Commons Sitting of 27 April 1993

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

    LONDON LOCAL AUTHORITIES BILL [Lords]
    Order for Second Reading read.
    To be read a Second time on Thursday 29 April.

Oral Answers to Questions
  EMPLOYMENT

    Labour Statistics
    Mr. Peter Atkinson: To ask the Secretary of State for Employment what measures she is introducing to assist the long-term unemployed in the north of England.
    The Parliamentary Under-Secretary of State for Employment (Mr. Patrick McLoughlin): New measures announced in the Budget will provide an extra 1010,000 opportunities nationally for the long-term unemployed. Learning for work, community action and an expanded business start-up scheme will be available for long-term unemployed people.
    Mr. Atkinson: Is my hon. Friend aware that Tyneside training and enterprise council, which I understand has been chosen for a pilot scheme for one of four workstart programmes, yesterday launched its own workstart programme, Tyneskill support, aimed at people who have been out of work for more than two years? Does my hon. Friend agree that the advantage of workstart is that it confers a double benefit—first, for the people who are helped and, secondly, in that it helps to convince employers that people who have been out of work for more than two years still retain their skills and an enthusiasm for work and should not be written off as unemployable?
    Mr. McLoughlin: I entirely agree with my hon. Friend, who points out the amount of help that we give to people who are unemployed long term. Indeed, the United Kingdom has a good record compared with our European counterparts. The proportion of long-term unemployed people in the United Kingdom, at 28 per cent., is lower than in Italy, where it is 67 per cent., in Belgium, where it is 61 per cent., in Ireland, where it is 60 per cent., in Germany, where it is 45 per cent., and in the Netherlands, where it is 43 per cent. That shows that we dedicate help to the long-term unemployed.
    Mr. Lewis: Does the Minister's litany of assistance include encouraging people to go on the sick register instead of the unemployment register? Will he ask his right
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    hon. Friend the Secretary of State to order the investigation that I have requested into the scandal going on in the Employment Service in my constituency?
    Mr. McLoughlin: It is rather sad that when we have seen unemployment falling for two months, the only people who complain about it, and continue to do so, are Labour Members. That is not surprising, in view of the way that they have relished it when unemployment has continued to rise.
    Mr. Trotter: May I say how much Tyneside will appreciate being chosen for one of the new schemes and how appropriate it is that an area of high unemployment, with an excellent basic record of industrial relations and skills, should have the opportunity to make itself available for inward and home-based investment as the recession ends? The news will be much welcomed in the community on Tyneside.
    Mr. McLoughlin: I am grateful to my hon. Friend. He is right to say that the scheme will have an important impact. We shall watch it closely to see what lessons we can learn from it.
    Ms Quin: Will the Minister confirm that there is a massive problem of long-term unemployment on Tyneside and that the scheme to which the hon. Member for Hexham (Mr. Atkinson) referred aims to create 400 jobs for the long-term unemployed by July, whereas there are 32,000 long-term unemployed people on Tyneside? Will the Minister agree to support some of the ideas advanced by the Labour party to bring Government Departments together in an office in the north to identify and promote employment opportunities in the region?
    Mr. McLoughlin: It would make a great difference if we started to receive some support from the Labour party for the many schemes that we try to offer long-term unemployed people. The Labour party is always lacking in enthusiasm. The hon. Lady rightly mentions the high unemployment in the northern region, but in July 1986 unemployment in that region stood at 220,000, whereas according to the latest figures it is now 166,000–25 per cent. lower. I should have thought that even the Opposition would welcome that.

    Total Quality Management
    Mr. Stephen: To ask the Secretary of State for Employment whether she will use the techniques of total quality management to measure the extent to which her Department is efficiently delivering the service which industry and commerce need.
    The Minister of State, Department of Employment (Mr. Michael Forsyth): Total quality management has a part to play in the Department's drive to improve services and to ensure value for money.
    Mr. Stephen: Will my hon. Friend ask a senior official in his Department to liaise closely with the European Foundation for Quality Management and to explore whether the excellent self-assessment model it has developed would benefit the public service?
    Mr. Forsyth: Anything that improves quality management at a European level is to be welcomed. I will pass on my hon. Friend's helpful suggestion to officials in the Department.
    Mr. McAllion: Does the Minister accept that his Department's ability to deliver services efficiently depends at least in part on its reputation for honesty? That being so, can he explain to the House why he allowed Sir Robin Butler, the head of the civil service, to write to civil service unions on 16 March saying that the imposition of no-strike clauses on public sector workers was not even under consideration when, 18 days earlier on 26 February, the Secretary of State for Employment had written to the Secretary of State for Education saying that she intended to amend the Employment Bill to make industrial action by public sector workers unlawful? That letter was copied and sent to Sir Robin Butler.
    Either Sir Robin Butler is so inefficient that he does not even read letters from the Secretary of State for Employment which are copied and sent to him or he is deliberately covering up for the Government by misleading civil service unions. Which is it? Did the Department know about that? If so, did it consent to it?
    Mr. Forsyth: The trouble with the hon. Gentleman is that when he scrabbles around in dustbins reading bits of paper, he ends up misinformed. The position that the Cabinet Secretary set out—which is that the Government have not considered introducing, nor do they have any plans to introduce, legislation to prevent industrial action in the public sector—remains the case. The hon. Gentleman is at a disadvantage in that he has relied for his information on scraps of paper that were based on leaked information.
    Mr. Evennett: Does my hon. Friend agree that the training and enterprise council network is improving the quality and effectiveness of his Department's training programme? Does he agree that the job seekers charter is improving the service throughout the Employment Service? Both schemes are to be welcomed and encouraged, and show that his Department is doing a good job for people seeking jobs.
    Mr. Forsyth: I agree with my hon. Friend. Since my right hon. Friend the Secretary of State took charge of the Department, the number of opportunities for the unemployed to obtain help in getting back to work or to obtain help with training has increased from around 1 million to 1,600,000. That dramatic record of achievement has been thanks to the efforts of the Employment Service, the training and enterprise councils and Ministers across the Government. I should have thought that that would be welcomed by everyone in the House.

    Disabled People
    Mr. Wigley: To ask the Secretary of State for Employment what progress is being made to reduce discrimination against disabled people in the context of employment; and if she will make a statement.
    Mr. Thurnham: To ask the Secretary of State for Employment what measures she is taking to promote employment opportunities for people with disabilities.
    Mr. Michael Forsyth: We aim to raise employers' awareness of the abilities of disabled people and to provide practical employment help and advice where necessary.
    Mr. Wigley: Does the Minister accept that, either deliberately or inadvertently, a significant number of employers discriminate against disabled people in terms of employment? Does he accept that the overwhelming majority of organisations working with and on behalf of disabled people want anti-discrimination legislation? What is the Department's latest thinking on how to make that a reality?
    Mr. Forsyth: I know how much time the hon. Gentleman spends on this subject, especially in his role as vice-chairman of the all-party disablement group. I accept his point that we need to do even more to encourage employers to take on disabled people and to make use of their skills. Disabled people certainly find it harder to obtain work when unemployed, especially during a recession.
    I am sure that we must look at ways to reduce discrimination and to encourage opportunities for disabled people. Although it is easy to look to legislation as the answer, the hon. Gentleman needs to address some of the difficulties that arise because of the legal complexities and the costs it would impose, which may not be to the advantage of disabled people. I am happy to continue the helpful discussion going on with the hon. Gentleman and others in the House on how some of the problems may be addressed.
    Mr. Thurnham: Does my hon. Friend agree that the private sector has a much better record than the public sector in employing people with disabilities? Will he recruit more disabled people in the civil service? Will he expand the successful sheltered placements scheme? Is not privatisation in the best interests of everyone, not least the disabled?
    Mr. Forsyth: The answers to my hon. Friend's questions are: I am not sure, yes, yes and yes.
    Mr. Galbraith: Can the Minister say why, despite the fact that only 23 per cent. of employers adhere to the quota, there have been no prosecutions whatever under the Government? Is it not time that the Government reviewed the quota system with a view to enforcing it properly?
    Mr. Forsyth: We are certainly examining the quota system. The hon. Gentleman will recognise that the 3 per cent. figure relates to registered disabled. The number of people who are registered as disabled is less than 3 per cent. of the work force and, therefore, it would be mathematically impossible for all employers to meet the quota. We take seriously employers who are not meeting their obligations. We try to ensure that they do so by persuasion. The policy of not having had prosecutions reflects the conduct of every Government in the past 40 years.
    Mr. Alan Howarth: Does my hon. Friend agree that the end of the recession and the extremely welcome recovery in the labour market make it an especially appropriate moment to introduce legislation to prevent discrimination in employment against disabled people? Will he reflect that the fears that have been expressed about the cost implications of such legislation are invalidated by the immense contribution that disabled people could make to

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    the economy and that experience shows that nothing less than anti-discrimination legislation would enable that contribution to be released?
    Mr. Forsyth: I agree with my hon. Friend that enlisting the talents of disabled people is a key element in ensuring that we maximise the performance of our economy as well as meet the needs of individuals. I would want to discuss my hon. Friend's specific ideas for legislation and its form before jumping to the conclusion that he reached. I would point to some of the difficulties that have arisen in other countries as a result of perhaps not thinking the matter through as carefully as it should have been. I should be happy to meet my hon. Friend to discuss his ideas in detail.

    Labour Statistics
    Mr. Winnick: To ask the Secretary of State for Employment how many people were unemployed for 12 months and longer in May 1979 and at the latest available date.
    The Secretary of State for Employment (Mrs. Gillian Shephard): The figures for January 1993 show a reduction of almost 10 per cent. in the number of people who have been unemployed for 12 months or more, compared with January 1983—the earliest date for which equivalent figures are available.
    Mr. Winnick: Is the Secretary of State aware that it is perfectly understandable that she has not given the figure for 1979, which is 366,700? I have just obtained that information from the Library. Is it not a fact that three times as many people have been unemployed for longer than one year than when the Labour Government left office? Is not the Secretary of State ashamed of the misery and heartbreak of so many of our fellow citizens who are long-term unemployed, many of whom work on the assumption that, even with the slow recovery which is taking place, they will never be able to work again? They are the victims of the Government's economic policies.
    Mrs. Shephard: I would not want in any way to minimise the difficulty for people who suffer long-term unemployment. The simple fact is that the number of long-term unemployed people is almost a quarter—24 per cent.—lower than at its peak in 1986. It is obvious from the hon. Gentleman's supplementary question that, like so many of his colleagues, he would have liked, and perhaps he was expecting, a more gloomy reply. I shall add to his all-too-obvious discomfiture by inviting him to welcome the fact that in his constituency the reduction was 21 per cent.
    Mr. Bill Walker: Does my right hon. Friend agree that the only jobs provided by the Government are the jobs of those who are directly employed by the public service or the quangos and other organisations set up in the public service area and that the jobs that are provided in the economy come as a result of the Government creating low inflation, low interest rates and competitive prices, thanks to white Wednesday? Consequently, we can look forward to improvements in the United Kingdom because we are more competitive than any other country in Europe.
    Mrs. Shephard: I would not want to build too much on the improvement in unemployment that we have seen for the past two months. Of course, my hon. Friend is
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    absolutely right. It is not the Government who create jobs; it is business, industry and commerce. It ill behoves Opposition Members to pour scorn on the good economic news, which is good news for unemployed people.
    Mr. Grocott: Does the Secretary of State recall that throughout the past 14 years we have had repeated assurances from the Secretary of State for Employment, two Prime Ministers and others that all the dreadful unemployment statistics were nothing whatever to do with the Government? Now that Ministers claim that there is some marginal improvement in the unemployment statistics, will the Secretary of State take this opportunity to reaffirm to the House the Government philosophy that if there is any improvement it is nothing whatever to do with the Government?
    Mrs. Shephard: What is absolutely certain is that only when Opposition Members express a commitment to keep Britain competitive, reject support for the national minimum wage and, in the case of the hon. Member for Holborn and St. Pancras (Mr. Dobson), support employers can their much vaunted and so-called support for unemployed people be taken seriously.
    Mr. David Evans: Does my right hon. Friend agree that of the 1 million long-term unemployed, probably half have no intention of working again and, therefore, can be termed layabouts? Do the long-term unemployment figures include the lot opposite? They have been unemployed for 14 years.
    Mrs. Shephard: My hon. Friend's strictures on fraud among people who call themselves unemployed are well known. I understand his anxiety because any fraud within the unemployment or benefits system can only serve to make things worse for people who are genuinely unemployed. As for the present or prospective employment of Opposition Members, my hon. Friend has made his point.

    Workstart
    Mr. Beith: To ask the Secretary of State for Employment what progress has been made in setting up the workstart pilot projects.
    Mrs. Gillian Shephard: I have asked the Employment Service and the two training and enterprise councils in the pilot areas to submit plans by 7 May. I hope that the first employees to be taken on under the scheme will start work by June.
    Mr. Beith: Does the Secretary of State realise how dissatisfied I am, as someone who advocated a workstart scheme and supports its principles, that long-term unemployed people in Northumberland—where there are many long-term unemployed—are excluded from the scheme both in my constituency and in the constituency of Hexham, which was mentioned earlier? At what stage will she decide whether to continue the scheme and whether to extend it?
    Mrs. Shephard: I hope that the right hon. Gentleman welcomes the 2 per cent. fall in unemployment in his constituency last month. I also hope that he will welcome the fact that long-term unemployed people in his

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    constituency and elsewhere will greatly benefit from the 1·6 million opportunities for long-term unemployed people that we now have on stream.
    As for the pilots, the right hon. Gentleman will realise that a pilot is a pilot. If the pilot projects succeed, we shall certainly consider extending them.
    Dr. Spink: Does my right hon. Friend agree that the return in confidence, the recovery and the workstart pilot scheme will give new opportunity, new hope and great help to the long-term unemployed in Britain?
    Mrs. Shephard: I agree with my hon. Friend that the workstart pilots should be extremely useful. We will monitor them carefully to see what lessons can be learnt and, in particular, what special help, confidence and encouragement they can give to people who have been unemployed for a long time.
    Mr. Tony Lloyd: Does the Secretary of State nevertheless recognise that even though workstart is only a pilot scheme, people are worried that employers are being asked simply to give an undertaking that they will not make other people unemployed in order to take on people on workstart and, I assume, an undertaking that they will not simply dismiss people at the end of the scheme? In the same vein as the Secretary of State waxed eloquent about fraud among those who claim benefit, will she wax eloquent about fraud among employers who seek to abuse the system?
    Mrs. Shephard: The hon. Gentleman raises an important point. The contracts with the participating firms will naturally stipulate that existing employees must not be displaced and that the workstart participants will be considered additional to normal recruitment. As he would expect, the scheme will be subject to close and careful monitoring.

    Labour Statistics
    Mr. Michael Brown: To ask the Secretary of State for Employment how many new jobs have been created in the Brigg and Cleethorpes constituency since January 1992.
    Mr. McLoughlin: The information is not available in the form my hon. Friend requested. However, I am sure he will welcome the news that two American firms, notably Kimberly-Clark and Paramount Packaging, have chosen to invest in his constituency, bringing 800 new jobs to the area.
    Mr. Brown: Does my hon. Friend agree that the information he has just revealed suggests that the recovery in the United Kingdom is centred on my constituency? Is he aware that it is hoped that the Kimberly-Clark project will eventually employ more than 2,500 people once it is fully operational and that my right hon. Friend the President of the Board of Trade performed the topping-out ceremony at that factory just a few weeks ago? Is he further aware that a new power station was opened last week, which will employ 35 people, and that, in Cleethorpes, Allied Colloids announced that it will employ 90 people? Those jobs are in addition to those that my hon. Friend has just announced. Does he agree that the industrial recovery in the United Kingdom has begun in Brigg and Cleethorpes?
    Mr. McLoughlin: My hon. Friend tempts me, but if I agreed with him wholeheartedly about Brigg and Cleethorpes I am sure that my hon. Friend the Member for Basildon (Mr. Amess) would have something to say about that. My hon. Friend the Member for Brigg and Cleethorpes (Mr. Brown) has revealed that the changes we have made since 1979 to reform industrial relations have meant that a number of companies now find the United Kingdom the most attractive country in which to invest. Those changes have, of course, been opposed by the Labour party.

    Voluntary Work
    Mr. Thomason: To ask the Secretary of State for Employment what measures she is introducing to encourage voluntary work among the long-term unemployed in the west midlands.
    Mrs. Gillian Shephard: We announced at the Budget the introduction of 60,000 voluntary work opportunities through community action.
    Mr. Thomason: Will my right hon. Friend join me in welcoming the Budget announcement of an additional 60,000 places for the long-term unemployed? Does she agree that that welcome new intitiative should be supported on both sides of the House and not grumbled about by Opposition Members, who are in the rut of opposing everything and who fail to put forward any constructive proposals?
    Mrs. Shephard: I hope that everyone will welcome the new programme. It will give unemployed people the opportunity to participate in a part-time work programme which will be supplemented each week by structured help with job search. That is a productive and useful way in which to help unemployed people and it deserves a welcome from the Opposition parties, although I doubt whether they will give it one.
    Ms Short: The Secretary of State will know that many unemployed people want to do voluntary work because there are not other opportunities for them. It is an outrage, however, that there is a mass of work that needs doing in our country when we have 4 million people unemployed. When the Conservative party came to power, there were 1·2 million unemployed people. I do not know how the right hon. Lady has the cheek to stand here today and constantly insult the Labour party as though the Conservatives' record on unemployment was good. The high levels of unemployment are causing poverty and high bills for benefits and mean that production rates are too low. The Conservative Government have failed dramatically on this issue and the right hon. Lady should not boast.
    Mrs. Shephard: I did say that the Opposition would not welcome this scheme and that turns out to be right. If the hon. Lady encouraged the Labour Front Bench to undertake credible economic policies, her remarks would carry much more credibility. I hope that she will at least accept that the Conservative party has introduced a vastly increased number of measures to help unemployed people and that those, combined with the vastly improved economic situation, mean that a great deal of help is available for unemployed people.
    Mr. Anthony Coombs: Although I welcome the Government's further measures for the long-term unemployed, does my right hon. Friend agree that the best scope for long-term jobs for unemployed people is provided by increased competitiveness in British industry? Will she pay tribute to the enormous efforts that have been made by British industry in the past 10 years, particularly in the past two years, to improve competitiveness? It has improved to such an extent that unit labour costs in this country have not gone up; that compares with the increase of 9 per cent. in Japan and 6 per cent. in Germany. Does my right hon. Friend agrees that that improvement in competitiveness will create jobs and that it is endangered by the social chapter of which the Opposition are so fond?
    Mrs. Shephard: My hon. Friend is right when he speaks of the need to keep Britain competitive and to oppose the provisions of the social chapter, which would heap ever more burdens on the heads of employers. It is important for Opposition and Conservative Members to congratulate British business on its performance—exports are up; car production is up; manufacturing productivity is up. Everything is up except the spirits of Opposition Members.
    Mr. Alex Carlile: However welcome the increase in voluntary placements, does the Secretary of State agree that we should be aiming at satisfactory paid employment for as many people as possible? Will she comment on a young couple—he has a first class honours degree in history—who have escaped long-term unemployment by obtaining menial jobs in a burger bar? When will the Government ensure that young graduates in this country are able to find the jobs for which they were trained and stop committing them to the burger economy?
    Mrs. Shephard: That was clearly a much rehearsed question. However. I can assure the hon. and learned Gentleman that, despite his exhortations, the Government will not espouse the cause of a national minimum wage.
    Mr. Spring: To ask the Secretary of State for Employment what measures she is introducing to encourage voluntary work among the long-term unemployed in East Anglia.
    Mrs. Gillian Shephard: In addition to the community action opportunities, I am making available further places on voluntary work projects in north Norfolk.
    Mr. Spring: Does my right hon. Friend agree on the importance of upgrading the quality of management in the voluntary services? Will she join me in congratulating the Suffolk training and enterprise council on undertaking a number of initiatives to promote good management in the voluntary sector? It sponsored 13 managers from the voluntary services to enrol on a course to gain a certificate in business administration. Does she agree that by raising the standards of management in the voluntary sector we can help improve services, both for the long-term unemployed and for our communities at large?
    Mrs. Shephard: I am very pleased to hear what my hon. Friend says about the work of the Suffolk TEC. No doubt both unemployed people and voluntary organisations stand to benefit from the new community action programme.

