a proper mortgage rescue scheme. Although it is outside the scope of the new clause, I believe that the housing market also desperately requires the phased release of receipts from council house sales so that adequate rented accommodation can be provided for the thousands of families living in unsatisfactory and high-cost bed-andbreakfast accommodation.
  It would be a shame and a scandal to have a debate about housing without mentioning the thousands of families throughout the country who are in the misery of bed-and-breakfast accommodation and whom we see every week in our surgeries. We deal with their cases every day and we have to tell them that basically nothing can be done because the Government do not have the heart or decency to act.
  Having established the moratorium, the Government, although they claim that they do not believe in interfering with the market, do not seem to be able to leave it alone. It is worth considering the comments of the hon. Member for Faversham (Mr. Moate):
  "the housing market will certainly come to a stop on 20 August. How many property transactions will take place on that day or during the succeeding weeks? Arc we really contemplating cessation of this exemption in mid-August? That is hardly a practical proposition, and I ask Ministers to think again about it … Ministers must recognise that it is impractical to suspend a tax for eight months while applying it to sums above an artificial threshold."—[Official Report. 15 January 1992; Vol. 201. c. 1068.]
  Indeed, Mr. Melville-Ross, the chief executive of the Nationwide building society and chairman of the Council of Mortgage Lenders, has also said that the decision not to extend the stamp duty holiday beyond the August deadline could be "fatal". Ministers must deal with this and respond to it.
  238
  Given the background and the dire straits of the housing market, I urge hon. Members to support the new clause in order to make a small impact on the horrendous mess which is the housing market under the Conservative Government.
  Sir Malcolm Thornton: There is no doubt that the construction industry faces severe problems and that the housing market is depressed. The House will know of my interest in such matters.
  Without any doubt, the Government's decision earlier this year was welcomed by the industry at large. Ministers have said on many occasions over many years that the construction industry is the barometer of the economy. So much depends on confidence. Whether or not the green shoots are there, as my hon. Friend the Member for Northampton, North (Mr. Marlow) said, it is generally held that the elements for the recovery are in place, but there is little evidence of that recovery taking place in substantial measure at the present time.
  The moratorium on stamp duty had some effect, although I am bound to say that it did not have the dramatic effect that some of us might have hoped for. There was a slight post-election surge in interest in the housing market, but unfortunately that has fallen back. The House will be interested and, I hope, concerned to note that the figures from the House-Builders Federation for May are worse than they were for May 1991. Indeed, the June figures are likely to be worse than the May figures. The present position on stamp duty has not had the desired effect.
  However, it is equally clear that if one accepts that the construction industry is capable of leading the recovery, the signals that we send to it are very important. Confidence is at the heart of the exercise. I believe that this debate is about confidence. That is what the Government are attempting to address at the moment.
  If the elements for recovery are in place, it is clear that the only element that is lacking is confidence. When it resumes, people will begin to buy houses and that will have a ripple effect throughout the housing market which will be of enormous benefit.
  Mr. Hoon: The hon. Gentleman referred to a surge in house buying after the general election. Does he accept that there was actually a 9 per cent. reduction in property transactions between April and May?
  Sir Malcolm Thornton: I am not certain what the hon. Gentleman is basing his figures on, but the evidence from the organisations concerned showed that there was an increase in interest after the election, which reflected people's confidence in the return of a Conservative Government. Clearly, the anticipated recovery has not proceeded in the way for which we hoped.
  Much has been made of the early-day motion to which I and many of my hon. Friends have put our names. It reflected our belief that the Government's policies of encouraging home ownership over the years have been right and that there is still among our fellow citizens a substantial desire to own their own homes.
  The construction industry has played a major part in making available at the right price homes that people want to buy. The early-day motion said that we hoped—the words were picked very carefully—that the Government would recognise the importance of doing everything that they could to stimulate the building and construction

  239
  industry. It added that if the Government could see their way to keeping or extending the moratorium, that would help. That remains the position.
  We want the Government to give every assistance that they possibly can to an industry which we firmly believe is capable of leading the country out of recession and of leading us to the confidence that we believe is necessary.
  We recognise that our right hon. Friend the Chancellor has enormous difficulty in balancing the various competing claims. At the end of the day, my right hon. Friend and his Treasury Ministers must judge exactly where they can best use the resources that are available to them. I shall have no difficulty in accepting what my right hon. and hon. Friends have to say in making their judgment. They are in possession of all the facts, and they know exactly—[Interruption.] Opposition Members can scoff as much as they like, but they cannot have it both ways. They previously regarded the measure as a gimmick and they are now seeking to try to embarrass the Government because some of my colleagues have ventured to suggest that the Government should consider something. We do that all the time. Putting one's name to an early-day motion is not a gesture of rebellion: it is an expression of opinion. The sooner Opposition Members realise that, the better.
  I reiterate that the building and construction industry is capable of making a major contribution to the recovery that we badly need. It is capable of leading the economy out of recession, particularly that difficult sector, the housing market. If my right hon. and hon. Friends will consider what they can do to stimulate the industry, we shall be content that the matter has been raised. For argument's sake, perhaps they will want to consider lowering the ceiling, recognising that a large proportion —about 70 per cent.—of all housing transactions involve sums of less than £80,000.
  Sir Michael Neubert: My hon. Friend speaks, as he has acknowledged, for the major construction companies. I should like him to accept—I am sure that he does—that his views are shared by smaller and medium-sized companies as represented by the Federation of Master Builders, whose parliamentary adviser I am. Does my hon. Friend accept that, in view of all that we have done for home ownership, one point that the Government might consider is that the time might come when the Chancellor is able to consider abolition of stamp duty altogether? It represents a tax on home ownership. What are we as Conservatives doing perpetuating a tax which has already been abolished for shares and other transactions and which remains a tax on home ownership?
  Sir Malcolm Thornton: I am grateful to my hon. Friend. I am sure that, in the long term, that very desirable matter will be fully considered by my right hon. Friend the Chancellor and the Treasury team. Bedevilled as they are by advice from every quarter—many people urging them to spend money as though it is going out of fashion, yet urging them to contain public expenditure—they have some very difficult choices to make.
  7.45 pm
  My right hon. Friend the Chancellor received a letter from the managing director of a major construction company, the Berkeley Group plc, who said:
  "I personally believe that the housing market is the barometer of the economy and until such time as it recovers
  240
  and the public in general have a feeling of well being, I do not believe that the economy as a whole will recover as the Government is hoping for."
  I endorse that remark. We recognise that until confidence is back and the recovery starts, we will be in a depressed period. I do not envy the task of my right hon. and hon. Friends, but I urge them to recognise the importance of that major industry and the vital contribution that it can make in leading us into the recovery that we all want.
  Mr. George Mudie: The hon. Member for Crosby (Sir M. Thornton) overestimates his importance and that of his colleagues who signed the early-day motion. It is not their credibility that is at stake; it is that of the Chancellor and the Government.
  I am grateful to the hon. Member for Northampton, North (Mr. Marlow) for referring to the green shoots of recovery, as that is the background against which the matter should be viewed. I shall add a northern voice to the discussion and tell the House what is happening to the green shoots of recovery in my home city. In Leeds in 1990, the unemployment figure was 22,476. That and the other figures that I shall give are the registered unemployed figures. The House knows the difference between the real level of unemployment and the real poverty that it causes and the registered figures which totally understate the position. In 1991, when the Chancellor introduced the measure, unemployment in Leeds climbed to 30,122, a 30 per cent. increase. As we discuss this matter, the unemployment figure is 35,102, which represents a 47 per cent. increase since 1990.
  Does that sound like the green shoots of recovery? If Conservative Members think so, let us consider employment in the construction industry. Unfortunately, the 1992 figures will not be available until Thursday, but the 1991 figures relating to employment in that industry both in the country and—
  Mr. Deputy Speaker (Mr. Geoffrey Lofthouse): Order. I ask the hon. Gentleman to relate his figures to stamp duty. He is straying rather wide.
  Mr. Mudie: I hope that in a moment, Mr. Deputy Speaker, you will see the picture that I am attempting to draw.
  I was dealing with the green shoots of recovery. The suspension of stamp duty was either a cynical measure to take matters relating to repossessions and so on off the front pages, or a genuine attempt by the Chancellor to bring forward the recovery by making a move in the housing sector that would help the construction industry, the retail industry, and unemployment. I give two figures to demonstrate my point. Employment in the construction industry, despite the suspension of stamp duty, continues to decline. In Leeds 95,000 people were employed in the construction industry in 1990, but that has fallen by 14 per cent. For Britain as a whole the figure has fallen by 13 per cent.
  The second figure is for property transactions—Conservative Members will surely accept that they are closely related to the matter with which we are dealing. The hon. Member for Crosby challenged my hon. Friend the Member for Ashfield (Mr. Hoon) about the figures for property transactions in England and Wales. In May last year there were 111,000 property transactions. In May this year, with stamp duty abolished, the figure was 83,000. Conservative Members may think that that is a one-off

  241
  figure but the figures for the preceding months are April: 91,000; March: 90,000; February: 89,000; January: 79,000.
  So if we consider unemployment in the construction industry and property transactions, the picture is bad. Unemployment continues to grow generally. Unemployment in the construction industry continues to grow and property transactions continue to fall. [Interruption.] You are well aware, Mr. Deputy Speaker, that in Yorkshire that is the highest office that one can assume. So you will understand the tribute that I take from that remark.
  When stamp duty was abolished the Chancellor of the Exchequer was accused of being cynical because of the closeness of the election. On 19 December he said:
  "But I recognise that there is a wider concern about the depressed state of the housing market, which has consequences for home owners in general and for the wider economy. I therefore have one further announcement to make."
  The announcement was the abolition of stamp duty. He continued:
  "I have decided to use a portion of that additional revenue to help encourage and facilitate transactions in the housing market."—[Official Report, 19 December 1991; Vol. 201, c. 454.]
  If in those circumstances he felt that it was necessary to encourage property transactions, we must ask the Economic Secretary as we approach August, with unemployment continuing to rise, home sales continuing to fall and unemployment in the construction industry continuing to grow, why on earth he is reintroducing stamp duty.
  Mr. David Hanson: We take it that the Government are genuine in this matter. I have received a letter from a building firm in my constituency saying that it had hoped that the Government's measure of a moratorium on stamp duty
  "would have provided a little extra confidence and possibly urgency within the house sale market. Unfortunately this has proved not to be the case".
  That is a major building firm in north Wales, Cheshire and the north-west. If the Chancellor was genuine, surely he should have given the measure time to work. The Minister should therefore support the Opposition new clause. That would meet the point that my hon. Friend makes.
  Mr. Mudie: My hon. Friend makes a valuable point —[Interruption.]
  Mr. Deputy Speaker: Order. Let us have some tolerance in the House. We all appreciate the difficulties for new Members.
  Mr. Mudie: When stamp duty was abolished the right hon. Member for Berwick-upon-Tweed (Mr. Beith) and others said that if £410 million were available, the money could have been spent better elsewhere. That is still a valid point and that is the issue tonight. Has the Minister come to the Chamber to say that the money will be spent elsewhere or is the measure a precursor of the autumn expenditure cuts? Will the money be spent elsewhere? It will not be spent on training, research and development or any measure to help the economy. Is it simply the beginning of public expenditure cuts?
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  On 2 June, in answer to the hon. Member for Faversham (Mr. Moate), the Minister seemed to imply that the measure was simply to save money. He said:
  "The yield costs are considerable, and we cannot afford to ignore the impact on the borrowing requirements of Government.… We simply cannot ignore such money in the current equations on public expenditure."—[Official Report, 2 June 1992; Vol. 208, c. 770.]
  In my constituency, as in Leeds as a whole, unemployment is growing. People look to the Government to give assistance and help. Tonight people see the answer. The money which was provided and which the Chancellor said was aimed at helping the economy, relieving unemployment and helping the construction industry and house sales is being withdrawn simply to save money in the forthcoming public expenditure round. That would lead the people in my constituency to agree with those who said that the Government were acting cynically and arranging something for the election rather than seeking to help the millions of people who faced unemployment in the city.
  Sir Anthony Grant: I have some sympathy with the new clause. I strongly supported the Chancellor when he introduced the moratorium. I do not believe for one moment that it was a gimmick. It may well have been a vote-catcher but what is wrong with that in a democracy? Listening to Opposition Members, one would think that they did not want any votes. Judging by the results of the election, they did not get many. There is nothing whatever wrong in vote-catching.
  I supported the abolition of stamp duty first because I have always disliked it. It is a ridiculous tax. It is perhaps a little better than the window tax of many years ago, but it is not a sensible tax and it should always be substantially reduced. I have always welcomed reductions in it. Secondly, in the wretched recession that we are suffering, there is no doubt that the construction industry and the housing market are the most serious aspect. They were the first to suffer, and they are suffering considerably. The housing market is a major factor in the confidence on which so much depends.
  Indeed, I would go further and say that a major factor in bringing back the confidence that we require to bring us out of the recession is a return to confidence in housing, house ownership and a property-owning democracy. In my time in Parliament I have been through all sorts of economic crises. There was stop-go and devaluation under the Labour party. All sorts of remedies have been suggested including monetarism and interventionism. None of them works. But the one thing that has been absolutely certain in the mind of the public throughout the ups and downs has been the thought that they owned a little bit of this country—their property. They believed in the old saying, "As safe as houses." That saying has existed for many years. To feel as safe as houses is a solid bedrock through the ups and downs of the economy and the proposed remedies.
  Unfortunately, the unease which has crept in in recent years has destroyed that confidence. That is a major factor in the lack of confidence. Let me hasten to say that I do not blame my right hon. Friend the Prime Minister or my right hon. Friend the Chancellor of the Exchequer for that. The trouble arose during the previous regime, because of the ludicrous boom stimulated by the previous Chancellor, the noble Lord Lawson, and his absurd mortgage tax relief proposals, which encouraged young people, including my

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  daughter, to rush into buying houses like mad. That was what stimulated a lot of this nonsense, and it was an artificial boom.
  If we manage to stimulate the housing market now, it is not likely that another boom will occur for many years. Banks and building societies are not so stuffed with money, nor are people sufficiently confident that they will take on loans with high interest rates, as another shift in value might mean that they would find themselves with a mortgage which was higher than the value of their property. There is no danger of another "Lawsonian" boom. Therefore, the Chancellor can feel confident about giving a boost to the economy. That is why he should apply his mind seriously to amendments such as new clause 3 and to the words of the early-day motion in the name of my hon. Friend the Member for Crosby (Sir M. Thornton), which also touched upon the matter.
  8 pm
  I recognise the importance of curbing public expenditure; I realise that it is fundamental to our economy. I am told that the stamp duty concession is worth about £600 million. Whatever it is, the sum involved is substantial. I therefore recognise that it plays a part in the public expenditure round.
  Unlike the hon. Member for Leeds, East (Mr. Mudie), I do not want the Government to cancel the concession and to spend the money instead on some folderol, which would he entirely counter to their general economic thrust. I should be happy if they used the money on the general, essential needs of the economy.
  Mr. Paul Boateng: Since when has building homes for people been a folderol? We have heard what the hon. Gentleman has had to say about the former Chancellor of the Exchequer, the noble Lord for Blaby. Was there a single occasion when he voted against any measure introduced by the previous Chancellor?
  Sir Anthony Grant: I never said that building houses was a folderol. As regards voting, if all of us had io bow down for errors in the way that we had voted, I am afraid that we would never stand up again. At least I accept my errors as much as anyone, and at least I was not Chancellor of the Exchequer at the time.
  I am strongly in support of what I understand to be the policy of curbing public expenditure. I hope that that will be done with a view to lowering interest rates, which is more important than reducing or abolishing stamp duty. That is a fundamental factor in the confidence equation. If my hon. Friend the Economic Secretary tells me in his winding-up speech that the purpose of cancelling the moratorium is not merely to fritter the money away but is a fundamental means of reducing interest rates, I shall happily support whatever he advises on the new clause. Whatever he proposes—[interruption] I have found that nearly everything that the Opposition propose is doomed to failure and disaster, so I shall also be guided by that factor.
  In all seriousness, the damage to confidence and to the concept of a property-owing democracy is extremely sad. I have believed in that theory throughout my political life. The Government and the Conservative party have always believed that encouraging people to buy is essential to our way of life. It is a bulwark against the ever-encroaching power of the state which the Opposition always encourage. I therefore hope that the concept of a property-owning
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  democracy has not disappeared and that my hon. Friend the Economic Secretary will express some sympathy, on behalf of the Treasury and of the Government, for the plight of the construction industry and of people who believed in such a democracy and who are now in a state of great unease. I hope that he will say something to reassure them. We shall listen with keen interest to his reply. In the words of the sergeant major who saw his junior NCO allowing a body of troops to walk to the precipice, "For God's sake say something, even if it's only goodbye."
  Mr. Hoon: New clause 3 sets out a stark choice for the Government and their supporters: they either plead guilty to the charge that they used up to £400 million of public money for electioneering, on a failed policy of kick-starting the housing market, or they accept the new clause and allow the housing market time to make some sort of recovery. Either the Government believe in the policy that they so eloquently advocated in December and January or they admit to raiding the public purse to secure their re-election.
  When moving the Second Reading of the Stamp Duty (Temporary Provisions) Bill in January this year, the then Financial Secretary said:
  "The purpose of the measure is to encourage people considering buying houses to get on with buying their houses or flats and to prompt others to bring forward their purchases to take advantage of the moratorium."
  That manifestly has not worked. The housing market remains flat, which is why I am prepared to give the Government the benefit of the doubt and to allow a little more time for the proposal to work. The then Financial Secretary admitted that that might be necessary because he added:
  "It will, of course, be a little while before the effects of the measure show up in the levels of house sales."—[Official Report. 20 January 1992; Vol. 202, c. 117.]
  New clause 3 is a modest proposal to give a little more time—as advocated by the then Financial Secretary—for the housing market to recover.
  If the Government were so enthusiastic about extending stamp duty relief in December and January, why are they choosing to abandon that policy now? One answer
  not available to them is to say that they can withdraw the extra relief because the policy has worked. Whatever else the Government may claim, they cannot say that the extra relief has helped the housing market in any way. If we compare the figures for January to May 1991 with those for January to May 1992, we find that there was a 24 per cent. reduction in property transactions.
  For the benefit of the hon. Member for Crosby (Sir M. Thornton), who challenged the statistics earlier, I should add that those figures were supplied by the Library and are based on the Government's figures for property transactions. Those figures illustrate a steady downward trend throughout 1992, when compared with the equivalent period in 1991. Notwithstanding the availability of extra relief, which came into force on 15 January, that trend continued.
  There is no evidence from the statistics that the Government's scheme has had the effect that the then Financial Secretary said that it would have, unless it is the Government's case that the decline in property transactions would have been greater but for the availability of extra relief. If that is their case, it is time that they said so. Otherwise, we risk a sudden surge at the end

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  of August, as people understandably try to complete transactions before relief ends, followed by a chronic reduction in demand.
  Mr. Tim Smith: Could the hon. Gentleman explain why, if the measure has had no noticeable effect on the housing market, he thinks that we should continue with it?
  Mr. Hoon: For precisely the reasons that the then Financial Secretary gave in January—he said that the measure would take a little time. If the hon. Member for Beaconsfield (Mr. Smith) looks at that speech, he will find that the then Financial Secretary referred to people's difficulties in finding homes, the time taken by the legal procedure and the time necessary to complete. There simply has not been enough time.
  The purpose of new clause 3 is to allow a little more time, precisely as the then Financial Secretary set out. The question by the hon. Member for Beaconsfield (Mr. Smith) implied that the scheme was not justified in the first place and that the Government were simply gambling up to £400 million of taxpayers' money in trying to secure an upturn in the market. I presume that the hon. Gentleman is now saying that that policy was doomed to failure in any event. Is he really saying that the policy has failed?
  Mr. Tim Smith: I am hoping to catch your eye later, Madam Deputy Speaker. I do not wish to prolong the hon. Gentleman's speech.
  Mr. Hoon: The Government may be tempted to tell us the truth for a change and to say that their policy was the shortest of short-term policies. It was designed to get the Government through the election but no further and is now to be abandoned, despite the evidence of a severe housing crisis throughout the country.
  The current state of the British housing market has caused a record number of repossessions. One in five of the houses currently on the market is available as a result of repossession or people voluntarily giving up their keys without waiting for appropriate legal proceedings. Those houses remain to be sold and the market will remain flat until they are sold and demand picks up.
  The fall in the value of houses has had a further effect on the level of demand and has led to a debt trap in which 1·8 million people are borrowing more money than the current value of their house. Their mortgages and loans against their house are much larger than its actual value, and they are unlikely to risk selling those properties and trying to move on while they are saddled with a substantial debt.
  Against that background, the Government have decided to restore stamp duty to its 1991 level and the fragile housing market will be given yet another serious blow inspired by the Government's misguided policies. That is not simply my view. We heard earlier the opinion of the chairman of the Council of Mortgage Lenders, who said that such a measure would be fatal to any recovery in the housing market.
  How do the Government propose to stimulate the housing market? Must we wait for another election before we can expect further action to help the housing market?
  Mr. George Walden: I speak as a supporter of the Government, but as a supporter they
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  would probably prefer not to have. When the moratorium measure first came up, I supported it out of loyalty. I now support its abolition out of conviction.
  Both sides of the House have been playing at competitive populism. The British economy is deformed by the housing market. When hon. Members talk about the "barometer of the economy", the "engine of the economy" and "leading us out of recession", they use damaging phrases that have gained currency in this country. People observing the British economy have said for years that such talk cripples British economic prospects because it sustains the illusion that the economy can be run on a pile of sterile bricks and mortar.
  I know exactly what the argument is about because I, too, have many small builders in my constituency. I do not need to discuss the matter because I understand it. I have been to many houses where a little van is parked outside at 3 o'clock in the afternoon, showing that the small business induced by the housing folly has collapsed and that the owner of that business has lost his job. Based on that business, he has bought an over-priced house for £90,000 that is now worth only £60,000.
  The House should not sustain the bubble of that illusion, yet in some way hon. Members on both sides of the House have sustained it for years. I do not subscribe to phrases like "barometer of the economy". The housing market may be a barometer of the economy but it should not be, because this country will not come out of recession into permanent prosperity on the back of a pile of bricks and mortar, the price of which is artifically supported by Government subsidy.
  8.15 pm
  Dr. Marek: I listened to the hon. Gentleman with interest but I hope that he does not misrepresent the Opposition's view. It will help if we can get the housing market moving again but the Opposition have always held the belief that the prosperity of this country is based on high quality investment in manufacturing industry and the export of services as well as manufactures. That is the prime requisite of any successful industrial economy.
  Mr. Walden: It is interesting that the hon. Gentleman felt moved to correct himself because I sense a note of defensiveness in his remarks. In my view, it is highly justified.
  When we talk about the primacy of confidence in the housing market we mean higher prices, so why beat about the bush? If the measure were to succeed—hon. Members on both sides of the House have suggested that it has not had much effect—in promoting "confidence", it would mean higher house prices and higher mortgages. All the crocodile tears about first time buyers are rubbish, because it would mean people gearing up from paying the preposterous current rate of 3·9 times of their incomes to paying even more. It is a deformity of the British economy and does not happen to the same extent in other countries. It deforms people's lives, which are geared to trying to meet that 3·9 times of their income for years, stretching to their middle age.
  Mr. John Wilkinson (Ruislip-Northwood)rose—
  Mr. Walden: May I finish my emotional outburst and then I shall give way.