    Pit Closures
    Mr. Churchill: To ask the Secretary of State for Employment what is her estimate of job losses saved in consequence of the announcement of 25 March of the reprieve of 12 coal mines in respect of jobs (a) in the pits and (b) in related industry.
    Mr. McLoughlin: The number of jobs saved in the pits and related industries will depend on how much coal British Coal can sell and how successful it is at reducing costs and improving productivity.
    Mr. Churchill: While I welcome the reprieve of the 12 pits and the saving for the time being of 10,000 jobs, may I ask my hon. Friend to confirm that that will represent a saving of £400 million—one third of the £1·2 billion pledged in redundancy pay by my right hon. Friend the President of the Board of Trade in his statement on 13 October last year? Does my hon. Friend agree that that figure equates almost exactly to the figure of £300 million to £400 million in subsidy pledged by my right hon. Friend the President of the Board of Trade? Therefore, there will be no additional cost to the taxpayer.
    Mr. McLoughlin: My hon. Friend adequately explains the equations that result from the White Paper recently published by the Government and endorsed by the House. There are a number of related issues; we obviously need to discover the outcome, the growth in demand for coal and how that will help to protect jobs in British Coal.
    Mr. Enright: Does the Minister agree that British Coal Enterprise has so far totally failed to replace the jobs that have already been lost? Will he undertake positively to examine what British Coal Enterprise is doing, evaluate the information and see how many jobs are lost after six months and how many after one year? British Coal Enterprise creates false jobs and false hopes.
    Mr. McLoughlin: I regret the false and negative way in which the hon. Gentleman approaches the issue. All our efforts to help specific areas fail to find favour with the Opposition, which is a great shame.
    Mr. Dickens: Does my hon. Friend accept that despite the cuts in British Coal brought about by falling orders for British coal, the coal mining industry in this country remains one of the largest in the world, a fact which should not be forgotten?
    Mr. McLoughlin: I am grateful to my hon. Friend for making that point. It is equally important to remember the great way in which British Coal has improved its productivity in the last few years, which will ensure that it sells more coal.
    Mr. Ronnie Campbell: Is the Minister aware that it is a disgrace that miners' pension money should go towards policies that will result in the loss of jobs in the industry, not only in the north-east of England but throughout the country? When will he get off his backside and get something done to create work in those areas?
    Mr. McLoughlin: When it comes to getting off one's backside, I wonder what the hon. Gentleman was doing between 1964 and 1970, when 277 coal mines closed in Britain.
    Mr. John Marshall: Does my hon. Friend agree that it is important to consider employment in all the energy-intensive industries and in the oil and gas industries? Does he further agree that all such employment would have been hit had we listened to the Labour party and done nothing about the coal industry?
    Mr. McLoughlin: I am grateful to my hon. Friend for making those points, which rightly sum up some of the questions that must be addressed by the President of the Board of Trade.

    Labour Statistics
    Mr. Raynsford: To ask the Secretary of State for Employment what has been the change in the number of unemployed people in Greater London in the past three years.
    Mr. Michael Forsyth: In the Greater London area, seasonally adjusted claimant unemployment rose by 274,800 between March 1990 and March 1993.
    Mr. Raynsford: Does the Minister recognise that in the past three years, the number of unemployed people in the London borough of Greenwich has doubled? Does he further recognise that unemployment is a corrosive force, particularly among the young, and that the unemployment level today is destructive of the social fabric? When will action be taken to bring down the level of unemployment at least to that which applied three years ago, and when will it be reduced to the level that existed in 1979?
    Mr. Forsyth: The hon. Gentleman's constituency is famous for its observatory for looking into deep space. What an irony that the hon. Gentleman cannot see what is happening under his nose. Unemployment in London has fallen for the first time in three years, and he cannot even bring himself to recognise that fact.
    Mr. Harry Greenway: Is the Minister aware that people in London welcome the fall in unemployment but remember in my constituency of Ealing the way in which we lost many jobs during the four years of the loony Labour left which had control there and which, at a stroke, increased local taxation by 65 to 100 per cent? That is how jobs are lost. Labour loses jobs. The Conservative party does not.
    Mr. Forsyth: The way to create jobs in Britain is to ensure that we are competitive. That means controlling public expenditure and keeping taxation, including local taxation, down, and my hon. Friend is right to point out how Labour authorities have destroyed jobs the length and breadth of Britain.
    Mr. Dobson: The census shows that in greater London, 28 per cent. more people were out of work and looking for jobs than the figure produced by Department of Employment officials. Which figure was right?
    Mr. Forsyth: When the figures were going up, the hon. Gentleman was happy to accept them. Only when they are going down does he cast doubt on them. [HON. MEMBERS: "Answer"] I will answer. The census figure for people not working includes people who are ill and people who are not working perhaps because they are going on holiday
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    —[Interruption.] The hon. Gentleman should not try to compare apples with pears, otherwise he ends up with results that are just bananas.
    Mr. Forman: Is the Minister aware that the policies of the Government for employment creation in the Greater London area will have a positive effect and that the co-operation that his Department is encouraging between further education, the training and enterprise councils and private employers can only be for the good? Is he further aware that the hon. Member for Greenwich (Mr. Raynsford) would not recognise good news if it were staring him in the face?
    Mr. Forsyth: My hon. Friend is right. The key to future employment in a competitive world market lies in improving our skills. I am grateful to my hon. Friend for welcoming the innovative measures that the Chancellor announced in his Budget to allow unemployed people to become involved in further education. Education and training are the key and the Government have done more to increase education and training opportunities than any other in Europe.

    Employment Action
    Mr. Flynn: To ask the Secretary of State for Employment how many previously unemployed people have been employed in the employment action programme in 1991–92.
    Mr. McLoughlin: Employment action ran for only six months in 1991–92. By March 1992, 19,300 people had started on the programme in England and Wales.
    Mr. Flynn: Does the Minister appreciate that the scheme has been a failure and that many people who have taken part in it feel cheated and demeaned by the experience? Only one third of places were taken up in the first year and there was a 15 per cent. shortfall in the second year. Is the Minister aware that in my constituency last year there was a 16 per cent. increase in unemployment and there have been a further 200 jobs losses this month? Why do not the Government stop trying to stir up manic optimism and realise that in my constituency and many others all that has taken place is a phantom recovery?
    Mr. McLoughlin: What has happened in the hon. Gentleman's constituency is that in July 1986 unemployment was 5,986 and in March 1993 unemployment was 4,530. For the sake of the Opposition, that is 24 per cent. lower than it was in 1986. Yet again, the Opposition condemn any kind of moves that we make to attempt to help those people who are unemployed. It is not surprising that no one believes what the Opposition say these days.

    Workstart
    Mr. Gale: To ask the Secretary of State for Employment if she will make a statement on the workstart pilot scheme established for east Kent.
    Mr. Gillian Shephard: I have asked the employment Service for a detailed plan for the pilot scheme in east Kent by 7 May. I expect the first participants to be employed in June.
    Mr. Gale: My right hon. Friend will understand that in north-east Kent we very much appreciate her

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    Department's recognition of our real needs. We hope that this measure will be followed by other Government measures to enable us to compete on equal terms with northern France for inward investment. Does my right hon. Friend understand that my constituents and the businesses that I represent, together with those represented by my hon. Friends the Members for Thanet, South (Mr. Aitken) and for Canterbury (Mr. Brazier), are greatly looking forward to taking part in the scheme? Will she try to find time to visit it herself once it is up and running?
    Mrs. Shephard: I can assure my hon. Friend that I shall attempt to visit at an early stage all the pilot areas where workstart is to take place.

    Apprenticeships
    Mr. Roy Hughes: To ask the Secretary of State for Employment what recent discussions she has held with employers' organisations on measures to increase the number of young people undergoing apprenticeship training.
    Mr. Michael Forsyth: The Government, working with TECs and other employers' organisations, is progressively extending youth credits to all 16 and 17-year-olds not in full-time further education.
    Mr. Hughes: Does the Minister appreciate that Britain's future is tied up with education and training together with the rebuilding of our manufacturing base and, alongside that, we face ever more intense competition in international markets? Therefore, will he tell those reluctant employers who are not training sufficient numbers of their employees that they are, quite literally, failing the nation?
    Mr. Forsyth: I agree with the hon. Gentleman and I shall certainly tell employers who are already doing more to do even more for training and to encourage apprenticeships. In return, I hope that the hon. Gentleman will tell those people in the Labour party and the trade unions who opposed youth training, employment training and every other Government training initiative, to change their minds and give us some support.
    Mr. Streeter: Is my hon. Friend aware that in Devon and Cornwall the Government guaranteed training place scheme for 16 and 17-year-olds is working extremely well, with almost every youngster who has applied for such a place being accommodated well within six weeks? Does he agree that the Devon and Cornwall TEC is operating extremely successfully—[Interruption.] Does he agree that the Devon and Cornwall TEC is doing a great job and should be congratulated?
    Mr. Forsyth: I agree with my hon. Friend. It is because of the work that has been done by my right hon. Friend the Secretary of State that the youth training guarantee scheme is being delivered despite the difficulties that were caused by the recession. It would be a matter of considerable support for the TECs if the House would acknowledge their splendid work, including that which my hon. Friend has outlined today.
    Mr. Janner: Does the Minister know that in many great manufacturing cities such as Leicester, there has been no decrease in unemployment? Over the years, there has been a vast increase among young people desperate for work.
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    As apprenticeships have dropped—and we know why—surely the Government could do much more to help young people to get jobs at the end of their training.
    Mr. Forsyth: As the hon. and learned Gentleman will know from his role as Chairman of the Select Committee, the youth training scheme has been remarkably successful in getting young people into jobs or ensuring that they get qualifications—indeed, it has helped some three quarters of them. It is particularly surprising that Opposition Members do not know that. I agree with the hon. Gentleman's point about apprenticeships. Training in the workplace is second to none and we should encourage apprenticeships. What a pity it is that the trade union movement did so much to destroy so many apprenticeships in Britain.

  PRIME MINISTER

    Engagements
    Mr. Gunnell: To ask the Prime Minister if he will list his official engagements for Tuesday 27 April.
    The Prime Minister (Mr. John Major): This morning, I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today.
    Mr. Gunnell: Now that there is optimism that the bulk of the Maxwell pension funding will be recovered over the next four years, is it not time to end once and for all the uncertainties felt by many of those lobbying us today? Will the Prime Minister authorise the availability of capital now, knowing full well that as funds are recovered most of that money will come back? Eighteen months is too long, for elderly people in particular, to suffer such anxiety. Will the Prime Minister end it now?
    The Prime Minister: I think that the hon. Gentleman knows that over many months we have made a positive response to the Maxwell reservations. I believe that it was the right thing to do, not least setting up the Maxwell pensioners' trust, which has raised more than £6 million, and providing £2·5 million to ensure that pensions are paid. We continue to look sympathetically at the problem, but I have no fresh announcements to make today.
    Sir John Wheeler: In the wake of the bomb in the City of London on Saturday, will my right hon. Friend confirm that the Government will bring forward the reinsurance scheme? Will he urge the Leader of the House to make time for legislation for that scheme as soon as possible?
    The Prime Minister: The Government scheme for insurance against terrorist attacks has been providing cover since 1 January this year and the Government will fully honour their commitment under the scheme. It is, of course, a matter for individual businesses whether or not they choose to take out such cover, but everyone who has done so, or has alternative policies, will have been covered against damage caused by the Bishopsgate bomb. The Government scheme is one of reinsurance for the industry, so those who have suffered damage will need to make claims to their insurers in the usual way.
    On my right hon. Friend's last point, legislation to provide for payments to be made to the insurance companies under the scheme will be brought before the

    845
    House as soon as possible. I hope that it will be possible to attract support from all parts of the House for that measure.
    Mr. John Smith: Now that all six teacher and head teacher organisations have appealed to the Secretary of State for Education to suspend this year's testing and assessment arrangements under the national curriculum, will the Government for once listen to the considered professional judgment of the whole teaching profession and suspend this year's tests?
    The Prime Minister: I think that the right hon. and learned Gentleman knows the importance that we put behind the principle of testing. He also knows—he will have heard the remarks of Sir Ron Dearing—that we need the experience of this year's tests to ensure that we are able to remove the unnecessary bureaucracy and make sure that the tests are right for the future. The implication of the right hon. and learned Gentleman's question is that he now accepts the principle of testing. I hope that is now so.
    Mr. John Smith: Does the Prime Minister not understand that this increasingly bitter dispute is not about the principle of sensible testing but about the dogmatic insistence of an arrogant Secretary of State that his view must prevail against those of governors, teachers and parents? Why does not the Secretary of State recognise that which is recognised by everyone else—that he has lost the argument and that it is an insult to use £700,000 of taxpayers' money on futile propaganda?
    The Prime Minister: I notice again that the right hon. and learned Gentleman did not indicate that he does not accept the principle. I assume that lie does accept the principle of testing. In view of his question, he may care to comment on the remark by the National Union of Teachers president, who said:
    "We should annihilate tests in the national curriculum."
    I hope that the right hon. and learned Gentleman will now condemn that particular comment. On his further point, I must tell him that I do not think it appropriate for teachers to take industrial action at the expense of those tests.
    Mr. John Smith: If the Prime Minister is so confident of parents' support, why does he not use that £700,000 to hold a ballot, to find out what parents really think? If the Government are sincere about parental choice, why not let the parents choose?
    The Prime Minister: The right hon. and learned Gentleman knows as well as every other right hon. and hon. Member that two agendas are in play—that of the ordinary teacher who wants less bureaucracy, which we are considering and to which we shall respond, and that of the militants' opposition to any sort of testing or appraisal and to all our reforms. I note that the right hon. and learned Gentleman implies that he is favour of tests, but he does not have the courage to denounce the NUT and its comments about industrial action.
    Mr. Cash: Will my right hon. Friend reconfirm the assurance that he gave the House unambiguously on 24 September last year, that if the Danes vote no in the second referendum it would be unacceptable for us and the rest of the Community to go ahead without Denmark, and that the Maastricht treaty could not go ahead?
    The Prime Minister: Perhaps my hon. Friend has been misled by some of the reports that he may have seen this morning. The leader of the Progress party in Denmark, which my hon. Friend will know is the only Danish party opposed to the Maastricht treaty, said:
    "There was nothing new in the Foreign Secretary's remarks, and they were manipulated by the press."
    That was her comment, not mine. As to my hon. Friend's specific question, if he will study the transcript of the remarks made by my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs, a copy of which will be placed in the Library, he will find that my right hon. Friend made four straightforward points. First, we do not expect the Danes to vote no. Secondly, were they to do so the Maastricht treaty could not enter into force because it requires ratification by 12 member states. Thirdly, United Kingdom legislation to ratify the treaty could therefore not proceed. Finally, all 12 members of the European Community would need to hold urgent consultations about what to do next. Each of those points is self-evident. That was said by my right hon. Friend yesterday.
    Mr. McFall: To ask the Prime Minister if he will list his official engagements for Tuesday 27 April.
    The Prime Minister: I refer the hon. Member to the answer I gave some moments ago.
    Mr. McFall: In the right hon. Gentleman's first speech as Prime Minister, he spoke of a commonsense view of life from a tolerant perspective. Now that the Scottish Conservative party has joined the massive opposition to water privatisation in Scotland, will the Prime Minister display that tolerance by recognising the genuine and universal concern felt in Scotland, where water is regarded as being for the benefit of all—not for the profit of a few? At next month's Tory conference, will the Prime Minister state that the public interest will best be served by increased investment in the present water and sewerage system? Regardless of whatever the Tories have brought to Scotland in the last 14 years, will the right hon. Gentleman confirm that we shall not witness the return of the Victorian cry of "Gardyloos!" to the streets of Edinburgh and Glasgow?
    The Prime Minister: The future structure of water and sewerage services in Scotland is still under consideration. I am sure that the hon. Gentleman would not want me to go further while that matter remains under consideration.
    Mr. Rathbone: To ask the Prime Minister if he will list his official engagements for Tuesday 27 April.
    The Prime Minister: I refer my hon. Friend to the answer I gave some moments ago.
    Mr. Rathbone: Now that Britain is exporting television to Germany, lace to Brussels, cosmetics to the French and pizzas to Italy, as my right hon. Friend pointed out in Manchester last week, does he not think that all British companies now have the competitive edge to develop export markets everywhere?
    The Prime Minister: My hon. Friend is entirely right to praise our exporters and to point to the opportunities for further exports. We also export more per head than Japan and now have an excellent opportunity to break into new markets and win back old ones. It was for that reason that my right hon. Friend the Chancellor increased the amount

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    of Export Credits Guarantee Department cover both last autumn and in the recent Budget. Manufacturing matters; exporting matters. We seek to support them both.
    Mr. Gerrard: To ask the Prime Minister if he will list his official engagements for Tuesday 27 April.
    The Prime Minister: I refer the hon. Member to the answer I gave some moments ago.
    Mr. Gerrard: Is the Prime Minister aware that very many people in London are extremely worried about the survival of the travelcard and concessionary fares after bus deregulation and rail franchising and that their fears are echoed today in the report by the Select Committee on Transport? Will the Prime Minister tell us what he intends to do to guarantee the future of the travelcard and concessionary fares schemes?
    The Prime Minister: As the hon. Gentleman knows, we have to study the report of the Select Committee and then respond to it. That is what we will do.
    Mr. Whittingdale: Will my right hon. Friend join me in congratulating President Yeltsin on his outstanding personal victory at the weekend? Does he agree that, in supporting President Yeltsin, the Russian people have voted in favour of democracy built on market economics? Does this not represent by far the best chance for the future of Russia?
    The Prime Minister: I have no doubt that my hon. Friend is right about the last point. I have sent my warm congratulations to President Yeltsin on the outcome of the referendum. The results are remarkable. They show that the Russian people maintain their personal trust in the President and, most important, that they wish him to carry his democratic reforms further. It is a remarkable result on the back of the sacrifices that have been made towards economic transformation. I believe that the Russian people are beginning to see the benefits of individual enterprise. Success for Russia is essential for its people and equally vital for the rest of the world.
    Ms Eagle: To ask the Prime Minister if he will list his official engagements for Tuesday 27 April.
    The Prime Minister: I refer the hon. Member to the answer I gave some moments ago.
    Ms Eagle: Does the Prime Minister not find ironic that, as we celebrate the 50th anniversary of the battle of the Atlantic, we are losing the battle for our shipyards without even a fight? Given his Government's refusal to create a strategy for defence diversification, what action does the Prime Minister intend to take in response to the petition handed to him today by the save Cammel Laird community group, asking him to save the yard from closure in July?
    The Prime Minister: As the hon. Lady knows, there is a problem for shipbuilding round the world as a result of the level of capacity and the level of demand. I understand the hon. Lady's concern about Cammel Laird and I know that it is shared by the hon. Member for Birkenhead (Mr. Field) and by my hon. Friend the Member for Wirral, South (Mr. Porter). The yard's future is primarily a commercial decision for Vickers Shipbuilding and
    848
    Engineering Ltd. which is having to respond to that worldwide decline, which is not just a problem for the United Kingdom but one for the rest of Europe and for countries in other parts of the world. None the less, I will study with great care the letter from the Cammel Laird support group and reply in due course.
    Mr. Batiste: Will my right hon. Friend reassess the case for identity cards to see whether they can give significant support to the police in their fight against crime and terrorism?
    The Prime Minister: That is a matter which from time to time we will need to review. It is one which has many difficulties. We have looked at it in the past and not found it a terribly attractive proposition. I know that a constituency is demanding it. It is not something which I would wish to rule out, but it is not on our immediate agenda.