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  Those mortgage repayments will stretch across the horizon, while the people sit at home and eat baked beans and do not go out and enjoy themselves as I would prefer them to do.
  Mr. Wilkinson: Whether they eat baked beans is neither here nor there. What is at issue is whether it is sound policy for the value of houses to continue to decline and the market to be so depressed that many thousands of people are in the miserable position of realising that the equity value of their property is less than the value of their mortgage. They are therefore totally locked in and face penury. Anything that can be done to do away with that misery, whether by continuing the relief or, more sensibly, by cutting interest rates, should have the support of the House.
  Mr. Walden: My hon. Friend has spoken to the feeling side of the nation. I want to do the impossible and appeal to its rational sense, which I have reason to believe exists. I have met people in my surgery who are trapped by a policy for which the Conservative party bears much responsibility—leading people to believe throughout the 1980s that the be-all and end-all of economic activity was to get on the housing ladder. It was wrong of us to do so. I do not agree with my hon. Friend the Member for Cambridgeshire, South-West (Sir A. Grant) that Conservative policy is to create a property-owning democracy. Property does not mean houses, and Conservatives, especially modern Conservatives, do not tell people what to do with their money. We give them the choice. As my hon. Friend the Minister of State for Housing and Planning said in a recent speech, the real choice that we should encourage is between whether people want to own or privately rent their house. It is wrong of us to continue to encourage, even at the present sotto voce level, this mumbo jumbo about home ownership.
  People must decide whether they want to own their homes. We must try to level the market and allow them to decide. The priority should not be to encourage home ownership, even by this relatively piddling measure—although £600 million is not piddling and could be better used than to prop up prices artificially. We do not want confidence if it means higher prices; we want stability, rationality and common sense in the housing market, and that means the minimum possible subsidies.
  Sir Anthony Grant: I do not dissent from my hon. Friend's view, but he appears to think that there is some marvellous alternative—that people can either buy property or privately rent it. That is not the case. It was true before the war, but since then—because of the trembling structure of the rent Acts, because of the hostility of Labour Governments to landlords and their belief in having council house ghettos all over the place —there has not been that choice. We believe that people should have a choice and own their homes if that is what they want. The point is that there has been little choice; I only wish that there were.
  Mr. Walden: If my hon. Friend is handing me arrows to fire at the Opposition, I am happy to let loose with them. The debate is relatively small stuff compared with the £6 billion to £8 billion—a third of the education budget that we spend, most of it wasted, on propping up the housing market through mortgage tax relief. We all know
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  the story of that. We are discussing a minor amount of taxation on house buying, yet at the other end of the scale we are giving £6 billion to £8 billion of indiscriminate tax relief to rich and poor alike. My points are directly relevant to the overall view, on which I am sure the Treasury rightly keeps an eye, of the housing market. Let us try for once to be a little rational and cool and not mislead the public, or lead them again along a path that has brought many families to the brink of financial ruin.
  Mr. John Townend: My hon. Friend's case is that the purpose of the moratorium on stamp duty was to increase house prices. Surely he does not expect us to believe that. Most of us do not want an increase in house prices. The purpose of the moratorium was to improve liquidity in the market.
  Mr. Walden: As I explained earlier, I supported the original proposal for a moratorium, although I was in two minds about it. My hon. Friend has eloquently expressed one of those minds. I did not want then, and I do not want now, the housing market to go into a precipitous slump because so deformed is our economy by the housing market that we cannot risk that happening. If it did, a whole series of dreadful things would happen in the City and elsewhere. Indeed, some are already happening. One reason why I supported the Government was that I wanted the housing market to be held steady rather than watch it go into an abyss.
  What is now happening in the housing market looks suspiciously like stability. That is not a bad thing. We should not lead people to believe that the price of their house can grow exponentially over the years with no effort from them, and that the Government have a duty to sustain inflated house prices for all time. Some people argue—in my view, out of the back of their heads—that mortgage tax relief should be increased to boost prices still further.
  I could continue like this, but I have taken enough time. I am trying to break through the collusive populism in the House on this matter, which has been so damaging to the country—especially the poorer sector—by misleading people in the economic organisation of their lives. Only a few hundred million pounds is involved, but this time the Government are getting it right.
  Mr. George Howarth: It is a rare event, but I could go along with about two thirds of the speech of the hon. Member for Buckingham (Mr. Walden). Indeed, I am more likely to agree with him than are many of his hon. Friends. He said that our economy was deformed by the way in which the housing market works. He made an important point in his comments about mortgage tax relief. I am sure that he would agree, as most economists agree, that the boom in 1987–88 was very much led by the property market, just as the recession has also been very much led by it. As prices fell, so the economy moved deeper into depression.
  It is not healthy for any economy to be in that position. It is also unusual. The United States and almost all European economies do not operate in the same way as Britain because they do not have the same overdependence on what happens in the property market, whichever way it moves.
  I agree with the hon. Gentleman that the Government's central mistake since 1979 has been their belief that there is an automatic virtue attached to home ownership. There

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  is not, and nor is there anything virtuous about renting. It is just a simple transaction that people make and it should not be based on which is the most subsidised option; it should be based on what circumstances suit an individual and his family at any given point in their lives.
  In the longer term, we must move away from that over-dependence on one tenure because it has such a dramatic impact on the economy. Not only is it not good social policy; it is appalling economic policy. The hon. Gentleman described the effects of that. From his tone, I suspect that he would have gone further in his point about mortgage tax relief. It does not have any economic benefit and, strictly speaking, it does not help anyone to buy a home. Most objective commentators—not generally politicians—such as the two national inquiries into housing led by the Duke of Edinburgh have said that mortgage tax relief achieves nothing in housing policy.
  The difficulty, and it is not unique to the Government, is that every political party that seriously wants power—with the exception of the Liberal Democrats, who usually do not expect to be taken seriously—has a difficult political problem because so many people receive mortgage tax relief. The economic and social aspects are different matters.
  At various times some of my hon. Friends, most recently my hon. Friend the Member for Hammersmith (Mr. Soley), have tried across the Dispatch Box to interest Ministers in finding a politically acceptable solution that would break the logjam of that problem, but so far they have shown no interest in reaching any accommodation. In the long run, a Government—or, I hope, a combination of major political parties—must reach consensus because we cannot go on in this way. The problem will not wither on the vine for a long time unless action is taken. We cannot be certain that stamp duty relief has had any appreciable effect on the property market. The state of the construction industry is so appalling—with low unemployment, a small number of starts, and every other indicator depressed—that something must be done.
  In the absence of a comprehensive package of measures of the kind that a Labour Government would have introduced, we must lend our support to stamp duty relief. It is not a wonderful innovation, and something more comprehensive is needed to deal with the real crisis in the construction industry. However, it is worth persevering, in the hope that that relief will eventually have some effect. I have no great enthusiasm for that policy, but in the pragmatic hope that it will have some useful effect, I will support my right hon. and hon. Friends in the Lobby.
  8.30 pm
  Mr. Wilkinson: Every now and then, we would do well to ask ourselves whether, especially on this side of the House, we have truly kept faith with our electors in housing matters. We have spent much of our political and parliamentary careers urging and encouraging people to realise their natural family aspiration to own their own home. By and large, we have been successful in that; but if we had been more successful, this debate would be neither so prolonged nor so intense. Nor would we have opened the Evening Standard a few days ago to see my
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  right hon. Friends the Prime Minister and the Chancellor of the Exchequer portrayed as innocent cherubs—somewhat podgy, but surprisingly underclothed.
  The Opposition's new clause is very much in the spirit of early-day motion 307, in the name of my hon. Friend the Member for Crosby (Sir M. Thornton). The Government would have done well to use the interval between the publication of that early-day motion and this predictable debate to announce new measures to stimulate the housing market and to make it easier for people, particularly first time buyers, to purchase their own homes. They noticeably did not do so.
  In that interval, I received letters from Prowling Homes, whose headquarters is located in Ruislip. It is a big company which contributes to the local economy, and it urges that stamp duty relief be maintained for some time yet. The same is said by Taylor Woodrow, which is no inconsiderable company. For Taylor Woodrow to have written in similar vein suggests that it has negated the apophthegm that he who pays the Tory piper calls the Conservative Government's tune. A similar letter came from Ideal Homes, which is not located in Ruislip, but which no doubt builds desirable residences all around the country.
  The facts are—and I wish that the Government and the House would pay more attention to the facts—that average house prices in London have fallen by no less than one quarter since the peak of the boom in 1989. That is a substantial decline, and the fastest that I have experienced during my 17 years in the House. It indicates that there is a prima facie case for stamp duty relief to be extended. If the market is so depressed, any ameliorating measure, such as perpetuating stamp duty relief, should be welcomed.
  That relief pales into insignificance compared with the measure that is really required—the reduction of interest rates by about 2½ per cent. Given that the Government are either unwilling or unable to do so, the next best thing must surely be to maintain stamp duty relief.
  Lord Healey, when he was a Member of this House, used to remind us in his engaging way that one of the first things that one learns in politics is that if one is in a hole, it is better to stop digging. The big hole in which our economy finds itself is the result of maintaining astronomically high levels of real interest for far too long.
  It was done not because inflation was out of control but because in our membership of the exchange rate mechanism a rate of 2·95 deutschmarks to the pound is some kind of totem or shibboleth. Would it adversely affect my constituents in Ruislip and Northwood—or the other people of London whose house values have declined so much and so fast—if the pound were worth instead only 2·83 deutschmarks or 2·75 deutschmarks? What matters to them is that they can service their mortgages, or can afford a mortgage to enter the property market in the first place.
  Mr. Walden: I genuinely do not understand my hon. Friend's argument. He seems to he saying that the Government should provide a stimulus to the housing market—which in my terms means higher prices—so that first-time buyers can buy property.
  Mr. Wilkinson: My hon. Friend may not understand, but many young people who want to buy a home understand very well. The marginal extra increment on the

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  cost of house purchase represented by stamp duty can make all the difference between a successful and an unsuccessful transaction.
  The cynical may argue that stamp duty relief represents only 1 per cent. of the purchase price, and that house values need to fall only by this amount to have the same effect. However, property values have already fallen 6 per cent. on average over the past year. Do we want them to fall further to meet the objective achieved by stamp duty relief?
  Reintroducing stamp duty would be to impose a direct tax on mobility and flexibility in the employment market. At a time when substantial and dramatic changes in employment patterns—with companies in various sectors of industry feeling the pinch, and other large companies going out of business—are forcing people to sell up and to move elsewhere for jobs, the Government are making the process more difficult by their desire to reimpose the stamp duty the relief of which new clause 3 seeks to perpetuate a little longer.
  Would it not be wiser to consider over the winter period whether other measures could be introduced, such as the cut in interest rates that I suggested? Or stamp duty might be abolished altogether, as my hon. Friend the Member for Romford (Sir M. Neubert) has cogently urged over the years on the basis of his professional experience. After all, there are few areas left in which the House has genuine discretion in tax matters.
  It is a matter of principle that we should at least consider using it in this instance. Without the approval of the House, we forwent the right to reduce VAT below 15 per cent. in the next four years. In days gone by, the reduction of indirect taxation was one of the primary methods that the Government used to restimulate the economy. Now we have deliberately eschewed it and I find this exceedingly strange.
  My distinguished and learned hon. Friend the Member for Buckingham (Mr. Walden) said that it did not particularly matter whether the housing and construction industries were stimulated and that we should not look to bricks and mortar to regenerate our economy. What was he looking to? Was he looking to the export market? There is not much of a growing export market to the United States where the recession is so deep, or to Japan which is facing such parlous economic problems, or to Europe which faces recession as we do. Anyway, with an artificially over-valued currency, it is all the more difficult for our exporters to get into those markets.
  What about aerospace? We all know about the difficulties of the airlines and the retrenchments in that business. What about motor cars? The motor industry is hardly the booming sector for which some people had hoped. What about defence and what about consumption? The savings ratio is so high that one cannot look to the high street to regenerate the economy. Therefore, the costs of extending the relief for a little longer are relatively small.
  The Government have shown by their actions that they are not especially concerned about public expenditure: just before the election the public sector pay settlement was ahead of inflation, child benefit was uprated in line with inflation instead of introducing child tax allowances, £1 billion was allocated to the inner cities—
  Madam Deputy Speaker (Dame Janet Fookes): Order. I am sorry to interrupt the hon. Gentleman, but we are debating new clause 3, not the entire economy.
  Mr. Wilkinson: Against those examples of massive increases in public expenditure, to which I add the net contribution to the European Community, the extension of this relief is small beer. That is why I believe that the Opposition have done the House a favour in tabling the new clause and giving us an opportunity to air the arguments.
  I accept that the Government said from the outset that the relief would be temporary. They are sticking to their intentions and carrying them out, and, I suppose, one should applaud that, however wrong-headed the end results. I shall not oppose the Government, but I shall not support them because I believe that the constructive criticisms which I have deployed were worth deploying, and I hope that my right hon. and hon. Friends will take note of them.
  Mr. John Hutton: I shall be brief because this has been a long debate and many hon. Members still wish to contribute. I believe that the new clause should be supported because it offers a small but practical incentive to persuade house buyers to enter the property market to get things moving again.
  It is extraordinary that the Government are proposing to end the moratorium on stamp duty at this time. I wonder whether they really believe that the worst is over for the housing market. Many hon. Members, particularly my hon. Friend the Member for Ashfield (Mr. Hoon), drew attention to some of the key housing market indicators. All hon. Members will have seen them, and there is no sign that the worst is over. The latest Halifax index shows that house prices fell again in May. In the first quarter of 1992, there were more than 16,500 repossessions. In 1991, 75,500 houses were repossessed, and those figures represent a 72 per cent. increase over 1990.
  All hon. Members know from their constituency surgeries and advice sessions for their constituents that the problems of mortgage arrears continue unabated. There is a massive problem in many constituencies, not least in mine, for people who are living in houses which are heavily mortgaged. Their mortgages now exceed the value of their houses. There are 1–5 million people living in such depressing circumstances.
  The Government simply cannot believe that this is the right time to lift the moratorium on stamp duty because it is evident that the housing market is still acutely depressed. If the Government are wrong and believe that the housing market is set to boom, and if some of the green shoots to which hon. Members have referred are apparent in the economy—although I believe that the green shoots, if they ever existed, have shrivelled up and dropped off by now —will they assure the House that they will draw up a fresh set of proposals to deal with the serious problems with which many of our constituents have to live?
  I find it difficult to appreciate and understand the argument about cost. As I understand it, the Government want to lift by 1993 the stamp duty in respect of share transactions. If my figures are correct, that will cost the Government nearly twice as much as extending the moratorium on housing purchases.
  The housing market is still in the doldrums as a result not only of the recession, which continues in my constituency and many others, but of many years of very

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  high interest rates. Although the recent cuts in interest rates are welcome, they have not slowed the number of repossessions or reduced the extent of mortgage arrears.
  8.45 pm
  We have heard some eloquent and rather philosophical contributions from Conservative Members, but what underscores the issue that we are debating is the fact that the Government do not have a credible housing policy. It is not enough to trot out the rather limp and tired slogans about the property-owning democracy. For many people who accepted the advice of the Government and were encouraged to buy their own homes, the reality of repossession and high personal debt has left a bad taste. A relevant housing policy should encompass the private as well as the public sector, tenants as well as home owners. Sadly, we are some way from such a credible housing policy.
  I shall say one or two brief words about the extent of the housing difficulties being experienced in my constituency. I took the trouble to consult all the estate agents in my constituency, and they have provided me with some interesting and relevant material for the debate. The local housing market is depressed for two reasons.
  First, as many hon. Members know, it is depressed because of the many job losses in the past two years at Vickers Shipbuilding and Engineering Ltd., which has led to a general lowering of confidence in the future. In fact, it has led to deep concern about what the future holds for people in Barrow and Furness. Secondly, and in particular, it is depressed because of the high level of redundancies among apprentices in my constituency, young men and women who have this year completed their four-year indentures. They have recently been declared redundant and, of course, they are the prospective first-time buyers in my local housing market. They now face the prospect of an uncertain period on the dole—it could be long or short, but we do not know—so there is no prospect of their considering the expensive option of purchasing their own property. Those combined effects have left the local property market in a sadly depressed condition, to which local estate agents see no signs of a substantive recovery.
  In that context, all my local estate agents have said in recent days that they want the Government to extend the moratorium on stamp duty. They do not believe that we can press a button, as it were, to extend the moratorium and suddenly create a whole new climate of optimism in the housing market. It is a complex and sensitive market, but it lies at the root of confidence in the economy as a whole, and until confidence returns to the housing market we shall not see green shoots springing up anywhere in the economy.
  I accept the view of my local estate agents that this is an important moment not to end the moratorium on stamp duty on house purchases. In my constituency, as elsewhere, ending the moratorium would have a negative effect on the housing market, and that would be bad news for the nation as a whole. So the Opposition proposal would be unlikely completely to transform the present state of the housing market. I wish it were possible for such a change to occur. But to end the moratorium now, when
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  there is no sign of an end to the housing crisis—the market remains in a deep trough of recession—would be a foolish and retrograde step.
  It is a novel experience for me, a new hon. Member, to hear a debate of such high quality, with a clear measure of cross-party support for our proposal. I hope that when we vote on the new clause there will be voting with us Conservative Members who have the courage of their convictions.
  Mr. John Townend: I agree with my hon. Friend the Member for Romford (Sir M. Neubert) that stamp duty is a bad tax which should be ended. We want to increase mobility of labour. A tax that bears heavily on people wishing to move house because they want to change jobs is damaging.
  On the other hand, most people accept that it is impossible to abolish now a tax which raises a great deal of money, when we are faced with a huge public sector borrowing requirement which next year will be nearly £40 billion.
  The housing market is flat, as hon. Members have made clear. It is experiencing little recovery, and that is holding back the recovery in consumer spending on which a general recovery of the economy could rest.
  I welcomed the Government's decision to lift stamp duty for a limited period, up to 20 August, to give a short-term boost to the property market and increase liquidity. That move has not had the impact that some might have expected, but I remind the House that there are still six weeks to go, and with any time-limited relief one would expect a surge as the last days of the relief approach.
  A significant example of that occurred when Lord Lawson was Chancellor of the Exchequer. He abolished dual mortgage tax relief for couples and, instead of abolishing it overnight, he had a moratorium for several months. What occurred towards the end of that period resulted in an enormous surge in the housing market. Indeed, that was one of the principal causes of the overheating of the economy.
  It is inept of the Opposition to propose a new clause that would extend the termination date of the moratorium before we have arrived at the first termination date of 20 August. That could abort the surge that we might expect in the coming six weeks. Had Opposition Members thought the issue through, they would have waited until 20 August and then, on our return after the summer recess, made the proposal, when it could have been discussed more sensibly.
  Another argument against the new clause is that it would cost £430 million more this year when, as I said, the Government's finances are under severe pressure. One way to make it possible to reduce interest rates—which, above all, would help the housing market and reduce the pain felt by those locked into high mortgages—would be to reduce the PSBR. I hope that there will be strong support from Opposition Members this year as each Government Department attempts to reduce its spending and bring Government finances more into balance. The more success we have in achieving that, the faster interest rates will come down. That is why I shall support the Government in opposing the new clause.
  Mr. Nigel Griffiths: The new clause goes to the heart of the Conservative bogus commitment to lift the burden on home owners and the housing

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  industry. What reasons have the Government given for reimposing stamp duty at this time? Do they claim that the recession is over, that recovery is under way or that the housing market is beginning to boom?
  Even the Government's friends are sceptical about those issues. Like other hon. Members, I receive many begging letters. Few have been as pitiful as one from the House-Builders Federation, the director of which sent me a copy of a letter he had written to the Prime Minister, saying:
  "now that the euphoria has passed"—
  clearly, he has been slightly unhinged—
  "it must be evident to you that nothing much has changed since 9th April. The economy is still locked in recession and Treasury claims of recovery are widely disbelieved. Indeed, they are thoroughly discredited."
  Commenting on the performance of the Chancellor, he says of the Treasury:
  "The housing market has been one of its greatest failures … we built fewer houses than in any decade since the 1940s. This imbalance alone left a shortage of more than one million homes by 1990."
  The House-Builders Federation, speaking for the private house building industry, as Conservative Members have done in this debate, writes:
  "Despite lower house prices and interest rates…the continued recession is holding back the housing market. After signs of an improvement in January and February, the housing market has slowed down markedly in May and June…If further damage to purchaser confidence is to be avoided, the existing stamp duty moratorium should be extended beyond 20th August…An improving housing market, with its stimulus to retail spending and to employment through new housebuilding, can play an important role in economic recovery."
  Government figures pay eloquent testimony to those sentiments. The slump has never been clearer. In my constituency and in Scotland generally, the boom in the issuing of mortgages by building societies occurred not in 1987, 1988 or 1990—although mortgage lending was much higher then—but in 1984. By 1991, lending had hit a 10-year low. That has meant, for example, that Edinburgh house prices have fallen dramatically and, as we have heard, they have fallen in London and throughout the country.
  No wonder the new clause is supported by the building industry, the mortgage lenders and everyone who believes that people should not be prevented from buying a first home or from moving to a new home, whatever the reason. If the Economic Secretary does not accept it, he will find that the Government's erstwhile friends will desert them, never to return. A time of deep recession is not a time at which to drive up house prices.
  If the new clause is not accepted, 20 August 1992 will go down in housing history as the day when an iron curtain was drawn, separating tens of thousands of families from their dream of home ownership for the foreseeable future. According to the housebuilders, the frosty freeze that will follow 20 August will make last year's housing slump seem like a boom. After a long, cold summer and a long and bitter winter—a winter of discontent—for milions of home owners and aspiring home owners, 20 August will come as the Government's nemesis.
  There is time, however, for the Government to listen to their friends in the building industry, who donated to their election campaign the lavish sums that put them in power and gave them the power to vote for or against home owners and aspiring home owners. We wait, but not with bated breath.
  9 pm
  Mr. Den Dover: I entirely deny that the Government introduced the moratorium in late 1991 as a gimmick. It was a responsible gesture, aimed at injecting some life into the housing industry.
  As one who has spent almost all his career as a civil engineer in housing, construction and property development, I consider the continuation of the relief immaterial: I do not believe that it will have any effect, adverse or positive, on the housing market. In the past it has exerted little pressure on the market; few additional sales have resulted. Anyone trying to buy a house anywhere in the country now is looking not for a I per cent. price reduction, but for a reduction of 5, 10 or 15 per cent.
  I want to dispel some of the doom and gloom. In the south-east a reduction of 25 per cent. or, more probably, 30 per cent. is possible, but in the more responsible areas —the north, the north-west and the north-east—house prices never reached such crazy levels. House owners and house builders are suffering the consequences of those price rises. My hon. Friend the Member for Buckingham (Mr. Walden) blamed the construction industry for the present parlous state of the economy, but I believe that it is the other way around: the economy is in such a difficult position that people arc unemployed, fearful of becoming unemployed or worried about the falling value of their properties.
  I am grateful to the Government for introducing the minor benefit of the moratorium last year, but, rather than continuing it, they should reduce the amount of public expenditure—hundreds of millions of pounds—that is involved in its perpetuation. The house building industry wants positive action. It wants lower interest rates and more action on repossessions; it wants pressure to be exerted on the insurance industry, because the present indemnity insurance premium levels are criminal. It does not help house buyers to make them pay a swingeing insurance premium for a mortgage of more than 70 or 80 per cent.
  The housing industry is probably the most private-enterprise oriented industry in the United Kingdom. It does not want subsidies; it wants the real market to apply, and it is more than capable of lifting itself to its former level. So often in the past, successive Governments have used the building industry as a regulator of the economy. At difficult times they have held back public expenditure, especially on council houses and infrastructure; at boom times they have expected too much of the industry, and the economy has overheated as a result.
  I signed the early-day motion tabled by my hon. Friend the Member for Crosby (Sir M. Thornton), but I told him that—along with other hon. Members, such as my hon. Friend the Member for Romford (Sir M. Neubert)—I had pressed for the total abolition of stamp duty for at least 10 years. The Government should bring that about in the next few years, for I am certain that, if left to its own devices and to natural market forces, the housing industry will lift off. This minimal measure will not do much.
  Mr. Betts: The stamp duty changes that were introduced last December were not, in my view, part of a coherent economic policy or of a coherent housing policy. They were a recognition by the Government that economic

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  recovery was not happening and that an election was coming. It was a matter of electoral expediency, in the crudest sense.
  The problem for the Government is that economic recovery has still not happened and that the election has come and gone. The Government now feel that the measure that they introduced to try to win some popularity has served its useful purpose.
  I agree with some of the comments made by the hon. Member for Chorley (Mr. Dover) about the Government's housing policy. They were very interesting. However, stamp duty is a matter not of general housing policy but of its potential impact on the housebuilding industry. If I were feeling a little more charitable about the Government's designs, I might even accept, as the Chancellor of the Exchequer said at the time, that there was recognition of the fact that the housebuilding industry could be one of the important motors for economic recovery. If the Government did recognise that fact, when they looked around they found that there were not many alternatives.
  The Government looked at the council house building sector and found that it no longer existed because their bigoted and dogmatic policies towards council housing over the years had killed it off. They were not prepared to take the obvious step of releasing capital receipts—which, by any logical definition, would have had no impact on the public sector borrowing requirement—which would have allowed local authorities to build council houses. They looked at the housing association sector and saw a little increase there, but the Treasury was growing worried about the cost. The Government also looked at the private rented sector and found that, after their 13 years in power and an awful lot of talk, the private sector was continuing to decline.
  Housebuilding in the private sector remained virtually steady throughout the 1980s, though the private sector had not replaced the fall-off in the council house building sector. By the early 1990s, however, private housebuilding had fallen to a record low. Stamp duty exemption was introduced against that background.
  If we examine the impact of that measure so far, it is fair to say that there are real doubts about its effectiveness. It has had a limited effect on the housing market; there has been no great take-off. In Sheffield, which has not been so badly hit by the fall in house prices and the fall-off in activity as other parts of the country, there are no clear signs of a sustained recovery.
  The question that we should be asking is not what has happened as a result of this measure but what the impact will be if the exemption is removed. It is just possible that the failure of the housing market to take off in the last few months was not due to the stamp duty changes. It is just possible that the housing slump would have been much worse without those changes. The real worry and concern is that the reimposition of stamp duty now will send the housebuilding industry into yet further decline. Confidence in the housebuilding sector is very delicate. The reimposition of stamp duty could have a significant impact in the wrong direction.
  Before I came to the House today, I asked a few builders and estate agents in Sheffield for their views. Obviously they have a vested interest, but they also have
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  knowledge that is worth sharing. Garton, Lockwood and Riddle, one of the leading estate agents in Sheffield, said that there is a real problem of confidence, that ending the exemption will be just another element in the equation which will be unhelpful to recovery and that the market is slow. The House-Builders Federation said that
  "while the stamp duty moratorium … may not have had the positive effect that was hoped for, its reimposition will simply depress confidence further and delay recovery."
  That point is borne out by Gleeson Homes, a major housebuilder in Sheffield. It referred to the real problems caused by the deep recession and said that the reimposition of stamp duty will further weaken any return of confidence. It said:
  "We believe that by suspending Stamp Duty it will not necessarily create an early market recovery but reimposing Stamp Duty will have a further depressing factor on an already weak, buyers confidence."
  Omega Homes have said that people have been rushing to meet the deadline in the last few weeks, but now it has all gone flat. Henry Boot told me that any reduction could have a detrimental effect on the housing market, which is just showing a few signs of recovering. And, of course, there are the comments by Tim Melville-Ross of the Nationwide building society, who said that the Government proposals could have a fatal impact.
  It is very clear from all this that there are some doubts so far about the effectiveness of the measures taken last December and a very real worry about the impact of reversing those measures at this time.
  There are two questions for the Government. Is the economic recovery so assured that the Government can afford to take any steps that might curtail it? I believe that the answer to that has to be a very clear no. Secondly, is the public sector borrowing requirement so completely out of control that the Government cannot afford another £400 million to continue the current exemption?
  The real problem for the Government is that one of their economic disasters, the PSBR, is now constraining their ability to deal adequately with another of their disasters, the economic slump which they have created. My hon. Friend the Member for Wrexham (Dr. Marek) gave the Government a way out with some suggestions about how they could negate the effects of the PSBR increases that would come from a continuance of the exemptions. Therefore, the only question left open concerns the impact on economic recovery.
  I hope that all hon. Gentlemen who spoke in favour, in principle, of the proposals in the new clause moved by the Opposition will support it in the Lobby. I do not believe that any of them, in the very delicate state of the economy, can ignore the risk that the measures that the Minister is proposing might have the very damaging effect of curtailing the possibilities of recovery. I will put it no more strongly than that. I therefore think that it is worth taking the risk, for £400 million, of supporting the new clause and giving a bit of hope to the housebuilding industry in the very difficult situation that it is experiencing.
  Mr. Milburn: When Ministers announced the moratorium on stamp duty it was part of a package of measures designed to stimulate recovery in the housing market. The argument deployed by the then Financial Secretary was that the measure
  "would not transform the world"
  but would give a mild impetus towards housing recovery.

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  I have a dreadful feeling as we sit here tonight that there were two kinds of impetus towards the introduction of the moratorium. Certainly the depth of the housing crisis with which Ministers were confronted was one, but I suspect that the second was the ticking away of the general election clock sounding very loud and clear in Ministers ears, and providing a very clear incentive to tackle the problems of the housing crisis.
  Mr. Ronnie Campbell: Cynical.
  Mr. Milburn: The hon. Member for Blyth Valley shouts "Cynical". Well, maybe I am.
  With its sister policy, the mortgage rescue plan devised by the building societies, the stamp duty moratorium was supposed to kill two birds with one stone: first, to give a boost to the housing market; hut, secondly, to give a boost to the Conservatives' electoral fortunes.
  Six months on, the Government have certainly achieved one objective, but they have failed lamentably in the other. Housing and the economy as a whole remain stuck deep in recession. The housing crisis that prompted the moratorium in the first place has not gone away; arguably, in some respects, it has even intensified. Hon. Gentlemen are therefore faced with a very simple question: why is it that the measure that was so important six or seven months ago is no longer relevant? If we accept that the housing crisis is as deep today as it was in December or January last, why should the moratorium be withdrawn?
  9.15 pm
  Mr. Geoffrey Dickens: Perhaps the hon. Gentleman will accept from me an answer to that question. The letter from the House-Builders Federation to which there has been reference says that the moratorium has had very little effect on the housing programme. The relief is not the primer that we hoped it would be, and it is costing £430 million. Has not the House-Builders Federation answered the hon. Gentleman's question?
  Mr. Milburn: I assume that the hon. Gentleman accepts that, in effect, Ministers have wasted about £400 million of public money. I see nods from Conservative Members. And this is from a Government who accept financial rectitude and tight control of public expenditure, a Government who always have the correct financial and economic answers.
  Let me tell the House what the House-Builders Federation said. I have a letter from Mr. Adamson, the regional chairman in the northern counties region, which says:
  "I accept that suspending stamp duty will not kick-start the market on its own, but reintroducing it will be a further depressing factor to house purchase confidence."
  The hon. Member for Crosby (Sir M. Thornton) made a very important comment when he said that the housing market is sensitive and very prone to shifts in confidence. It is confidence that counts, yet here we have an example of the ways in which the Government undermine confidence in the very housing market that they are supposed to support.
  Mr. Marlow: The hon. Gentleman seems to be implying that the Government have wasted the £400 million. If he is saying that that money has been wasted—
  Mr. Bob Cryer: He is not saying that. You are.
  Mr. Milburn: You are saying that it has been wasted.
  Madam Deputy Speaker (Dame Janet Fookes): Order. There are many "you"s flying about. I hope that they do not refer to me.
  Mr. Marlow: Is the hon. Gentleman saying that that money has been well spent?
  Mr. Milburn: I refer to comments of the hon. Gentleman's hon. Friends—and I note the nods from Conservative Members—that the money has been wasted.
  When this measure was introduced, Ministers made it very clear that it would take some time to become effective. We have now had six or seven months to test its credibility. I hope that when the Financial Secretary introduced it he did not have in mind just the period leading up to the general election and immediately after it. That would give rise to a great deal of cynicism among hon. Members on both sides of the House.
  The housing crisis has not gone away. The number of families losing their homes through repossession has hit 144 per day. As is normal in these situations, Conservative Members are indifferent to the consequences of their own Government's policy. On the programme "Desert Island Discs" a few months ago the Prime Minister, with his finger on the pulse of public concern, as usual, told Sue Lawley:
  "Well, we stopped, if you recall, the repossessions before Christmas."
  Let the Prime Minister and other Ministers express that sort of sentiment to the 126 families in the Darlington area who had mortgage repossession orders against them in the first four months of this year—a 9 per cent. increase on the number for the same period last year. In the north-east as a whole about 1,670 families lost their homes in the first four months of the year, compared with 1,284 in the same period last year.
  Mr. Marlow: A little while back, the hon. Gentleman was quite candid and straightforward. He said that the money that the Government had spent so far had been wasted. In that case, why does he want to extend the exemption to March next year?
  Mr. Milburn: The hon. Gentleman is obviously confusing what I have said with what his hon. Friends have said. They have said that the £400 million has been wasted, and others nodded in assent.
  Mr. Dickens: It may be that in terms of priming the housing market the money has been wasted, but the hon. Gentleman should not forget all those families who have been grateful for that tax concession when buying their homes. The money was not wasted because it stayed with the people.
  Mr. Milburn: In that case, if the measure was important enough in the past seven months and if it has failed lamentably, as it has, to stimulate the major pick-up in the housing market for which we all hoped, why on earth, at this juncture, are the Government saying that enough is enough? Why should not the measure be given a chance to benefit other families, other owner-occupiers and young families seeking to get on the first rung of the housing ladder?

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  By ending exemption, the Government will be seen as delivering a kick in the teeth to young families who are looking to get on the first rung of the housing ladder. Far from kick-starting the recovery in the housing market, by ending the moratorium on stamp duty, the Government will kick away the prospective recovery in the housing market. The crisis is as deep as ever and the Government, by withdrawing what paltry assistance they offered six months ago, leave us to draw no other conclusion than that the whole exercise was designed not to help people save their homes but to help Conservative Members of Parliament to save their seats. That was the cynical purpose underlying the measure.
  The exemption was a cynical and crude exercise in manipulating genuine public concerns about the difficult circumstances of home owners. The mortgage rescue plan and the temporary exemption of stamp duty have fulfilled their purpose for the Conservative party but not for those who are suffering the consequences of the policies pursued by the Government. I only wish that Conservative Members would listen not only to the House-Builders Federation but to the Royal Institution of Chartered Surveyors and the building societies, and to the estate agents in my constituency, whom I contacted today, who are urging that the moratorium be continued if the fragile recovery that may be around the corner is not to be brought to a shuddering halt.
  As the hon. Member for Crosby said, we all know that confidence is the key to recovery in the housing market. After all, we are told that all the other ingredients are in place—prices have fallen, there is a glut of properties on the market, it is a buyers' market—but people are not buying because they lack confidence or the incentive to do so. The Government can help with both. They can pursue measures to stimulate the economy by cutting interest rates, by investing in the regions, in infrastructure and in training. They could also stimulate housing more directly. For example, they could ensure that there is a phased release of capital receipts to allow local authorities to make good use of the money that is lying useless in bank accounts around the country. Those assets should he put to use. They should not be allowed to gather dust.
  The Government should not be closing options at this stage; they should be opening them up. First-time buyers are the mortar of the housing market and they must feel that it is worth their while to invest in a home. Suspending stamp duty for another nine months will not, by itself, instil new confidence. However, it will be a pointer in the right direction. The removal of the concession can only make matters worse.
  My hon. Friend the Member for Barrow and Furness (Mr. Hutton) said earlier that young families who are hoping to get on to the first rung of the housing ladder will look rather askance at a Government who claim that they cannot continue the moratorium because of public expenditure concerns, but who, at the same time, are prepared to spend £730 million ending stamp duty on share transactions as from next April.
  I have a direct point for the Economic Secretary to the Treasury. No doubt some Conservative Members are genuinely concerned about the ending of the moratorium, but they will not be prepared to put their money where
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  their mouths are. They will vote against the new clause. I have no doubt that the new clause will be lost as a consequence of that.
  However, what are the Government prepared to put in place of the moratorium to ensure that there is a recovery in the housing market? What are they going to do to ensure that there is new investment in housing so that we begin to house our homeless people and start to bring an end to the repossession crisis that is gripping my constituency and others around the country? What new measures will the Government introduce tonight? By all means end the moratorium on stamp duty, but let us hear from the Conservative Benches exactly what new policies the Government are prepared to bring forward to stimulate the recovery that we all want to see in the housing market.
  Mr. Nelson: There are perhaps two things that we can all agree on at the end of this extensive debate. The first is the comment of the hon. Member for Barrow and Furness (Mr. Hutton) that this has been a very high-quality debate and the other is that stamp duty is not a much-loved tax.
  I will try to persuade the House that stamp duty raises sums of money that the Government cannot ignore or forgo. I will also try to persuade the House that when introducing a concession for a time-limited period, it does not induce one to embark on further concessions unless one sticks to the conditions. That does not mean that they are immutable, but that is a powerful argument for sticking to the concession that has been agreed.
  If money is available, there is a question of judgment as to how most effectively it can be spent in the regeneration of the housing market and in other social and industrial areas and priorities for public expenditure. We have debated some of the criteria and considerations to a high standard.
  I want first to set out the financial parameters. The concession has cost £400 million. During that time, 540,000 housing transactions have benefited and have not had to pay stamp duty. Although the moratorium has been of limited value, it has been of real value. It has meant that a number of transactions have been brought forward, and a number of individuals have not had to incur an additional marginal capital cost on the purchase of their properties. That is still happening, for the moratorium period has not yet ended. Many people are bringing forward their house purchases, to the benefit both of the construction industry and the general liquidity of the housing market.
  The hon. Member for Wrexham (Dr. Marek) asked what amount of money the delay in the implementation of TAURUS has released. The answer is about £850 million. Of course, the concession, which costs about £400 million, leaves a balance. The hon. Gentleman rightly asked, "Is not that money available?" Sadly, it is not available. The balance of those sums is included in the Budget strategy of my right hon. Friend the Chancellor. It is part of the overall equation of income and expenditure of the Government; therefore, it is not money which has been released and which can easily be spent.
  9.30 pm
  If we were to extend the moratorium, it would be an additional cost which would have to be financed by additional borrowing, additional taxation or cuts elsewhere in public expenditure. It behoves hon. Members, principally Opposition Members, who easily call for an

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  extension to say where the money would come from, what additional tax or borrowing burden they would be prepared to live with, or what public expenditure cuts they would be prepared to make.
  I shall complete what I was saying about the financial parameters, because they are very important. The moratorium cost £400 million. Were we to extend the moratorium, as the new clause provides, for the rest of the financial year, the additional cost is estimated to be £430 million. That is not an insignificant sum, even in terms of an addition to the borrowing requirement.
  One of my responsibilities in the Treasury is to help to raise the funding requirement through national savings and through the gilt-edged markets. That is not easy. Substantial sums are involved. We are talking about very material additional amounts which would be bound to inhibit the extent to which we could further reduce interest rates at a later date or the extent to which we could further reduce taxes—objectives to which the Government have firmly adhered.
  Mr. Marlow: My hon. Friend has said quite clearly that the moratorium has persuaded people to bring forward their house purchases. Does he agree that if the moratorium were extended to the end of this year, thereby extending the house-buying season, other people would bring forward their house purchases? If they brought forward their house purchases, what impact would that have on the recovery of the economy? What impact would that have on tax revenues? What impact would that have on the reduction in the cost of unemployment?
  Mr. Nelson: I was about to refer to my hon. Friend's intervention, because I listened carefully to what he said. His proposal would cost another £220 million. That money would have to be found from one of the sources to which I referred. Also, our hon. Friend the Member for Bridlington (Mr. Townend) said that part of the effect of increasing liquidity by bringing forward sales would be diminished if we announced that we would extend the exemption period, because people would relax and be less keen to complete sales early.
  Although it is not the intention to have an enormous bunching of house sales towards August, that would be the effect of a finite date on the exemption period. Wherever we set that, whether later in the financial year or at the end of it, we would have the same effect. The substantial answer to my hon. Friend's proposal is that it would cost us £220 million—again a highly significant sum.
  The hon. Member for Hornsey and Wood Green (Mrs. Roche) referred to the problems of first-time buyers in London. My hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson) referred to the 25 per cent. reduction in house prices in London. The Government are very conscious of the personal problems that that imposes on many families who are struggling with mortgage repaymeois. We are also very conscious of the difficulties that have been faced in the construction and property-related industries because of it, but, to the extent that prices have fallen, the only group who have benefited are first-time buyers, because property prices are more affordable. Of course, I acknowledge that that depends on whether someone has a job, can afford the mortgage payments and so on. However, more affordable
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  accommodation at least offers more hope to first-time buyers than the ridiculous, spiralling boom prices that many of them faced previously.
  My hon. Friend the Member for Crosby (Sir M. Thornton) made an outstanding contribution to the debate. He said that the debate was about confidence in the housing market. That point was reiterated by my hon. Friend the Member for Cambridgeshire, South-West (Sir A. Grant). I acknowledge that confidence is essential to both prospective buyers and people maintaining their financing commitments once they have bought a home.
  However, the Government should not try to rekindle confidence by fiscal or other measures that simply inflate house prices still further. The Government already have in place a range of measures, including mortgage interest tax relief and other financial supports. We provide substantial support for home ownership. Surely the main factor that will revive confidence in the housing market is not fiscal stimulus provided by the Government but economic policies that lead to further reductions in interest rates when it is sensible and responsible to cut them. Our policies should provide a sustained basis for more liquidity and healthier prices in the market, but especially more liquidity.
  Mr. Betts: Will the Minister give way?
  Mr. Nelson: If the hon. Gentleman will permit me. I shall make a little progress. I will come to his remarks later.
  The hon. Member for Leeds, East (Mr. Mudie) referred to unemployment in the construction industry and in his constituency. I readily acknowledge that the social and employment impact of the recession in the housing market has been serious. Those of us who represent constituencies in the south are at least as conscious of that as the hon. Gentleman.
  While my hon. Friend the Member for Romford (Sir M. Neubert) understood the Government's position, he reiterated his long-held conviction that we should get rid of stamp duty altogether. He espoused that conviction in compelling fashion.
  As I said, stamp duty is an unloved tax and abolishing it altogether is an appealing line. However, the cost of doing so would be £1 billion. Approximately £800 million is raised from transactions up to the current threshold, but another £200 million to £300 million over and above that is raised from much higher-priced properties. The total amount is about £1 billion. To abolish it would impose on us opportunity fiscal costs. Where would we raise the revenue from—extra borrowing or cuts in public expenditure?
  I cannot predict in the longer term the decisions of the Government and the Chancellor on stamp duty. All such taxes are examined from year to year. But the Government and the Conservative party have a good record on stamp duty. Since we came to office we have not only halved the rate of stamp duty on property but increased the threshold twice.
  Mr. Roger Moate: Does my hon. Friend the Minister recall that we seemed to find it relatively easy to get rid of stamp duty on all exchange dealings and share transfers, at a cost of almost £1 billion yet we seem to find it incredibly difficult to get rid of it for the much worthier matter of house purchase? Many of us find it extremely difficult to walk through the Lobby in support of stamp

  265
  duty—a tax to which most of us have objected for decades. Can he at least tell us that there is some prospect that in years to come, sooner rather than later, we will consider getting rid of stamp duty altogether?
  Mr. Nelson: We can always consider it. However, it would be improper for me to hold out false hopes to my hon. Friend. I am not in a position to say that we anticipate or intend to abolish stamp duty. The considerations that led to that decision for paperless transfers in the TAURUS system had as much to do with the new technical systems that were being imposed and the attractions of the London market for international share dealings as anything else. Stamp duty is a duty on documents and it extends to not only financial transactions and house purchases but other documents.
  My hon. Friend the Member for Cambridgeshire, South-West said that reassurance about the Government's commitment to home ownership was required. I am happy to provide that reassurance, even though my hon. Friend the Member for Buckingham (Mr. Walden) is not in the Chamber, as he also made an interesting speech, which questioned the import of the remarks made by my hon. Friend the Member for Cambridgeshire, South-West.
  The Government are committed to maintaining and encouraging home ownership, and the range of measures that we have already implemented should stimulate it. The stamp duty concession was designed to promote and encourage home ownership, as were many other measures announced by my right hon. Friend the Chancellor. A testimony to that is the £600 million worth of payments to people on income support who are having difficulty with their mortgages.
  My hon. Friend the Member for Cambridgeshire, South-West said that the boom went too far, too fast, and that, as there was no prospect of its being repeated, we could afford to extend the concession. Large sums of money are involved and, as he rightly remarked, it is much more important for us to pursue policies designed to reduce interest rates and to maintain restraint on public expenditure.
  The hon. Member for Ashfield (Mr. Hoon) dismissed the moratorium, but then called for its extension. That paradox was also implicit in speeches by the hon. Member for Wrexham and others. They called the moratorium a political ploy and described it as being of marginal benefit, if any, but also called for its extension. I have mentioned the cost involved. That is real money and it is a substantial amount of money, which remains in the private, rather than the public, sector.
  In a brave and interesting speech, my hon. Friend the Member for Buckingham said that housing should not be a barometer of the economy and that high-priced property is a deformity of the economy. I acknowledge the intellectual persuasion of much that he said, but it is a question of "where you are at" and not "where you come from". For many years, substantial support has been given to the ideal and the reality of home ownership and the Government are not about to abandon that or to undermine it in any switch of policies.
  The hon. Member for Knowsley, North (Mr. Howarth) supported an extension of the moratorium, in the absence of other Government policies. I have sought to explain that the Government have other policies—notably on the
  266
  broader economic front—which are designed to return a healthier degree of liquidity in transactions to the property market.
  My hon. Friend the Member for Ruislip-Northwood was right to remind the House that owning one's home is a family aspiration and that for many people in London ownership has had to be deferred because of the difficulties that they face. As mortgage liabilities have in many cases exceeded the value or properties, following the fall in prices, home ownership has also become more difficult for those who have mortgages on their homes to realise.
  My hon. Friend said that stamp duty was a tax on mobility. The substantial reduction in house prices has reduced the differential between prices in the north and south of England. During the boom, prices spiralled up in the south. Although the fall in price has been injurious to many home owners, it has meant that the differential has narrowed. If anything, that should encourage mobility rather than discourage it.
  My hon. Friend the Member for Bridlington was right to concentrate on public expenditure. It is essential that the Government are mindful of the impact of public expenditure on their ability to deliver lower interest rates and lower taxation in years to come. I am sure that all my hon. Friends agree that the Government have an essential early responsibility to get a grip on public expenditure if we are to deliver the sort of political promises with which we gained the trust of the electorate at the general election. We shall not do so if we grant extensions and engage in expenditure of this order.
  Stamp duty is but one of many items on which the Government will rightly be pressed for concessions to bring personal relief, but we have a greater responsibility. We must bring the benefits of lower interest rates, lower inflation and lower public expenditure to our economy.
  The hon. Member for Edinburgh, South (Mr. Griffiths) gave an apocalyptic, theatrical description of his predictions for Scotland. I acknowledge that there have been serious problems with the depth and severity of the property recession in Scotland, but that alone is not a reason for extending the relief, given the cost for the country as a whole.
  My hon. Friend the Member for Chorley (Mr. Dover), whose considerable knowledge and experience in these matters is acknowledged throughout the House, also supported the case for total abolition, about which he has spoken on many occasions. I am sorry that I cannot offer him that prospect tonight, but I hope that he understands why we must reintroduce stamp duty in August.
  The hon. Member for Sheffield, Attercliffe (Mr. Betts) said that as the market would have been much worse without the moratorium, now is not the right time to abolish it. However, although the market is still low and there are serious problems, there are also some positive signs. The figures for housing starts and completions in May were up by 4 per cent. and 1 per cent. respectively. Many building society predictions show substantial increases in the turnover of property transactions as well as prices in the remainder of this year.
  9.45 pm
  The hon. Member for Darlington (Mr. Milburn) accused us of a cynical political ploy. It would have been a cynical political ploy if the Chancellor had announced the abolition or the substantial raising of thresholds permanently, won the election and then reneged on that.

  267
  [Interruption.] No, it was always clear that the measure was for a finite period of time to bring much-needed relief, liquidity and some support to the property market during a difficult time. The fact that we have been able to reduce the average mortgage interest rate from 15·4 per cent. to less than 11 per cent. shows that the Government's policies are working and we are moving in the right line. To abandon those policies with public expenditure commit-ments that would derail us would be imprudent and the Government could not responsibly offer such a course to the House.
  Therefore, although I understand the concerns and representations of all my hon. Friends, I hope that they will understand that, for public expenditure and other reasons, it is essential and important that we revert to the imposition of stamp duty on the date originally given.
  Dr. Marek: We have had a good debate and, in some ways, its nub was when the hon. Member for Faversham (Mr. Moate) intervened in the Minister's speech and presented him with the option of cutting the duty on share transfers or extending the moratorium on stamp duty. Presented with such an option, I should have thought that share transactions could bear tax for a few months longer so that the Government could find the extra £220 million necessary for them to accept the Opposition's new clause. That would be straightforward because, ultimately, getting the economy right and lifting the country out of recession are far more important than allowing shares to be exchanged without tax for a few more months. No harm would befall the City or the international capital markets if the Government chose to do that.
  The Minister tried to muddy the waters a little by implying that the Government had a good record on interest rates because they were already down to 11 per cent. So they were from the high of 15·4 per cent. that we experienced for a year and a half a few years ago. Interest rates were above 10 per cent. for some 20 per cent. of the time in which the last Labour Government were in office, whereas they have been below 10 per cent. for only 20 per cent. of the time in which the present Conservative Government have been in office. When hon. Members compare the record of the past Labour Government with the present Conservative Administration they will see that, by and large, interest rates are high when a Conservative Government are in office and much lower under a Labour Government. There was a secret agenda for the Conservative Government to have high interest rates so that they could have high real interest rates.
  I agree with the Economic Secretary that this has been a good debate, in which many different views have been expressed. It was nice to hear speeches from seven or eight Conservative Members and eight Labour Members. The Labour speeches were all individual and targeted at the problem. My hon. Friends made the case for the new clause. Although it will not solve the problems of the recession, if the Government are not prepared to do anything else at least it will do something to help the country when it comes out of recession.
  We were treated to amazing pirouettes by a number of Conservative Members. I shall start with the hon. Member for Crosby (Sir M. Thornton). He said that it did not matter what is contained in an early-day motion because it is simply an expression of opinion. He invited us to believe that if the House did not like a particular set of opinions, it did not matter because he had plenty of others.
  268
  I wonder what his constituents in Crosby will think. It is hardly worth him putting his name to an early-day motion if, at the slightest pressure from the Whips, he says, "I do not really mean it, or if I do, I do not mean it that much. I shall exercise my beliefs in the right Lobby in the interests of my constituents—but I shall be persuaded by the Whips to go elsewhere."
  That was not the view of the hon. Member for Ruislip-Northwood (Mr. Wilkinson), who made a principled speech. He did not say that he would support the Opposition, but he said that he would not support the Government. He was the only Conservative Member to say that and he has my respect for doing so.
  The hon. Member for Bridlington (Mr. Townend) said that, as there are still six weeks to go before the relief from stamp duty ends, there is still plenty of time. He implied that we should ask for a recall of Parliament on 21 August to debate the issue. I do not think that there is much chance of that. Although there are six weeks left, people cannot suddenly buy a house. They have to exchange contracts, proper searches have to be made and the conveyance procedure must be carried out. Indeed, moving from one house to another depends on many agreements in a chain. All that takes time, but there is no more time. The Government now know what removing the exemption from stamp duty will mean to the housing market. Six weeks may appear to be a long time, but it is not.
  The hon. Member for Buckingham (Mr. Walden) made a very different speech and I agree with the Economic Secretary's analysis of it. Most Labour Members felt that the hon. Gentleman made some good points. However, as the Economic Secretary said, it is not a matter of where we want to start from, but where we are now. I have a great deal of sympathy for what the hon. Member for Buckingham said. He spoke his mind and added to the debate.
  We believe that there are better ways of spending £220 million—such as helping manufacturing industry or, if possible, reducing interest rates. The Government either cannot or will not do that. Because of that attitude, the new clause would help when the economy eventually begins to move out of recession. That has not begun yet, which is why the exemption from stamp duty has not really been successful—but it would be when we do begin to move—[Interruption.] The hon. Member for Lancaster (Dame E. Kellett-Bowman) has not been here during the debate. I hope that she has dined well. Making silly noises and signs does not help or add to a debate in which about eight Conservative Members and eight Opposition Members have spoken—and which, by and large, has been one of the best debates in the House for some time.
  Madam Speaker: Order. The House is not giving the hon. Member a fair hearing. Right hon. and hon. Members who want to hold conversations must either do so quietly or remove themselves from the Chamber so that the rest of us can hear the hon. Member.
  Mrs. Teresa Gorman: On a point of order, Madam Speaker. I am sure that we are all extremely keen to hear the hon. Gentleman, but I am not sure that his microphone is working. He is almost inaudible to those of us seated on these Benches.
  Madam Speaker: I am not surprised that the hon. Lady did not hear. I was watching her closely, and she was engrossed in conversation.
  Dr. Marek: That has enlivened the debate a little. I am reaching the end of my remarks.
  The continuation of stamp duty relief would be useful if we move out of the recession. The cost of £220 million could be budgeted. The duty on share transactions can be delayed if the Government so choose. That presents them with a clear choice, but I understand that they have decided to terminate the relief in August.
  We will see how many Conservative Members turn on their heads and vote for the cessation of stamp duty relief and for a continuing crisis in housing. I urge my hon. Friends to join me in the Lobby in voting for new clause 3. It is not the complete answer. There are better ways of spending the money and of helping manufacturing industry, which is absolutely necessary if we are to survive as an industrial nation. However, I invite the House to join me in voting for the new clause because it will provide some help in alleviating the crisis in housing that we all want to see come to an end at the earliest opportunity.
  Question put. That the clause be read a Second time:—
  The House divided: Ayes 281, Noes 311.

  Division No. 54]

  [19.57 pm

  AYES

  Abbott, Ms Diane

  Clark, Dr David (South Shields)

  Adams, Mrs Irene

  Clarke, Eric (Midlothian)

  Ainger, Nick

  Clarke, Tom (Monklands W)

  Ainsworth, Robert (Cov'try NE)

  Clelland, David

  Allen, Graham

  Clwyd, Mrs Ann

  Alton, David

  Coffey, Ms Ann

  Anderson, Donald (Swansea E)

  Cohen, Harry

  Anderson, Ms Janet (Ros'dale)

  Connarty, Michael

  Armstrong, Hilary

  Cook, Frank (Stockton N)

  Ashdown, Rt Hon Paddy

  Cook, Robin (Livingston)

  Ashton, Joe

  Corbett, Robin

  Austin-Walker, John

  Corbyn, Jeremy

  Banks, Tony (Newham NW)

  Cousins, Jim

  Barron, Kevin

  Cox, Tom

  Battle, John

  Cryer, Bob

  Bayley, Hugh

  Cummings, John

  Beckett, Margaret

  Cunliffe, Lawrence

  Beggs, Roy

  Cunningham, Jim (Covy SE)

  Beith, Rt Hon A. J.