    Shetland
    Mr. Wallace: To ask the Prime Minister whether he has any plans to pay an official visit to Shetland.
    The Prime Minister: I have no plans to do so at present, but my right hon. and noble Friend the Earl of Caithness visited Shetland on 29 and 30 March.
    Mr. Wallace: I know that that reply will dismay my constituents. They will be dismayed to learn that, some 16 weeks after the Braer went aground, the Prime Minister has neither visited the area nor indicated any intention of doing so. [Interruption.]
    Madam Speaker: Order.
    Mr. Wallace: I shall resist the temptation to ask what would have happened if a ship had gone aground on the white cliffs of Dover. [Interruption.]
    Madam Speaker: Order. The House must come to order and hear the hon. Gentleman out.
    Mr. Wallace: If the Prime Minister came to see at first hand a community's remarkable, practical and vigorous response to the adversities that affected it on 5 January, he would be very impressed indeed. If, in the attempt to restore the economic fortunes of that community, it is necessary to embark on a marketing exercise to restore Shetland's good name for good-quality produce, will the Prime Minister repeat that the polluter should pay? If so, will he give the International Oil Pollution Compensation Fund a nudge in the right direction?
    The Prime Minister: I can certainly say to the hon. Gentleman that the response of the people in the area was indeed remarkable. That was noted by my right hon. Friend the Secretary of State for Scotland, and by a number of my other right hon. Friends, all of whom visited the area in the period immediately following the tragedy.
    What the hon. Gentleman neglected to mention was that an economic impact study is being mounted under the direction of Shetland Islands council, and with the participation of Shetland Enterprise and Highlands and Islands Enterprise. That will help to target resources where they are most needed, and I think that it is the right way in which to proceed for the present.

Fox Hunting (Abolition)
3.31 pm
Mr. Tony Banks: I beg to move,
That leave be given to bring in a Bill to make the hunting of foxes with dogs illegal.
Mr. Alan Duncan: On a point of order, Madam Speaker. May I seek your guidance on the tabling of the motion in the name of the hon. Member for Newham, North-West (Mr. Banks)? It refers to the hunting of foxes with dogs. Given that anyone who knows anything about fox hunting knows that it takes place with hounds, is the motion in order? [Interruption.]
Madam Speaker: Order. That is a matter for dispute for the House. I want to hear what the hon. Member for Newham, North-West (Mr. Banks) has to say.
Mr. Banks: As a matter of fact, Madam Speaker, the hon. Member for Rutland and Melton (Mr. Duncan) is absolutely correct. As it appears on the Order Paper, the wording is wrong. The hon. Gentleman will soon find out, however, that I am begging to move that leave be given to bring in a Bill to make the hunting of foxes with hounds illegal.
I last attempted to make progress with such a measure on 18 July 1990. That, in turn, was the first time that a ban on fox hunting had been tried since the second world war. Since my effort in 1990, a private Member's Bill has been presented by my hon. Friend the Member for Kingston upon Hull, North (Mr. McNamara). It sought, among other things, to give wild animals the same protection against cruelty as domestic animals. It would have banned fox hunting, and a number of other disgusting so-called sports.
My hon. Friend's Bill was narrowly defeated on Second Reading, following—[Interruption.]
Mr. George Foulkes: Order!
Mr. Banks: I am most grateful to my hon. Friend.
Madam Speaker: Order. I remind the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) that there is no vacancy in this job. He seems to have forgotten that it is just a year today since the House elected me.
Mr. Banks: My hon. Friend clearly has unrequited ambitions in that respect.
The Bill presented by my hon. Friend the Member for Kingston upon Hull, North was narrowly defeated on Second Reading, following what I must concede was a spectacular whipping exercise on the part of that cross between Sir John Falstaff and Bertie Wooster, the hon. Member for Crawley (Mr. Soames), who is sitting on the Government Front Bench.
I have detailed those various attempts to secure legislation as a clear indication that those of us on both sides of the House—[Interruption.]
Madam Speaker: Order. I am interested in hearing what the hon. Member for Newham, North-West (Mr. Banks) has to say. I hope that the House will come to order.
Mr. Banks: I am giving the background details of the attempts that have previously been made in the House to
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ban fox hunting as a way of showing that those who oppose the so-called sport will never let the matter drop until this anachronistic, barbarous sporting activity has been declared illegal.
A few weeks ago, the British Field Sports Society sent out a video to every Member of Parliament in what can only be described as a desperate attempt to vindicate its wretched activities. The video was introduced by Ludovic Kennedy, a man of great reputation who, I am afraid, sullied it by agreeing to front such an obviously fraudulent presentation. I trust that his fee matched the scale of the attempted deception. May I inform those who discarded the tape unseen, or used it to tape a showing of "Blind Date", that the film has been reported to the Metropolitan police on the grounds of possible offences under the Protection of Animals Act 1911, the Wildlife and Countryside Act 1981 and the Cinematograph Films (Animals) Act 1937.
The film shows a fox being seized by the stomach. It is then subsequently ripped to pieces, although the latter sequence has been edited out. Another shot is of a fox deliberately snared in order to demonstrate the cruelty of snaring. I certainly agree that snaring is cruel, but when the House considered a ban on snares, the Bill was blocked by Members of Parliament who support the British Field Sports Society. So to fraud they add hypocrisy.
It is difficult to understand how anyone can claim to derive pleasure from hunting another creature to death in the name of sport. I try to understand the psychology hut, for the life of me, I can find no point of contact whatsoever. For me, those who hunt foxes are no better, in the final analysis, than those perverts who bait badgers, course hares, hunt steers, stage dog fights and inflict mindless suffering on domestic pets and wildlife.
There seems to be a close correlation between those who take pleasure in hunting and hurting animals and those who inflict violence on other human beings. Those who ride to hounds would no doubt be outraged at such a linkage, but respect for life is indivisible. Anyone who derives pleasure from the pain and suffering experienced by a fox being hunted by a pack of hounds is on a continuum which, like it or not, ends up, in its most extreme form, with the hideous cruelties of a Bosnian massacre or a Nazi death camp.
There might be reasons for culling wild animals or controlling foxes, but to use such reasons to derive pleasure from killing them is pandering to a blood lust. To take any form of life dehumanises all of us. It lowers the threshold of our resistance to further and more objectionable forms of violence. In recent months, we have heard of appalling violence being inflicted by hired thugs on those seeking to protest against fox hunting, including the tragic deaths of two young men. Regrettably, fox hunting is still a legal activity, but protest against fox hunting is also legal, and the police have a duty to enable protest to take place without hunt-hired thugs assaulting protesters.
According to all public opinion polls, the great majority of people in this country—and, I dare say, all foxes—oppose fox hunting. It is not a town versus country argument, either. A clear majority of country dwellers also support abolition. Despite this weight of public opinion, the vile practice has survived and there is substantial, albeit declining, support for it in this House—and, no doubt, in the House of Peers.

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The fact is that, although fox hunters are guilty of babarous behaviour, they are neither fools nor without political influence. Indeed, champions of the so-called sport are to be found at the very highest levels of influence and status in our society. I only hope that whoever encouraged the young princes to slaughter a few harmless rabbits recently does not go on to introduce them to the organised barbarity of fox hunting.
The fox hunters know that their days are numbered, and their arguments are becoming increasingly desperate. They say that people like me loathe the type of person who hunts. I readily confess that, in the main, they are not my favourite people, but who could loathe the hon. Member for Crawley (Mr. Soames), however much one might detest the colour of his socks on Friday or discreetly laugh at his Mr. Toad wardrobe? It is not a campaign against middle-class people—[Interruption.] Obviously, no one could deny the middle-class antecedents of the hon. Member for Crawley, but one often hears the argument that there are hunts up in the north-east that are based on the old mining collieries. I do not know whether hunts continue in those areas—if they do, perhaps they would prefer to hunt the President of the Board of Trade—but I condemn those hunts as much as I condemn those in the south and elsewhere.
The use of environmental and conservation arguments by the fox hunters makes me reach for my sick bag. It is no argument for fox hunting to say that foxes sometimes kill livestock and are pests. The fox is a carnivorous predator and scavanger, but far more lambs die of hypothermia, for example, than are ever taken by foxes, and those the fox takes are usually either dead or unlikely to survive.
However, the great majority of foxes live largely on beetles, frogs, rabbits, wild birds and carrion, and they are
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the most significant destroyers of rats and mice. They do not constitute a pest, but, if they did, there are more humane and efficient methods of controlling them other than having a bunch of yahoos on horseback, a pack of hounds and assembled motley villains charging over the rural landscape.
Of the estimated 300,000 foxes killed each year, fox hunting accounts for some 7,500 dog foxes, and cub hunting, which is especially despicable, for another 8,500. The final lie given to fox hunting as a method of pest control is that, in some parts of the country, foxes have been deliberately encouraged to provide a quarry for the hunt.
The hunting mob is running out of valid arguments and time. Only the Labour party is officially committed to banning fox hunting at the next general election. However, given the number of Tories in the House and the country and the number of Liberal Democrats, I hope that, one day soon, those two parties will also embrace the same policy of banning fox hunting. I ken we shall shortly welcome the day when we hear the last "tally-ho" and when John Peel will have to find something else to do with his horn in the morning.
Question put and agreed to.
Bill ordered to be brought in by Mr. Tony Banks, Mr. Jeremy Corbyn, Ms Dawn Primarolo, Mr. Andrew Bowden, Mr. Elliot Morley, Ms Diane Abbott, Mr. Kevin McNamara, Mrs. Alice Mahon, Mr. Alan Meale, Mrs. Anne Campbell, Mr. Simon Hughes and Mrs. Maria Fyfe.

FOX HUNTING (ABOLITION)
Mr. Tony Banks accordingly presented a Bill to make the hunting of foxes with dogs illegal: And the same was read the First time; and ordered to be read a Second time upon Friday 7 May, and to be printed. [Bill 186.]
Orders of the Day

  Non-domestic Rating (No. 2) Bill
  Order for Second Reading read.
  3.42 pm
  The Minister for Local Government and Inner Cities (Mr. John Redwood): I beg to move, That the Bill be now read a Second time.
  The Bill will freeze business rates in real terms for a further year. It honours the pledge given by my right hon. Friend the Chancellor of the Exchequer in his Budget speech on 16 March to protect businesses from the most serious consequences of the 1990 revaluation. A similar measure, which we introduced last year, was welcomed by the House, and I hope that the Bill will be equally well received.
  Under the current law, business rates cannot rise each year by more than the rate of inflation if the property's valuation stays the same. The Government's success in tackling inflation means that the rises this year will be no more than 3·6 per cent. following increases of only 4·1 per cent. last year—and, of course, inflation is now lower again.
  For 30 per cent. of the businesses, however, the 1990 revaluation implied larger annual increases last year and this year. Although the increases were being phased in gradually, some businesses would still have faced real-terms increases of up to 20 per cent.
  Bearing in mind the effects of the recession, the Government decided last year not to add to the burden on businesses. The 1992 Act therefore froze all rates increases in real terms for 1992–93. Last year's measure was intended as a one-year respite. However, although the economy is now recovering, a full resumption of the transitional arrangements would be premature, so the Bill extends the freeze on transitional real increases for a further year.
  About 250,000 shops and offices, mainly in the south of England, will benefit from the measure to the tune of more than £190 million. About 85,000 factories and warehouses, mainly in the north of England, will benefit from reductions worth more than £30 million. A further 165,000 properties will gain relief worth £120 million. Businesses in Wales will save about £9 million. The total savings for business will be £350 million this year and £225 million next year.
  Mr. John Maxton: I am aware that the Bill does not cover Scotland, but can the Minister tell a good Scottish Member such as myself what the Scottish Office is doing by way of an equivalent to the Bill?
  Mr. Redwood: I am happy to oblige the hon. Gentleman. As he says, there are different arrangements in Scotland. Through regulations, a comparable reduction of 2·6 per cent. in rates bills overall—the English level—will be achieved in the 1993-94 rates poundages, at a cost of £32 million. Derating has not been adjusted in line with reduced poundages, so the ratepayers will get the full benefit. I hope that that satisfies the hon. Gentleman.
  The benefits in England come on top of the benefits of last year's freeze, which was worth £1,250 million over the years of its impact on its rates hills.
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  Many of the businesses that fared worst as a result of the recession were those facing the largest increases following the 1990 revaluation. In the six months following that revaluation, 633,000 ratepayers appealed against their valuations. I want the backlog of appeals to be cleared, as I am sure the whole House does. Of the initial 633,000 appeals, more than 525,000 have now been settled, and I am told that valuation tribunals are well on target for clearing the remainder by the end of the current year. I am sure that the House will welcome that.
  In 1995, a new revaluation, based on the property market at 1 April this year, will come into effect. Rental values in depressed sectors are likely to be significantly lower than they were at the time of the previous revaluation. If that is so, the rateable values concerned will fall. That means that, as I promised last year, some businesses still in transition may never have to face the full rates liabilities implied by their 1990 valuations. I am sure that that will be most welcome to many businesses, especially the small businesses that faced the largest increases.
  Mr. Michael Ancram: I am grateful to my hon. Friend, and I am sure that many businesses in my constituency will welcome what he has said. However, does not what he has said reveal one of the difficulties of the present non-domestic rating system, in that what a business pays effectively depends on the general economic situation, and therefore on the value of the property in which it operates, rather than on anything to do with the nature of the business itself?
  Not immediately, but at some time in the future, will my hon. Friend examine the basis of local taxation of businesses to find out whether there is a fairer way of assessing what they should pay for local services?
  Mr. Redwood: I am afraid that I cannot promise any immediate action along those lines. We are happy with the basis of property taxation for some element of businesses' tax bills. Of course, businesses also contribute to the national exchequer through VAT and through the income tax and national insurance that their employees contribute, which businesses originally pay in employee remuneration. We feel that there is a balance in the taxation affecting businesses, their employees and their turnover. That is Parliament's and the Government's chosen method of taxation to support local authority expenditure.
  However, my hon. Friend has a good point when he says that problems were caused by the 1988 valuation. The main problem arose because that valuation took place at the peak of an extremely active property market, especially in the south, and especially for shop and office properties. We trust that the valuations based on 1993 values, which do not allot such extreme relative values as between different types of properties, will remedy that.
  I hope that the results will be more acceptable across the country than the results were when they were based on the high values of certain properties in 1988. A further pause in increases this year should help to smooth any changes to bills resulting from the 1995 revaluation.
  We believe that the Bill will provide another valuable fillip for many businesses, and will give a further boost to

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  our economic recovery. My hon. Friend the Under-Secretary of State will be happy to deal with any issues that arise in the debate when he winds up. I have great pleasure in commending the Bill to the House.
  4.9 pm
  Mr. Doug Henderson: The Opposition support the general thrust of the Bill, and we shall not oppose Second Reading. However, we are concerned that businesses are becoming dependent on artificially held-back increases in rates.
  Since the revaluation in 1988, which was implemented in 1990, businesses have, in addition to the original transitional limitations in 1990–91 and 1991–92, been protected by a further limitation in 1992–93. The Bill proposes another limitation in 1993–94. Businesses potentially face a large hike in business rates when the transitional arrangements expire and the next revaluation takes place in 1995.
  The late Lord Ridley, who was Secretary of State for the Environment at the time, announced in 1989 the terms of the original transitional arrangements which were intended to be self-financing.
  Mr. Roy Thomason: Does the hon. Gentleman agree that, in referring to the 1995 revaluation as potentially increasing the liability of the business rate payer, he is assuming a continuing increase in rental values, because the rates are based on rental values? In fact, most business rents have been stagnant over the past few years; consequently, the increase in valuation which is likely to take place in 1995 should be quite limited. The hon. Gentleman's point therefore has a limited validity.
  Mr. Henderson: I do not accept that. If I replied at this stage, I should have to do so at some length. I shall give the hon. Member a flavour of what I propose to say later. Whether businesses face a hike after the implementation of the 1993 revaluation in 1995 depends very much on what happens elsewhere.
  It depends on whether the real level of local authority expenditure is maintained. It depends on whether the rate poundage, as originally outlined in the Local Government Finance Act 1988, is maintained in relation to inflation. It also depends on what happens to businesses that have already had their rates bills artificially held back—I support this—because of the recession over the past two or three years.
  The answer to the hon. Gentleman's question is that it very much depends on what the Government do between now and 1995, and on whether the revaluations in 1995 are based on what people actually pay in rates or on what they would have paid if there had been no transitional arrangements. I shall develop that point at a little more length later. If more hon. Members had wished to catch your eye, Madam Speaker, I might have restrained myself a little on the matter. In the circumstances, it may help the hon. Gentleman and his colleagues to be a wee bit more appreciative of some of the difficulties that they may face in the near future.
  I return to what the late Lord Ridley said. He believed that the original transitional scheme would be an incentive to many businesses to flourish in the late 1980s. I realise that he had no more access to the future than any of the rest of us had. He said:
  "The Local Government Finance Act provides for a uniform business rate in England and in Wales and for a
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  revaluation of non-domestic property … This will provide a welcome incentive for businesses to expand in the currently less economically buoyant areas."—[Official Report, 15 February 1989; Vol. 147, c. 315.]
  It is clear that he did not anticipate the economic events of the post-1989 period. Indeed, he predicted the opposite of what has transpired: he argued that northern business would be helped by rate reductions that could stimulate the more depressed parts of the country. The late Lord Ridley did not foresee the depth and length of the recession that would sweep through the country at the time that the business rate was introduced.
  The year 1990 was a bad one for the economy, with 28,935 businesses collapsing. In 1991, the position was even worse, with 47,777 business failures during the year —an increase of 65 per cent. on the previous year. The pace of collapse quickened in the last quarter of 1991: from 900 collapses a week to 995, or 199 business collapses each working day.
  All parts of the country suffered. The south-east recorded 9,722 business failures that year—an increase of 68 per cent. The east midlands recorded 2,189 failures—an increase of 79 per cent.—and the south-west had 5,415 failures—an increase of 76 per cent.
  The position grew even worse in 1992 as the recession deepened, with business failures reaching an all-time high. A total of 62,767 businesses failed—a 31 per cent. increase on the previous year. London and the south-east were the areas worst hit by the hurricane of collapsing business. The south-east recorded 14,000 business failures during 1992— a 46 per cent. increase. In 1992, 9,132 bankruptcies took place and liquidations increased by 20 per cent. to 5,000 plus.
  The eastern region also recorded a dramatic increase in business failures—a 22 per cent. increase on the previous year. In London, there were 9,121 business failures in 1992–15 per cent. of the total for the country.
  Despite all the self-congratulation from the Government Front Bench, 1993 has continued to be a disastrous year for business. In the first quarter, 15,444 businesses collapsed—a rate of almost 1,300 a week. A total of 5,297 limited company liquidations were recorded, and there were 10,000 individual insolvencies, compared to 9,200 in the same quarter last year.
  Dun and Bradstreet pointed out that the latest overall figures represented a 4 per cent. increase in business failures on the same period last year. London and the south-east are still suffering the worst. But beyond this region, the record of failures has also worsened, despite the soothing words of Ministers on this matter. For example, in the west midlands, there was an increase of 5·5 per cent. in the number of business failures compared to last year. In the south-west, there was an increase of 9 per cent. compared with the same period last year. In my own region, the north-east, 1,176 business failures were recorded—an increase of 3 per cent.—but bankruptcies increased by 8 per cent.
  Not only did the late Lord Ridley get wrong the level of aggregate demand in the economy: he and the Government completely failed to predict that the 1990–93 recession would hit the southern parts of the country worse than the north. Yet many areas in the south face the largest increases in business rate bills arising from the introduction of the national business rate in 1990.
  The original transitional release scheme was therefore wholly inappropriate in the economic circumstances of the