  Cunningham, Dr John (C'p'l'nd)

  Benn, Rt Hon Tony

  Dalyell, Tam

  Bennett, Andrew F.

  Darling, Alistair

  Benton, Joe

  Davidson, Ian

  Bermingham, Gerald

  Davies, Bryan (Oldham C'tral)

  Berry, Roger

  Davies, Rt Hon Denzil (Llanelli)

  Betts, Clive

  Davies, Ron (Caerphilly)

  Blair, Tony

  Davis, Terry (B'ham, H'dge H'I)

  Blunkett, David

  Denham, John

  Boateng, Paul

  Dewar, Donald

  Boyce, Jimmy

  Dixon, Don

  Boyes, Roland

  Dobson, Frank

  Bradley, Keith

  Donohoe, Brian

  Bray, Dr Jeremy

  Dowd, Jim

  Brown, Gordon (Dunfermline E)

  Dunnachie, Jimmy

  Brown, N. (N'c'tle upon Tyne E)

  Dunwoody, Mrs Gwyneth

  Bruce, Malcolm (Gordon)

  Eagle, Ms Angela

  Burden, Richard

  Eastham, Ken

  Byers, Stephen

  Enright, Derek

  Caborn, Richard

  Etherington, William

  Callaghan, Jim

  Evans, John (St Helens N)

  Campbell, Ms Anne (C'bridge)

  Ewing, Mrs Margaret

  Campbell, Menzies (Fife NE)

  Fatchett, Derek

  Campbell, Ronald (Blyth V)

  Faulds, Andrew

  Campbell-Savours, D. N.

  Field, Frank (Birkenhead)

  Cann, James

  Fisher, Mark

  Carlife, Alexander (Montgomry)

  Flynn, Paul

  Chisholm, Malcolm

  Foster, Derek (B'p Auckland)

  Clapham, Michael

  Foster, Donald (Bath)

  270

  Foulkes, George

  Mallon, Seamus

  Fraser, John

  Mandelson, Peter

  Fyfe, Maria

  Marek, Dr John

  Galbraith, Sam

  Marshall, David (Shettleston)

  Galloway, George

  Marshall, Jim (Leicester, S)

  Gapes, Mike

  Martin, Michael J. (Springburn)

  Garrett, John

  Martlew, Eric

  George, Bruce

  Maxton, John

  Gerrard, Neil

  Meacher, Michael

  Gilbert, Rt Hon Dr John

  Meale, Alan

  Godman, Dr Norman A.

  Michael, Alun

  Godsiff, Roger

  Michie, Bill (Sheffield Heeley)

  Golding, Mrs Llin

  Michie, Mrs Ray (Argyll Bute)

  Gordon, Mildred

  Milburn, Alan

  Gould, Bryan

  Miller, Andrew

  Graham, Thomas

  Mitchell, Austin (Gt Grimsby)

  Grant, Bernie (Tottenham)

  Molyneaux, Rt Hon James

  Griffiths, Nigel (Edinburgh S)

  Moonie, Dr Lewis

  Griffiths, Win (Bridgend)

  Morgan, Rhodri

  Grocott, Bruce

  Morley, Elliot

  Gunnell, John

  Morris, Rt Hon A. (Wy'nshawe)

  Hain, Peter

  Morris, Estelle (B'ham Yardley)

  Hall, Mike

  Morris, Rt Hon J. (Aberavon)

  Hanson, David

  Mudie, George

  Hardy, Peter

  Mullin, Chris

  Harman, Ms Harriet

  Murphy, Paul

  Harvey, Nick

  Oakes, Rt Hon Gordon

  Henderson, Doug

  O'Brien, Michael (N W'kshire)

  Heppell, John

  O'Brien, William (Normanton)

  Hill, Keith (Streatham)

  O'Hara, Edward

  Hinchliffe, David

  Olner, William

  Hoey, Kate

  O'Neill, Martin

  Hogg, Norman (Cumbernauld)

  Orme, Rt Hon Stanley

  Home Robertson, John

  Paisley, Rev Ian

  Hood, Jimmy

  Patchett, Terry

  Hoon, Geoff

  Pendry, Tom

  Howarth, George (Knowsley N)

  Pickthall, Colin

  Howells, Dr. Kim (Pontypridd)

  Pike, Peter L.

  Hoyle, Doug

  Pope, Greg

  Hughes, Kevin (Doncaster N)

  Powell, Ray (Ogmore)

  Hughes, Robert (Aberdeen N)

  Prentice, Bridget (Lew'm E)

  Hughes, Roy (Newport E)

  Prentice, Gordon (Pendle)

  Hughes, Simon (Southwark)

  Prescott, John

  Hutton, John

  Primarolo, Dawn

  Jackson, Ms Glenda (H'stead)

  Purchase, Ken

  Jackson, Ms Helen (Shef'ld, H)

  Quin, Ms Joyce

  Jamieson, David

  Radice, Giles

  Janner, Greville

  Raynsford, Nick

  Johnston, Sir Russell

  Redmond, Martin

  Jones, Barry (Alyn and D'side)

  Robertson, George (Hamilton)

  Jones, Ieuan (Ynys Môn)

  Robinson, Geoffrey (Co'try NW)

  Jones, Jon Owen (Cardiff C)

  Robinson, Peter (Belfast E)

  Jones, Ms Lynne (B'ham S O)

  Roche, Mrs Barbara

  Jones, Martyn (Clwyd, SW)

  Rogers, Allan

  Jowell, Ms Tessa

  Rooker, Jeff

  Kaufman, Rt Hon Gerald

  Rooney, Terry

  Keen, Alan

  Ross, Ernie (Dundee W)

  Kennedy, Charles (Ross, C & S)

  Ross, William (E Londonderry)

  Kennedy, Ms Jane (L'p'l Br'g'n)

  Rowlands, Ted

  Khabra, Piara

  Ruddock, Joan

  Kilfoyle. Peter

  Salmond, Alex

  Leighton, Ron

  Sedgemore, Brian

  Lestor, Joan (Eccles)

  Sheerman, Barry

  Litherland, Robert

  Sheldon, Rt Hon Robert

  Livingstone, Ken

  Shore, Rt Hon Peter

  Lloyd, Tony (Stretford)

  Short, Clare

  Llwyd, Elfyn

  Simpson, Alan

  Loyden, Eddie

  Skinner, Dennis

  Lynne, Ms Liz

  Smith, Andrew (Oxford E)

  McAllion. John

  Smith, C. (Isl'ton S & F'sbury)

  McAvoy. Thomas

  Smith, Rt Hon John (M'kl'ds E)

  MacDonald, Calum

  Smith, Llew (Blaenau Gwent)

  McGrady, Eddie

  Smyth, Rev Martin (Belfast S)

  McKelvey, William

  Snape, Peter

  Mackinlay, Andrew

  Soley, Clive

  McLeish, Henry

  Spearing, Nigel

  McMaster, Gordon

  Spellar, John

  Madden, Max

  Squire, Rachel (Dunfermline W)

  Maginnis, Ken

  Steel, Rt Hon Sir David

  Mahon, Alice

  Steinberg, Gerry

  271

  Stevenson, George

  Watson, Mike

  Strang, Dr. Gavin

  Welsh, Andrew

  Straw, Jack

  Wicks, Malcolm

  Taylor, Mrs Ann (Dewsbury)

  Williams. Rt Hon Alan (Sw'n W)

  Taylor, Rt Hon John D.(Str'gf'd)

  Williams, Alan W (Carmarthen)

  Taylor, Matthew (Truro)

  Wilson, Brian

  Tipping, Paddy

  Wise, Audrey

  Trimble, David

  Worthington, Tony

  Turner, Dennis

  Wray, Jimmy

  Tyler, Paul

  Wright, Dr. Tony

  Vaz, Keith

  Young, David (Bolton SE)

  Wallace, James

  Walley, Joan

  Tellers for the Ayes:

  Wardell, Gareth (Gower)

  Mr. Jack Thompson and

  Wareing, Robert N

  Mr. Eric Illsley.

  NOES

  Adley, Robert

  Coombs, Simon (Swindon)

  Ainsworth, Peter (East Surrey)

  Cope, Rt Hon Sir John

  Aitken, Jonathan

  Cormack, Patrick

  Alexander, Richard

  Cran, James

  Alison, Rt Hon Michael (Selby)

  Currie, Mrs Edwina (S D'by'ire)

  Allason, Rupert (Torbay)

  Curry, David (Skipton & Ripon)

  Amess, David

  Davies, Quentin (Stamford)

  Ancram, Michael

  Davis, David (Boothferry)

  Arbuthnot, James

  Day, Stephen

  Arnold, Jacques (Gravesham)

  Deva, Nirj Joseph

  Arnold, Sir Thomas (Hazel Grv)

  Devlin, Tim

  Ashby, David

  Dickens, Geoffrey

  Aspinwall, Jack

  Dicks, Terry

  Atkins, Robert

  Dorrell, Stephen

  Atkinson, David (Bour'mouth E)

  Douglas-Hamilton, Lord James

  Atkinson, Peter (Hexham)

  Dover, Den

  Baker, Rt Hon K. (Mole Valley)

  Duncan, Alan

  Baker, Nicholas (Dorset North)

  Duncan-Smith, Iain

  Baldry, Tony

  Dunn, Bob

  Banks, Matthew (Southport)

  Durant, Sir Anthony

  Banks, Robert (Harrogate)

  Eggar, Tim

  Bates, Michael

  Elletson, Harold

  Batiste, Spencer

  Emery, Sir Peter

  Bendall, Vivian

  Evans, David (Welwyn Hatfield)

  Beresford, Sir Paul

  Evans, Jonathan (Brecon)

  Biffen, Rt Hon John

  Evans, Nigel (Ribble Valley)

  Blackburn, Dr John G.

  Evans, Roger (Monmouth)

  Bonsor, Sir Nicholas

  Evennett, David

  Booth, Hartley

  Faber, David

  Boswell, Tim

  Fabricant, Michael

  Bottomley, Peter (Eltham)

  Fairbairn, Sir Nicholas

  Bottomley, Rt Hon Virginia

  Fenner, Dame Peggy

  Bowden, Andrew

  Field, Barry (Isle of Wight)

  Bowis, John

  Fishburn, John Dudley

  Boyson, Rt Hon Sir Rhodes

  Forman, Nigel

  Brandreth, Gyles

  Forsyth, Michael (Stirling)

  Brazier, Julian

  Forth, Eric

  Bright, Graham

  Fowler, Rt Hon Sir Norman

  Brooke, Rt Hon Peter

  Fox, Dr Liam (Woodspring)

  Browning, Mrs. Angela

  Fox, Sir Marcus (Shipley)

  Bruce, Ian (S Dorset)

  Freeman, Roger

  Budgen, Nicholas

  French, Douglas

  Burns, Simon

  Fry, Peter

  Burt, Alistair

  Gale, Roger

  Butcher, John

  Gallie, Phil

  Butler, Peter

  Gardiner, Sir George

  Butterfill, John

  Garel-Jones, Rt Hon Tristan

  Carlisle, John (Luton North)

  Garnier, Edward

  Carlisle, Kenneth (Lincoln)

  Gill, Christopher

  Carrington, Matthew

  Gillan, Ms Cheryl

  Carttiss, Michael

  Goodlad, Rt Hon Alastair

  Cash, William

  Goodson-Wickes, Dr Charles

  Channon, Rt Hon Paul

  Gorman, Mrs Teresa

  Chaplin, Mrs Judith

  Gorst, John

  Churchill, Mr

  Grant, Sir Anthony (Cambs SW)

  Clappison, James

  Greenway, Harry (Ealing N)

  Clark, Dr Michael (Rochford)

  Greenway, John (Ryedale)

  Clarke, Rt Hon Kenneth (Ruclif)

  Griffiths, Peter (Portsmouth, N)

  Clifton-Brown, Geoffrey

  Grylls, Sir Michael

  Colvin, Michael

  Gummer, Rt Hon John Selwyn

  Congdon, David

  Hague, William

  Conway, Derek

  Hamilton, Rt Hon Archie

  Coombs, Anthony (Wyre For'st)

  Hamilton, Neil (Tatton)

  272

  Hampson, Dr Keith

  Moate, Roger

  Hanley, Jeremy

  Monro, Sir Hector

  Hannam, Sir John

  Montgomery, Sir Fergus

  Hargreaves, Andrew

  Moss, Malcolm

  Harris, David

  Needham, Richard

  Haselhurst, Alan

  Nelson, Anthony

  Hawkins, Nicholas

  Neubert, Sir Michael

  Hawksley, Warren

  Newton, Rt Hon Tony

  Hayes, Jerry

  Nicholls, Patrick

  Heald, Oliver

  Nicholson, David (Taunton)

  Heathcoat-Amory, David

  Nicholson, Emma (Devon West)

  Hendry, Charles

  Norris, Steve

  Hicks, Robert

  Onslow, Rt Hon Cranley

  Higgins, Rt Hon Terence L.

  Oppenheim, Phillip

  Hill, James (Southampton Test)

  Ottaway, Richard

  Hogg, Rt Hon Douglas (G'tham)

  Page, Richard

  Horam, John

  Paice, James

  Hordern, Sir Peter

  Patten, Rt Hon John

  Howard, Rt Hon Michael

  Pattie, Rt Hon Sir Geoffrey

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

  Pawsey, James

  Howell, Rt Hon David (G'dford)

  Peacock, Mrs Elizabeth

  Howell, Ralph (North Norfolk)

  Pickles, Eric

  Hughes Robert G. (Harrow W)

  Porter, David (Waveney)

  Hunt, Rt Hon David (Wirral W)

  Portillo, Rt Hon Michael

  Hunt, Sir John (Ravensbourne)

  Powell, William (Corby)

  Hunter, Andrew

  Rathbone, Tim

  Jack, Michael

  Redwood, John

  Jackson, Robert (Wantage)

  Renton, Rt Hon Tim

  Jenkin, Bernard

  Richards, Rod

  Jessel, Toby

  Riddick, Graham

  Johnson Smith, Sir Geoffrey

  Rifkind, Rt Hon. Malcolm

  Jones, Gwilym (Cardiff N)

  Robathan, Andrew

  Jones, Robert B. (W H'f'rdshire)

  Roberts, Rt Hon Sir Wyn

  Jopling, Rt Hon Michael

  Robertson, Raymond (Ab'd'n S)

  Kellett-Bowman, Dame Elaine

  Robinson, Mark (Somerton)

  Key, Robert

  Roe, Mrs Marion (Broxbourne)

  Kilfedder, Sir James

  Rowe, Andrew (Mid Kent)

  Kirkhope, Timothy

  Rumbold, Rt Hon Dame Angela

  Knapman, Roger

  Ryder, Rt Hon Richard

  Knight, Mrs Angela (Erewash)

  Sackville, Tom

  Knight, Greg (Derby N)

  Sainsbury, Rt Hon Tim

  Knight, Dame Jill (Bir'm E'st'n)

  Scott, Rt Hon Nicholas

  Knox, David

  Shaw, David (Dover)

  Kynoch, George (Kincardine)

  Shephard, Rt Hon Gillian

  Lait, Mrs Jacqui

  Shepherd, Colin (Hereford)

  Lang, Rt Hon Ian

  Shepherd, Richard (Aldridge)

  Lawrence, Sir Ivan

  Sims, Roger

  Legg, Barry

  Skeet, Sir Trevor

  Leigh, Edward

  Smith, Sir Dudley (Warwick)

  Lennox-Boyd, Mark

  Smith, Tim (Beaconsfield)

  Lester, Jim (Broxtowe)

  Soames, Nicholas

  Lidington, David

  Speed, Sir Keith

  Lightbown, David

  Spencer, Sir Derek

  Lilley, Rt Hon Peter

  Spicer, Sir James (W Dorset)

  Lloyd, Peter (Fareham)

  Spicer, Michael (S Worcs)

  Lord, Michael

  Spink, Dr Robert

  Luff, Peter

  Spring, Richard

  Lyell, Rt Hon Sir Nicholas

  Sproat, Iain

  MacGregor, Rt Hon John

  Squire, Robin (Hornchurch)

  MacKay, Andrew

  Stanley, Rt Hon Sir John

  Maclean, David

  Steen, Anthony

  McLoughlin, Patrick

  Stephen, Michael

  McNair-Wilson, Sir Patrick

  Stern, Michael

  Madel, David

  Stewart, Allan

  Maitland, Lady Olga

  Streeter, Gary

  Malone, Gerald

  Sumberg, David

  Mans, Keith

  Sweeney, Walter

  Marland, Paul

  Tapsell, Sir Peter

  Marlow, Tony

  Taylor, Ian (Esher)

  Marshall, John (Hendon S)

  Taylor, John M. (Solihull)

  Marshall, Sir Michael (Arundel)

  Taylor, Sir Teddy (Southend, E)

  Martin, David (Portsmouth S)

  Thomason, Roy

  Mates, Michael

  Thompson, Patrick (Norwich N)

  Mawhinney, Dr Brian

  Thornton, Sir Malcolm

  Mayhew, Rt Hon Sir Patrick

  Thurnham, Peter

  Mellor, Rt Hon David

  Townend, John (Bridlington)

  Merchant, Piers

  Townsend, Cyril D. (Bexl'yh'th)

  Milligan, Stephen

  Tracey, Richard

  Mills, Iain

  Tredinnick, David

  Mitchell, Andrew (Gedling)

  Trend, Michael

  273

  Trotter, Neville

  Whittingdale, John

  Twinn, Dr Ian

  Widdecombe, Ann

  Vaughan, Sir Gerard

  Wiggin, Jerry

  Viggers, Peter

  Willetts, David

  Waldegrave, Rt Hon William

  Winterton, Mrs Ann (Congleton)

  Walden, George

  Winterton, Nicholas (Macc'f'ld)

  Walker, Bill (N Tayside)

  Wolfson, Mark

  Waller, Gary

  Wood, Timothy

  Ward, John

  Yeo, Tim

  Wardle, Charles (Bexhill)

  Young, Sir George (Acton)

  Waterson, Nigel

  Watts, John

  Tellers for the Noes:

  Wells, Bowen

  Mr. Sydney Chapman and

  Wheeler, Sir John

  Mr. Irvine Patnick.

  Whitney, Ray

  Question accordingly negatived.
  It being after Ten o'clock, MADAM SPEAKER interrupted the business.
  MADAM SPEAKER then put forthwith the Question which she was directed to put pursuant to paragraph (1) of Standing Order No. 53 (Questions on voting of estimates, &c.).

  SUPPLEMENTARY ESTIMATES 1992–93
  Resolved,
  That a supplementary sum not exceeding £833,362,000 be granted to Her Majesty out of the Consolidated Fund to defray the charges for Defence and Civil Services which will come in course of payment for the year ending on 31st March 1993, as set out in House of Commons Papers Nos. 44 and 45.
  Bill ordered to be brought in upon the foregoing resolution relating to Supplementary Estimates 1992–93 by the Chairman of Ways and Means, Mr. Chancellor of the Exchequer, Mr. Michael Portillo, Mr. Stephen Dorrell, Sir John Cope and Mr. Anthony Nelson.

  CONSOLIDATED FUND APPROPRIATION BILL
  Mr. Stephen Dorrell accordingly presented a Bill to apply certain sums out of the Consolidated Fund to the service of the year ending on 31 March 1993 and to appropriate the supplies granted in this Session of Parliament: And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 40.]

  Points of Order
  10.12 pm
  Mr. Nigel Spearing: On a point of order, Madam Speaker, relating to the manner in which Secretaries of State present reports to Parliament. You may be aware that, last August, the Secretary of State for Transport published a report by the marine accident investigation branch into the "Marchioness" tragedy. It precipitated some controversy, because of the nature of the report and its failure to mention six accidents involving the dredger "Bowbelle". Subsequent parliamentary questions and requests led the Secretary of State to appoint a Mr. Hayes to report on river safety in general.
  That report was published today. I had given evidence, and had tabled a question asking when the report would be published. This afternoon the Secretary of State for Transport published an extensive press release relating to the report, a copy of which is in the Library. I understand that the Minister for Aviation and Shipping, Lord Caithness, has given television and radio interviews on the subject.
  According to the press release,
  "Mr. Hayes recommended that there should be an early review of the rescue arrangements and equipment on the Thames. The Government has given careful consideration to the recommendation but has concluded that further review of this kind would not be justified."
  My point of order is that, having asked the question as to when this report would be published and having submitted evidence to the inquiry, neither I nor the hon. Member for Southwark and Bermondsey (Mr. Hughes), who is the constituency Member concerned, was informed about this report, or about the press conference, or about the statement that is in the Library. We were told about it by, ironically, Thames Television. If a report is made to Parliament, it is surely made to Members of Parliament. In particular, it should be available to those who have some concern about and knowledge of this matter, as well as to the generality of hon. Members. I ask you, Madam Speaker, so to rule.
  Mr. Simon Hughes: Further to that point of order, Madam Speaker. I confirm everything that the hon. Member for Newham, South (Mr. Spearing) has said. He and I have discussed the issue since these matters were drawn to our attention early this evening. There is no difference between us.
  The points that I should be grateful if you would also consider are these. First, when any hon. Member tables a question that specifically asks about the publication of a report that is either known to be or is believed to be imminent, is it a proper procedure or an abuse of procedure for a planted question subsequently to be tabled so that the question is then asked by somebody who has no constituency or previous interest in the matter? That appears to be a breach of the traditional link between a constituency Member, or a Member with a wider interest, and the Department concerned.
  The second matter relates to the sequence of events once a decision has been made to produce a report to Parliament. I understand that there may have been an appropriate time of day when that report could be published, but, like the hon. Member for Newham, South, the first knowledge I had that the report had been published today was a telephone call to my office at about

  275
  5.30, two hours after it had been confirmed by Thames Television that it had been published. I was out of the House. I asked that inquiries should be made of the Department as to the contents of the report. The anwer that was given to my assistant was that that information could not be divulged because a press conference was at that very moment going on. I had to wait until after the press conference was over before I was allowed to have the information contained in the press release that had been issued earlier in the day.
  There have been similar sequences of events on other issues. I hope that you, Madam Speaker, will feel it appropriate, either now or at an early opportunity, to rule on the proper procedure so that all Departments and all Members can believe, on behalf of those whom they represent, particularly in the case of tragedies such as this, that the proper procedures have been observed. I hope, too, that an appropriate apology will be made regarding what has happened today.
  Madam Speaker: I take the view that those Members who are directly involved in such incidents should be the first to be informed when there is any statement to be made, but I also take the view that I am biased in favour of this House in its entirety being informed when the Government have something to say to the House and that statements of such a nature should not first be made outside it. We in this House have the right to know first.
  Sir Ivan Lawrence: On a point of order, Madam Speaker. I do not know whether you witnessed the quite disgraceful incident that took place on the previous vote. What I saw—it may be confirmed by a large number of colleagues—was two Opposition Members trying to get through the door after you, Madam Speaker, had ordered it to be closed. What then followed was the attendant—doing his duty as the servant of the House—trying to hold the door closed while those two hon. Members tried to force it open. They were not able to do so, but only after a protracted struggle and, no doubt, a great deal of energy having been expended by the servant of the House who was following your orders. One of the most disgraceful aspects of this incident is that those hon. Members who are sitting on the Opposition Front Bench saw this incident, but have not seen fit to come to the Dispatch Box and apologise for the behaviour of those two hon. Members. I respectfully ask, Madam Speaker, that, having seen that incident yourself, you will do something about it, because it is totally wrong that such an incident should go unredressed.
  Madam Speaker: I sit here very quietly and watch what goes on at the door once a Division is called. I saw precisely what happened tonight. Members who were going through the door did so in a very leisurely fashion, and I feared that they would not get through in time. However, hon. Members know the rules of the House, and there is nothing I can do about that, other than, when I instruct the Doorkeepers to close the door, to see that they obey my instruction. I deprecate the incident that occurred tonight when two Members forced their way through the door. I hope that this is the last time that I shall sit in this Chair and see anything like that happen. The Doorkeepers are, like me, servants of the House. We all know the rules. Let us now proceed with our business.

  Finance Bill
  Not amended in the Committee and as amended ( in the Standing Committee), again considered.
New clause 5

  ADDITIONAL RELIEF FOR DEVELOPING COUNTRY DEBT
  `After section 88C of the Taxes Act 1988 to insert the following section—
  "Additional relief for overseas Government debt
  88D—(1) Where in relation to a debt to which section 88A(2) above applies, a company has included a provision in its accounts for any accounting period ending on or after 30th June 1992 which exceeds the aggregate amount which has been deducted under section 74(j) above in relation to that debt for that and any previous accounting period, then it shall be entitled to additional relief under subsection (2) below, subject to the clawback provided for by subsection (3) below.
  (2) The additional relief shall be a deduction from profits chargeable to corporation tax for that accounting period equal to the difference between the aggregate amount mentioned in subsection (1) above and the lesser of

  (a) the provision mentioned in subsection (1) above and

  (b) the maximum provision which would have been made in relation to the debt had the company followed the recommendations contained in the Bank of England's guidelines for overseas debt provision m force at the end of that accounting period;

  and for the purposes of subsection (1) above any relief given by virtue of this subsection shall be regarded as an amount deducted under section 74(j) above.
  (3) The additional relief granted by subsection (2) above shall be withdrawn to the extent that, at a date one year from the end of that accounting period, the company has not made a relevant release of the debt; and an assessment made to give effect to this subsection (or subsection (5) below) may be made at any time up to six years after that date.
  (4) For the purposes of subsection (3) above, a "relevant release" means

  (a) a release of the debt in favour of the Creditor Overseas State Authority for no consideration, or

  (b) a disposal of the debt to the Creditor Overseas State Authority for a consideration equal to or less than its book value at the end of that accounting period, or

  (c) a disposal of the debt by the company under a development plan or an environmental protection plan approved by the Treasury;

  and the Treasury shall be empowered by this subsection to issue regulations demonstrating the criteria which it will use in deciding whether or not to approve under this subsection a development plan or environmental protection plan submitted to it for approval.
  (5) Nothing in subsections (1) to (4) above shall cause the aggregate profits charged to corporation tax of any person for the accounting period in question, and all previous accounting periods in relation to which he was chargeable to corporation tax, to exceed those which would have been so charged had this section never been enacted, and this section shall have no effect to the extent that it would otherwise cause such excess to be charged to corporation tax.".'.—[Mr. Boateng.]
  Brought up, and read the First time.
  10.20 pm
  Mr. Boateng: I beg to move, That the clause he read a Second time.
  This clause is debated in the aftermath of the Rio summit, where the disparity between the nations of the north and of the south was revealed in all its reality and we

  277
  saw the impact, not only in terms of poverty and life expectancy but in terms of environmental degradation, of the ever-growing burden of third-world debt.
  This clause seeks to focus the attention of the House on that issue and to put forward a practical proposal to encourage banks and those commercial lenders who currently require from the developing world a degree of interest, a degree of repayment, that all too often has the effect of crippling those countries to forgo the debt and to see that it is applied in such a way, in the alternative, as to promote environmental and development objectives.
  No one should be under any illusions as to the extent of the global crisis in debt. The figures speak for themselves. In 1989, the figure was $1·3 trillion—44 per cent. of the gross national product of the developing world. Money paid to developed nations in interest was $77 billion; money repaid, $85 billion; net flow from poor to rich countries, $50 billion.
  The figures are enormous and they speak for themselves. What they do not reveal, however, is the enormous burden of human suffering that flows from those figures. In the last decade debt has emerged as the main cause of hunger and misery in the world. One thousand children are estimated to die every day from its effects alone. That is a clear indication of the extent to which the matter with which the House is concerned tonight has an immediate impact on the world outside the House.
  If we take one example, the impact on one country, Ghana, of the burden of overseas debt, the position becomes very clear. In Ghana, the current position is that to meet its crippling burden of debt it devotes one half of the foreign exchange earned by its cocoa farmers to servicing that debt. The cocoa farmers provide the countries of the north with drinking chocolate and chocolate to eat, at a time when, Oxfam informs us, more than half of the children in Ghana do not have enough to eat. That is an indication of the extent of the crisis.
  But it does not end there. No doubt we shall hear that some measures have been taken by the developing world to address the problem. The Trinidad terms that were proposed by the Prime Minister when he was Chancellor of the Exchequer were welcome so far as they went, but they did not go far enough.
  Mr. Tim Smith: They have not been accepted.
  Mr. Boateng: The hon. Gentleman is quite right. The Trinidad terms, limited though they were, were not accepted by many of our partners in the European Community or, indeed, by the United States. The result is continued failure to address the problem of world debt.
  When one peels away the rhetoric of Rio—and, indeed, when one examines the rhetoric itself—one sees that a great deal was said about the importance of at least aiming for the United Nations target of the expenditure of 0·7 per cent. of gross domestic product on overseas aid. That fact is not insignificant. But the target was dismissed by President Bush as being unrealistic, and the British Government regarded it as a dim, distant objective. However, at least there was talk about the matter; at least the objective was focused upon.
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  How much time did the participants at Rio devote to discussion of the issue of debt?
  Mr. Chris Smith: None.
  Mr. Boateng: Indeed—none. But a good deal of time was devoted to keeping it off the agenda, to ensuring that it was not given the negotiating position that it merited as a matter of urgency to the developing world. Indeed, the action programme for Governments managed to reach it only as agenda item number 21, at which point it was said that a reduction of up to $80 billion in debt should be given consideration. That is the extent to which the Rio programmme of action was prepared to take this matter on board. We seek to give the banks some kind of incentive to address the issue. That is modest enough, but it should be welcomed by all and every hon. Member, on whichever side, who cares about development.
  It is interesting to note how this is being addressed through the current tax provisions—a matter that was referred to by my hon. Friend the Member for Islington, South and Finsbury (Mr. Smith) in a recent question to the Chancellor of the Exchequer. The Economic Secretary responded to my hon. Friend's question about the amount of corporation tax that had been forgone from British banking institutions through the writing down of developing country sovereign debts in the past five years. My hon. Friend asked:
  "how much sovereign debt has (a) been cancelled or (b) been made available for debt-for-environment or debt-fordevelopment swaps, in each of the last five years as a result of this writing-down."
  The answer was:
  "Provisions for doubtful sovereign debt by banks operating in the United Kingdom are estimated to have reduced corporation tax receipts in the last five years by the following amounts:

  £ million

  1987–88

  240

  1988–89

  550

  1989–90

  360

  1990–91

  720

  11991–92

  190"

  —[Official Report, 25 June 1992; Vol. 210, c. 278.]
  10.30 pm
  The last figure is provisional. It was not possible to provide the information requested and to show the benefit in terms of debt for environment or debt for development swaps, and how the forgoing of corporation tax had benefited the developing world.
  The most commendable feature of this modest new clause is that it at least begins to make a start in that direction. At least it requires, through subsection (4)(a), (b), and (c), that there be a notion of what the objective of the "relevant relief" is. We shall be able to recognise to what end reliefs are directed. That important aspect of the new clause should commend itself to the House.
  We do not hold out this modest new clause as being the whole answer to the problem, but at least it makes a start towards encouraging the banks to resume an attitude towards such debts that is conducive to development and makes a start to recognising the link between the burden of debt and environmental degradation. The developed countries of the north have condemned the developing countries of the world to a labour of Sisyphus in which, day in and day out, their agricultural and industrial

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  production, such as it is, is used to service an ever-increasing mountain of debt. That crushes their efforts and has a devastating effect on their environments and peoples.
  We hope that the House will give a warm welcome to this new clause, which will make a small start in the right direction.
  Mr. John Battle: In May of this year, a report was published by the Washington-based Population Crisis Committee in the form of an "International Index of Human Suffering". It pointed out that almost three quarters of the world's population live in conditions that tax human endurance, and that the gap between the rich and the poor countries is massively widening. It pointed out that more than 430 million people live in conditions of extreme suffering and 3·5 billion in conditions of what it terms high suffering. We do not recall often enough in the House or in our society that we live in a world in which 1 billion people have less than the equivalent of £1 a day on which to live.
  Economic distress, national disasters, persecution and war are turning millions of people into refugees and migrants. This year we need only consider the evidence of drought in sub-Saharan Africa. Zambia set out at the beginning of last year with a new planting programme. It managed to plant 130 per cent. more of the land than had been planted the previous year. In other words, it was on target for a better harvest than ever before. The spring shoots came through, but people then had to sit and wait for the rain, and it did not come. The crop failed and the lack of sales of that crop to other countries will mean hardship and economic distress in Zambia.
  Some development bodies, including the World bank, are referring to the 1980s as the lost decade of development. Since our previous debate on the issue in 1990, the burden of third-world debt has increased. When we last debated the issue in a Finance Bill debate, the debt figure was $1,180,000 million. In 1992, the projected figure is $1,223,000 million. Some 55 per cent. of the debt is in the poorest 46 countries.
  The debt that has built up is equivalent to half the developing countries' combined gross domestic product and nearly twice their annual export earnings. In 1991, the debtor nations paid out $24 billion more in debt payments than they received in new loans. For example, Peru is now paying $50 million a month back to the International Monetary Fund and the World bank since Mr. Fujimori took office. In other words, the net flows of funds are clearly from the south to the north specifically as a result of the volume of debt.
  Debt servicing is continuing to transfer wealth from the poor to the rich countries. In April, the United Nations development programme report spelt out how the gap between rich and poor had doubled in the past 30 years with the richest one fifth receiving 150 times the income of the poorest. Even the author of the report, a former Minister in Pakistan, said that he was shocked by that figure and that the international community should be shocked by it as well. Some 1·2 billion people live in acute poverty and suffer grossly inadequate access to resources such as education, health, infrastructure, fresh water, land and credit. That number has been increasing annually.
  The restrictions in the global market—otherwise known as trade barriers—cost developing countries about
  280
  $500 billion a year. Farm and industrial production protection cost third-world countries $55 billion a year in lost earnings.
  Although that protection is in place and although, even today, we are told that the Prime Minister has not managed to make any breakthroughs in the GAIT third-world trade talks, third-world countries are being told by the World bank, the IMF and northern Governments that, conditional to their getting aid and trade, they should liberalise and open up their national markets, precisely when the world will not do that when it is not in its interests. Apparently, it is fine for third-world Governments to have open and fair trade, but it is not fine for the world system to open up so that there is some justice in the trade system for third-world countries as well.
  We need to remember that only 17 per cent. of global capital is available to poor countries in the south. Only 0·2 per cent. of global commercial credit goes to poor countries. Africa, which now has to be the most marginalised continent from the world economy, now accounts for only 1 per cent. of world trade. In the 1960s, it accounted for 4 per cent. In other words, in terms of trade, Africa is being marginalised even further.
  In practice, the World bank and the IMF have become institutions for recycling debt, rather than sources of new resources. Again, the United Nations Development Programme report spelt out that the IMF is now taking $6 billion a year out of the south and that the World bank is taking $0·5 billion a year out of the poorest countries. What is being done to tackle the debt burden? The United Nations Secretary-General, in his acceptance speech. commented:
  "tackling the crippling problem of international debt is central to achieving a healthy world economy."
  We have had the Brady plan and we have had the Prime Minister's Trinidad terms initiatives. Of course, they related only to Government official debt relief, especially aimed at the poorest. We would have pressed for them to be extended certainly to middle-income countries as well, such as Peru, but not even they have been accepted at the G7 summit. At the previous summit, the issue of international debt was pushed off the agenda by the new east-west negotiations with what was the Soviet Union. It would be helpful if world debt were even on the agenda of the G7 summit which is now meeting.
  On commercial debt, in 1990, the Government changed the rules, as we know, on corporation tax relief, but only in relation to how much relief could be claimed in any one financial year. In practice, tax relief in Britain has not meant debt cancellation in third-world countries. Many middle-income countries and many Latin American countries owe most of their debts to commercial banks. At present, if a commercial bank has a developing country debt in its portfolio, it can claim corporation tax relief when it writes down that debt in its books. It does not, however, have to cancel the debt to the country concerned. In other words, provision seems to be set aside in the accounts of the bank but it does not necessarily benefit third-world countries.
  The new clause would insist that in order to qualify for relief from corporation tax, a bank must cancel the debt to the debtor nation or transform it, as my hon. Friend the Member for Brent, South (Mr. Boateng) has suggested, into a debt-for-development swap, for example. The new clause would grant immediate tax relief to overseas debts if the banks released or disposed of the debt to the country

  281
  concerned. At present, British taxpayers are subsidising the banks, but without much relief to the world's poorest. The subsidy is said to have been worth £650 million last year. My hon. Friend gave the table of figures that were available for each year from 1988 to the present. It strikes me that that relief alone is worth more than half of what the Government are currently giving in aid to third-world countries.
  Debt has fundamentally undermined the value of trade earnings and flows of aid to developing countries. In the immortal words of Michael Manley, it seems to third-world countries that they are trying to go up an escalator that is coming down against them and speeding up in the process. What chance do they have of going up the down escalator? Two thirds of the world is being drained of capital by the industrialised world. External debt is a major obstacle to economic development and social progress in the poorest countries of the world.
  10.45 pm
  The way in which our corporation tax operates is crucial. We ought not to pretend that it contributes to the alleviation of world poverty when nothing of the sort happens in practice. Ministers tell us that aid has to be tied for third-world countries. Countries are told that the aid must go to certain projects and according to certain conditions. The same rule should apply to the banks. If tied aid is good enough for third-world countries, it ought to be good enough for banks in the western world. The tie should be that if banks are to receive corporation tax relief on debts, those debts must be cleared.
  The new clause would be a minor measure in the Bill, but we do not have too many opportunities to take practical, political and economic action on the problem of world poverty. It is important that the attention that the world paid to the Rio summit is not simply dissipated with words without any action resulting. Tonight. the Government have a chance to support the new clause and carry through a tiny measue which might make some difference.
  Sir David Steel (Tweddale, Ettrick and Lauderdale): I rise to support the amendment on behalf of my party. When I spoke in the post-Rio debate in the House, I dwelt at some length on the symbolism of our aid programmes and their failure to meet the United Nations target. But I said in parenthesis that I recognised that the aid target was less important to the developing world than the terms of trade and debt write-off. The figures that were given by the hon. Members for Brent, South (Mr. Boateng) and for Leeds, West (Mr. Battle) justify the observation.
  The developing world owes in total approximately $1,300 billion to the developed world—to the Governments and banks of the industrialised nations and to the international financial organisations. The blunt truth—public opinion does not seem to have grasped it —is that the amount of debt repaid from the developing world every year in capital and interest to the developed world exceeds the amount of aid that we give every year. So there is a net flow of resources every year from the developing world to the developed world.
  As the hon. Member for Leeds, West said, the new clause is modest. However modest, such measures would be warmly supported by the public if people knew that
  282
  they existed. I welcome the opportunity on the Report stage of the Finance Bill to give a small nudge towards encouraging the write-off of debt.
  One problem that the developing countries face in tackling debt repayment is that there is no single effective body to which they can turn for assistance. They have to cope with several organisations separately—the IMF, the World bank and the individual creditor nations. It is because the thinking of creditor nations is of such importance that when he presented his plan as the United States treasury secretary, Mr. Brady said:
  "creditor governments should consider how to reduce regulatory, accounting or tax impediments to debt reduction where these exist."
  I assume that that is what the new clause seeks to do. I say that because I am honest enough to admit that the clause is so technical that I do not fully grasp how it will work. I am comforted by the thought that nor did the official Opposition spokesman, the hon. Member for Brent, South. Certainly he did not explain how it would work.
  In all seriousness, it is important that the House should register its support for any measure, however technically complex, that will have the effect of assisting the banks in relieving third-world countries of some of their debts. That is the object of the new clause, and accordingly it has my support.
  In 1990, as the hon. Member for Leeds, West said, the Prime Minister, when Chancellor of the Exchequer, responded to pressure from the House and outside organisations and took a small but significant step in the direction of using tax incentives to encourage debt reduction. Two years later, we are asking the Treasury to take a similar step. I know that the Financial Secretary, who will respond to the debate, was a member of the board of Christian Aid, and I know also that he is genuinely concerned about the issues which have been raised. Perhaps he is more concerned than a standard Treasury Minister. I hope that he will respond positively. It is—[Interruption.] I do not understand why the Minister smiles; I am paying him a tribute.
  The United Kingdom's record on debt repayment is not all that good. We all cheered in October 1991 when the Trinidad announcement was made. We were told that there was to be a 67 per cent. write-down of all official debt. My party believed that that pledge should be upheld and implemented in full. Two months later, in Paris, it was quietly downgraded to 50 per cent. of the amount falling due in the next three years. Unfortunately, we have gone back on the excellent statements of the Prime Minister when he was Chancellor of the Exchequer. I hope that the Treasury will redeem itself, at least to some extent, by accepting the new clause.
  Mr. Tim Smith: The right hon. Member for Tweeddale, Ettrick and Lauderdale (Sir D. Steel) was honest enough to say that, because the hon. Member for Brent, South (Mr. Boateng) did not explain the new clause, the right hon. Gentleman does not understand it. I do not understand it either, but I understand the general objective behind it.
  Does it make sense, whatever one thinks about the growing disparity between the poverty of developing countries and the wealth of developed countries, to use or manipulate the corporation tax system to try to alleviate the debt problem of developing countries? That is the question which the House must consider.

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  Much of what the hon. Member for Leeds, West (Mr. Battle) said was irrelevant to the new clause. I agree with his remarks about the terms of trade between developing and developed countries, but they are not relevant to the clause. I agree with his comments about the poorest countries, but they are not much affected by the clause. On the whole, the banks did not lend to the poorest countries. Largely, they lent to middle-income countries. Implementation of the Trinidad terms, to which the right hon. Member for Tweeddale, Ettrick and Lauderdale referred, would benefit the poorest countries the most.
  Mr. Jeremy Corbyn: My hon. Friend the Member for Leeds, West (Mr. Battle) said that.
  Mr. Smith: The hon. Member for Leeds, West said it all, and I am repeating what he said, but it was all irrelevant to the new clause. That is the point that I am trying to make. The new clause is about lending by commercial banks, largely to middle-income countries. The question that the House must consider is whether it is right in principle to make a distinction in terms of corporation tax between the allowances that companies can have in the ordinary course of lending to domestic borrowers as against overseas borrowers.
  Mr. Boateng: It is not true that some of the poorest countries do not have a high proportion of commercial debt. Somalia and Mozambique, for example, have above average debt, even for sub-Saharan Africa. At the same time, more than the proportion of debt attributable to Governments is owed to commercial creditors or multilateral institutions. That is the position in Somalia and Mozambique. countries which have been ravaged by the burdens of famine and continual war as well as the burden of debt.
  Mr. Smith: The hon. Gentleman said that those countries are indebted to commercial banks or to multilateral institutions. The bulk of the debt, however, rests with South America and Latin America. That is a well-known fact. I do not want to become involved in a debate about the particulars, because, as I have said. the question of principle is whether it is right in terms of corporation tax to distinguish between domestic and overseas borrowers. I see no reason to make that distinction. To me, there is no distinction. If a lender makes provision against his profits because he does not think that he can recover a debt and the Inland Revenue accepts that, there should be corporation tax relief. If the lender subsequently recovers the money from the borrower, the relief is clawed back. That would happen in the unlikely event that one of the debtor countries repaid the banks, but we should recognise that large sums of money were lent to those countries and they have not been repaid, for whatever reason. In those circumstances, I see no reason to distinguish between that kind of debt and the debt that arises at home in a recession.
  Mr. John Denham: Whether or not the hon. Gentleman feels that it is right to distinguish between different categories of debt for the purpose of tax treatment, the Government established that principle in the Finance Act 1990. We are not arguing about that principle tonight because it is already enshrined in the law. We are discussing how the principle is further developed.
  Mr. Smith: The hon. Gentleman has misunderstood the provisions of the Finance Act 1990, which do not deny banks the relief but simply deny them the relief in a particular time scale. It is a question of when, not whether, they receive the relief. A formula in the Act means that, whatever the provision in the accounts, the relief is phased over a period of years. I take no exception to that as it seems to be a reasonable arrangement, but it is not right to try to use the tax system to influence our policy in relation to poorer countries. That should come through our aid programme and the establishment of better trade relations through the GATT negotiations.
  Those measures would benefit the poorer countries much more than what was described by the hon. Member for Brent, South as a relatively modest new clause. Although the new clause's impact would not be great, it would distort our corporation tax system.
  Mr. Denham: The tax treatment of banks' third world provision constitutes one of the biggest but least known public financial scandals for many years. Billions of dollars of tax income have been forgone by Governments not just in this country but across the industrialised world. Banks have been allowed to avoid tax liabilities by claiming relief on provisions made against third world debt hut, at the same time, they have largely avoided any commensurate action to mitigate the burden of debt on developing countries.
  If we take stock of the international debt strategy in 1992, we must conclude that its whole thrust has been to cushion commercial banks, as far as possible, from the effects of imprudent lending at the expense not only of people in developing countries but of taxpayers in the developed world. The root cause of that scandal is simple. The regulatory systems may vary to some extent in the different industrialised countries but in most of the OECD countries banks have been able to claim tax credits on provisions made against sovereign loans, even though no loss was incurred by them and no reduction in the heavy burden of debt was enjoyed by the developing countries.
  The sums involved are huge. A conservative estimate would be that $40 billion of tax credits were generated by banks in the OECD countries by mid-1990, with little debt reduction to match. That is 55 times the annual budget of UNICEF—the respected organisation that estimated that half a million young children were dying each year as a result of the debt crisis—and twice the annual OECD development aid to low income countries. It is about eight times the extra money pledged in Rio to save the planet, about which we have heard so much in recent weeks.
  Christian Aid estimates that, by 1990, United Kingdom banks received some £1·6 billion in tax relief. If my mental arithmetic is correct, on the figures given earlier about £1·8 billion has now been received. But the tax relief that will ultimately be received by those banks will be about three times that figure.
  11 pm
  Of course, once the debt crisis had been created through imprudent lending, bad borrowing and even worse regulation, it was inevitable that the citizens of northern countries would have to pay a fair part of the cost of resolving the crisis. With the record of generosity of the British people, I believe that they would have happily accepted that burden. It is not acceptable that vast sums of