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  country. The limitations and reductions of rate bills in the north acted against northern-based companies holding on in the recession because they needed the full stimulus of any reductions. Even with the original limitations contained in the original transitional arrangement scheme, the increases in the south served to put great pressure on many companies which faced extremely serious problems and could ill afford even the limited increase.
  I want to be fair to the Minister by saying that, during the Second Reading of the Bill on non-domestic rates which was before the House last year, he recognised that the Government had allowed the country to sink into a deep recession and that, as a consequence, the original transitional scheme was wholly inappropriate and therefore had to be modified. He told the House on 19 May:
  "I know that the recession has created difficulties for many businesses and some of those that would have faced the largest increases this year have been particularly hard hit in the recession. The Government have therefore decided that their costs this year should not be worsened by any real increases in the business rates."—[Official Report, 19 May 1992; Vol. 208, c. 204]
  The Minister's proposals to limit increases in rates to inflation will be welcomed by businesses throughout the country. Businesses look to that assistance to help them recover from the battering that they received from the recession. They also recognise that the net cost to the taxpayer will not be as has been suggested in the accompanying papers, for every business that is saved by the measure will continue to contribute rates and other taxes on which the Exchequer depends. The multiplier effect in local economies will help other companies.
  The Minister's proposals might excite the ashes of John Maynard Keynes. However, to save the hon. Gentleman's blushes among his erstwhile friends and colleagues, I shall not press the point too far. I would hate to be responsible for any provocation that might compel the hon. Gentleman to renege on his conversion or to make his task of getting the Bill through another place more difficult, even if it receives the support of the House of Commons.
  As the Minister knows all too well, some noble Lords and at least one right hon. and noble Lady in the other House currently delight in opposition to Maastricht but might re-focus to delight in opposition to the Non-Domestic Rating (No. 2) Bill. I am sure that the business community, the Government and the Opposition would not want to incite such opposition to the Bill.
  Another worrying impact of the recession is the general and projected decline in business rate revenue. That partly addresses the point raised by the hon. Member for Bromsgrove (Mr. Thomason). The aggregate business rate revenue fell from £12·4 billion in 1991–92 to £12·3 billion in 1992–93. In 1993–94, according to the Government's figures, it will fall to 11·6 billion. Does the Minister agree that that has serious consequences for Government revenues in general?
  Does the Minister acknowledge that, if local authority resources are to be maintained, one of several things must happen? The shortfall must be made up by central Government grant, by raising more revenue from council tax or by increasing the poundage beyond the rate of inflation to compensate for the impact of the narrower
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  business tax base—that avenue might create additional problems—or the books will have to be squared by forcing a cut in local authority resources.
  Does the Minister agree that there are, indeed, severe potential major problems ahead? Does he agree that, if there is to be stability in the business community, it is important that the Government state their future policy well in advance, so that business can plan accordingly?
  In his statement on local authority finance to the House in November last year, the Secretary of State said that there would be no cuts in services if councils were run efficiently. The Minister and I discussed the matter at some length only a week last Friday in a debate in the House. There were arguments about whether services were cut by councils which were efficient or only by councils which were inefficient.
  Setting aside that argument, I said in that debate, and I repeat today, that cuts were made by councils in many parts of the country, and severe cuts were made by some Conservative authorities. Even if the Minister has been unable to meet his stated policy this year, can he give us some assurances for the future?
  Mr. Redwood: Clause 2 makes similar arrangements to those last year, to ensure that the rates pool does not suffer from the decision to forgo the extra increases on properties suffering from the revaluations. So we have made our position clear. The rates pool will be compensated through that mechanism. But is the hon. Gentleman saying that it is Labour party policy not only to support that compensation but to urge higher real rates increases for businesses in order to allow higher local authority expenditure? That would be interesting, and the House should know.
  Mr. Henderson: It is always interesting to be questioned about Labour party policy. I do not intend to detain the House all afternoon, but I shall mention Labour party policy later, and I shall consider the local determination of rates—a method which, as I shall demonstrate, is supported by some Conservative Members.
  The basic issue is what the Government's policy will be if cuts are made. Can the Minister assure the House that the Government will maintain the real level of local authority expenditure as a proportion of our gross domestic product? If so, will he assure the House that, if business rate revenue continues to fall, as the Government's own figures predict, the Government will increase their subventions to local authorities in one way or another to compensate for that shortfall?
  If the Minister cannot give that assurance, is he prepared to commit himself to making that argument to the Chancellor, with a view to a relevant announcement in the joint Budget and expenditure statement in the autumn? Will he stress to the Chancellor the need to maintain the real level of local authority resources?
  If there is a shortfall as a result of the existing way in which revenue is gained and as a result of a fall in business rate revenue because of the recession, will the Minister make proposals to allow the Government to compensate for any subsequent losses?
  On the question of the transitional arrangements covering business rate increases, will the Minister give a commitment that there will be no sudden elimination of

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  the limitation on increases? Does he accept that, if that were to happen, many companies, especially in the south, would face a sharp hike in their rates?
  If the Minister accepts the case for a stable and predictable business rate, which is especially important to the small business community, is he prepared to say how the 1995 revaluation in the business rate will be approached? The small business community considers such stability to be crucial to its economy, and I hope that the Minister will accept the strength of its argument, which is frequently presented to politicians and others, and rightly so.
  I hope that the Minister will recognise—if he does not, his officials certainly will—that, even if the transitional arrangements had been allowed to work through, about 160,000 businesses would still have had the increase in their rates deferred until the end of 1994–95. The Association of Metropolitan Authorities estimates that, following the two-year freeze in real increases, which the Labour party supports, about 350,000 businesses will not even pay full rates under the 1990 revaluation when the new 1995 revaluation comes into force. The London Chamber of Commerce and Industry has stressed that point, and noted:
  "The Uniform Business Rate still presents enormous problems for London businesses, particularly when the new valuations are brought in."
  Can the Minister tell us whether there will be transitional arrangements after 1995? Are the Government prepared to contribute additional funds to the national business rate pool to assist businesses that face sharp increases? If transitional arrangements are intended after 1995—this relates to what I said in answer to the hon. Member for Bromsgrove—will they be based on the actual rate payments made under the various schemes in 1994–95 or will they be made on the basis of what the bills would have been had the full effects of the 1990 revaluation worked through the system?
  That also relates to the point that the Minister tempted me to discuss when he intervened, and what was said by his hon. Friend the Member for Devizes (Mr. Ancram), who is sitting to the rear and left of the Minister—perhaps that hon. Gentleman is to the left of the Minister in all senses: he certainly used to be when he was on the other side of the border.
  Is the Minister prepared to review the system? Is he prepared to consider giving local councils full responsibility for setting the business rate? Over the past two or three years, it has sometimes been suggested that anyone making such a proposition must be off his head and would not receive the support of the business community. But that is not really what the business community believes. It recognises that there is considerable advantage in. the business rate being determined by local councils.
  I do not want to detain the House for too long, but I have quotes from two representative business organisations. I do not necessarily concur with their views on other matters, but I think that they speak much sense on this issue. In its recent submission on local government affairs, the Institute of Directors said:
  "We consider that on balance there is more to be gained than lost by reverting to non-domestic rates being determined by the individual local authorities".
  In its submission on local authority policy, the London Chamber of Commerce and Industry states:
  "The Chamber would like to see a return to local revenue raising and accountability for at least 50 per cent. of all local
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  government expenditure. This could be done if both the council tax and business rate were controlled locally. The voice of business could then be heard, and in a real sense accountability could be reintroduced … Changes along those lines would ensure that locally raised rates were spent in the areas of need, and reflect the local economy … the Chamber strongly recommends that the Government includes a fundamental reassessment of the present arrangements as part of its overall view of local government finance."
  It is not only Opposition Members who subscribe to the cause of determining rates at local level. Conservative Members who are closely associated with such organisations make the same submissions, and many in the business community have made it clear that they do not want to be determined by central Government, but want to allow reasonable local discretion.
  Does the Minister agree that it is advantageous to allow local councils to make decisions, as they know more about their business community, and they know how much the business community can afford to pay in rates? It would be extremely stupid of them not to take that into account when setting the rates. It would be counter-productive in economic terms, as, if they made the rates too high, companies would run into difficulties, which would produce a lower net revenue. That would be a pointless exercise, and local government would be stupid to make such a mistake—indeed, it is not doing so.
  Not long ago, the Minister was praising the way in which local government approached many issues. He has done so at political conferences, in press releases and elsewhere. Some of us have sometimes been tempted to question the authenticity of his apparent conversion to local government. Setting that aside, the Minister—and, indeed, the Prime Minister—have made the case for local government.
  The Opposition support the measure, but would it not be wise to consider the longer term to discover whether there are better and more flexible ways of determining business rates, so that local communities and local business needs can be taken into account? The London Chamber of Commerce and Industry also referred to democracy. If local democracy is to mean anything, local people must have the ability and right to determine the level of services they want, and how much the business community should contribute to them.
  It is clear that the Government are intent on pressing on with seemingly endless changes in the rules governing local authorities. It is no surprise to me that the business community is still subject to the unstable business rate levels caused by the Local Government Finance Act 1988. It is also clear that the House will face further requests to support further legislation to change the rules relating to the business rate.
  I am clear that a return to the local determination of business rate is a more democratic policy and will, in the long term, reduce the involvement of the House in such matters. But until then, business will need assistance in shielding itself from severe hikes in business rates. If the Bill gives a measure of support, it has our general approval.
  4.15 pm
  Mr. Roy Thomason: I had not intended to participate in the debate until I heard the hon. Member for Newcastle upon Tyne, North (Mr. Henderson) say that Opposition Members intended to support the Bill. I was immediately filled with suspicion, bearing in mind their

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  long history of changing policies, but always opposing the present rating system for businesses. I was minded to intervene on hearing that change of tack emerging from the Opposition.
  The hon. Member for Newcastle upon Tyne, North referred to the former Secretary of State for the Environment, Nicholas Ridley, and compared the differences between the rates charged in different parts of the country and the adjustments that would take place between north and south. Perhaps the hon. Gentleman forgot the horror that many business people felt when they saw their rates bills before the new legislation was introduced.
  Perhaps the hon. Gentleman forgot, for example, that in Conservative-controlled Kensington and Chelsea, the rates for a business similar to one in Labour-controlled Sheffield would have been 117p instead of 347p in the pound. There was by no means a level playing field. A considerable additional burden was placed on businesses in a Labour-controlled authority such as Sheffield compared with businesses in Kensington and Chelsea and that situation could be replicated throughout the country. There was a wide variety of business rates.
  The reason for that was the old valuation. The difference of two, three or even four times the amount of rates in the pound charged was related not to the ability of a business to make payments in relation to its turnover or profit. It followed that there was gross unfairness between businesses in different parts of the country as to what they were paying in local authority business rates and the amount that they were reasonably able to pay as a proportion of their gross profit. The issue had to be resolved.
  Labour Members have said in the past that they wished to introduce a form of property tax and that they did not want the sort of measure that is now before the House. They said that their new property tax would be based on capital values and would be handed over for local government to determine levels of payment. For many years, as a former chairman of the Association of District Councils, I defended the role of local government and viewed with concern the removal of its right to determine business rates. But I concede that the change, made necessary by the wide discrepancies to which I referred, has been a success.
  Under the old system, in many Labour-controlled authorities the majority of ratepayers were in receipt of benefits, which meant that they were cushioned from the charge, so the business proportion of the community bore a much heavier part of the rate charge. Would the Labour party advocate a return to that system?
  The Liberals suggest that we could overcome the problem not by adopting the type of measure that is before the House, but by introducing site value taxation. How would that work? That question cannot adequately be answered because site value taxation is a totally unworkable proposition. For example, take a corner sweet shop and a large tower block adjacent to it, value the site of those two units, which per square foot might be identical, and charge a rate based on that site value. The little corner shop might be occupying an old building of limited capital value in total, whereas the office block
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  might be a substantial and expensive block. But under the Liberal scheme they would both pay an identical amount of business rates on a square foot basis.
  That is nonsense. It bears no relationship to ability to pay or to the use of the land and it often bears no relationship to the potential use of the land. The corner sweet shop may be occupied by a lessee who cannot redevelop the land and thereby release the capital values to justify the payment of a higher business rate.
  It follows that there is no easy solution to the problem of business rates. There is no quick answer to the problem of how businesses should contribute, justly and equitably, to the costs of the local community. We need to find a fair and reasonable solution. The one before us is the best to date.
  I am concerned that the Labour party's proposals will go back to the bad old days of greatly varying charges according to the accident of a local authority's political control. The hon. Member for Newcastle upon Tyne, North quoted with approbation various business organisations which had said that they wanted to participate in local government and saw the payment of locally based taxes as the answer. I question that because there is no connection between the charge and elections. There is no proper accountability if it is not electorally based.
  A business man or woman may have business premises in one local authority, but be a council tax payer in a different authority, so the local authority in which his business is based will not be democratically accountable to him or her. The proposal to charge a business rate on their premises gives them no say or opportunity to participate in the decision making of the council of the authority in which their business premises are situated. That is a grave weakness of the Labour party's present position.
  I welcome any proposition that will allow businesses to participate in local government. That must be a way ahead. But I am worried that democratic accountability may no longer be maintained through the ballot box. If the hon. Member for Newcastle upon Tyne, North was proposing that business people had some business vote and that councillors received their franchise by virtue of the business rate, that might be an argument to be listened to, if not in the end supported. But he has not pursued that to its proper conclusion.
  I am therefore left with concern that some authorities that have clearly shown themselves to be anti-business would use any new proposal to weaken the economic strength of businesses within their community.
  It is true that some in the Labour party have belatedly appreciated the importance of a thriving business community. Sadly, that is not always reflected on Labour benches in council chambers throughout the country. A movement away from the present system must therefore be undertaken with great care.
  I started by describing the important link between the rate paid by businesses in different parts of the country. I mentioned in an earlier intervention that the 1995 revaluation was not a factor that should be taken into account in assessing to any great degree the levels of business rates. We had to assume that there would be no substantial difference between the 1990 and 1995 values put on properties owing to stagnant rent levels.
  There is of course the question of how much the Government should properly contribute to local government expenses by virtue of the lower yield that that will

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  produce from business premises. It would be of assistance to those in local government if, in replying to the debate, or, more appropriately, on some future occasion after consultation, my hon. Friend the Minister could let us know the Government's long-term views on creating a balance between the yield from the council tax, grant and the business rate in supporting local government services.
  There is no doubt that the yield from the council tax is excessively small as a proportion of local government income. Therefore, the gearing can create distortions and the element of democratic accountability to which I referred earlier may be weakened when such a large part of the total local government income is generated by resources outside those determined by people elected to their council. However, those are wide issues and perhaps it would not be appropriate for me to spend long on them this afternoon, although there may be some who would prefer it if I did.
  In joining colleagues in all parts of the House in supporting this measure, I hope that in future the Opposition will take a more realistic and fair approach to businesses and their relationship with local government. We commend the Government for once again protecting the interests of businesses this year at a time of critical importance to them. I trust that the measure will receive universal support.
  4.26 pm
  Mr. Paul Tyler: I, too, am glad to welcome the measure, but I am particularly glad to welcome the terms in which the Minister introduced it. Unlike some of the cuckoos of spring from whom we have heard so much in the past 24 hours, who have been bawling the fact the whole economy is now on the road to recovery, the Minister was frank enough to say that a full resumption of UBR increases would be premature. He made it quite clear that, as far as the universal business rate and its impact on businesses were concerned, recovery has not taken place, is not taking place and is not likely to take place in the near future. I welcome the more realistic, if slightly more pessimistic, way in which the Minister introduced the measure.
  This is our annual occasion to take stock of where the uniform business rate has led us and I shall touch on three aspects, the first of which is accountability. That was mentioned by the hon. Member for Bromsgrove (Mr. Thomason), who was a notable leader of the Association of District Councils.
  I recall a criticism of that body, the Association of County Councils and the Association of Metropolitan Authorities at the time of the introduction of the non-domestic rate, the uniform business rate and the poll tax in 1990 in the interests of accountability. It was claimed that the link to the electorate was destroyed because so much of the decision-making was centralised in London and so little was left to the council chambers of which the hon. Gentleman was such a spendid ornament. That argument must bring us to the test of how the average elector, an individual or from a business, actually influences the UBR for his or her area.
  Next week there is to be an election in all the shire counties of England and Wales. Can the elector, by putting his cross against a particular candidate, influence the level of UBR?
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  Of course not. He cannot make any difference to the way in which that particular council approaches the problem of raising revenue from the business community. The only thing that he can do next week—the Government may regret this—is to demonstrate his contempt for that inelastic system by voting against the governing party. If the elector considers that the system is unfair or is being misused, that is the only way in which the elector can fight back.
  The system was introduced because of the ludicrous antics of a small minority of loony left Labour councils. The idea was that businesses needed to be protected against a minority elected under the first-past-the-post system, which then abused their majority position.
  The accident of political control mentioned by the hon. Member for Bromsgrove (Mr. Thomason) is entirely the product of low turnout and an inefficient, non-proportional election system, but to use the UBR and centralised control as a way of getting back at the vast majority of conscientious local authorities which are run by Conservatives, Liberal Democrats, or the saner parts of the Labour party—or a combination of them—seems an extraordinary way of using a sledgehammer to crack a particularly cracked nut.
  Mr. Redwood: Does the hon. Gentleman agree that a vote for his party is a vote for site value rating, which means slaughtering our high street greengrocers, bakers and butchers by forcing them out of business by inappropriately high levels of tax, because their sites would be more valuable for other uses? What does the hon. Gentleman have to say about that? Does he agree that our proposals are much better for the business community, which is why people will vote Conservative?
  Mr. Tyler: That is patent nonsense, as the Minister knows full well. I wish that it were possible next week to change the Government of the day, but we shall not be able to do that. I do not know whether there is an election in the Minister's area next week.
  Mr. Redwood indicated assent.
  Mr. Tyler: There will be in my own. As an elector, I shall have a clear choice between electing representatives of the three main parties. One party's candidate supports the status quo, as represented by the measure before us, but we have no way of amending, altering ameliorating or changing the application of that policy in our area. My party is prepared to fight for more local accountability —not just for businesses but for the whole community. I will not be drawn into the argument about site value taxation. The hon. Member for Bromsgrove—who has left the Chamber—knows full well that he was talking nonsense when he said it was impossible and impracticable. He denied not just the evidence of professional local authority valuers who have made sure that it would be possible to introduce the scheme, but the experience of many countries, including New Zealand and parts of the United States, which operate it most effectively. It is nonsense to suggest that the system would have the effect he claimed.
  Mr. Redwood: If the Liberal Democratic party is interested only in local issues, why does its manifesto for the county elections devote a great deal of time and energy to making the case for proportional representation and local income tax—which are clearly national issues that