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  money should be used to pad out the banks' balance sheets without any benefit to the debtor countries or their peoples.
  For years up to 1990, the Government tolerated, endorsed and even encouraged that financial scandal. Year after year, they insisted that nothing could be done to treat sovereign lending differently from other loans, despite the obvious difference in the nature of those loans and the global urgency for a solution. The hon. Member for Beaconsfield (Mr. Smith) Missed the central point, which is that the Finance Act 1990 clearly showed that third-world debt provisions could be treated legally in a different category and manner from other provisions. The Government swept aside their pretence and the 1990 Act proved that such loans could be treated differently. The tragedy is that the action was too little, too late.
  In the first stage of the financial scandal, the problem was one of allowing banks to claim tax relief on provisions on loans that they still held at face value. We are now in a second and rather different stage of the same scandal. Many banks, certainly many British banks, have disposed of a large part of their loans. They have taken some losses, so what was originally tax relief against provisions is now tax relief gained on the actual losses on the banks' balance sheets. The problem is that those losses and that tax relief are still, in most cases, unrelated to any real debt relief for developing countries. The British banks' balance sheets may look cleaner, but there has been little benefit to the developing countries.
  Most of the disposal of United Kingdom hank loans has been through sales on the secondary market. In 1989 and 1990, Midland reduced the debt on its books by almost $2 billion, but only $365 million was through out
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  and out debt reduction—the remainder was through debt equity swaps, which merely transforms one form of foreign obligation into another, or through simple trading on the secondary market. Other banks such as National Westminster appear to have disposed of virtually all of their third-world debt through secondary market sales.
  The truth is that having padded the banks to the hilt, the Government have now allowed them to get away with the loot. At that moment in time in the late 1980s and early 1990s when the provisions were high, had the Government chosen to link tax relief to direct debt reduction they could have ensured not only that the banks received the tax relief, but that there was a commensurate benefit in the developing countries.
  Internationally, the value of commercial bank debt reduction under the Brady initiative is perhaps at best $30 billion—less than the amount of tax credits that OECD banks appear to have generated. That is appalling. Of course, that is not the only way in which the taxpayers in the north have been asked to help the banks at no benefit to developing countries. In addition to the tax relief, it took vast sums of new official loans and new publicly underwritten loans to developing countries to enable them to maintain debt service payments to the commercial banks throughout the 1980s. The taxpayer has paid twice
  through tax relief and through the advance of new official loans.
  The sums involved amount to maladministration on a massive scale. The concern of Governments in the north to protect the banks, irrespective of the cost to their own citizens and the damage done to developing countries and their people, is truly scandalous.
  Mr. Jeremy Corbyn: It is a pleasure to follow my hon. Friend the Member for Southampton, Itchen (Mr. Denham). I welcome the work that he has done, and will no doubt continue to do, in exposing the scandal of banks fiddling around with third-world debt in order to enjoy Government tax write-offs.
  When the hon. Member for Beaconsfield (Mr. Smith) rose to speak, he first professed not to understand the new clause, and then went on to say that we should concentrate on overseas aid rather than worry about debt problems. He made one useful admission, which Hansard will obviously record—that there is a growing disparity between the rich and poor in the world.
  All the aid increases that are suggested, projected, sought, or demanded will be eliminated at the stroke of a pen by the debt repayment system, underpayment for commodities produced by third-world countries, and the repatriation of profits by multinational corporations That occurs to the extent that last year the poor in the poorest countries in the world transferred $50 billion to the economies of the richest countries in the world. That wealth went not to the people who are sleeping in cardboard boxes along the Strand tonight, but to the banking systems of this country, the rest of Europe, and north America.
  The new clause of my hon. Friend the Member for Brent, South (Mr. Boateng) takes a useful step forward in exposing what British banks have been up to over the past few years. They pretended to the public that they were doing something about the debt crisis of developing countries, when in reality they were enjoying a handout at the expense of British taxpayers.
  A new approach is needed. For all the honeyed words at Rio and the other statements that have been made, unless there is a fundamental change in the relationship between the richest countries and the poorest people in the poorest countries, we will be heading for a massive ecological and social disaster.
  In many cases, people who are seeking asylum in neighbouring third-world countries are the victims of the debt crisis. They flee to seek a living elsewhere because they have been forced off their land, have nowhere to live, and can get nothing to eat. They are the initial victims.
  The debt crisis has its origins in the oil price rises of the 1970s and the funding of inappropriate development programmes. The two crucial elements in any developing country's economy are the prices paid for the commodities that it produces and the interest that it pays on borrowings to develop its agriculture, social infrastructures, or industry.
  Neither of those two important economic levers is in the hands of third-world countries. The prices of cocoa, coffee, tea, and other commodities are set not by the producer country but in London, Frankfurt, Chicago—everywhere except in the countries that produce them. Similarly, interest rates are set not by those who must meet them but be greedy bankers in western Europe and north America.
  The debt crisis reached its height in the early 1980s, when, basically, Mexico declared itself bankrupt. The response was swift and, in some ways, very clever in the interests of north American bankers in particular. They sought to divide the indebted nations by making one-off agreements, to persuade them to borrow yet more money to pay the arrears on interest payments on existing loans and to accept an alternative economic package.
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  If one studies the economics of Latin American countries over the past 15 years, one finds a steady reduction in public spending on the social infrastructure and on social needs. One also finds a steady increase in the repatriation of profits by multinational capital and in the amount of money paid as interest on debts. Very little of the principal has been paid. Mexico, for example, has paid more than all the money it ever borrowed, but it is still a heavily indebted country.
  In a sense, they are technical points. The reality is that expenditure on the health service, social services and education is cut in countries which cannot afford any reductions of expenditure on such vital services. When we read of increasing infant mortality rates in third-world countries and of the growing cholera epidemic in many parts of Latin America, we should realise that there is a direct connection between those horrible and horrifying facts and the economic restructuring programmes which have been forced on those countries by the International Monetary Fund and by the World bank.
  This process cannot continue. Tonight we are considering one aspect of that process, in which the British taxpayer is expected to support the British banks in their attitude—their mistaken attitude—towards third-world countries. The issue is enormously important. Unless there is a serious programme of writing off public and private sector debt in its entirety and of restructuring payments for commodities and trading arrangements with third-world countries, the future will involve nothing but more and more experts stepping off planes from Washington—
  Mr. Bernie Grant: And London.
  Mr. Corbyn: And London, telling third-world Governments that they must cut down their rainforests because they are a source of export earnings, that they must produce more coffee, tea and cocoa while, at the same time, the world price for those commodities continues to fall. They must repay increasing sums in debt, sell state-owned enterprises and cut public expenditure programmes. Such countries face horrific prospects.
  While I obviously support an increase in the aid programme and support the non-governmental aid programmes, unless we deal with the basic issues of debt, fair trade and commodity prices, the outlook for 1 billion people around the world is not one of improved living standards or increased life expectancy but of the very opposite—of seeing their economies collapse, their life expectancy fall, and infant mortality rates rise.
  As a developed country which has made millions or billions of pounds over decades and centuries from the poorest people in the poorest parts of the world, we have a responsibility to play an important role in trying to restructure the world's economy and to base it on social justice, on environmental protection and on paying the people who produce the goods that we consume a reasonable price for them. Instead, we have a cock-eyed financial system under which those who have made the most out of the third world now seek to make the most out of the British taxpayer.
  The new clause is a useful step forward, but I hope—indeed, I am sure—that we shall return time and again to such an important issue as the world situation gets worse and more people suffer because of the rapacious attitudes of the banking systems of western Europe and north America.
  11.15 pm
  Mr. Tam Dalyell: At this late hour, I shall confine myself to asking the Financial Secretary three questions. First, can we be clear about whether the £100 million talked about in relation to Rio is new money or whether some or all of it will come out of existing Overseas Development Administration funds? I see my hon. Friend the Member for Cynon Valley (Mrs. Clwyd) indicating that she, too, wants that question answered. Few people know precisely what is the Government's position in the matter. I went to hear the Secretary of State for the Environment make his big statement at the natural history museum in South Kensington and it was far from clear to the roomful of experts just what had been committed by the Government.
  As another part of the same question, may we be told what money has been given to the Darwin initiative? Is it £2 million or £5 million? I am all for that initiative, but a sign of how little it was thought out is the fact that neither the head of the Royal Botanic gardens in Edinburgh, whose institution was named by the Prime Minister in Rio, nor the head of Kew gardens, Ghillean Prance, knew anything about it beforehand. Dr. David Ingram learned about it from a reporter from the Edinburgh Evening News. Not since Harold Wilson dreamt up the Open university on the night train to Glasgow has such a thing happened.
  Secondly, what does the Financial Secretary consider the responsibility of the Government to be in this area? I listened carefully to everything that my hon. Friends, especially my hon. Friend the Member for Southampton, Itchen (Mr. Denham), said, and I agree that there is a big problem. One or two banks cannot be expected to operate by themselves in the matter.
  I went to the rally of the Amerindians in February 1989 and I was in Brasilia at the same time as Sir Kit McMahon, who had briefed me when I was a member of the indirectly elected European Parliament, when he was an official of the Bank of England. He subsequently became chairman of the Midland bank. It was clear that the Midland could not unilaterally take on the responsibilities involved. Indeed, the Midland and Lloyds could not take on those responsibilities, and one could not in those days expect Sir Jeremy Morse and Sir Kit McMahon to take on total responsibility. What does the Treasury now see, in those circumstances, as the responsibilities of the British Government and the responsibilities of the EC as a whole?
  My third question, asked in the presence of my hon. Friend the Member for Tottenham (Mr. Grant), is about Libyan sanctions. I hope that in the Consolidated Fund Bill debate one of us will be lucky enough to raise at length the folly and—dare I use the expression—ignorance of the Foreign Office in relation to that issue.
  I am as concerned as anybody about Lockerbie. I saw it. But I also saw, in the company of my hon. Friend. the bombing of the working-class areas of Benghazi and Tripoli. It is a complicated matter. It is generally accepted who were the main instigators of the worst crime against civilians in the western world since 1945, the bringing down of the PanAm airliner over that Scottish village. The police from my constituency had to help clear up the mess, and it was a terrible mess.
  We want to know the cost of the sanctions. We talk about the third world, but, frankly, the Gadaffi regime, for all its shortcomings in the middle and early 1980s—
  Mr. Deputy Speaker (Mr Geoffrey Lofthouse): Order. The hon. Member has been in the House long enough to appreciate that he is straying from the subject matter of the new clause.
  Mr. Dalyell: I always accept the Chair's ruling, Mr. Deputy Speaker.
  I leave the matter there. What is the cost of the Libyan sanctions, imposed against a regime that is one of the most ecologically imaginative in Africa?
  Mrs. Roche: As my hon. Friend the Member for Brent, South (Mr. Boateng) has said, the new clause constitutes a modest attempt to set Britain in the right direction in regard to the debts of the south of the world. It is not nearly enough, but it is a start.
  In 1992, UNICEF published its "State of the World's Children" report, which stated:
  "A new slavery has shackled the African continent and its name is debt. The countries of Sub-Saharan Africa, including most of the world's least developed countries, now owe a total of approximately £150 billion. Each year, Africa struggles to pay about one third of the interest which falls due; the rest is simply added to the rising mountain of debt under which the hopes of a continent lie buried. The total inhumanity of what is now happening is reflected in the single fact that even the small proportion of the interest which Africa does manage to pay is absorbing a quarter of its export earnings and costing the continent, each year, more than its total spending on the health and education of its people".
  As my hon. Friend the Member for Islington, North (Mr. Corbyn) pointed out, the 1970s saw the beginning of many problems for developing countries. Following the first oil shock at the end of 1973 and the subsequent world economic slump, many developing countries faced financial disaster, and borrowing was one temporary way out. Many of the debts then fell due in the late 1970s, at the same time as oil prices quadrupled for a second time and interest rates began to rise. As we have seen time and time again, it is always the poor who pay the price.
  For as long as I can remember, we have periodically seen on our television screens terrible pictures of famines and droughts. and of politicians saying that this must never be allowed to happen again. Yet, time and time again, we see the same pictures and hear the same words.
  There were many fine words to be heard at the recent conference in Rio. Of course something must be done. It is frequently said, not only by Opposition Members, but in the House as a whole, that we are not three worlds but one world. As Susan George so ably pointed out in her book
  "A Fate Worse than Debt":
  "The reality is we are all aboard the same ship steaming towards the iceberg. Even if those of us in the developed countries are travelling first class, and the people of the poor countries are travelling in the most miserable steerage, we all have the same need to navigate away from disaster".
  If Brazil is crippled by bank loans and debts, the one world's ecosystem is destroyed and its rainforests are flattened. If India is defenceless against unscrupulous corporations. the one world's atmosphere is polluted by chemical plants.
  Our one world is a small world, and the new clause goes only a tiny part of the way towards putting things right. Without action to reduce debt substantially, any form of development in the 1990s simply will not be possible for many developing countries. Of course small steps such as the British Trinidad terms initiative are to be welcomed. but they need to be greatly expanded. Faster and deeper reductions in commercial debt must be achieved. It is

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  deplorable that while the Government were proposing the Trinidad terms, they were blocking proposals in Brussels to reduce debt owed to the European Community.
  British tax regulations encourage commercial banks to set aside provisions against possible default on third-world debts in the accounts, but not to translate these provisions into debt relief for the countries concerned. Many British taxpayers resent the fact that they are subsidising the banks without providing any relief for the world's poor —especially when the tax relief is to the tune of £650 million, as it was in the financial year 1990–91. According to the Government's figures, as was pointed out by my hon. Friend the Member for Leeds, West (Mr. Battle), that is about half of what Britain spends in aid a year. The new clause seeks to offer banks more relief, but it would be conditional on using it for the reduction of debt, either through the sale at a loss of the debt to the debtor country or a swap that had environmental or developmental gain.
  When the Opposition tabled a new clause similar to this one during the proceedings on the Finance Bill in 1990, the then Economic Secretary to the Treasury, the right hon. Member for Mid-Norfolk (Mr. Ryder), told my hon. Friend the Member for Brent, South that the relief proposals in the new clause could be very costly. Rather than considering these proposals as costly, we should consider them as a first faltering step which we cannot afford not to take.
  The Financial Secretary to the Treasury (Mr. Stephen Dorrell): The purpose of the new clause is to extend relief against corporation tax to relief, in certain circumstances, of world debt. Two separate issues are tied up in that proposition, as the debate has made clear. That is best illustrated by looking at the transaction from two different perspectives.
  First, there is the perspective of the banking supervisor or the banking manager whose proper concern is to ensure that if a debt is in the bank's balance sheet and is unlikely to be serviced or repaid, proper provision is made against that debt within the bank's accounts. The second perspective is what one might broadly term the borrower's perspective: never mind what is going on in the bank's accounts, is the bank going to demand repayment of the debt, whether or not it has been provided against?
  There has been a tendency during the debate to assume that the banker's or the banking supervisor's viewpoint is the private concern of bankers and that it need be of no concern to hon. Members, and still less of concern to developing countries. That is not a proper proposition for any hon. Member to accept. The fact is that every hon. Member and everyone working in our domestic economy has a clear and important vested interest in ensuring that banks have stable balance sheets so that they are able to undertake their proper activity of providing credit for the purpose of ensuring the efficient functioning of both the home and the overseas economy. It is not, therefore, something that is an abstruse concern of banking regulators.
  What is also striking is the hostility that has been articulated, not so much by the hon. Member for Brent, South (Mr. Boateng) but certainly by his hon. Friends the Members for Islington, North (Mr. Corbyn) and for Southampton, Itchen (Mr. Denham), towards the role of private capital in financing trade and economic activity in the developing world. They made it absolutely clear that they saw no legitimate role for servicing the capital
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  provided to third world countries through private banking institutions. In taking that view, they are being left far behind by those in the developing world whose day-to-day responsibility it is to ensure the development of those third world economies and who have moved on from the world of 20 years ago when they regarded every private sector company from the developed world as a multinational company whose sole purpose was to rape their country. That is not the role or the perspective of those people within the developing world who are now interested in ensuring the development of their countries.
  It was striking to hear the hon. Member for Islington. North rightly stress the importance of ensuring proper and fair terms of trade between developed and developing countries and then, in the next breath, to make clear his hostility to the provision of finance to allow that trade to take place. That seems to me a difficult argument for the House to accept.
  Mr. Corbyn: The hon. Gentleman may not have heard all that I said very clearly. Perhaps he has a problem with hearing. The point that I was trying to make was that the money paid for coffee, cocoa, tea and other commodities is less now, in real terms, than it was 20 years ago. The more coffee that is produced at the behest of advisers from the World bank and the International Monetary Fund, the lower, in effect, is the resulting price. Thus, more land is taken up producing export crops, and there is less land available to produce food for the people in the countries concerned. I want the Government and the Minister to address the serious problem of the prices paid for basic commodities produced by poor countries.
  11.30 pm
  Mr. Dorrell: The one thing I will certainly not do is export on an international scale the kind of intervention price system which is causing us so much difficulty in the context of the common agricultural policy. The interest of those who want proper development to take place and full participation of developing countries in the international trading system, among whom I include almost all the responsible Governments in the developing world, is to see a proper financial structure that allows a free interchange of goods and services between all countries, developed and developing, and to allow that trade to be properly financed.
  The Opposition, during this debate, have, not surprisingly and not improperly—I make no complaint about it—concentrated on the borrower's perspective. They have been concerned—it is not fundamentally controversial between the two sides of the House—to ensure that if a debt continues to be shown and to he enforceable against a particular country there should he the realistic prospect of that developing country being able to service and repay that debt. That was, indeed, the point of view that motivated my right hon. Friend the Prime Minister when he promulgated the Trinidad terms, which have been mentioned in the debate. It was also the perspective which motivated Treasury Secretary Brady when he launched his initiative to encourage the banks to recognise in the Brady plan the proper limits on the likely collectability of their debts. He was concerned to make the reduction of the debts outstanding between the banks and the developing countries conditional on the necessary

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  reforms, to make the economic benefit of that debt reduction tangible within the developing country in question.
  It is easy to dismiss, as some hon. Members have done, the practical results of the Brady plan, but I think that it would be wrong to do so. Let us look, for example, at the most publicised headline case of the Brady plan in action —Mexico. Whereas in the 1980s the average rate of growth of the Mexican economy was 1·1 per cent., it has now been projected to over 3·5 per cent. as a direct result of the changes negotiated in the context of the Brady plan. That plan has seen the debt outstanding from Mexico fall from 74 per cent. of gross domestic product in 1988 to 29 per cent. of GDP this year. The Brady plan has seen the Mexican economy relieved of $400 million a year in interest costs. So it is not true to say that the Brady plan has been disappointing in action. It has been quite impressive and has delivered, tangible benefits to those countries where the banks have been involved in a discussion about the future economic well-being of their borrower clients.
  I move now to the specifics of the new clause and the proposal that is being pressed upon the House in terms of an amendment to the provisions of the Finance Act 1990. It was precisely that recognition of the importance of ensuring that we do not insist on the repayment of irrecoverable debts that motivated the changes to the corporation tax provision that we introduced into the Finance Act 1990. There were three important changes. First, the Finance Act 1990 made it clear that provisions by banks against irrecoverable sovereign debt were indeed tax allowable. Secondly, it made provision to fix the quantum by which allowable reliefs would be decided. Thirdly, it included phasing of that provision to ensure that the tax relief would not all fall in a single year. But the important point that the supporters of this new clause Miss is that there is no phasing in terms of the 1990 Act if the debtor is to be released immediately from the obligation to repay the loan.
  The clause would simply remove the phasing requirement in three circumstances that are identified in subsection (4). The first of those relates to the release of debt in favour of the creditor state, and the second concerns the reduction of debt in favour of the creditor state. In both those cases phasing is already waived under the terms of the 1990 Act. Therefore, the new clause would only provide the tax relief a year earlier than the present law allows—in effect, a one-year, interest-free loan from the Government to the bank provided that the bank then went ahead and made a "relevant release" of the debt in question.
  Mr. Boateng: That is the purpose.
  Mr. Dorrell: The Opposition now say that that was their purpose. It was not the tenor of their speeches, which indicated greater concern with the introduction of a new principle into the law. But the principle that if a debt is written off, and the debtor is exempted from servicing or repaying it, there should be no phasing requirement is written into the 1990 Act. The only provision of this new clause that is not in the 1990 Act is the third one in subsection (4)—that the phasing requirement should be waived if an environmental and development plan that has
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  been approved by the Treasury is undertaken. That shows a touching faith in the environmental and developmental expertise of Her Majesty's Treasury, and I gratefully recognise it.
  Mr. Dalyell: Is the Rio £100 million new money? The question of Treasury approval is very unclear.
  Mr. Dorrell: I can assure the hon. Gentleman that my right hon. Friend the Prime Minister does not make commitments to put money into the global environmental fund without securing the prior consent of the Treasury. This does indeed have Treasury consent.
  The proposal is that there should be exemption in the case of development plans approved by the Treasury. I prefer to encourage the banks to agree to release the borrowers, provided that they undertake the reforms that are necessary to the efficient functioning of their economies. That principle underlies the Brady plan, which has been effective in practice, and I commend it, rather than the one espoused by the Opposition, to the House.
  Mr. Boateng: In his speech, which was clearly prepared before the debate, the Minister has not in any way answered the points made by my hon. Friends. He has not addressed the central issue that has dominated this debate —the need to ensure that where relief is given it actually relieves the countries that are so desperately in need. The Minister has not addressed the importance of ensuring that relief given to commercial banks has an environmental and developmental focus. These issues, which are incorporated in the new clause, remain crucial. They are central to the modest proposals intended to lighten an intolerable burden on developing nations, and we intend to press the new clause to a Division.
  Question put, That the clause be read a Second time:—
  The House divided: Ayes 101, Noes 254.

  Division No. 55]

  [11.39 pm

  AYES

  Abbott, Ms Diane

  Dowd, Jim

  Alton, David

  Dunnachie, Jimmy

  Ashdown, Rt Hon Paddy

  Evans, John (St Helens N)

  Banks, Tony (Newham NW)

  Ewing, Mrs Margaret

  Barron, Kevin

  Foster, Derek (B'p Auckland)

  Bayley, Hugh

  Foster, Donald (Bath)

  Beckett, Margaret

  Fyfe, Maria

  Beith, Rt Hon A. J.

  George, Bruce

  Benton, Joe

  Gilbert, Rt Hon Dr John

  Bermingham, Gerald

  Godman, Dr Norman A.

  Betts, Clive

  Golding, Mrs Llin

  Boateng, Paul

  Graham, Thomas

  Brown, N. (N'c'tle upon Tyne E)

  Grant, Bernie (Tottenham)

  Bruce, Malcolm (Gordon)

  Gunnell, John

  Campbell, Menzies (Fife NE)

  Hall, Mike

  Campbell-Savours, D. N.

  Hanson, David

  Carlile, Alexander (Montgomry)

  Heppell, John

  Chisholm, Malcolm

  Hill, Keith (Streatham)

  Clapham, Michael

  Hinchliffe, David

  Clarke, Eric (Midlothian)

  Hoey, Kate

  Clwyd, Mrs Ann

  Home Robertson, John

  Cohen, Harry

  Hood, Jimmy

  Connarty, Michael

  Hoon, Geoff

  Cryer, Bob

  Howarth, George (Knowsley N)

  Cunliffe, Lawrence

  Hoyle, Doug

  Dalyell, Tam

  Hughes, Kevin (Doncaster N)

  Davidson, Ian

  Hughes, Robert (Aberdeen N)

  Davies, Ron (Caerphilly)

  Hughes, Simon (Southwark)

  Davis, Terry (B'ham, H'dge H'I)

  Hutton, John

  Denham, John

  Illsley, Eric

  Dewar, Donald

  Kilfoyle, Peter

  Dixon, Don

  Llwyd, Elfyn

  Donohoe, Brian

  McAllion, John

  295

  MacDonald, Calum

  Skinner, Dennis

  Mackinlay, Andrew

  Smith, C. (Isl'ton S & F'sbury)

  Mahon, Alice

  Smith, Rt Hon John (M'kl'ds E)

  Mandelson, Peter

  Spearing, Nigel

  Marek, Dr John

  Squire, Rachel (Dunfermline W)

  Marshall, Jim (Leicester, S)

  Steel, Rt Hon Sir David

  Meale, Alan

  Strang, Gavin

  Michael, Alun

  Turner, Dennis

  Milburn, Alan

  Tyler, Paul

  Morley, Elliot

  Wareing, Robert N

  Mudie, George

  Watson, Mike

  O'Neill, Martin

  Welsh, Andrew

  Pendry, Tom

  Wilson, Brian

  Pike, Peter L.

  Wise, Audrey

  Primarolo, Dawn

  Wray, Jimmy

  Purchase, Ken

  Radice, Giles

  Tellers for the Ayes:

  Roche, Ms Barbara

  Mr. Jeremy Corbyn and

  Salmond, Alex

  Mr. John Battle.

  Short, Clare

  NOES

  Ainsworth, Peter (East Surrey)

  Dorrell, Stephen

  Aitken, Jonathan

  Douglas-Hamilton, Lord James

  Alexander, Richard

  Dover, Den

  Alison, Rt Hon Michael (Selby)

  Duncan, Alan

  Allason, Rupert (Torbay)

  Duncan-Smith, Iain

  Amess, David

  Durant, Sir Anthony

  Ancram, Michael

  Eggar, Tim

  Arbuthnot, James

  Elletson, Harold

  Arnold, Jacques (Gravesham)

  Evans, Jonathan (Brecon)

  Arnold, Sir Thomas (Hazel Grv)

  Evans, Nigel (Ribble Valley)

  Ashby, David

  Evans, Roger (Monmouth)

  Aspinwall, Jack

  Evennett, David

  Atkinson, David (Bour'mouth E)

  Faber, David

  Atkinson, Peter (Hexham)

  Fabricant, Michael

  Baker, Nicholas (Dorset North)

  Fairbairn, Sir Nicholas

  Baldry, Tony

  Fenner, Dame Peggy

  Banks, Matthew (Southport)

  Field, Barry (Isle of Wight)

  Banks, Robert (Harrogate)

  Fishburn, John Dudley

  Bates, Michael

  Forman, Nigel

  Beggs, Roy

  Forsyth, Michael (Stirling)

  Beresford, Sir Paul

  Forth, Eric

  Blackburn, Dr John G.

  Fowler, Rt Hon Sir Norman

  Bonsor, Sir Nicholas

  Fox, Dr Liam (Woodspring)

  Booth, Hartley

  Freeman, Roger

  Boswell, Tim

  French, Douglas

  Bowden, Andrew

  Gale, Roger

  Bowis, John

  Gallie, Phil

  Brandreth, Gyles

  Gardiner, Sir George

  Brazier, Julian

  Gill, Christopher

  Bright, Graham

  Gillan, Ms Cheryl

  Brooke, Rt Hon Peter

  Goodson-Wickes, Dr Charles

  Browning, Mrs. Angela

  Gorst, John

  Burt, Alistair

  Grant, Sir Anthony (Cambs SW)

  Butcher, John

  Greenway, Harry (Ealing N)

  Butler, Peter

  Green way, John (Ryedale)

  Butterfill, John

  Griffiths, Peter (Portsmouth, N)

  Carrington, Matthew

  Gummer, Rt Hon John Selwyn

  Carttiss, Michael

  Hague, William

  Cash, William

  Hamilton, Rt Hon Archie

  Channon, Rt Hon Paul

  Hamilton, Neil (Tatton)

  Chaplin, Mrs Judith

  Hampson, Dr Keith

  Churchill, Mr

  Hanley, Jeremy

  Clappison, James

  Hannam, Sir John

  Clark, Dr Michael (Rochford)

  Hargreaves, Andrew

  Clarke, Rt Hon Kenneth (Ruclif)

  Harris, David

  Clifton-Brown, Geoffrey

  Haselhurst, Alan

  Congdon, David

  Hawkins, Nicholas

  Conway, Derek

  Hawksley, Warren

  Coombs, Anthony (Wyre For'st)

  Hayes, Jerry

  Coombs, Simon (Swindon)

  Heald, Oliver

  Cope, Rt Hon Sir John

  Heathcoat-Amory, David

  Cran, James

  Hendry, Charles

  Currie, Mrs Edwina (S D'by'ire)

  Heseltine, Rt Hon Michael

  Davies, Quentin (Stamford)

  Hill, James (Southampton Test)

  Davis, David (Boothferry)

  Horam, John

  Day, Stephen

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

  Deva, Nirj Joseph

  Howell, Rt Hon David (G'dford)

  Devlin, Tim

  Howell, Ralph (North Norfolk)

  296

  Hughes Robert G. (Harrow W)

  Robathan, Andrew

  Hunt, Rt Hon David (Wirral W)

  Robertson, Raymond (Ab'd'n S)

  Hunt, Sir John (Ravensbourne)

  Robinson, Mark (Somerton)

  Hunter, Andrew

  Roe, Mrs Marion (Broxbourne)

  Jack, Michael

  Ross, William (E Londonderry)

  Jackson, Robert (Wantage)

  Rowe, Andrew (Mid Kent)

  Jenkin, Bernard

  Rumbold, Rt Hon Dame Angela

  Jessel, Toby

  Sackville, Tom

  Johnson Smith, Sir Geoffrey

  Sainsbury, Rt Hon Tim

  Jones, Gwilym (Cardiff N)

  Scott, Rt Hon Nicholas

  Jones, Robert B. (W H'f'rdshire)

  Shaw, David (Dover)

  Kellett-Bowman, Dame Elaine

  Shephard, Rt Hon Gillian

  Key, Robert

  Shepherd, Colin (Hereford)

  Kilfedder, Sir James

  Shepherd, Richard (Aldridge)

  Kirkhope, Timothy

  Sims, Roger

  Knapman, Roger

  Skeet, Sir Trevor

  Knight, Mrs Angela (Erewash)

  Smith, Sir Dudley (Warwick)

  Knight, Greg (Derby N)

  Smith, Tim (Beaconsfield)

  Knight, Dame Jill (Bir'm E'st'n)

  Soames, Nicholas

  Knox, David

  Spencer, Sir Derek

  Kynoch, George (Kincardine)

  Spicer, Sir James (W Dorset)

  Lait, Mrs Jacqui

  Spicer, Michael (S Worcs)

  Lang, Rt Hon Ian

  Spink, Dr Robert

  Lawrence, Sir Ivan

  Spring, Richard

  Legg, Barry

  Sproat, Iain

  Leigh, Edward

  Squire, Robin (Hornchurch)

  Lester, Jim (Broxtowe)

  Stanley, Rt Hon Sir John

  Lidington, David

  Steen, Anthony

  Lightbown, David

  Stephen, Michael

  Lilley, Rt Hon Peter

  Stern, Michael

  Lord, Michael

  Stewart, Allan

  Luff, Peter

  Streeter, Gary

  Lyell, Rt Hon Sir Nicholas

  Sumberg, David

  MacGregor, Rt Hon John

  Sweeney, Walter

  MacKay, Andrew

  Tapsell, Sir Peter

  Maclean, David

  Taylor, Ian (Esher)

  McLoughlin, Patrick

  Thomason, Roy

  Madel, David

  Thompson, Patrick (Norwich N)

  Maitland, Lady Olga

  Thornton, Sir Malcolm

  Malone, Gerald

  Thurnham, Peter

  Mans, Keith

  Townend, John (Bridlington)

  Marlow, Tony

  Townsend, Cyril D. (Bexl'yh'th)

  Marshall, John (Hendon S)

  Tracey, Richard

  Martin, David (Portsmouth S)

  Tredinnick, David

  Mawhinney, Dr Brian

  Trend, Michael

  Merchant, Piers

  Twinn, Dr Ian

  Milligan, Stephen

  Vaughan, Sir Gerard

  Mills, Iain

  Waldegrave, Rt Hon William

  Mitchell, Andrew (Gedling)

  Walden, George

  Monro, Sir Hector

  Walker, Bill (N Tayside)

  Montgomery, Sir Fergus

  Waller, Gary

  Moss, Malcolm

  Ward, John

  Needham, Richard

  Wardle, Charles (Bexhill)

  Nelson, Anthony

  Waterson, Nigel

  Neubert, Sir Michael

  Watts, John

  Nicholls, Patrick

  Wells, Bowen

  Norris, Steve

  Wheeler, Sir John

  Onslow, Rt Hon Cranley

  Whitney, Ray

  Oppenheim, Phillip

  Whittingdale, John

  Ottaway, Richard

  Widdecombe, Ann

  Page, Richard

  Wilkinson, John

  Paice, James

  Willetts, David

  Pattie, Rt Hon Sir Geoffrey

  Winterton, Mrs Ann (Congleton)

  Peacock, Mrs Elizabeth

  Winterton, Nicholas (Macc'f'Id)

  Pickles, Eric

  Wolfson, Mark

  Porter, David (Waveney)

  Wood, Timothy

  Portillo, Rt Hon Michael

  Yeo, Tim

  Redwood, John

  Ronton, Rt Hon Tim

  Tellers for the Noes:

  Richards, Rod

  Mr. Sydney Chapman and

  Riddick, Graham

  Mr. Irvine Patnick.