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  the hon. Gentleman's party is trying to influence? Why will not he come clean about the Liberal Democrats' proposals for small businesses which would be deeply damaging to many small firms that provide excellent services in the high streets of this country?
  Mr. Tyler: If I launched forth on a restatement of our manifesto, I would be called to order. We have made it clear on successive occasions in House and outside that the main basis for local authority funding at local level should be based on a local income tax.
  We do not believe that the current system—be it the council tax, or the wholly discredited poll tax that the Minister and his colleagues foisted on the country on a minority vote—is appropriate. Our system would be much more appropriate. In addition, land value taxation is a much more effective system for identifying the benefit given to the individual, commercial ratepayer by the council services and planning consents given. If there is no outstanding planning consent giving an enhanced value to a particular property, it does not release that value and engage the land value taxation at a higher level. It is nonsense to suggest that the system would squeeze out small shopkeepers.
  I also wish to refer to the anomalies in the present system. I am especially concerned with the holiday industry, having some responsibilities for the matter in the House and in my constituency. It is extraordinary that, since the introduction of the uniform business rate, the inflexibility of the system has meant that hotels and guest houses which have been pushed by the recession into reducing their months of opening find that there is no change in their rate burden. If an hotel in Newquay was operating on a 12-month basis in 1988, employing people and letting its rooms all the year round, but has now, as a result of the recession, had to cut back and close for perhaps eight months of the year, such is the absurdity and inflexibility of the UBR system that the hotelier still pays the rate for the full 12 months' opening.
  The argument, in case the Minister thinks that I have not heard it, goes thus. Because the hotelier is in theory sitting beside his telephone in January waiting for a booking to be made for July, August or September, it is suggested that the whole hotel is therefore in business and must still be rated at the full valuation set in 1988 and introduced in 1990. It will be obvious that in such circumstances the relationship to his ability to pay—his profitability, turnover or whatever may be the test—is absolutely nil. There is no connection whatever.
  The hotelier's attempts to appeal against the system, based on experience in our area, seem doomed to failure. The only way in which some change may be made is if there is a material change of business. I know of a case in my constituency of someone who has had a tea room in the front room and, in days gone by, was able to operate it every week of the year has now decided that, because of the recession and the consequent reduction in the disposable income of visitors, the room will be used for domestic purposes during the winter months. There is then a possibility of some form of appeal. Otherwise, the inflexibility of the system is extraordinary.
  Another anomaly has been brought to our attention by the Confederation of British Industry, usually very
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  supportive of Government policy. It points out in its current brief that the setting of half rates on empty shops and offices in England and Wales is absurd. It says:
  "The rationale behind this practice is flawed, going against the principle that rates are a tax on beneficial occupation. Moreover, in current market conditions its application is penal. Many businesses, in all sectors, are facing empty rates bills amounting to about £450 million in addition to other onerous costs of holding properties which they are trying to rent or sell, hitherto with little success."
  Another cause for serious concern across all parties, as far as I know, is the arrangements for hardship relief. Last week the Federation of Small Businesses, whose policy chairman hails from Torquay in the south-west of England, pointed out that huge numbers of smaller businesses have been badly affected by the uniform business rates that they have been called upon to pay and that the response of local authorities has been exceedingly patchy, to say the least, because the system is not fully funded by the Exchequer, is not fully understood and, as a result, is not fully operational.
  The Minister will agree, I think, that section 49, on hardship relief, is not being adequately used by local authorities largely because, in very constrained times, when all their resources are restricted, even the limited contribution that they must make—which they must get from their council tax payers or by some other means—is considerable. As hon. Members know,
  "remission … on grounds of hardship should be the exception rather than the rule".
  I quote from the Department's "Non-domestic Rates Discretionary Rate Relief- practice note on the subject. As hon. Members also know, not only must the individual ratepayer prove that he is suffering hardship; but if the uniform business rate were imposed in all its rigour, the wider community—council tax payers in the area—would also suffer hardship. The example often quoted is that of a post office which, if the uniform business rate were imposed to the full extent, would disappear—and perhaps the only shop would go with it—and the whole community around it would suffer. That is a valid case, and I will come back to it in a moment.
  At present, the hardship restrictions are being so narrowly drawn that many local councils are not using them at all. I note that authorities of all political colours include both the best, at the top of the league, and the worst, at the bottom. This is not a party political point and I hope that the Minister will look sympathetically at how the hardship relief can be more effectively defined so that all parties in local government can use it to better effect.
  The Minister referred to appeals. That is my next "A". The Department was able to give my right hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith) some figures. It is a staggering fact that there are nearly half a million outstanding uniform business rate appeals. I was pleased to hear the Minister say in his introduction that he is determined to remove the backlog by the end of this financial year. I am sure that many hon. Members will want to hold him to that.
  The appeals system is extraordinarily cumbersome and very narrowly defined. I do not know if I am alone in the House—I suspect that I am this evening—but, just before the general election, I fought an appeal, not on behalf of a constituent but on behalf of a postmistress who ran a tiny post office at Trekenner, which is in Lezant, just outside my constituency. The experience of that appeal is

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  one that I will never forget. I have never been subjected to such an extraordinary surrealist exchange of non-information.
  Let me illustrate it for the benefit of the House. The valuation officer produced a splendid tabulation of a number of comparative premises—post offices and shops from different parts of Cornwall—and it was on the basis of those calculations that he was proposing the entry in the rating list of some £300 for one room. The room had previously been the dining room of the postmistress and her husband. They had decided, in the interests of security, that it was no longer sufficient to use the dining room table and that, for obvious reasons, they should have some form of protection. They therefore decided to erect a screen and a counter, although the room still had in it the deep freeze, their records of dog and sheep breeding, and parish council minutes and other information. It was still, to all intents and purposes, part of the domestic premises.
  Because there was a screen that could not be taken down at night, and therefore they could no longer have a dinner party there even if they wanted to, it was suggested by the valuation officers that that one room was effectively a business premise.
  Our first argument that a post office which opened only for limited hours was hardly a business, but rather a social service, was kicked out by the tribunal—not because it was unsympathetic, but because of the inflexibility of the system. Our second argument was that, despite the position of the counter, the premises were still largely for domestic use and could be used for domestic purposes when the post office was not open. That, too, was thrown out.
  I am shortening the long proceedings in the interests of brevity—I know that many Conservative Members wish to speak. The final session of the tribunal hearing was devoted to the actual figure to be applied to the premises and a schedule of different figures for similar premises was produced in evidence. I noticed in one column of the criteria to be used the magic initials "SPOT". I am not a professional valuer or an advocate—I am a mere politician —and I wondered whether I should draw attention to this form of description. I imagined that it meant "scientific and professional objective test", or some such.
  I screwed up my courage and said to the chairman of the tribunal, "I do not understand what SPOT means. No doubt you and the other members of the tribunal fully understand." The chairman took counsel from his clerk, as was appropriate, and from other members, and they said, "Mr. Tyler, we have to confess that we do not know either." After a great deal of humming and ha-ing, the valuation officer admitted that SPOT meant that he had made it up on the spot. Nevertheless, I obtained a reduction.
  The basis of the valuation and the inadequacy of the appeal system causing tremendous anxiety, confusion and anger in the business community. The fact that it is still taking so long to get a hearing and an answer—despite the Minister's assurances—makes the position worse.
  To show that I am by no means parochial, I shall refer to an example from another part of the country, arid go from north Cornwall to Newbury. It is a random example, but it may be of interest to members of other parties.
  Newbury was an area of considerable economic success, but small businesses in Berkshire are suffering, as in many other parts of the country, from the delayed reaction to the effects of the recession. As a result,
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  registered unemployment has risen from 861 in February 1990 to 4,033 in February 1993. It is clear from the continuing business failures in the area that a large number of newly unemployed come from the small business sector. We cannot be sure of the exact numbers of small businessess that are now failing in the Newbury constituency, but the local chamber of commerce reports no let-up whatsoever in the recession in the past few weeks. Its monitoring suggests that 16 local firms went under in February this year, compared with an average of 10.5 in 1992.
  Councils throughout the country have been trying to mitigate the worst effects of the uniform business rate and I am delighted to note that Newbury district council—which, like my own in north Cornwall, has a strong Liberal Democrat presence—has used the hardship relief to the full. But how much more could be done if it were more effective than it is at present?
  We all look forward to the revaluation and the effect that it will have on the 1995 figures, but unless the three As— accountability, anomalies and the appeals system—are addressed, we may end up with just a revamp of the present system. Meanwhile, the lack of local flexibility, the lack of willingness to tackle the sort of anomalies I have described and the continued lack of realistic assessments in the valuation and appeals procedure are doing great damage to small businesses throughout the country.
  4.48 pm
  Mr. James Hill: I have taken on board much of what hon. Members on both sides of the House have said about how the business man should be represented in local authorities. In the mid-1960s, there was a local government vote for business men. It seemed to work very well and I have no criticism of it. I fought a ward in which local business men voted. I was not elected. Nevertheless, they exercised their democratic right to pay rates and at the same time influence the local authority. That influenced the local authority in many ways, although it did not disregard local business men completely.
  It is a totally different story now. My Labour-controlled local authority definitely disregards local business men. It has many schemes afoot. Behind closed doors, it formulates economic and planning policies without consulting the local business hierarchy. For years, the Southampton chamber of commerce has said that it would like more representation in the civic centre, but it just does not get it. However, there will come a day when business men rise up and say, "If we are expected to pay a considerable uniform business rate, we must have a voice in what is being planned by the local authority."
  As we know, the introduction of the uniform business rate came as an extreme shock to the business community. It came in at a very high level. Business men were shaken to the core. It was introduced halfway through the recession, so it was impossible for them to find the additional money. I am pleased that the Chancellor of the Exchequer has listened to the pleas of various chambers of commerce, the Confederation of British Industry and other bodies such as the Institute of Directors, with the result that, for the second year running, the uniform business rate has not been increased.
  That is very satisfactory for business men who run small businesses. I am not so concerned about the

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  multinationals that can open or close factories at the stroke of a pen on paper, but I am very concerned about the man who runs the local greengrocery or newspaper business. To him, the uniform business rate is another heavy burden of taxation.
  The Chancellor in his wisdom has relieved the burden on such businesses in England by £329 million. Taken together with the help in last year's Budget, nearly £1·8 billion has been provided to help to reduce the bills of business ratepayers. Much of the help, I am pleased to say, is going to businesses in the south of England, which has been hit particularly hard by the recession, for unemployment in the south is well over 10 per cent.
  Under the Bill and the transitional arrangements, the bills of 530,000 properties will rise by no more than 3·5 per cent. in 1993–94. When the Government decided to grasp the nettle, they found that the bone of contention was that the old rating system was unreliable. Councils used the business rate to subsidise increased spending, at no political cost to themselves, and obscured from voters the true cost of local authority expenditure.
  Business rates were also unfair. Neighbouring properties with equivalent rating valuations but in different authorities, found that their business rate bills were not the same. That led to the complete distortion of trading competition. Business rates increased dramatically year by year, often at short notice. Notice amounted to only a few weeks and the business rate bore no relationship to the services provided.
  I hate to say this, but Labour councils that set high business rates drove businesses and jobs from areas that could not afford to lose them. I have figures for Labour-controlled councils, but we do not want to get involved in that debate, because in this one we ought to congratulate the Government on ensuring that the uniform business rate is to be held at a level that businesses can afford.
  Businesses in England will, overall, pay £800 million less in 1993–94 than they would have paid if business rates had risen in line with council spending, as they did before the introduction of the uniform business rate. I hope that I have got that point over to the media. In 1990–91, savings amounting to £1 billion were made; in 1991–92 they amounted to £850 million. If business rates had risen in line with council spending—I must admit that my council is probably one of the worst councils to which to refer business bills since 1990 would have amounted to more than £2·5 billion extra. Business rates nationally rose by some 37·4 per cent., in real terms.
  Market rents and rateable values are inextricably linked. No one can get away with saying, "I can pay a high uniform business rate and a low rent." It is amusing to note that the Southampton, Test Conservative association headquarters paid far less in rent than it did in uniform business rate. That was the position at the beginning, but the two are now beginning to square up.
  As we have heard several times during the debate, local authorities have the power to reduce or remit rates when businesses face hardship but, dare I say it, some councils, or even individual councillors, have no great liking for business. They exploit the poor. They take money out of the pockets of those who earn and put it into their own.
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  The very smell of business makes them adopt a very poor attitude towards it. We must ensure that local councils implement the hardship provisions to the full.
  Today we have heard something about the policy of the Liberal Democrats. I do not know why, but there is an enormous burst of Liberal Democrat propaganda at the moment. I cannot understand it. The Liberal Democrats virtually go to sleep for four years between each general election, but they are wide awake again now. Site value rating was a nonsense. It was proved categorically, even to a Liberal Democrat council, that the Institute of Fiscal Studies and the Institute of Revenues, Rating and Valuation have explicitly rejected site value rating as unworkable and have warned that,
  "as with rental revaluation, there may be little market information on site values in some areas."
  If a tobacconist's shop has a rather large garden, one can say with certainty that its site value is not the same as that of a factory that has a rather large garden alongside.
  The expansion of a business depends on the capital that the business can expend. A small business man cannot explain to his bank manager that, if he would only give him another £250,000, he could develop the land on the site, so the site value rating system is particularly unworkable and, after a short time, would be regarded as completely unfair.
  I have had strong dialogue with my local chamber of commerce, which is very aware that the difference between profit and loss could be in the rating system itself. It is not possible for businesses always to make profits of several hundred per cent. or, indeed, anything like that amount. Many small businesses could be teetering on the edge of bankruptcy simply because of high uniform business rates.
  We have made a good stab at solving the problem. The Chancellor has made an excellent effort to control it, and it must be controlled. Local authorities must use the hardship provisions available under their mandate and all councils, whether Labour, Liberal Democrat or Conservative, must appreciate the fact that chambers of commerce and business men should be involved in all dialogue about plans whether for the city centre or for the transportation infrastructure.
  The proposals are excellent, and I shall have no hesitation in voting for them.
  5.1 pm
  Mrs. Angela Knight: This is an appropriate debate for today, as the headlines in so many newspapers are telling us that the recession is over. Indeed, the figures for sales, output, productivity and growth all point in that direction. Unemployment is also down, not only in my constituency of Erewash but in Newbury.
  Mr. Simon Burns: Has my hon. Friend had the opportunity to read the Newbury declaration of the right hon. Member for Yeovil (Mr. Ashdown) in which he states that the Liberal Democrats wish for honesty in politics, among other things? I am not sure whether the hon. Member for North Cornwall (Mr. Tyler) deliberately sought to mislead the House or whether he merely made a mistake. In his catalogue of gloom and doom, which was aimed not at the Chamber but down the road in Berkshire and Newbury, he quoted an unemployment figure of 4,033. It was typical of the Liberal Democrats because that was the figure for February. March's figures show a fall in

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  unemployment of 77 to 3,956 in Newbury, which is a bit of good news that the hon. Gentleman was not prepared to share with the House.
  Mrs. Knight: My hon. Friend makes an excellent point, and I hope that the hon. Member for North Cornwall (Mr. Tyler) will withdraw his remark.
  Mr. Tyler: I am sorry that the hon. Lady has been so misled by the hon. Member for Chelmsford (Mr. Burns). The change from March 1990 to March 1993 is almost precisely the same figure as that to which he referred, so my argument stands. If the hon. Gentleman makes the comparison, he will see that I am right. There has been a substantial increase in the past three years. The figure may have marginally decreased over the past month but, as Ministers keep telling us, one month does not make a whole year.
  Mrs. Knight: The hon. Member for North Cornwall has made it clear that he does not welcome a fall in unemployment, whereas my colleagues look forward to further falls in Newbury, Erewash and elsewhere.
  In the east midlands, companies, institutions and organisations—be it the Confederation of British Industry, the chambers of commerce or the businesses themselves—have quietly been saying for some time that the recession is over. In my constituency, lace manufacturers, car component and iron pipe manufacturers, and the retail and housing sectors are all improving. They now have fuller order books and they are anticipating continuing improvements in the economy.
  I listened carefully to the speech by the hon. Member for North Cornwall and I was sorry that he did not elaborate on his party's site valuation proposals. My hon. Friend the Member for Southampton, Test (Mr. Hill) made it clear why the hon. Gentleman had kept quiet. It is very important to consider those valuation proposals carefully because, under the Liberal party's system of site value rating, smaller businesses could be charged the same rate for a one-storey shop as a multinational corporation will be charged for an office block. If the same rate is charged for an economically under-utilised site such as a garage as for an office block, which the Liberals propose, it will create a strong incentive to overdevelop land. That is not what I would wish to see, and I suggest that the Liberal Democrats re-examine their proposals more closely.
  I should like to consider UBR from another angle. I represent an area that has made substantial gains as a consequence of the introduction of the uniform business rate. Companies in the midlands and the north were very highly rated for many years because of the way in which their local authorities chose to levy excessive rates on local businesses. Often, companies in the midlands and the north despaired of anything being done to prevent such excessive rates being levied, and when the late Lord Ridley introduced the uniform business rate, they welcomed the fact that it would enable them to expand in the historically more depressed parts of the country. Last year, there were accelerated gains for the gainers, and companies in my constituency and across the east midlands welcomed the changes.
  I have a personal interest in these matters because of the many years I spent working in industry. I have a further interest because I come from the north and now represent a constituency there. It is not an exaggeration to say that,
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  for many years, businesses in that area were badly affected by high rates or that companies were leaving and taking with them the jobs that they would otherwise have created.
  My hon. Friend the Member for Bromsgrove (Mr. Thomason) gave some examples of the variations in rates between one authority and another. However, the problem was not only the rates themselves but the fear of what would happen next year. Local authorities would decide how much they wanted to spend and, once they had decided that, would levy a high rate, much of the burden of which would fall heavily on the business community. That meant that the business community was unable to plan ahead properly. Of course, the high-rated areas were Labour controlled, so the move to the uniform business rate was absolutely essential.
  I was very worried by the proposal by the hon. Member for Newcastle upon Tyne, North (Mr. Henderson) that the business rate should once again become the responsibility of local authorities. He presented his case in a moderate, reasonable and restrained manner, but many of his colleagues in local government are not reasonable or restrained individuals. Those people, whose actions penalised companies, cannot be allowed to regain control of the business rate and therefore over the economy of the local area.
  The hon. Member for North Cornwall—[HON. MEMBERS "Where is he?"]—has sadly seen fit to leave the Chamber rather than listen to the debate on the rating system proposed by his party.
  Mr. Burns: Does my hon. Friend accept that, given the importance of the Bill and the impact that it will have on businesses, it is rather strange that the Liberals seem to care so little that they cannot be bothered to be in the Chamber for the whole debate?
  Mrs. Knight: My hon. Friend makes a good point. The Liberals' absence shows the contempt with which they treat business.
  The hon. Member for North Cornwall said that all local authorities should not be condemned because of the failings of a few. He has now returned to the Chamber, and I tell him that it was not just a few local authorities that failed. Too many failed their areas by levying too high a rate. In any event, what would the hon. Gentleman's proposals, or those of the Labour party, do for companies in areas where the local authorities continue to penalise companies in that way? They would leave companies to suffer the sort of interference and penalty through high rates, which would prevent businesses from expanding. It is essential that the business rate be kept independent of local authorities.
  I shall examine briefly local authority expenditure in my area.
  Mr. Tyler: Is the hon. Lady saying that the Conservative councillors elected next week—if any are elected—are not to be trusted to decide the level of the business rate in their areas?
  Mrs. Knight: The hon. Gentleman has deliberately chosen to mislead the House by misrepresenting my argument. I shall return to the subject of local authority expenditure in my area.
  Mr. George Mudie: Will the hon. Lady give way?
  Mrs. Knight: If I may expand my argument for a moment, I shall give way later.
  What exercises my constituents and other residents of the county is their concern for the way in which the county council spends money on education or; in some parts it fails to do so. They are also worried about the way in which the local police force has been hampered in the excellent job that it does by the county council's failure to give it the funds that it requires. That is what is happening now, and that is why business rates should not be put back into local authorities' hands.
  There are many competent local authorities in this country but, sadly, there have been too many excesses and too much mismanagement.
  Dame Elaine Kellett-Bowman: Does my hon. Friend agree that the county council's policy of paying for nuclear-free zones is of no advantage to business men in Lancashire?
  Mrs. Knight: My hon. Friend makes an excellent point. We all know how well she speaks for Lancashire, how supportive she is of local people in that county, and how well she exposes the failings of Lancashire county council, as she has just done.
  In an ideal world, everyone would have a say in local government and in how money raised locally should be spent. However, we all know that that is not the reality. In practice there are low turn-outs at election time and many areas have been held year after year in the grip of the same group of councillors. I do not believe that the House could seriously propose to leave business to its fate under local authorities, as the hon. Member for Newcastle upon Tyne, North (Mr. Henderson) has suggested.
  I do not think that there is any such thing as welcome taxation. Surely no one would put up his hand and ask to be taxed more heavily. But in local taxation as in national taxation, there has to be fairness, and there is fairness in the uniform business rate, which has been seen across the midlands and the north of England. If one talks to the business community and to business organisations, as my hon. Friends and I do, they tell us that their overheads must be kept down. They say that interest rates, too, must be kept down, and the Chancellor of the Exchequer has achieved that over the past few months. Business men also want their rates bills to be frozen, which is what the Bill proposes.
  Mr. Mudie: Does the hon. Lady agree that those same business men are the first to criticise, vocally and in the press, the standards of the children coming through our education system? Are they not the first to say that those standards should be improved? Yet the same business men who criticise the education system are those who tell the hon. Lady that although they want standards to rise, not only will they not contribute more, but they wish to contribute less.
  Mrs. Knight: The hon. Gentleman is correct to say that the business community criticises education standards; that is why it is so important that tests take place this summer in our schools for seven-year-olds such as my son and for 14-year-olds. I hope that the hon. Gentleman will support his business community and join my hon. Friends and myself in urging all the teaching unions to forget
  874
  about the boycott and to get on with testing those children. However, we had the education debate last week, so I must return to business rates.
  It is stability in the rating system that is so important to businesses. That gives them the opportunity to plan for their future. It is important to ensure that there are no big increases, and no big changes year after year in companies' business rates. The UBR and the changes proposed today make an important contribution in that respect.
  5.16 pm
  Mr. Paul Murphy: I am pleased to be able to say that the Opposition will support the Government on the Bill, and I am pleased, too, that The Parliamentary Under-Secretary of State for the Environment, the hon. Member for Hornchurch (Mr. Squire), is present, as he was a year ago almost to the day, when we dealt with the Non-Domestic Rating Act. I suppose that this is his annual foray into matters Welsh. I shall not go too deeply into such matters, but I shall make one or two general points about what has occurred in this interesting if short debate.
  My hon. Friend the Member for Newcastle upon Tyne, North (Mr. Henderson), and the hon. Members for Southampton, Test (Mr. Hill) and for North Cornwall (Mr. Tyler) all, rightly, referred to the recession and to the fact that small businesses—and, indeed, other business —had been seriously affected by it over the past few years. The newspapers this morning all say something along the lines of, "Recession is over—official".
  However, in Wales there are still some 50,000 young people unemployed, we have lost 30,000 manufacturing jobs, unemployment costs us £1·2 billion and there are 17 claimants chasing every job, and businesses have gone under at an alarming rate—there were 2,425 business failures recorded during 1992, which represents an increase of 26 per cent. on the 1991 figure, and there were 1,728 bankruptcies, which represents a 38 per cent. increase. I fancy that, if the journalists came to Wales and wrote headlines saying that the recession was over, the idea would be seen to be nonsense.
  None the less, we welcome the Bill, as we welcomed last year's Non-Domestic Rating Act, because it will ease the burden on small businesses. But we must ponder the amount of money that will be made available. For example, the Government can now find £9 million this year and £5 million next year to make up the shortfall to local authorities. That contrasts significantly with the statements and debates that took place in the Chamber some months ago when we debated the revenue support grant settlement for Welsh local authorities.
  The counties and districts in Wales agree that that was the worst settlement ever. There have been cuts in education, in social services, in the police force and in all the services that are vital to the business community—and vital too, of course, for inward investment.
  The hon. Member for Erewash (Mrs. Knight)—[Interruption.] The name of her constituency is as difficult to pronounce as the name of my own. The hon. Lady mentioned stability. Businesses in Wales are yearning for stability in the local government system, yet stability is the very thing that we have not had in local government finance. In 1988, the Under-Secretary of State and I served

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  on the Committee that considered the poll tax during its three-month passage through the House. We agreed then on the issues—as, in a sense, we agree today.
  There have been enormous changes to local government finance in just a few years. The hon. Member for Bromsgrove (Mr. Thomason) referred to changes that my party might want to introduce in local government financial institutions. When we consider the huge change that occurred as a result of the fiasco of the poll tax, any change that we might bring about would pale into insignificance. Billions of pounds were squandered on having first to prop up the poll tax and then to replace it altogether.
  My fear is that the local government financial system in Wales, and in Britain generally, is becoming discredited. In Wales especially, but also in England, one aspect is the so-called "gearing" effect. It means that local councils can do virtually nothing unless they increase their local taxes dramatically. That has distorted local government finance, and has meant that local authorities no longer have a proper revenue-raising function. In Wales, a 1 per cent. increase in expenditure means an increase of about 9 per cent. in the council tax.
  Yesterday, for the first time ever in the Principality, the Secretary of State for Wales announced his ideas about which local authorities should be capped. Only one authority out of 45 in Wales has been capped and it is the authority of the Minister of State, Welsh Office. It is an authority that is not controlled by any one political party. The decision has meant that the whole subject of capping has been discredited in Wales, as has the fact that the Secretary of State is having to take Gwent county council to court over its budget. The whole thing is a sorry mess, and the sooner we get some stability in local government finance, the better for businesses and the better for our communities.
  In many parts of the country, business rate arrears are high. Local authorities find it increasingly difficult to collect business rates. There is an increasing gap between business rate payers and council tax payers. In Gwent, for example, business rates over the past three years have increased by 1·6 per cent., whereas local council tax payers have had to face a 53 per cent. increase.
  The chief question, which has exercised the minds of hon. Members who have contributed to this short debate, concerns the nature of the business rate and what we want it to be. It is not a local business rate; it is a national business tax. It bears no relation to the way in which rates used to operate, or to the way in which the council tax operates.
  I believe that there is a vital link between local businesses and the local community, and that the link has been broken by the new business rate. All local authorities provide for businesses an educated work force, roads and infrastructure. In Wales, local authorities play an especially important role in economic development and inward investment. All my experience in 15 years as a member of a local authority was that local authorities and the business community saw great advantages in that direct link.
  Large multinational companies in my own constituency agreed tremendously with what the local authorities were doing. They were very much involved in local authority matters, including the sponsorship of council activities. The sooner the link between business people and local authorities disappears, the worse it will be for democracy.
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  The business rate is no longer related to commercial activity or to a particular district. There may be a great steelworks or a massive factory in an area. It may provide employment, but it may also disturb the area. The fact that the business rate is now collected centrally in Cardiff or in London means not only that there is no link between business and the community, but that there is no link between commercial activity and the business rate.
  The business rate should relate to the ability of business people to pay it. There should be a system of rebates related to the profitability of businesses with an annual turnover below a specific level. We are firmly of the view—
  Mr. Simon Burns: I have listened carefully to the hon. Gentleman speaking up for businesses. The Labour party speaking up for the interests of business is about as convincing as Herod being in charge of a nursery.
  Mr. Murphy: All I can do is describe my experience over many years, since local government organisation, of the relationship between my local authority, whether the county council or the district council, and the businesses in the area. I believe that the relationship has been healthy. That experience may not be repeated throughout the length and breadth of the country, but local government and local democracy are all about diversity. The great harm that has come from having a uniform business rate is that individual local authorities cannot determine their rate locally; they cannot set it, and they cannot collect it.
  I am not the only person who makes that point. Sir John Banham, for example, said recently that the present system
  "reflects neither the ability to pay nor the level and quality of the local services businesses receive."
  He has a role to play in local government reorganisation in the months ahead.
  Mr. Thomason: Does the hon. Gentleman agree that it was this Government who introduced a consultative procedure on local authority budgets with businesses, and that that procedure was opposed by many in the Labour party?
  Mr. Murphy: Opposition comes to different things in different ways. The Under-Secretary of State was a firm opponent of the poll tax when it was introduced in 1988. The Government saw the error of their ways and rightly appointed the hon. Gentleman to be a very good Minister. There are differences in view on all these matters across the country.
  As I said, it is healthy for a diversity of views to be held on these matters by local authorities in England and in Wales. That is what local accountability and local democracy are all about. Businesses play a vital role in our communities, and that is why we support the Bill.
  The Secretary of State for Wales acknowledges that belief, because he appoints many business people to quangos in the Principality. The White Paper on Welsh local government reform is the only indicator of how the Government intend to develop their ideas on the future shape of local government. They propose a system of unitary local authorities which will be responsible for raising their own revenue.
  When the Secretary of State for Wales reforms local government, he has a golden opportunity to set an example to the rest of the country, and to have another

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  look at the system of local government finance. I am not saying that the Government must change the council tax —they will not—but there are changes to be made. The simplification of the grant system would be something that hon. Members on both sides and members of local authorities throughout Britain would welcome.
  There is a case for the business rate to be examined, as my hon. Friend the Member for Newcastle upon Tyne, North (Mr. Henderson) said, and to be brought back into the local community. That opportunity should not be wasted. I urge the Secretary of State for Wales and the Government generally to rethink the whole question of local government finance when the reforms are introduced.
  We support the Bill, but we recognise that it is a short-term expedient. It does not answer all the problems that face the country and local government in terms of how to finance local government, and it does not explain what the relationship between businesses and local authorities should be. I hope that the Government will address those matters in the months ahead.
  5.29 pm
  The Parliamentary Under-Secretary of State for the Environment (Mr. Robin Squire): It is a great pleasure to follow the hon. Member for Torfaen (Mr. Murphy). As he said, we have followed each other for several years both in our previous role as Back Benchers and as "Box and Cox", or whatever the phrase is. It is nice to do so. He raised points to which I shall refer in my speech, as have other hon. Members.
  I shall start by reminding the House that the Bill will provide a further £350 million boost to businesses this year on top of the £1·25 billion package that was introduced last year. We calculate that it will ease rate bills for some 400,000 small business premises and 100,000 larger ones.
  As with the changes we made last year, local authorities will not suffer from the reduction in non-domestic rate income brought about by the Bill. The Government are committed to refunding the national pool to the extent of the estimated loss. We will also allow local authorities to net off their reasonable costs of re-billing from their national non-domestic rate payments.
  We will need a short period—about a month—after enactment to introduce regulations governing the adjustment of rate bills that have already been issued and to enable local authorities to recalculate their contributions to the non-domestic rating pool. We will bring the Act into force in parallel with those regulations. Once in force, the Act will have retrospective effect to 1 April and authorities will be required to give refunds to ratepayers who have overpaid instalments in the meantime.
  The debate was interesting, and I shall refer to some of the earlier speeches. The first Opposition speaker, the hon. Member for Newcastle upon Tyne, North (Mr. Henderson), highlighted some of the sad realities of the recent recession. There is no division between Conservative Members and Labour Members on that. The recession has had a terrible impact on a number of businesses and on many individuals.
  In the context of the Bill, let us not forget—as some of my hon. Friends rightly reminded the House—that before the uniform business rate, many businesses were being hammered year after year by Labour councils up and
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  down the country. The figures are clear. Between 1979–80 and 1989–90—the last year of the old system—locally set non-domestic poundages rose by 37·4 per cent. more than inflation on a compound basis nationally. Some of my hon. Friends who spoke today were councillors in opposition and saw that at first hand. My hon. Friend the Member for Erewash (Mrs. Knight) immediately comes to mind.
  By replacing locally set non-domestic rate poundages with uniform national poundages which cannot increase faster than inflation and by pooling and redistributing the proceeds of the business rate on a per capita basis, it is no longer possible for authorities to increase expenditure, knowing that businesses will meet much of the extra cost.
  Mr. Dennis Turner: Will the hon. Gentleman give way?
  Mr. Squire: I shall willingly give way to the hon. Gentleman when I have finished this point. Although he has just come in, we would not like to disappoint him. If the uniform business rate had not been introduced, businesses would have paid £842 million more in 1992–93 and £797 million more in 1993–94.
  Mr. Turner: I shall simply make this point. It is the height of cheek and hypocrisy for Conservative Members and the Minister to blame Labour local authorities for increasing rates during the period to which he referred, when in fact it is a direct result of the Government's failure properly to fund local government. The Minister should tell us how much was lost to local government in rate support grant settlement over that period. Every year, your Government cut support for local government. When Labour and Conservative local authorities had to increase rates, it was a direct result of your Government's policy.
  Mr. Deputy Speaker (Mr. Michael Morris): Order. It is the hon. Member's Government, not "your" Government or my Government.
  Mr. Turner: Indeed, I am referring to the Minister's Government. How can the Minister use such cheek to imply that it was Labour local authorities' fault that rates increased during the period he quoted, when he knows that it was a direct result of his Government's failure properly to fund local government?
  Mr. Squire: The hon. Gentleman was entertaining but not factually correct. I recommend that he go to the Library. He will find that the amount of support for local government during much of the period to which I referred increased rather than decreased. To help him a little more, I suggest that, if he looks under S for Sheffield, he will find a prime suspect in the area to which I was referring.
  Mr. Henderson: I refer the Minister to his figures about the savings to business as a result of the introduction of the business rate. Does he accept that those figures must be put in the context of a subsidy from central Government and taxpayers generally? During the debate on the Non-Domestic Rating Bill on 2 June 1992, the Minister for Local Government and Inner Cities made it clear that the cost to the central Exchequer of protecting the business community from the introduction of the national business rate was £1,250 million, which is almost greater than the figure that the Under-Secretary of State claimed was saved by the business community. What has happened is that,

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  generally, the taxpayer has subsidised the business community. I do not necessarily disagree with that, but the figures must be put in that context.
  Mr. Squire: That is an interesting interpretation. I think other hon. Members will agree that there is a significant difference between the amount of Exchequer support which we are debating now, and which we debated on an almost identical Bill last year—the hon. Gentleman quoted the correct figure—and the tendency, until recently, for a number of local authorities to let rip as far as the private sector was concerned. That is the context in which I am speaking.
  Before I leave that aspect of the debate I shall refer to the democratic argument. I note that Labour Members want to revert to such a system and suggested that in some way it would bring greater accountability. Frankly, I do not accept that. My hon. Friend the Member for Southampton, Test (Mr. Hill) has said that there is no such thing as a business vote—nor is there any intention of introducing one. In the absence of such a vote, the concept of accountability as I understand it would be sadly lacking if such a proposal were entertained.
  Mr. Murphy: It is important to understand the point that we made earlier about the gearing effect. Having taken control of the business rate away from local authorities, the amount of money that is left for local authorities to control is limited. That distorts the local government finance system.
  Mr. Squire: It is an arithmetical fact that there is a gearing effect in England, Wales and Scotland—I cannot deny that. That does not, in itself, deny the advantages which the concept of the uniform business rate has brought to businesses in general.
  I was referring to the speech of the hon. Member for Newcastle upon Tyne, North. I welcome his welcome for the measure, which was echoed by hon. Members on both sides of the House. He rightly said that the measure would be welcomed by businesses across the country. He then tried to get me to estimate the national non-domestic rate for 1994–95. His tongue might have been slightly in his cheek at the time. He knows that it is unrealistic to estimate that rate at present. Obviously, we must continue to be guided by the state of the economy and the impact of residual increases on big and small businesses. The hon. Gentleman will know that, under legislation previously passed, the maximum will be limited to the inflation rate, rather than the impact of past revaluation.
  It is a little early to say what transitional arrangements may be needed to phase in the results of the 1995 revaluation. We have always said that we will examine the outcome of the revaluation before deciding whether transitional relief will be needed. By April 1995, many businesses will not have reached their full bills under the 1990 rating list, as the hon. Gentleman said. That is one factor that we will need to take into account, although many businesses may well find that their post-1995 bills are much reduced, reflecting relative changes in business rates between the valuations.
  I can reassure the hon. Gentleman on his specific point. If any business which faces an increase under the 1990 revaluation does not reach its full payment, any increases under the 1995 revaluation will be by comparison with the amount paid in 1994–95 rather than the amount that would have been paid if protection had not been available.
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  The hon. Member for North Cornwall (Mr. Tyler) referred to the fall in business rate revenue. The distributable amount of business rates has fallen since 1991–92. That is, indeed, partly the result of the recession, which has led to an increase in empty property relief. A second factor which is equally important is the effect of rating appeals. Increasing numbers of appeals are now being decided, as my hon. Friend the Minister for Local Government and Inner Cities said.
  Repayment of rates following appeals may relate to the whole period from 1 April 1990, but the entire cost falls in the year in which the repayment is made. Therefore, the yield of business rates is likely to rise again once the peak of appeals has passed. Any changes in business rate yield will, of course, be compensated for by revenue support grant pound for pound within the published plans for external finance.
  My hon. Friend the Member for Bromsgrove (Mr. Thomason) spoke with all the experience of a former senior local authority councillor. I assure my hon. Friend that, notwithstanding his nervousness at the appearance of support from the Opposition Front Bench, he is right to support the Bill. He pointed out how much impact the measure would have and how welcome it would be to business ratepayers in general.
  My hon. Friend was the first hon. Member in the debate to highlight the failings of site value rating, which subsequently became almost a separate debate in itself. I wish to put on record just some of the reasons why site value rating would be a poor system and a poor substitute for the current system which is the subject of the Bill.
  Site value rating would be a tax on a small number of owners rather than on many occupiers. It would be a hidden tax on the latter through rents. We would need a register of beneficial owners. Site value rating would involve indentifying the development potential of each and every parcel of land. It would require detailed evidence of land sales and prices in each area. It would be unfair to owners if existing convenants and contractual arrangements meant that land could not realise its development potential.
  Perhaps as importantly, if site value rating was limited to where planning or zoning permission had been obtained, any competitor, other developer or business could apply for planning permission on someone else's site. The consequence could be to drive the business out. That seems a strange way to encourage business. I urge the Liberal party to rethink.
  Mr. Tyler: I am grateful to the Minister and his colleagues for paying so much attention to my party's policies. That is a new experience for me. I wish to pursue the Minister's last point because I know something about planning. Is he aware that it is now widely regarded as unacceptable for someone who has no interest in land to be in a position to make a planning application for it? If that is the Minister's main objection, as it seems to be, does he accept that there is in any case considerable anxiety about that feature of the planning system?
  Mr. Squire: I listed several reasons why site value rating was inadequate. On the hon. Gentleman's specific point, he will be aware that it is likely that more than one person will have an interest in any site, land or property. It could be a tenant, the landlord or a putative purchaser. A range of people could have an interest. The hon. Gentleman