  Question accordingly negatived.

New Clause 8

  Vans provided to employees for private use
  'After Section 156 of the Taxes Act 1988, there shall be inserted the following new section—
  "156A(i) This section shall apply where a van is provided by an employer to an employee for private use.
  (ii) In these circumstances, no benefit shall arise under section 156 above.
  (iii) Instead, the scale benefit that will apply to a van will be £200 for each year.
  (iv) The above scale benefit will be reduced proportionately when the van is available for private use for less than the whole tax year.
  (v) The van will not be regarded as available for private use when it is a pool van (to be determined in like manner to a pool car as is set out in Taxes Act 1988, section 159).
  (vi) For the purposes of this section, a van means any mechanically propelled motor vehicle construct-ed primarily for the conveyance of goods or burden of any description.".'.—[Mr. Beith.]
  Brought up, and read the First time.
  Mr. Beith: I beg to move, That the clause be read a Second time.
  Hundreds of thousands of employees who are provided by their employer with a van ih which they drive home at night now face additional income tax charges. That is also a problem for their employers because they have much paperwork associated with it. It results from the Inland Revenue treating the provision of a van for private use as a benefit in kind, so thousands of employers, from the largest such as British Telecom to small businesses such as plumbers, shopfitters and joiners, face the prospect of a bureaucratic nightmare in maintaining the records necessary to fill in form P11D, which is the form on which benefits in kind are included.
  The tax charge applies whenever an employer makes a van available for the private use of an employee, and that will include private motoring on evenings or weekends, travel from home to either the main base of work or to the first call of the day, and travel to home from the main base of work or from the last call of the day.
  Let us consider a plumber's employee who is provided with a van which he uses to make his calls and to carry his heavy equipment. He takes the van home each evening, partly because he has secure parking here, partly, perhaps, because it is a way of carrying his tools home and not leaving them around, and partly because he can then proceed to his first call the next day. The Revenue will regard as private use that private journey home, plus any use that he may make of the van at the weekend, and a tax charge will be raised on that.
  It is well known that the provision of a car to an employee triggers an income tax liability computed with reference to a scale of charges in the tax legislation, but, because of the precise definition of a car in the legislation, the provision of vans for private use is not caught by the car scale charge provisions. The legislation enabling a tax charge to be levied on vans has been around since 1976, but until recently it has not been invoked by the Revenue.
  The Inland Revenue finds out about benefits in kind from form P11D, which has to be completed by the employer in respect of every employee earning more than £8,500 a year, which is increasingly most people who would have the use of a van. The pre-printed form issued by the Revenue lists all the main tax benefits, and the employer fills in the details. Although technically the provision of a van for private use should in any event be filled in by the employer in the other section on the form, there was no specific box on the form to record the provision of vans. Largely because of that, most employers
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  did not bother. Apparently, that was allowed by the Revenue by default. The result is that people have not faced a tax charge on the availability of a van.
  The Revenue appears to have changed its policy during the tax year 1990–91, and it started to raise the matter during inspections. During a form P11D inspection, a member of the Inland Revenue visits an employer and looks into the background documentation on the basis of which the form has been filled in. In some recent investigations, it appears that the Revenue took the view that it would regard the provision of a van for private use as a benefit from 6 April 1990, although not apparently from any earlier date. That approach of apparently ignoring previous tax years is completely non-statutory. It illustrates that there has been a change in the Revenue's policy.
  For the employees the change means that they have to pay more tax. For the employers it means an awful lot of paperwork. Records need to be kept of individual vehicle costs right down to the last gallon of petrol, which employee has the use of the van in each year and each mile travelled by the van, differentiated between business and private use. Guidelines have to be established on what is business and what is private use. It is a complex task for employers. In many cases, small businesses have just one or two vehicles. Several employees may switch around and have the van for private use at different times in the tax year.
  The only way to avoid the charge is to require the employee to return the vehicle each night to the employer's depot and hand in the keys and demonstrate that he did no private mileage during the day, for example, at lunch-time. That is an extremely elaborate procedure for the relatively limited benefit of the private use of a van.
  Therefore, in the new clause we suggest a simple annual scale charge of £200. That would avoid the employer having to keep the records. It would fix at a limited point the liability of the employee to tax—that is the tax raised on the £200. The charge would be analogous to the car tax, but would be at a lower level. It seems reasonable to put it at a significantly lower level. First, the private use of a van has not been taxed in practice until recently. Secondly, the use of a van for private motoring is not exactly a luxury motoring perk.
  I can speak with some authority and experience on the matter because, before we were married, my wife came to meet me on many occasions driven in a van which her father used to drive home from work. Sitting on a cushion in the back of a van for transport is not by any means an opportunity for luxury motoring. I must stress that I no longer have a financial interest in the matter because the events took place more than 25 years ago.
  Not many employees who have the use of a van for private motoring would regard the imposition of a detailed charge justified mile by mile as a reasonable way of computing a tax liability. It does not make sense to the man who has the use of the van when he compares his pay slip with that of his mate who he drops off on the way home from work, who does not have the use of the van but gets a lift home in it. One of them pays a higher tax charge than the other because he has the van available. The procedures are wholly bureaucratic and could be easily remedied by the use of a small scale charge such as I have proposed.
  Mr. Dorrell: The new clause proposes to set a scale benefit of £200 for the purposes of charging tax under schedule E on the benefit of a van provided by an employer to an employee for private use—one might add, of whatever kind. The right hon. Member for Berwick-upon-Tweed (Mr. Beith) justified his proposal on the ground of the undoubted complexity of the present position because there are no special rules governing the provision of a van to an employee. Such provision is consequently covered by the general rules which, as they apply to a van, can be complex.
  I have some sympathy with the principle of the new clause. But the crucial question is whether the proposals should be added to the Finance Bill this year and whether the hon. Gentleman wants to go down as the Member of Parliament who introduced the tax charge on vans used privately by employees.
  Of course, the use of scale charges is not new. It applies to the majority of company cars. It has been applied more recently to mobile telephones. The £200 charge that the hon. Gentleman proposes is, of course, the same as that which applies to a mobile telephone. I am not sure that it is reasonable to say that the value to the employee of the availability of a van is the same as that of a mobile telephone. The most obvious difference is that the capital and running costs of a typical van—they must be taken into account in setting a scale benefit because it is an approximation of the value of the benefit—are considerably higher than those of a mobile phone. A charge of £200 would seem rather low when set alongside the scale benefit of just over £1,000 for the smallest company car with a high business mileage, even bearing in mind the intrinsic difference between the two levels of benefit to which the right hon. Gentleman drew attention.
  12 midnight
  I do not want to rule out the idea of some scale benefit for company vans. The Inland Revenue reminded employers last year that the provision of vans for employees' private use should be returned on P11Ds. That leads, undoubtedly, to the complexity that the right hon. Gentleman has described. I invite him to consider withdrawing the clause on the basis that we recognise that the present position causes unnecessary complexity and that it is something that we undertake to consider.
  Mr. Beith: I am glad to know that the Minister understands that from the employers' point of view complexity leads to problems, and that many employees might have to pay a larger amount of tax because their employers have not calculated carefully and accurately the relevant charges, because of the time involved. A scale charge, although perhaps a rough-and-ready method, is probably—the same applies to a car—a much simpler approach from an employee's point of view.
  I recognise the willingness of the Minister to consider the issue with greater care between now and the next Finance Bill. On that basis I beg to ask leave to withdraw the motion.
  Mr. Deputy Speaker: Is it the pleasure of the House that the new clause be withdrawn?
  Hon. Members: No.
  Mr. Deputy Speaker: The Question is, That the clause be read a Second time. As many as are of that opinion say Aye. To the contrary, No.
  Hon. Members: No.
  Mr. Deputy Speaker: The Noes have it.
  Question negatived.
  Mr. Beith: On a point of order, Mr. Deputy Speaker. The initial pressing of the matter to a Division—it did not proceed—was not my doing because I was happy to accept the Minister's undertaking.

New Clause 11

  TAX EXEMPTIONS FOR CERTAIN SPORTING AND RECREATIONAL ASSOCIATIONS
  `(1) Where—
  (a) an Association which has as its object the encouragement, development and governance of any sport or other form of recreational activity (or which has as its objects the representation of such Associations) is approved for the purposes of this section by the Secretary of State, and
  (b) the memorandum of association of other similar instrument regulating the functions of the Association precludes the direct or indirect payment of transfer to any of its members of any of its income or property by way of dividend, gift, division, bonus or otherwise howsoever by way of profit,
  there shall, on a claim in that behalf to the Board, be allowed in the case of the association—
  (i) exemption from tax in respect of income, and
  (ii) exemption from tax in respect of chargeable gains.
  (2) In sections 338 and 339 of the Income and Corporation Taxes Act 1988, "qualifying donation" shall include a payment under a disposition or covenant made by a company in favour of an Association approved for the purposes of this section under subsection (1) above.
  (3) The conditions specified in paragraph (b) of subsection (i) above shall not be deemed not to be complied with in the case of any Association by reason only that the memorandum or other similar instrument regulating its functions does not prevent the payment to its members of reasonable renumeration for goods or facilities supplied, or for services rendered, of reasonable interest for money lent, or of reasonable rent for any premises.
  (4) In this section "recreational activity" means any activities in the fields of physical recreation conducive to the health or welfare to those participating in them.'. —[Ms. Hoey.]
  Brought up, and read the First time.
  Ms. Hoey: I beg to move, That the clause be read a Second time.
  My hon. Friend the Member for Linlithgow (Mr. Dalyell) first raised this issue in the House in 1980. Since then, many all-party attempts have been made to convince the Treasury of the strength of our case. Those of us who persist in pushing the new clause hope that reason and justice will eventually prevail. As a relatively new Member, I have made various speeches on the subject. The hon. and learned Member for Fife, North-East (Mr. Campbell) and the hon. Member for Surbiton (Mr. Tracey) must have filing cabinets full of speeches that they have made on it.
  The only thing that changes each year is that the debate on the matter gets later. I apologise for holding up the House on this issue, but it is important and hon. Members should listen with a little more attention—
  Mr. Deputy Speaker: Order. If hon. Members want to leave the Chamber, they should do so quietly. I am having

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  great difficulty in hearing the hon. Lady and a lot of patter is also going on behind me. I hope that hon. Members will take note.
  Ms. Hoey: The new clause is simple and I hope that hon. Members will not be taken in by Treasuryspeak, which usually seeks to make the issue seem difficult. The new clause seeks to obtain tax exemptions for governing and representative bodies of sport and recreation, such as the Central Council of Physical Recreation, the Sports Aid Foundation and, most important in this Olympics year, the British Olympic Association.
  The proposal is not intended to benefit private sports clubs and associations that operate for private profit. Corporation tax is paid by 81 national governing bodies of sport, which are members of the Central Council of Physical Recreation. That amounted to almost £3 million in 1980–90, which is approximately 6 per cent. of the Government's direct funding to the four sports councils.
  The all-party new clause would give the Secretary of State for National Heritage a duty in addition to the many duties that he is adding to his new Department. He would have the final decision on whether the governing or representative body met the objective that is stated clearly in the new clause: to encourage, develop and govern sport or other forms of recreational activity.
  Another purpose of the proposal is to enable sports governing bodies to benefit in a similar way to charities, so that those who wish to give donations will find them tax-attractive. They could benefit from the tax advantages of the gift aid scheme introduced by the Prime Minister in his former role of Chancellor.
  Although the amount of tax lost to the Exchequer would be relatively insignificant, the benefit to sport and recreation cannot be overestimated. It would be substantial, not just because there would be some financial help to the beleaguered finances of many of the governing bodies of sport, but because of the moral boost that it would give, at a stroke, to some 6 million volunteers in sport. They are its backbone, providing thousands of hours of unpaid work to run the 150,000 registered sports clubs in the country.
  Last week I attended the sports day of an inner-city school in my constituency—Charles Edward Brook. Many of the pupils were enjoying competitive sport at every level in that deprived area. The enjoyment that the youngsters were getting out of that sports day was evident, but more important was the voluntary work that the school's physical education department did after school hours and in the evenings, and the work that the instructor in charge, Steve White, does to encourage many youngsters who show talent to get involved in a sports club in the evening.
  It is those sorts of voluntary works that we want to encourage through the new clause. It would be a clear signal from Parliament that it recognised the importance and the beneficial contribution to our communities of the voluntary sports governing bodies.
  Without the burden of corporation tax, more money could be made available for grassroots sporting development at a time when there is so much concern about the welfare of schools' sporting arrangements. There is no reason why some of the exemptions could not
  302
  be tied to specific development projects, which the governing bodies of sport would have to undertake as part of an overall strategy for sport and recreation.
  I wish to say a few words about the British Olympic Association. It is incredible that in an Olympics year the association is virtually unique among the 166 national Olympic committees in that the British Government tax its Olympics fund-raising efforts. All the effort of many people throughout the country to help the association to ensure that our team has the best when competing with other countries is bitten into by Government taxation.
  Mr. Brian Wilson: Does my hon. Friend find it as odd as I find it that, while she is fighting the good fight on behalf of sport and the British althletics and Olympic movements, the hon. Member for Falmouth and Camborne (Mr. Coe) is not with us?
  Ms. Hoey: The hon. Member for Falmouth and Camborne is a sponsor of the new clause. He has apologised for not being able to be here for personal reasons, which will probably appear in the newspapers tomorrow—[Interruption.] He has rather pressing personal problems tonight—or rather, his wife has.
  The British Olympic Association bears sole responsibil-ity for the cost of the British team at both the winter and summer Olympics, including transport, maintenance and equipment. It also funds injury research and pre-Olympic training and it maintains the Olympic library. That expenditure has increased substantially during the past 10 years. The association receives no direct Government grant. In 1988, the year of the last Olympics, it raised more than £4 million towards the cost of the participation of the British team. In 1989, just after the Olympics were over, it paid back £750,000 of that revenue in tax to the Treasury.
  The association is wholly dependent on appeals to raise money every year. Relief is now needed. It would be an important gesture, not just to the association but to sport generally, if some attempt were made immediately to consider specifically the position of the association. Will the Minister agree to meet a deputation within the next week from the governing bodies of sport? Will he consider the immediate position of the British Olympic Association? Depending on his answer to those questions, I shall decide whether to press the new clause to a vote.
  We have had enough excuses. Each year the matter is raised time and again. Last year, it appeared that there was some give from the Treasury; there was a feeling that something might be done in the Budget. In fact, because of various deals being struck with the pools companies—ironically, unsuccessfully to try to stave off a national lottery—any plans were dropped.
  I hope that the Treasury will reconsider and that the Secretary of State for National Heritage, rather than just talking and attending sporting events, will show that his Department has muscle. I hope that he and his officials will get back to the grassroots of sport and serve our youth and British sport well.
  12.15 am
  Mr. Menzies Campbell: This debate has become something of an annual event in the British sporting calendar, though it is not always attended by as many spectators as it is this evening. It gives the Government an opportunity to demonstrate whether their

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  public profile of support for British sport is buttressed by a realistic understanding of the consequences if new clause 11 were to pass into law.
  The Olympic games will shortly commence in Barcelona. If previous performances are any yardstick, the United Kingdom will undoubtedly win several medals. When Britain's competitors return they will be received at No. 10 Downing street. There will be considerable expressions of pride at their achievements, and it will be said how much the United Kingdom's reputation has been enhanced. Some may even find themselves figuring in the next honours list.
  The truth is that that will do nothing to assist sport's various governing bodies in helping others to achieve the standards of Olympic medallists. Nor will it do anything to help sports men and sports women of all standards, or to provide recreational facilities for the increasing number of people who, for sound and sensible health reasons, consider sport to be an attractive pastime.
  As the hon. Member for Vauxhall (Ms. Hoey) made clear, the House has debated tax exemption on many previous occasions. In a debate on new clause 15 of the Finance (No. 2) Bill on 13 July 1988, beginning at column 454 of the Official Report, a similar proposal attracted the support of Sir Eldon Griffiths, the hon. Member for Surbiton (Mr. Tracey), who I am glad to see in his place, Mr. Denis Howell, as he then was but now ennobled, and the hon. Member for Dumfries (Sir H. Monro). Previous proposals for making sports associations exempt from tax attracted considerable support in all parts of the House. It would be to the great advantage of British sport and British sports men and sports women if new clause 11 were added to the Bill.
  The hon. Member for Vauxhall hopes that the Government will respond positively, by meeting a deputation representing those with an interest in the subject. If the Chancellor of the Exchequer were willing to meet such a deputation, he would be doing no more than reflecting his remarks in the debate to which I referred. Replying to the amendment moved by Sir Eldon Griffiths, the right hon. Gentleman said:
  "I have noted the comments of my hon. Friend the Member for Bury St. Edmunds (Sir E. Griffiths). There are difficulties with the new clause, but I am prepared to review the issues raised in it and to meet hon. Members to discuss it."
  He concluded:
  "I have just outlined a number of difficulties, but I recognise that there is keen interest in this subject. I shall review it, and I shall be happy to talk to hon. Members about it at their convenience."—[Official Report, 13 July 1988; Vol. 137, c. 460–62.]
  Mr. Dennis Skinner: There could be a meeting in Barcelona.
  Mr. Campbell: We could meet in Barcelona, if we could persuade the Fees Office that was a legitimate purpose for Members of Parliament. If the Minister is concerned about making what might appear to be a concession in being willing to meet hon. Members who have expressed an interest, he can take comfort from the fact that as far back as 1988 the Chancellor of the Exchequer—albeit when operating at a different level of responsibility—thought that a meeting about and further discussion of the subject was well justified.
  I am happy to support the new clause, which was moved so ably by the hon. Member for Vauxhall, and I hope that it will commend itself to the House.
  Mr. Richard Tracey: I rise briefly to support the cross-party new clause. I agree with the hon. Member for Vauxhall (Ms. Hoey) and the hon. and learned Member for Fife, North-East (Mr. Campbell) that it is about time that my party said something other than it will consider the issue and that it really did so.
  As the hon. and learned Gentleman said, when the Chancellor of the Exchequer occupied the post now held by my hon. Friend the Financial Secretary he gave an undertaking that he would examine the matter seriously and I take him at his word. This year we were pleased to be joined in tabling the new clause by my hon. Friend the Member for Falmouth and Camborne (Mr. Coe). I reiterate his regrets that he is not here because his wife is expecting an imminent happy event. I am sure that the House will understand why he is not here to lend his considerable support as one of the greatest athletes this country has ever produced and to urge my hon. Friend the Minister to give the issue some serious thought, especially with regard to the British Olympic Association.
  As the hon. Member for Vauxhall said, the association is merely seeking relief in line with all other Olympic associations across the world. It seeks tax relief once every four years to allow our teams to be better supported and thus to perform better in the Olympic games.
  We now have a Prime Minister with an avowed and very visible interest in sport. Although we did not hear him say that he would consider the issue when he was a member of the Treasury team, I am sure that in his heart of hearts he wishes to see our Olympic team going into the field properly supported and equipped. I hope that my hon. Friend the Minister will be able to say something more and will at least agree to meet a delegation so that the hon. Member for Vauxhall will not be forced to press the matter to a vote.
  Mr. Wilson: I shall be brief, as I spoke in the debate last year. I think that the arguments have been well made and I shall merely support them rather than prolong the proceedings.
  As a matter of courtesy, I express my best wishes to the hon. Member for Falmouth and Camborne (Mr. Coe). It is generally a sound rule not to make impromptu references to hon. Members' non-presence in the House and I regret the fact that I broke that rule.
  Mr. Dorrell: I am sure that my hon. Friend the Member for Falmouth and Camborne (Mr. Coe) will be grateful to the hon. Member for Cunninghame, North (Mr. Wilson) for the retraction of his ill-judged comment.—[Interruption.] Indeed. Perhaps we shall see the hon. Member for Bolsover (Mr. Skinner) there too.
  Several hon. Members have said that this debate has become an annual event, and my hon. Friend the Member for Surbiton (Mr. Tracey) was good enough to offer me a little career advice by suggesting that the Prime Minister will take a keen personal interest in the examination of the issue so it behoves the holder of my office to consider it particularly seriously. I gladly assure the hon. Member for Vauxhall (Ms. Hoey) that if she wants to discuss it in depth with me and my officials, I should be very pleased to see her and any delegation she may wish to bring. The issue has aroused interest in all parts of the House over a number of years, so I gladly commit myself to looking at it in detail and from a sympathetic background.

  305
  However, I should in honesty tell the House that there are some reservations. I put them to hon. Members not in a spirit of saying, "That is why I shall conclude, as a result of the examination, that the system must go on as before," but in the spirit of saying, "Those are the questions that the hon. Lady and her delegation will find confronting them when they come to see me, so those are the issues that their representations will have to address."
  The new clause is generous and wide ranging. It would give complete exemption from corporation tax to any association that was involved in the promotion of physical and recreational activities. That would include a very wide range of activities. That generosity should be compared with the present position, where the only bodies in British tax law that are wholly exempt from corporation tax are local authorities and health service bodies. Even the exemption enjoyed by charities is conditional on the charity's income being applied solely to charitable purposes, which does not include sport. That is not to say that there is no way round the problem, but it is the problem that we face in the current structure of corporation tax.
  If such an exemption were granted carte blanche to the bodies that the hon. Lady and her supporters have in mind, it would confer an unfair advantage on those bodies where, for example, they sold sports equipment or refreshments or indulged in any other trade activity in direct competition with other local traders who did not enjoy similar tax privileges.
  Further, although there is a common-sense perception of the meaning of the word "sport", it is not a word which lends itself easily to the sort of tight definition that would be necessary if it were to be written into tax law in such a way as to avoid others free riding on the hon. Lady's proposal in a way that she would be the first to deprecate. So if we are to make any progress, we must consider a definition of "sport" that delivers the hon. Lady's objective without including a wide range of activities which she would not wish to include.
  The clause contains provisions designed to allow companies to receive relief for covenanted donations. Again, I am prepared to examine that, but we must remember that the covenanting system is currently associated with the concept of charity. It is well understood in charity law, as I said, that sport is not a charitable activity, and it is legitimate to ask whether we want a significant share of money now provided to the charities world through the covenanting system diverted to the sports world, remembering that the sports world benefits to a significant extent from company sponsorship, which in many cases is tax allowable.
  The hon. Lady asked for a meeting. I shall be glad to hold a meeting to examine the issue carefully and to see whether those questions can be answered.
  Mr. Skinner:When?
  Mr. Dorrell: The hon. Gentleman, tough inquisitor that he is, asks when. When the hon. Lady seeks a meeting, I shall be glad to arrange it as quickly as may be.
  Ms. Hoey: The Minister has said nothing about the British Olympic Association. Will he please dwell on that?
  Mr. Dorrell: I think that the fact that the Olympic games start in the next couple of weeks is a coincidence of timing which concentrates hon. Members' minds on the application of a general principle. I did not gather that the hon. Member for Vauxhall was seeking special treatment for the Olympic movement; I understood her to be citing it as a particularly acute example of the operation of tax law in Britain and contrasting our treatment of our Olympic association with the treatment of such associations in other jurisdictions. I consider that a less powerful argument than the arguments that the hon. Lady advanced about the generality of sporting bodies. To consider the impact on the Olympic association of a specific aspect of our tax system is to avoid, or ignore, a range of support arrangements that are available to our Olympic movement and available—or not, as the case may be—to other such movements. I think that the hon. Lady's case is stronger when she concentrates on the principle, rather than on its specific application to the Olympic movement.
  As I have said, I will gladly meet the hon. Lady to discuss the subject further, but I hope that she will then address her representations to the concerns that I have expressed this evening—concerns that my predecessors have expressed on similar occasions in the past.
  12.30 am
  Ms. Hoey: I thank the Financial Secretary, who has been a little more positive than his predecessor. It may be a coincidence that his predecessor is no longer a Member of Parliament. His predecessor did meet a deputation last year, and we considered the meeting very useful; unfortunately, nothing came of it.
  I should be happy to meet the Financial Secretary with a deputation, but I hope that his powers of persuasion are a bit stronger than those of the previous incumbent; otherwise, we shall be wasting our time. The hon. Gentleman said that he would consider the wider issues carefully. I hope that that will happen as a result of our meeting, and that we shall not have to come back next year for the same sterile debate. I hope that we shall make progress during the coming year.
  There is strong agreement, and a wish to find a way forward. I realise that the issue is complicated; we all realise that. What I do not want, however [and what sports governing bodies do not want—is a continuing failure to consider the matter seriously because of the gobbledegook of Treasuryspeak.
  I shall take up the Financial Secretary's offer, and hope to see him next week. I beg to ask leave to withdraw the motion.
  Hon. Members: No.
  Question put, That the clause be read a Second time:—
  The House divided: Ayes 22, Noes 161.

  Division No. 56]

  [12.32 am

  AYES

  Beith, Rt Hon A. J.

  Hill, Keith (Streatham)

  Bruce, Malcolm (Gordon)

  Hoey, Kate

  Campbell, Menzies (Fife NE)

  Home Robertson, John

  Connarty, Michael

  Hood, Jimmy

  Donohoe, Brian

  Hughes, Simon (Southwark)

  Dowd, Jim

  McAllion, John

  Ewing, Mrs Margaret

  MacDonald, Calum

  Godman, Dr Norman A.

  Pendry, Tom

  Graham, Thomas

  Salmond, Alex

  Heppell, John

  Welsh, Andrew

  307

  Wilson, Brian

  Tellers for the Ayes:

  Wray, Jimmy

  Mr. Bob Oyer and

  Mr. Dennis Skinner.