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  described the existing law. I was simply interpreting his remarks. It was not clear whether in the event of a Liberal Democrat Government being elected—the House should not hold its breath—site value rating would be introduced.
  I am grateful to the hon. Member for North Cornwall for welcoming the measure, in company with the other hon. Members who spoke. However, it was a bit rich, virtually in his first minute and the day after quarterly GDP figures were announced showing an increase for the first time in three years, for the hon. Gentleman to suggest that my hon. Friend the Minister had denied a recovery. It is simply untrue. My hon. Friend not only highlighted it, but put it in context, as a re-reading of Hansard will show.
  It is possible that the recovery is badly timed for the Liberal Democrats whether in the context of the county council elections or that of the Newbury by-election. However, the hon. Gentleman will understand if I say that the vast majority of people welcome the recovery notwithstanding any difficulties that it may give the hon. Gentleman.
  The hon. Gentleman said that it was interesting that, out of all the figures for Newbury, we mentioned the figures for only one month. But the figures have fallen for two months and Newbury's rate of unemployment at 7·1 per cent. is well below both the Great Britain and EC averages. I shall be delighted if the hon. Gentleman's speech is widely circulated in Newbury in the next two weeks. It will not add one vote to the Liberal Democrats' likely haul.
  Mr. Tyler: Of course we all welcome any reductions in unemployment, even if they are only in one or two months. I wish that we had a dramatic reduction in unemployment in my constituency, but sadly that is not the case. In my speech—I am sure that the Minister was paying careful attention—I compared the position of small businesses before the introduction of the uniform business rate in 1990 with now. That is why I picked 1990 and 1993. I made a comparison over a three-year period. I know that the Minister is an honourable, honest and fair-minded man. He will accept that over a three-year period there has been a substantial increase in business rates, whether one takes February, March or any other month.
  Mr. Squire: I am not sure whether I should continue with my modest, up-beat comments based on fact or look backwards to what has happened in the past three years. I judge that on balance most people prefer to look forward rather than back, so I shall keep going with my speech.
  The hon. Member for North Cornwall made some comments about tourism. Seasonality of use is taken into account in rates assessments. If a holiday resort is open for only a limited period in the year, that will be reflected in rents and hence in rateable values. Any change in economic circumstances such as a shorter summer season is taken into account at revaluation. Any change made within the life of an existing list would cause a loss of revenue from rates which would have to be made up elsewhere in the tax system. That would be unfair.
  The hon. Member for North Cornwall correctly pointed out that several local authorities under all forms of political control had been rather slow in applying section 49 and providing hardship relief. I underline from
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  the Dispatch Box that hardship relief is available where there is genuine hardship. I was not sure whether the hon. Gentleman suggested that because the take-up had been low, the Government should centralise hardship relief. I hope that he was not suggesting that. If he was, it runs counter to the actions of the Government in devolving decision making to local authorities. It also runs against what his party normally stands for.
  Mr. Tyler: I am grateful to the Minister for giving way yet again. As he seems to be so interested in my speech, I hope that he will forgive me for interrupting. The point that I made was clear. If the Government were prepared, within the criteria, to fund hardship relief 100 per cent., clearly local authorities would feel a great deal less inhibited in providing the hardship relief which he and I agree should be available.
  Mr. Squire: The whole point of the system—I know that the hon. Gentleman knows this—is that it gives local authorities discretion to determine hardship. If we provided 100 per cent. support, we would do precisely what I thought that the hon. Gentleman would not support and take the decision into central Government. Hardship is better determined by a local authority. I join the hon. Gentleman in urging its wider use by local authorities.
  My hon. Friends the Members for Test and for Erewash made strong speeches, drawing on their experience of small business and local government. They correctly spelt out the gain that businesses will make under the measure.
  The hon. Member for Torfaen spoke, as I expected him to do, about the gearing effect and the relationship especially in Wales between central and local government support for local government expenditure. He will know that prior to setting the levels of total standard spending and aggregate external finance for 1993–94, the Secretary of State for Wales took account of the view expressed by Welsh local authority associations that the proportion of revenue raised locally in Wales should be increased. The lower level of increase in the additional aggregate external finance of 1·7 per cent., relevant to that of the total standard spending, means that Welsh local authorities are able, on average, to raise about 10 per cent. of their income from the council tax, which represents an increase of more than 1 per cent. on the figure for 1992–93.
  The hon. Gentleman also raised the spectre of further reform of local government finance. I beg the hon. Gentleman as a Minister and as an individual, although I am not allowed to hold a separate view, to ignore that siren call. The hon. Gentleman and I have sat on many Committees and we know perhaps better than other hon. Members just how difficult it is to reform that system. I believe that the system now in place for the collection of local business and personal taxation will last and will be welcomed by the overwhelming majority of people.
  The overall effect of the Bill is that no business will end up paying more rates in real terms this year than it did last. The Bill is important and worth while. It is well targeted on those businesses that have borne much of the brunt of the recession and I urge the House to support it.
  Question put and agreed to.
  Bill accordingly read a Second time, and committed to a Standing Committee, pursuant to Standing Order No. 61 (Committal of Bills).

  Non-Domestic Rating (No. 2) Bill [Money]
  Queen's recommendation having been signified—
  5.51 pm
  The Minister for Local Government and Inner Cities (Mr. John Redwood): I beg to move,
  That, for the purposes of any Act resulting from the Non-Domestic Rating (No. 2) Bill, it is expedient to authorise the payment out of money provided by Parliament of any increase attributable to the Act in the sums so payable out of money so provided under any other Act.
  It gives me great pleasure to move the resolution so that the money is available to provide the relief that business is seeking—the relief that the House seems to favour.
  The Bill has two main financial consequences. The big one is the reduction in the amount of money to the rates pool, which the Bill will make good. The second is that there will be some additional expenditure to local authorities in implementing the Bill, and we are proposing to allow authorities to set that expenditure against the pool to adjust the rates bills. I hope that the House will welcome those two features, which are reflected in clauses 2 and 3.
  The cost of making good the shortfall for the pool in England is estimated to be £340 million in 1993–94 and £220 million in 1994–95. That is on top of the substantial relief that was made available last year as a result of a similar Bill to which my hon. Friend the Parliamentary Under-Secretary of State for the Environment has already referred. In Wales, which has separate pooling arrangements, the cost will be £9 million in 1993–94 and £5 million in 1994–95.
  The money issues were given prominence on Second Reading. It is interesting that the Liberal party in particular favours a different approach to the financing of local government—one which would be deeply damaging to many businesses. The hon. Member for North Cornwall (Mr. Tyler) seemed to be particularly interested in Newbury and in Berkshire. He failed to tell the House, or the people of Newbury, however, about the impact of his proposals upon the butchers, the greengrocers and; the grocers of that town.
  Dame Elaine Kellett-Bowman: It would be disastrous.
  Mr. Redwood: Yes, my hon. Friend is correct. It would put such businesses under intense pressure. We are glad that Liberal policies are not threats but spectres, or their effects would be considerably more serious.
  We can always tell when there is a by-election, county council election or even a general election in the offing, because it is then, in spring time, that we begin to see the first "Focuses". They come out of the woodwork after a year of absence and a year of neglect and appear in Newbury or wherever else containing all sorts of claims about how the Liberals have done everything that has, in fact, been done by the Conservative party for the good of local people.
  The Liberals claim the credit, but they do not do the work, as is evident from the "Focus" publications. I am sure that another "Focus" will be issued to say that the Liberals were behind the money resolution, which is so instrumental in helping local business.
  Site value rating should be condemned by all men, and women of good will and by all sensible parties in the
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  House, because it would be extremely damaging. It is symptomatic of the Liberal party that it usually supports the Labour party in local government. Recently, I believe that the Liberals have encouraged the Labour party to withdraw candidates from the county elections in Berkshire. Obviously, they have struck some kind of deal.
  When we hear about Liberal party policies, they seem to be Labour policies in fiscal drag. They are dressed up in a new kind of style, with local income tax and site value rating on top of the other imposts that the Labour party would like to impose. As always, it is the Liberals who want other people's money. They may well vote for the money resolution today, but, secretly, they would like to impose far more taxes and to waste far more money.
  As my hon. Friend the Under-Secretary has already said, it is a curious paradox, some might say that it was a two-faced approach, that the Liberal party reveal. It claims that it wants much more devolution and local autonomy, but as soon as any measure offers such autonomy to Liberal councils, the Liberal party will not use its local discretion and gets its spokesman to come to the House to say that the Government must order councils to exercise such autonomy.
  Mr. Paul Tyler: The Minister's claims are erroneous, as is his interpretation of his colleague's remarks. The Under-Secretary said that parties of all colours in government in local councils throughout the country have used the hardship relief. In my speech on Second Reading, I was able to quote the impeccable record of Newbury district council and North Cornwall district council on their use of the hardship relief. The Under-Secretary was right to acknowledge that.
  Why is the Minister trying to stir things up? He said that election time was when "Focus" appeared, but that is not the case in my part of the country. It appears throughout the year. We always know when the Government are expecting a defeat at the hands of the electorate, however, because they attack us.
  Mr. Deputy Speaker (Mr. Michael Morris): Order. We are actually debating the money resolution.
  Mr. Redwood: I thought that a little circumlocution about the money might be appropriate at this stage. As I understand it, there is no great pressure on our parliamentary business, and I thought that it was important to elucidate these crucial—
  Mr. Deputy Speaker: Order. The Chair allows no circumlocution dependent on time. I am afraid that the Minister must stay in order regardless of the time factor.
  Mr. Redwood: I shall, of course, endeavour to do that —and with your guidance, Mr. Deputy Speaker, how can I fail?
  The money issues at stake are clear. The hon. Member for North Cornwall has said that more use should be made of hardship relief. He said that that should be incorporated in Government proposals in a Government mandate to local government. I am sure that he would like that proposal to be added to the money resolution, if that were possible.
  The answer to that request is that the powers are there, and councils can use them if they see fit. That is local judgment and local autonomy in action, and I cannot understand why the hon. Gentleman wanted us to insist that that power be used. Now he is, as always,

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  backtracking on this very point. He now accepts that there is local discretion, and he is trying to claim that Liberal councils use it well.
  The money resolution is important for business and the continuing economic recovery. It is an important means of building on the improved figures and prospects that we have seen in recent weeks. It is important that the House now gives more stability to local authority taxation and expenditure measures. The resolution is part of that process, and it will mean that local government has the money for the job so that the burden on business is not unacceptably high. I have pleasure in commending the resolution to the House.
  5.58 pm
  Mr. Doug Henderson: We have witnessed a somewhat unorthodox approach to a money resolution. I did not intend to speak, but I feel bound to make some response to some of the Minister's remarks. I shall endeavour, Mr. Deputy Speaker, not to circumlocute; I am sure that, if I do, you will bring me back into line.
  A number of cuckoos have been flying around Westminster and Fleet street, and Wapping, I suppose, over the past two days, and it seems that one of them has got into the House. Claims are being made about the recovery from which the country is now beginning to benefit. The Opposition want to see the economy recovering, business pulling itself out of recession and output picking up. We want jobs to be created in our economy.
  The statistics announced by the Government yesterday —a 0·2 per cent. increase in output in the first quarter of
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  1993—have been mentioned. There has been a 0·2 per cent. increase in output in the first quarter of 1993, but does that constitute the beginning of a recovery? That is the question that businesses will be asking as they face business rates.
  It is interesting to note the way in which the Government claim that a 0·2 per cent. increase in output —if my arithmetic is correct, that means a 0·8 per cent. annual increase in output—constitutes a recovery in Britain. When Germany and France enjoyed increases in output of 1 per cent. and 1·5 per cent., the Government said that those statistics represented part of the world recession and constituted a recession in those countries. There seems to be some contradiction in the Government's position. I hope that the House will reflect on that when it considers the money resolution.
  The Opposition supported the Non-Domestic Rating (No. 2) Bill as a means of assisting the business community, and they also wish to extend their support to the money resolution. However, we wish that the Government—and, perhaps, the Liberal Members—
  Dame Elaine Kellett-Bowman: There is only one.
  Mr. Henderson: Yes, there seems to be only one Liberal Member. I wish that they would stick to the business before us, not squabble over one election that will take place on 6 May. The country and the business community will look to the state of the country on 6 May, and the verdict delivered in the other county council elections may be different from that given in one specific part of the country.
  Question put and agreed to.
  Resolved,
  That, for the purposes of any Act resulting from the Non-Domestic Rating (No. 2) Bill, it is expedient to authorise the payment out of money provided by Parliament of any increase attributable to the Act in the sums so payable out of money so provided under any other Act.

Disability (Grants) Bill
Not amended (in Standing Committee), considered.
[MR. MICHAEL MORRIS in the Chair.]

Disability (Grants) Bill
  Clause 1

    GRANTS TO CERTAIN ORGANISATIONS CONCERNED WITH DISABLED PERSONS
    6.2 pm
    Mr. Barry Sheerman: I beg to move amendment No. 1, in page 1, leave out line 13 and insert 'to enable payments to be made to or for the benefit of people with disabilities for the purpose of promoting their independence and freedom of choice.'.
    In Committee, we were disappointed that we were not successful in amending the Bill despite the debate that we had on Second Reading and the obvious shared concerns expressed in Committee. When it came to the crucial act of voting, the Government were not flexible. On a Bill that covers many aspects on caring for the severely disabled, we hoped for some compromise and flexibility from the Government.
    The key words in the amendment are
    "independence and freedom of choice".
    I note that the Minister for Social Security and Disabled People agrees with me. In the foreword of the Greenwich personal evaluation scheme, which was published recently, he said:
    "This report on Personal Assistance schemes shows that as well as being cost-effective, some schemes offer disabled people a greater degree of independence."
    The Minister will know that the amendment is designed to reintroduce into the debate the important change in the way in which disabled people view the sort of help and support that they need and receive, and the way in which they receive it. That merely scratches at the surface of a fundamental change that has taken place in the sphere of disability in recent years. The debate is continuing, not only in the form of the Bill that we are discussing, but in another place, where a different Bill was recently debated which was designed to address the same subject: how people receive the help necessary for them to continue to live lives that are full and give them the opportunity to use all their potential.
    I do not wish to speak merely as the shadow Minister and say what I believe to be the main concerns of disabled people and those who support them. I prefer to act as a mouthpiece and tell the House the comments that have been made in favour of direct payments by the people affected by them. They have expressed their views far more eloquently than I could hope to do.
    Two disabled people were quoted in Anne Kesselbaum's report, "Cash for Care". They said:
    "It makes us feel in control of our lives; gives us back the feeling of being people and not a pathetic handicapped family …
    If you have a carer you feel safe with, you know your quality of life is better. It opens things up. Your personality changes, you laugh."
    Some of those comments go to the heart of the subject.
    Jane Campbell, a disabled person, said in conversation with Lord McColl:
    "Employing your own personal care assistants places negotiations on a very different plane. You are not asking for favours or desperately attempting to change the (statutory)
    888
    home carers rota so as to enjoy another hour at that party. Instead, you are setting your schedule for the day, which you know will be adhered to by your employee, with whom you have agreed a one to one contract of employment.
    Whereas my traditional form of help gave me no privacy, and was often loaded with what people thought 'best for me', I now decide my own priorities, and I feel I have an equal say in how my home and my family life is run."
    Those are moving words from disabled people who want the sort of care on which the amendment focuses. She concludes:
    "This is, I believe, fundamental to one's dignity and sense of belonging and contributing."
    A young lady, Maria, was interviewed by Jenny Morris for the Rowntree trust's report, "Community Care or Independent Living", and said:
    "It means I can get up in the morning when I want to, go to bed in the evening when I want to, and lead the kind of life that I want to."
    That is a true testimony of the power given to the disabled when they can receive money from the independent living fund. I should be out of order if I strayed too far, but that example shows the amount of power that is handed to disabled people when a local authority social services department can provide cash for disabled people to allow to make their own decisions and to draw up contracts of employment to meet their needs. In the same interview, Vicky, a disabled person, said:
    "Independent living means that I employ people, and basically that they are here to do the physical things that I can't do, which allows me to have the lifestyle that I choose."
    The important common factor running through all the quotations is that, given the money to employ their own care assistants, people with disabilities enter into a one-to-one, employer-employee relationship with their helper. They can specify exactly the sort of care that they want, and in what form they want it. They can specify the exact hours when they want that help. Last, but certainly not least, they can ensure that the person helping them, who spends much time in their house—and sometimes lives in it—and helps them to perform intimate functions, is someone with whom they feel happy and comfortable. Surely that is something that every hon. Member should want for the severely disabled people of our country.
    I do not wish to delay this stage of the Bill. I give a final quotation which illustrates the sort of horror story that can occur when a disabled person does not have full control over the care contract and those who fulfil it:
    "The home help came to me one day when my bed was wet and I asked her to change the sheets. She refused. She said, 'Today is not the day we change the bedlinen.' I asked if she expected me to go to sleep in a wet bed. She said, 'Well, I'm not changing it.'"
    Clearly, that is untypical. We appreciate that the vast majority of local authority carers are genuinely caring and compassionate people. I simply point out what can happen. When it happens, the disabled have fewer powers to seek redress and prevent the atrocity recurring than if they employ their own helpers.
    In a recent Friday debate, my right hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris) introduced a Bill that would have established a commission for disabled people to have their grievances inquired into and righted. That measure was voted down at the behest of the Government, so the disabled do not even have that avenue to pursue. When such a ghastly experience occurs and a disabled person is unable to have carried out by her carer the sort of basic task that I have