  NOES

  Ainsworth, Peter (East Surrey)

  Hawksley, Warren

  Alexander, Richard

  Hayes, Jerry

  Alison, Rt Hon Michael (Selby)

  Heald, Oliver

  Allason, Rupert (Torbay)

  Heathcoat-Amory, David

  Amess, David

  Hendry, Charles

  Ancram, Michael

  Hunt, Rt Hon David (Wirral W)

  Arbuthnot, James

  Jack, Michael

  Arnold, Jacques (Gravesham)

  Jenkin, Bernard

  Arnold, Sir Thomas (Hazel Grv)

  Jessel, Toby

  Ashby, David

  Jones, Robert B. (W H'f'rdshire)

  Atkinson, David (Bour'mouth E)

  Key, Robert

  Atkinson, Peter (Hexham)

  Kirkhope, Timothy

  Baker, Nicholas (Dorset North)

  Knight, Mrs Angela (Erewash)

  Baldry, Tony

  Knight, Greg (Derby N)

  Bates, Michael

  Kynoch, George (Kincardine)

  Beresford, Sir Paul

  Lait, Mrs Jacqui

  Booth, Hartley

  Legg, Barry

  Bowden, Andrew

  Lidington, David

  Bowis, John

  Lightbown, David

  Brandreth, Gyles

  Lilley, Rt Hon Peter

  Brazier, Julian

  Lord, Michael

  Bright, Graham

  Luff, Peter

  Brooke, Rt Hon Peter

  MacKay, Andrew

  Browning, Mrs. Angela

  Maclean, David

  Burt, Alistair

  Maitland, Lady Olga

  Butcher, John

  Malone, Gerald

  Butler, Peter

  Mans, Keith

  Butterfill, John

  Marlow, Tony

  Carrington, Matthew

  Martin, David (Portsmouth S)

  Cash, William

  Merchant, Piers

  Chaplin, Mrs Judith

  Milligan, Stephen

  Chapman, Sydney

  Mitchell, Andrew (Gedling)

  Clappison, James

  Monro, Sir Hector

  Clarke, Rt Hon Kenneth (Ruclif)

  Moss, Malcolm

  Clifton-Brown, Geoffrey

  Nelson, Anthony

  Congdon, David

  Neubert, Sir Michael

  Coombs, Simon (Swindon)

  Nicholls, Patrick

  Cope, Rt Hon Sir John

  Norris, Steve

  Cran, James

  Oppenheim, Phillip

  Davies, Quentin (Stamford)

  Page, Richard

  Davis, David (Boothferry)

  Paice, James

  Deva, Nirj Joseph

  Patnick, Irvine

  Dorrell, Stephen

  Pattie, Rt Hon Sir Geoffrey

  Douglas-Hamilton, Lord James

  Porter, David (Waveney)

  Dover, Den

  Richards, Rod

  Duncan, Alan

  Robertson, Raymond (Ab'd'n S)

  Duncan-Smith, Iain

  Robinson, Mark (Somerton)

  Elletson, Harold

  Rowe, Andrew (Mid Kent)

  Evans, Jonathan (Brecon)

  Ryder, Rt Hon Richard

  Evans, Nigel (Ribble Valley)

  Scott, Rt Hon Nicholas

  Evans, Roger (Monmouth)

  Shaw, David (Dover)

  Faber, David

  Shepherd, Colin (Hereford)

  Fabricant, Michael

  Smith, Sir Dudley (Warwick)

  Fairbairn, Sir Nicholas

  Smith, Tim (Beaconsfield)

  Fenner, Dame Peggy

  Soames, Nicholas

  Fishburn, John Dudley

  Spencer, Sir Derek

  Forman, Nigel

  Spicer, Michael (S Worcs)

  Forsyth, Michael (Stirling)

  Spink, Dr Robert

  Forth, Eric

  Spring, Richard

  Fox, Dr Liam (Woodspring)

  Sproat, Iain

  Freeman, Roger

  Stanley, Rt Hon Sir John

  French, Douglas

  Steen, Anthony

  Gale, Roger

  Stephen, Michael

  Gallie, Phil

  Stern, Michael

  Gill, Christopher

  Stewart, Allan

  Gillan, Ms Cheryl

  Streeter, Gary

  Goodlad, Rt Hon Alastair

  Sweeney, Walter

  Goodson-Wickes, Dr Charles

  Taylor, Ian (Esher)

  Gorst, John

  Thomason, Roy

  Greenway, John (Ryedale)

  Thompson, Patrick (Norwich N)

  Hague, William

  Thurnham, Peter

  Hanley, Jeremy

  Townsend, Cyril D. (Bexl'yh'th)

  Hargreaves, Andrew

  Trend, Michael

  Harris, David

  Twinn, Dr Ian

  Hawkins, Nicholas

  Walker, Bill (N Tayside)

  308

  Waller, Gary

  Winterton, Mrs Ann (Congleton)

  Wardle, Charles (Bexhill)

  Wolfson, Mark

  Wells, Bowen

  Wood, Timothy

  Wheeler, Sir John

  Whittingdale, John

  Tellers for the Noes:

  Widdecombe, Ann

  Mr. Tim Boswell and

  Wilkinson, John

  Mr. Robert G. Hughes.

  Willetts, David

  Question accordingly negatived.
  Motion made, and Question put, That further consideration of the Bill be now adjourned.—[Mr. MacKay.]
  The House divided: Ayes 132, Noes 14.

  Division No. 57]

  [12.43 am

  AYES

  Ainsworth, Peter (East Surrey)

  Hawkins, Nicholas

  Alexander, Richard

  Heald, Oliver

  Alison, Rt Hon Michael (Selby)

  Heathcoat-Amory, David

  Amess, David

  Hendry, Charles

  Ancram, Michael

  Hill, Keith (Streatham)

  Arbuthnot, James

  Hughes Robert G. (Harrow W)

  Arnold, Jacques (Gravesham)

  Hunt, Rt Hon David (Wirral W)

  Arnold, Sir Thomas (Hazel Grv)

  Jack, Michael

  Ashby, David

  Jessel, Toby

  Atkinson, David (Bour'mouth E)

  Kirkhope, Timothy

  Atkinson, Peter (Hexham)

  Knight, Mrs Angela (Erewash)

  Baker, Nicholas (Dorset North)

  Knight, Greg (Derby N)

  Bates, Michael

  Kynoch, George (Kincardine)

  Beith, Rt Hon A. J.

  Lait, Mrs Jacqui

  Beresford, Sir Paul

  Lidington, David

  Booth, Hartley

  Lightbown, David

  Bowis, John

  Lord, Michael

  Brandreth, Gyles

  Luff, Peter

  Bright, Graham

  MacKay, Andrew

  Brooke, Rt Hon Peter

  Maclean, David

  Brown, N. (N'c'tle upon Tyne E)

  Maitland, Lady Olga

  Browning, Mrs. Angela

  Malone, Gerald

  Bruce, Malcolm (Gordon)

  Mans, Keith

  Burt, Alistair

  Marek, Dr John

  Butcher, John

  Merchant, Piers

  Butler, Peter

  Milligan, Stephen

  Butterfill, John

  Monro, Sir Hector

  Campbell, Menzies (Fife NE)

  Nelson, Anthony

  Carrington, Matthew

  Neubert, Sir Michael

  Chaplin, Mrs Judith

  Norris, Steve

  Chapman, Sydney

  Paice, James

  Clappison, James

  Pattie, Rt Hon Sir Geoffrey

  Congdon, David

  Richards, Rod

  Coombs, Simon (Swindon)

  Robertson, Raymond (Ab'd'n S)

  Cope, Rt Hon Sir John

  Robinson, Mark (Somerton)

  Cran, James

  Rowe, Andrew (Mid Kent)

  Davies, Quentin (Stamford)

  Ryder, Rt Hon Richard

  Davis, David (Boothferry)

  Shaw, David (Dover)

  Dorrell, Stephen

  Shepherd, Colin (Hereford)

  Douglas-Hamilton, Lord James

  Smith, C. (Isl'ton S & F'sbury)

  Dover, Den

  Smith, Sir Dudley (Warwick)

  Duncan-Smith, Iain

  Soames, Nicholas

  Elletson, Harold

  Spencer, Sir Derek

  Evans, Jonathan (Brecon)

  Spicer, Michael (S Worcs)

  Evans, Nigel (Ribble Valley)

  Spink, Dr Robert

  Evans, Roger (Monmouth)

  Spring, Richard

  Faber, David

  Sproat, Iain

  Fabricant, Michael

  Stanley, Rt Hon Sir John

  Fairbairn, Sir Nicholas

  Steen, Anthony

  Forsyth, Michael (Stirling)

  Stephen, Michael

  Fox, Dr Liam (Woodspring)

  Stewart, Allan

  Freeman, Roger

  Sweeney, Walter

  Gallie, Phil

  Taylor, Ian (Esher)

  Gill, Christopher

  Thompson, Patrick (Norwich N)

  Gillan, Ms Cheryl

  Thurnham, Peter

  Goodlad, Rt Hon Alastair

  Townsend, Cyril D. (Bexl'yh'th)

  Goodson-Wickes, Dr Charles

  Tracey, Richard

  Gorst, John

  Trend, Michael

  Greenway, John (Ryedale)

  Twinn, Dr Ian

  Hague, William

  Walker, Bill (N Tayside)

  Hanley, Jeremy

  Waller, Gary

  Hargreaves, Andrew

  Wardle, Charles (Bexhill)

  309

  Wells, Bowen

  Wolfson, Mark

  Wheeler, Sir John

  Wood, Timothy

  Whittingdale, John

  Widdecombe, Ann

  Tellers for the Ayes:

  Wilkinson, John

  Mr. Irvine Patrick and

  Willetts, David

  Mr. Tim Boswell.

  Winterton, Mrs Ann (Congleton)

  NOES

  Chisholm, Malcolm

  Morley, Elliot

  Connarty, Michael

  Salmond, Alex

  Donohoe, Brian

  Welsh, Andrew

  Ewing, Mrs Margaret

  Wilson, Brian

  Godman, Dr Norman A.

  Wray, Jimmy

  Graham, Thomas

  Hood, Jimmy

  Tellers for the Noes:

  McAllion, John

  Mr. Dennis Skinner and

  MacDonald, Calum

  Mr. Bob Cryer.

  Question accordingly agreed to.
  Bill, not amended in Committee and as amended (in the Standing Committee), to be further considered this day.

  The Naze
  Motion made, and Questions Proposed, That this House do now adjourn.—[Mr. Robert G. Hughes.]
  12.53 am
  Mr. Iain Sproat: I am extremely grateful, at this early hour of the morning, to have the opportunity to put to my hon. Friend the Minister the important case of the Naze at Walton-on-the Naze. I do so because I seek the Government's help in efforts to protect and preserve the Naze. Before I go into further detail on this matter, perhaps I should give a description of the Naze because I do not know whether my hon. Friend has seen it.
  The Naze—I believe that the name is etymologically connected with the word "nose"—is a grassy promontory that sticks out into the North sea. It is extensive, being about 159 acres, and it has a sea line of three miles. The important thing about it is that it is an extremely beautiful, open, natural space. It is unspoilt countryside and a real bit of old England. It is absolutely central to the life of the community, and that is easily proven by the fact that the attractive and picturesque seaside resort of Walton-onthe-Naze takes its name from the Naze.
  We have 150 acres of beautiful land. However, it is not just a beautiful coastline, and my hon. Friend the Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food should consider several other factors when, hopefully, he agrees to approve the scheme which lies with his Ministry and grants the money to execute the scheme. As well as being a beautiful landscape, there is a listed building on the Naze called the Naze tower. It was built in 1720 and is a very dramatic and romantic building.
  The area is much visited by tourists and the prosperity of Walton-on-the-Naze depends to a considerable degree on the tourist trade. However, most important of all is the natural amenity value. My hon. Friend the Minister will recall that, when there was a public inquiry on a previous occasion about the Naze, the inspector said that it was a natural asset whose high amenity value could not be measured simply in monetary terms. That is part of the essence that I wish to put to my hon. Friend the Minister.
  We have a beautiful area, so what is the problem? Very simply, the problem is that that very beautiful area is being destroyed by two factors: first, by springs at the top of the cliffs; and, secondly, by the fact that the cliffs, which run for well over 1,000 yds along the seaward side and which are very substantial, being about 70 ft to 80 ft high, are being worn away by the action of the sea. When I say "worn away", I am not talking about a slow erosion.
  I received a reply from my hon. Friend the Minister of State, Ministry of Agriculture, Fisheries and Food on 22 June which stated that the erosion over the past 12 months was on average about 6 ft a year. Of course, if there is a violent storm, a huge chunk of the cliff—much more than 6 ft—may fall away. Perhaps I can give an example that may strike the imagination of my hon. Friend the Minister. In the days when his grandfather was Prime Minister, a number of block houses were built on the cliffs of the Naze to resist the German invasion. If one walks on the cliffs today, one can hardly see those concrete block houses because they are so far out at sea with the waves washing over them. That is what will happen to the whole of the Naze.
  I mentioned earlier the Naze tower, a beautiful and romantic listed building that was built in 1720. The Naze

  311
  tower now stands some 60 yds from the cliff edge. One does not need to be a profound mathematician to work out that it will not take many years with an erosion rate of 6 ft or more a year before that listed building topples into the sea.
  We have a beautiful amenity area with a listed building standing on it, and it is a prime source of tourist attraction for the area. However, it is being steadily destroyed. I hope that my hon. Friend the Minister will be able to provide the funds to preserve it. As he will know, on three occasions over the past 15 years, plans have been put to the Government for groynes, rebutments and other ways of stopping the sea smashing up against the base of the cliffs. Those plans were rejected on every occasion. I shall refer to the reasons for the rejections in a moment, but now a fourth plan is being laid before the Ministry.
  The fourth plan is not very expensive —indeed, it is so cheap comparatively that I wonder how much good it would do in the long term. None the less, those who are more expert than I in such matters say that it is desirable. At 1992 prices, it is costed at £400,000, of which my hon. Friend's Ministry will be responsible for only 70 per cent., 15 per cent. being the responsibility of the local Tendring district council, and the other 15 per cent. being the responsibility of Essex county council. My hon. Friend has it in his power to enable a comparatively small amount of money to do an enormous amount of good.
  My hon. Friend, with his usual robust common sense, may ask, "Why are we even having the debate? We have that beautiful area, that listed building, that tourist attraction, and something which is central to the locality. It is being destroyed. Why should there be any argument about it?" Of course, it is a natural asset of this country, and it should be preserved. There have been a number of reasons in the past why previous Governments have rejected plans to preserve and protect the Naze as it should be preserved.
  The first argument which my hon. Friend's predecessors have put forward is that that kind of protection against the sea is normally given only when houses are in imminent risk of being washed away. I gladly tell my hon. Friend that, on this occasion, no houses are in imminent danger of being washed away. There are certainly houses on the Naze, but it would take many years before the land on which they stand is in danger of crumbling away, although considerable apprehension is felt by the people who live there. They feel that a blight has descended on their houses because the defences are not adequate to protect the Naze against the sea. None the less, I am not maintaining the argument that it is to preserve houses that are in imminent danger of destruction, but surely the point of saying that the danger to houses is an argument to be taken into consideration by the Government is that houses are an important asset. We have another important asset, and that is the Naze itself. That is what, on this occasion, should move my hon. Friend.
  The second argument that has been put on previous occasions concerns the economic benefit of the Naze. I wrote to my noble Friend Earl Howe two weeks ago, and he sent me a letter which I received yesterday. I thank him and his officials for sending me a duplicate copy this morning. However, when I read the letter I was disturbed by it, first, because my noble Friend said that, as entry to the Naze is free, it is very difficult to make any economic judgments and that we must find an indirect way of judging it.
  312
  Of course, although it is true that access to the Naze is free to pedestrians, one must pay if one goes in a car. The least charge that one pays is 1·20. In spite of that, 16,000 cars a year go to the Naze. If there is an average of three people in a car, and that is almost 50,000 visitors already, I guess from my own observation of the Naze that at least that number arrive on foot. One hundred thousand people a year think that the Naze is a sufficient tourist attraction to visit.
  Even more worrying about my noble Friend's letter and his not realising that cars have to pay to go to the Naze and that therefore we have a direct economic index of the popularity of the Naze is his description of how the Ministry proposes to make an indirect judgment of the economic benefits of the Naze. My hon. Friend the Minister, who might not have seen the letter, will hardly credit that his Ministry proposes that tourists should be stopped at the top of the Naze and asked what monetary value they place upon visiting the Naze at this moment and what monetary value they would place on the Naze next year if it were to be reduced by 6 ft. That is absolutely barmy. The Ministry proposes to aggregate that sum, multiply it by the number of visitors, and say that the difference between the two is the value which people put on having the Naze protected. I appreciate that my hon. Friend the Minister will want to take into account the economic value of the Naze. However, the extraordinary ivory-tower academic absurdity of the letter will give people living in the constituency little confidence that a proper economic evaluation has been made.
  The third reason why the Naze has not attracted Government help in the past is almost more absurd. It can be described as "the fossil case". The Naze is built in part of a type of earth, if I may speak in layman's language, known as London clay. London clay is an old substance —some 50 million years old. Many ancient fossils are found in it. Of course, fossils are extremely interesting, but the argument has been made that the more the sea is allowed to wear away the wonderful natural beautiful asset of the Naze, the more fossils will become apparent.
  The value placed on studying the fossils is given priority over the value to the people who enjoy the amenity of the Naze. I hope that my hon. Friend will not use that argument again, as it has been used in the past. I understand that agreement has been reached with English Nature—the quango which deals with such matters—on finding a way for the fossil hunters to continue to find some of the fossils without the whole of the Naze having to be destroyed.
  So far the plan which the Tendring district council put before my hon. Friend the Minister has found only one objector out of the many thousands of local inhabitants. I hope that my hon. Friend agrees that it would be an abuse of democracy if we had to go through the rigmarole of a public inquiry, which would cost money that could be far better devoted to saving the Naze, simply because one person had objected. I hope that my hon. Friend accepts that any application made by one person for a public inquiry should be overridden.
  If my hon. Friend the Minister says, "I agree with everything that you say. You have persuaded me. I am about to give approval to the plan and to give funds to execute it", I will accept with alacrity and gratitude. But if he is minded to say no to the splendid plan, I hope that his refusal will not be set in concrete. I hope that he will agree

  313
  to meet me and perhaps a delegation so that we can bring more persuasion to bear in private than perhaps I have been able to bring this morning.
  1.7 am
  The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Nicholas Soames): May I first congratulate my hon. Friend the Member for Harwich (Mr. Sproat) on being selected to debate this topic on the Adjournment of the House. Without being over-familiar, I congratulate my hon. Friend on presenting such a persuasive and authoritative case without using a single note. He was obviously in command of his subject and knowledgeable about it.
  My hon. Friend represented the interests of his constituents with great knowledge and feeling. He has written to my Department on several occasions about the matter and has tabled no fewer than nine parliamentary questions. The issue is of considerable importance to him and his constituents. Naturally, we take it seriously. I assure my hon. Friend that, whether or not he is satisfied with the answer that he receives tonight, the Parliamentary Secretary in the House of Lords, Earl Howe, will, of course, be delighted to receive my hon. Friend at a suitable time, together with whatever delegation he may choose to bring with him.
  Coastal defence is an important and often controversial issue. It is right that such matters should be subjected to careful scrutiny, as my hon. Friend acknowledged, before any decisions are reached. Before I respond to the particular points that he has made, I shall explain a little of the background.
  The Ministry that I represent has policy responsibility both for the alleviation of flooding, whether by rivers or the sea, and for the protection of the coastline from erosion. The Government set the national priorities, provide substantial sums in grant aid for flood and coastal defence works and give guidance on the engineering, environmental and economic factors that should be taken into account.
  Operational responsibility for the construction and maintenance of defences in particular locations rests with local bodies. For sea defences against flooding, this generally means the local committees of the National Rivers Authority. For works to protect the coast from erosion—as, for example, at Walton-on-the-Naze—this usually means the district councils. These local bodies decide whether to put forward schemes of coastal defence work to the Ministry for approval and for grant aid. The system is essentially one of partnership between central and local government.
  In considering applications for grant aid, the Ministry expects the operating authorities to have examined a range of options for tackling flooding or erosion at a particular site, and also to have assessed the implications of taking no action whatever. The no-action option provides an essential benchmark against which to judge the advantages and disadvantages of attempting to resist the forces of nature at a particular point. Naturally, much depends on the nature of the land immediately behind the coastline.
  Proposals for coastal protection work are considered first by the Ministry's regional engineers for the relevant area, who have the necessary professional expertise.
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  Essentially, there are a number of yardsticks against which all such proposals will be judged. Planned schemes must be sound in engineering terms, environmentally acceptable and economically worth while.
  It is essential that these works should fall into the criteria that I have described. Above all, they must represent value for money for the taxpayer. My hon. Friend is an experienced parliamentarian and had been a Member before being elected to represent Harwich, so he knows that value for money must be a critical judgment and assessment. That means that all of the costs and benefits of a proposal must be extremely carefully quantified. Put simply, unless it can be shown that the benefits are at least equal to the costs, there must be a presumption against a particular scheme being approved for grant aid.
  It is self-evident that coastal defence works must be properly engineered to undertake the task that is required. There are often a number of different ways of achieving the desired result, and the local authority must be able to demonstrate that its design and construction plans, and its choice of materials, are sound. The Ministry's engineers are well qualified to undertake the task of verifying the propositions.
  Proposed works must be properly engineered and environmentally acceptable, and that is inevitably a more subjective assessment. All coastal engineering work involves some interference with the natural environment, and sometimes a balance will have to be struck between the protection of life and property and the protection of the environment. All proposed schemes are, therefore, passed to English Nature for comment. Local authorities are strongly encouraged to consult both statutory and voluntary conservation bodies from the earliest stages when planning work. Wherever possible, conservation and amenity features are incorporated in modern coastal defence schemes. We now try to work with, rather than against, nature.
  I should stress that these cost-benefit analyses are not undertaken in a crude or simplistic manner. It is, of course, easier to quantify the so-called "tangible" costs and benefits of coast protection schemes. By that I mean that we can fairly readily measure benefits in terms of prevention or mitigation of damage to domestic and commercial property and transport links, for example. We have made progress in recent years with the much more difficult job of quantification of the so-called "intangible" benefits of coastal defence schemes, such as amenity, recreational and environmental benefits.
  A number of techniques are available for the quantification of amenity or environmental benefits. Of those, the contingent valuation method is best suited to valuing the benefits of preserving cliff-top recreational sites like those so graphically and admirably described by my hon. Friend. That involves asking members of the public to place a monetary value on their enjoyment of a site as it is and as it would be if no action were taken to preserve it. The differences between the two values can then be aggregated to give a value for the amenity benefit of any scheme that preserved the site. There is clearly an element of subjectivity here and it is clear that this and similar techniques must be used with scrupulous care if credence is to be given to the results. But such measurements can help us to put a figure on intangible benefits when carrying out a cost-benefit analysis. There are examples of schemes in which the costs outweighed the benefits when only

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  tangible factors were looked at, but which became eligible for grant aid once the intangible benefits were brought back into the scale.
  I now come to the particular problems of the Naze. As my hon. Friend graphically pointed out, the Naze is a site of special interest and concern for his constituents. It is a site of special scientific interest, a nature reserve and a popular area for recreational pursuits. The cliffs contain important bird fossils and the Naze tower, a disused lighthouse, is a listed building. The area suffers from severe coastal erosion as the cliffs are cut away.
  Tendring district council, the responsible coast protection authority, submitted schemes to protect the Naze from erosion twice in the 1970s and once in the 1980s. Those schemes were either rejected by the Department of the Environment—which had policy responsibility for coast protection against erosion until it passed to MAFF in 1985—or were withdrawn by the council itself. That was because the costs of the proposed schemes outweighed the benefits and, in the most recent case, because of objections from conservation bodies that the fossil deposits would be damaged.
  The present scheme from Tendring district council was submitted to the Department last year and has been redesigned in consultation with English Nature. The scheme does not seek to prevent erosion at the Naze altogether, but rather to slow the rate of erosion. The scheme would change the appearance of the coastline by turning it into two small sheltered bays. But I am advised that English Nature is satisfied that it would permit sufficient residual erosion to allow the important bird fossils to be released for study.
  The present position is that officials have assessed the council's proposal and found it to be sound from an engineering and environmental point of view. However, I understand that, as my hon. Friend said, a private individual has lodged an objection which, if unresolved, may necessitate the holding of a local investigation by the Ministry. Leaving that on one side for the present, the other main area that remains in contention is the economic justification for the scheme, with which my hon. Friend dealt at some length.
  On the basis of the information so far provided by the council to officials, the costs of the scheme are likely to be considerably in excess of the benefits. Residential properties to the rear of the Naze are not expected to be at
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  risk from erosion for 100 years and so do not have a significant effect on the calculation. The main benefits from the scheme, as my right hon. Friend rightly said, would be amenity benefits, and I have already acknowledged, as he does, the difficulty of quantifying those. But if we are to justify the expenditure of public money, we must quantify those intangible benefits as best we can. It is also essential that we do that if we are to assign priority as between different schemes competing for scarce resources. Competing schemes elsewhere in the country may involve a much more direct threat to life and property than is the case at the Naze. I hope that my hon. Friend will accept that the Naze case is by no means an open and shut matter.
  In the last financial year, the Government spent around £19·5 million in grant aid on coast protection works against erosion, out of a total of £56 million on flood and coastal defence overall. We are therefore investing very considerable sums of public money, and rightly so. However, the resources available are not infinite in this or any other area. I hope that my hon. Friend will also accept that the cost-benefit analyses which the Department rightly insists are carried out help to provide a broad indication of the types of coastal defence project that are likely to represent the best return on that capital investment.
  In conclusion, I assure my hon. Friend that I and my ministerial colleagues will give very careful consideration to the points that he has raised. When he sees my noble Friend, he may wish to elaborate on other points. We have yet to reach a final decision on the Naze proposals. I have been entirely open with my hon. Friend about the rules to which we work and the potential difficulties we envisage with the district council's present scheme. However, I shall not prejudge the eventual decision tonight. I think that we have had a useful and constructive debate in which my hon. Friend has raised with considerable skill and care some very important and fundamental issues. We will want to reflect on them before reaching a final view, but I assure my hon. Friend that we hope to do that in the very near future. I assure him that he will be the first to know when we have done so.
  Question put and agreed to.
  Adjourned accordingly at twenty-one minutes past One o'clock.