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    described, it is regarded by many of us as a minor atrocity, because it combines physical discomfort with personal humiliation to a quite intolerable degree.
    In his Second Reading speech, the Minister referred to local authorities being in the driving seat. As the Bill proceeded through its brief Committee stage—we did not prolong the proceedings; it went through in two very civilised sessions—we got the impression that the Minister made a slip of the tongue or, if that was not the case, that he regretted what he said when he referred to the need for local authorities to be in the driving seat.
    The thrust of our argument in Committee—unfortunately, we were not successful in getting it accepted—was that disabled people should be in the driving seat. The experiment conducted by the independent living fund showed that empowering people to make their own arrangements costs dramatically less than providing the service direct. In other words, when people can choose and draw up their own contracts with the people of their choice, the Exchequer can make a saving of between 20 and 50 per cent. of the cost. People make more sensible decisions than bureaucracy makes for them.
    The Minister has seen the evidence. He saw much of it in the debate on cash payments in another place. Apart from the case made by the Minister in that debate, the view was unanimous, on the evidence before the other place, that cash payments are effective, are empowering and save money.
    The argument adduced throughout our debates leads us to believe that, secretly, the Minister is on our side. Indeed, it is rumoured that some of his colleagues are on his side. Clearly, if they were not whipped, many Conservative Members would be with us—I have particularly in mind the all-party amendment that was voted down by the Government majority in Committee.
    We are willing to believe that, but for some evil power lurking in the Treasury, many Ministers and Conservative Members would be with us. I give the Minister the benefit of the doubt on that issue. But if that is not the case, we deserve a thorough explanation today. If I am right, and it is the fault of the Treasury, we are left to wonder what sort of people are making decisions in the Treasury under Conservative rule. What kind of Treasury official or Minister would consider the research and the figures and say, "This is not permissible because it would save money"? Let us be clear: as I have explained, it would save money.
    6.15 pm
    I am talking of an innovation that is tried and tested. The independent living fund tried it for five years, and local authorities have tried it to good effect. Suddenly the Government realised that some local authorities were giving direct cash payments, and said that that was outside the letter of the law. What sort of Treasury official, in this day and age, could look at the facts, which clearly show a saving to the Government of 20 to 50 per cent., and still refuse to make a change in the law that would bring about such a saving?
    Are we not, in the closing years of this century, enlightened enough to ask who the people are who are making such decisions behind the closed doors of the Treasury? Why are they allowed to be in the driving seat? This is not a question of local authorities or disabled
    890
    people being in the driving seat. Treasury mandarins are in control. That is why we believe that they are the evil influence. They are stopping the acceptance of consensus for an obvious sensible way forward.
    The amendment would give the Government at this late stage a chance to make a change. We hope that they will respond in a positive manner.
    Mr. Alan Howarth: I apologise for arriving late for the debate, which started earlier than I had expected. Even so, I hope that I may crave the indulgence of hon. Members and make a contribution because it is an extremely important subject and I hope that, as a result of the consensus that undoubtedly exists across the Floor of the House, the Government will find it possible to concede the case for direct payments, and will respond positively.
    The case for the amendment is well rehearsed and familiar. The arguments for it are so solid and the case against it so insubstantial that it seems strange that it remains necessary to debate it, but we must do so. The moral case is too important to neglect and the case in terms of practical efficiency and good value for money alone should be recognised and accepted by the Government.
    The moral case should be restated, being the most important part of the argument. The principle at stake is the dignity of the individual. The argument essentially is that direct payments by local authorities to severely disabled people would enable them to enjoy as much as possible of the autonomy that able-bodied people assume as a right for themselves. The point was eloquently expressed by Lord McColl, Baroness O'Cathain, Lady Darcy de Knayth, Lady Masham and others in the debate last week in the other place on the Disabled Persons (Services) (No. 2) Bill:
    The issue for us is whether we are to empower those of our fellow men and women who happen to suffer from severe physical disability to live as independently as they may and on terms as equal as possible with everyone else. What do we mean by policies of care? Is care merely to be an expression of an authoritarian and patronising attitude that says, "We who are in charge will take care of your problem. Indeed, we will take care of the problem that you are"? Or is care to be a manifestation of compassion, of a fellow feeling that impels us to act imaginatively to help someone who faces exceptional difficulties to meet his or her needs?
    To give the simplest instance, are we to enable a physically disabled person to make his own decision about when he gets up in the morning and goes to bed at night? Or are we to decide that for him? Or for her? In an impressive and moving account of the transformation rendered to her life as a result of direct payments, Jane Campbell recently wrote:
    "Almost overnight I gained full control over my physical and to some extent mental being. Can you imagine that until the age of 29 everything I wanted to do from getting out of bed to attending an important meeting had to be negotiated? … Employing your own personal care assistants places negotiation on a different plane. You are not asking for favours or desperately attempting to change the (statutory) home carers rota. … Whereas my traditional form of help gave me no privacy and was often loaded with what people thought was 'best for me', I now decide my routines and I feel I have an equal say in how my home and my family life is run. This is, I believe, fundamental to one's dignity".
    Ann Kestenbaum, in the case studies that she describes in "Cash for Care", quotes Mr. M's wife, aged 48, suffering

    891
    from rheumatoid arthritis, heart condition and leg fractures as saying that having control of their own resources
    "makes us feel in control of our lives. Gives us back the feeling of being people and not a pathetic handicapped family."
    Ms K, who suffers from a spinal injury, says:
    "Having the cash to pay for the things you need means you have standing."
    Jenny Morris in "Community Care or Independent Living?" quotes Jack as saying:
    "I am a husband, a father and a breadwinner. And 10 years ago I was in an institution where I could not even decide when I would go to the toilet.… You know you can't really understand it if you haven't done it.… Your whole life changes."
    Jane Campbell endorses Jack's point impressively. She says:
    "Contributing, of course, is the biggest gift that direct payments has awarded me.… I have been able to take up a demanding full-time job that is equal to my skills."
    She works as a training director and she chairs the British Council of Organisations of Disabled People.
    The moral, practical and financial arguments all reinforce each other. Jack and Jane contribute their skills to the betterment of society. They pay taxes. Jane attests that less stress as a result of less dependence on others and more control over her own body has had beneficial effects on her health.
    Lord McColl, whose view on the point must carry particular weight, observed in last week's debate:
    "a high morale directly enhances the body's defences against illnesses of all kinds. As a result, people have fewer illnesses and thereby save the National Health Service money."
    The arguments in favour of independent living are familiar to the Government. My right hon. Friend the Minister for Social Security and Disabled People inaugurated the independent living fund, something of which he is proud, and justly so.
    The Under-Secretary of State for Health, Baroness Cumberlege, replying to the debate in the other place last week was emphatic when she said:
    "We fully support the aim of enabling disabled people to live independently and to exercise choice. We wish to give local authorities freedom and flexibility to meet those choices in innovative ways and to see disabled people placed at the centre of decision making."
    That statement is consistent with numerous other ministerial utterances and, I believe, truly reflects the spirit in which Ministers have sought to establish care in the community. What, therefore, is puzzling and deeply unsatisfactory is that Ministers, who express enthusiasm for independent living and scepticism about bureaucratic procedures and solutions, continue to refuse to allow local authority social services departments to make direct cash payments to severely disabled people.
    I shall examine the objections that Ministers have put forward to direct payments by local authorities. The speech by the Under-Secretary of State in another place last Wednesday was the fullest and latest rehearsal of those objections.
    The Minister made the point that social services departments and the social security system have different roles. She said:
    "Social services departments arrange exactly that—services. The Benefits Agency provides cash benefits. It is the business of the social security system to provide cash to support individuals in need. It is not the business of local authorities."—[Official Report, House of Lords, 21 April 1993; Vol. 544, c. 1663–64.]
    892
    That seems to me a descriptive observation rather than an argument against change. Moreover, it is not entirely accurate as a description of the status quo. Local authorities make cash payments in certain instances and they do so under recent legislation—the Children Act 1989. Local authorities make payments to children leaving care. They make cash payments to foster parents. They also make cash payments to voluntary organisations. So, the Government cannot pray in aid as a principle of administration that local authorities should not make cash payments.
    The Government have themselves legislated to enable local authorities to make payments to children and to able-bodied adults. I cannot imagine under what principle of administration disabled people alone should be excluded from receiving cash payments from local authorities.
    In any case, even if the Minister's descriptive statement is broadly valid, that is not an argument for persisting slavishly with a fixed conception of the respective roles of different public service organisations. The Under-Secretary of State talked of the Government's fear of "imbalance", as if the existing bureaucratic structure were a thing of such beauty that its preservation had to be the paramount consideration, more important than finding better ways to help disabled people. Doubtless there were powerful reasons for that broad division of labour in the past, but society and its needs and our conception of how to meet them have moved on.
    Throughout the 1980s my right hon. Friends have encouraged us to think of Government as enabler rather than provider and have encouraged those in the public service to think in terms of outputs and value for money rather than inputs.
    Only yesterday, in an article in The Times, my right hon. Friend the Chancellor of the Duchy of Lancaster inveighed against the bureaucratic top-down model of governmental provision. He condemned the inadequacy of
    "rule-bound, hierarchical, uncompetitive old style service providers".
    He went on:
    "Any organisation that governs its employees by detailed rule books in the end will promote only the best operator of rules, not the innovator or the creator. Any organisation that believes it is accountable only upwards, to those who set the rules, will treat its citizen customers as troublemakers".
    My right hon. Friend is right. For corroborative evidence, he need only read "Squaring the Circle", a study of needs assessment by Kathryn Ellis of the university of Birmingham for the Rowntree Foundation. She demonstrates the procrustean approach of social services staff, fitting clients into rigid categories of need, defined by pre-existing bureaucratic structures and assessment categories. Disabled clients who did not fit in and who expressed views of their own were dismissed as "demanding", "fussy", and "manipulative".
    My right hon. Friend the Chancellor of the Duchy of Lancaster went on to emphasise the need to delegate financial responsibility down and measure outcomes.
    In The Times today, my right hon. Friend the Chief Secretary to the Treasury is reported as saying of the Government's review of the welfare state:
    "We will consider all options … which will have the purpose of meeting our objectives, one of which is to focus benefits increasingly on those in need … we want to ensure people have greater control of their own resources".

    893
    So Cabinet Ministers are actively repudiating the status quo which the Under-Secretary of State was briefed to pray in aid last week.
    The Under-Secretary of State went on to say that local authorities are providers, enablers and facilitators of care services. That is right and as it should be. But if local authorities are to be enablers and facilitators, the Under-Secretary of State undermined her own argument against them making direct payments to clients because enabling and facilitating is exactly what that process involves.
    As the House knows, the Association of Directors of Social Services is unanimous in its support for direct payments by its departments. It passed a formal resolution to that effect last autumn. It is keen to move with the times.
    I spoke yesterday to Mr. David Mason, director of social services for Warwickshire county council, who confirmed his urgent hope that the Government will change their mind on this subject. As he said to me,
    "choice and empowerment come through purchasing power".
    The Under-Secretary of State raised, however, another objection, which the Government have advanced repeatedly. She said that it would be difficult for local authorities to define eligibility for direct payments. I find that a singularly unpersuasive argument in the context of the Government's policy of care in the community. The essence and great virtue of the policy is that local authority social services departments are to lead in assessing the needs of individual clients. Their daily duty and activity, enjoined on them by the Government, will be to assess need and, therefore, eligibility for help of one kind or another.
    But the Government have another argument to show that it could not be done. The Minister said that it would be difficult for local authorities to manage a genera', system of cash payments. That is an Aunt Sally. We are not talking about a general system. We are talking about a strictly finite and relatively small number of cases. In "Cause for Concern", published in March, Pauline Thompson provides the number of clients of the previous independent living fund authority by authority.
    The largest number was in Birmingham, where there are 424; in my county of Warwickshire, there are 79; the smallest number was in Barking and Dagenham, where there are nine. Nor need the Treasury fear any opening of the floodgates. Mercifully, there are not large numbers of severely disabled people in this country and, of them, only a limited proportion want to handle their own budgets and employ their own assistants. When Kingston-upon-Thames social services department made inquiries as to how many severely disabled people might wish to take advantage of such an option, 12 said that they would.
    6.30 pm
    The Treasury continues all the same to fear that costs would run out of control. Last week the Parliamentary Under-Secretary of State said the local authorities would find it difficult to carry out the necessary monitoring to keep control over public funds. Again, that is an odd assertion. It would be easier for local authorities to monitor and control individual budgets assigned to clients than it is for them to keep control over the costs of their own in-house services. There is no problem whatsoever in requiring clients to keep funds provided by social services
    894
    departments and the ILF in a separate bank account and to be provided with regular statements, receipts and timesheets.
    If the Treasury did not spend its time inventing imaginary difficulties, it would see that direct payments enable a given level of care to be achieved at less cost than the cost of publicly provided services. Evidence for that has been impressively marshalled by Jenny Morris, Ann Kestenbaum and Victoria Phillips. I shall not elaborate that part of the argument except to make the obvious point that there is far greater flexibility in pay rates and job descriptions for people employed directly by clients than there is for local authority employees.
    My right hon. Friend the Minister for Social Security and Disabled People, in his foreword to the "Evaluation of Personal Assistant Schemes" in Greenwich by Mike Oliver and Gerry Zarb, endorsed their cost-effectiveness. That report suggests that, for its £5 million-plus home help budget, Greenwich council could have purchased 665,912 hours of work; for the same amount the personal assistant scheme could have brought 1,450,569 hours. Similarly, the personal assistant scheme could have bought twice the number of care attendant hours.
    Under the scheme that the Government are now introducing, there will be an incentive for councils to inflate their costs, to bring the cost of care packages above the £200 threshold for a contribution from the ILF 1993 fund.
    In the debate in another place, the Minister also raised as an objection to direct payments that they would be at odds with the idea of a flexible response to individual circumstances and that somehow they would entail the creation of a separate social security system within social services with its accompanying rigidity. That would seem to be a through-the-looking-glass argument. A wealth of evidence demonstrates that cash payments which enable clients to manage their own arrangements for assistance provide enhanced flexibility. It is one of the strongest arguments in favour of direct payments.
    Ann Kenstenbaum writes:
    "Some of these arrangements are very flexible. Although the ILF award is assessed on the basis of regular hours of need, clients very often see their care needs in much less rigid terms. This is certainly true where care is essentially respite, allowing a family carer to have a break and get out of the house. It is also the case where a client's state of health and therefore care needs vary from one week to the next, or where a client leads a relatively active life engaging in different activities for which different hours of help are needed."
    She goes on to describe the problems of rigidity in the provision of services by social services departments.
    Mrs. B, with rheumatoid arthritis, is quoted as saying:
    "Home helps are bound by too many rules.… You couldn't expect a home help to be so flexible because of the other people they have to see."
    Mrs. J says:
    "As a home help, she had to refuse to clean windows. Now (employed privately) if she is asked to do something, she just does it."
    Miss C sums up the problem of rigid practices among local authority employees:
    "They canna do this, canna do that".
    Those complaints take us into the arguments against yet another objection by the Government. The Under-Secretary of State said that cash payments by the social services department would be unnecessary because the new

    895
    scheme ensures that in future the two parts of the package, cash from the ILF and services from the local authority, will be brought together
    "so that the client receives a coherent package of care agreed jointly by the disabled person, the local authority and the new fund."
    But this could have been designed as a model of cumbersome, time-consuming and expensive bureaucracy. I do not believe that care packages can be most cost-effectively designed if they are made up of £200 of services and extra cash put in from the ILF.
    The Minister went on to emphasise that she would expect the disabled person to have
    "as great a say as possible as to who is to be employed to provide the care."
    She added:
    "There is no reason why a care assistant should riot be personally chosen by the disabled person."
    I find it hard to credit that disabled clients will actually decide who is to be employed by local authorities. But if they are to have a say, why not go the whole way to autonomy? Would it not be less costly, administratively simpler and morally better for disabled people to employ their assistants?
    The argument to which the Minister appeared to attach the greatest weight was that, while
    "in individual cases disabled people may be able to use money more effectively than certain authorities"—
    a grudging but useful acknowledgement—there is a risk that they will
    "adversely affect authorities' ability to match their resources to all local needs, not just those of people receiving direct payments."—[Official Report, House of Lords, 21 April 1993; Vol. 544, c. 1664–65.]
    That would be a powerful argument if it were true, but the Association of Directors of Social Services does not believe it to be valid. The truth is that many social services departments will find it extremely difficult to play their part in providing services to severely disabled people. To do so requires specialist resources and expertise.
    One of the most important and worrying findings in Pauline Thompson's recent survey is that only a minority of severely disabled people receive services from their local authority. The case for allowing severely disabled people who wish to do so to design and manage their own care arrangements becomes all the more powerful. To the extent that social services departments do not have to commit staff and time to detailed organisation of care for people with complex needs, so they will be able to address themselves more fully to the huge range of their other responsibilities.
    The Minister's one other argument was that it would not be right to expand authorities' "already very full agendas" by asking them to take on responsibility for cash payments. Would that the Government had always been so concerned not to impose on local authorities. But they need not be fearful of doing so in this instance. They would be easing the enormous burden that they have laid on local authorities with care in the community.
    I apologise for having dealt with these arguments somewhat laboriously. But it is an important issue, and they are the arguments that the Government have so far invited us to accept. I cannot accept them, because they disintegrate as one looks at them. I do not think that the Ministers who have advanced them believe in them either. Lady Cumberlege said that she was sad to have to reject the case made by every speaker in last week's debate. She
    896
    asked their Lordships not to shoot the messenger. I certainly have not meant to do that; she is held in warm personal regard.
    However, it is our duty to debate the policy. If parliamentary debate is to count for anything, I hope that my right hon. and hon. Friends will heed the arguments that have been put forward from all parties and in both Houses. Early-day motion 1673 on independent living has been signed by 146 hon. Members of all parties. I hope that Ministers will respond positively to those arguments and views now because it is an urgent issue. My hon. Friend the Minister the hon. Member for Bury, North (Mr. Burt), has said that the Government's position is not irreversible. Care in the community and the new independent living fund must be established on a sensible basis. We cannot continue to defer to the obstinate obscurantism of a departmental tradition which dates from 1948.
    Ms Liz Lynne: I shall not detain the House for long, as the arguments have been well rehearsed by hon. Members on all sides of the House.
    Direct payments to people with disabilities will help them to lead individual lives in the same way as everybody else. We all know that, and I believe the Minister is well aware of it. I hope that the Government will change their mind about the amendment, as it will empower people with disabilities and help them to feel as if we treat them as normal human beings, because that is what they are. If we do not allow them to manage their own lives, we are saying that they do not have the same rights as us.
    One of the arguments was that it is not cost-effective, but it is very cost-effective. If people with disabilities do not stay in their own homes and cannot manage their own budgets, they will probably have to go into residential accommodation and that will cost a great deal more. I hope that the Government take that on board. If disabled people do not go into residential accommodation, yet again the carers will have to cope. The carers, who carry the burden all the time, will have to meet those needs. Under new community care legislation, much respite care will be cut because of insufficient Government funding. I urge the Government to change their mind.
    I do not accept that there would be a lack of accountability. It will be far easier for an individual to liaise with his or her local authority than for the local authority to liaise with the provider of services. The individual can be in constant contact with the social services department as to his or her needs and the services that it is buying in. That argument also goes by the board.
    Only a small number of people are involved, and for the Government to deny them a proper standard of living is extremely heartless. Cash payments are already made under the Children Act 1989, so a precedent has been set. I hope that the Minister will tell the Treasury that costs will not run out of control. There are too few people involved for that to happen. Disabled people should be able to enjoy their dignity and to manage their own lives. That is why I put my name to the amendment.
    Mr. Paul Flynn: There is unanimity on this issue on all parts of the House, and I will emphasise some of the points made with great force by other hon. Members in the belief that, as we say in Wales, "Dgtal donc a dgrr y garreg"—constant knocking breaks the stone. The stone that we have to crack is a strange and uncharacteristic stubbornness among Ministers.

    897
    Clause 1 gives the Secretary of State the power to make grants to the funds
    "for such purposes as the Secretary of State may determine."
    The amendment would define those purposes as
    "promoting … independence and freedom of choice"
    among the disabled. I am sure that we will share that aspiration.
    The importance of the disabled receiving cash payments wherever possible is that they can make their own decisions—something very much with the grain of Government thinking on so many other issues—as to how the money should be spent and the services needed can best be provided.
    The old ILF made payments direct to the person concerned, and that was a successful arrangement. The extension fund will continue to make such payments to those already receiving them, and the 1993 fund will make payments to the disabled and to third parties—and is likely to do so in most cases. The reason is that part of the money required will be provided by local authorities, which cannot make cash payments to the disabled but only provide services.
    The 1993 fund trustees will probably feel that it makes more sense to deliver the full package in kind rather than part of it being paid in cash and the rest in kind. The solution is to give local authorities the power to make cash payments, as they can in Scotland. Ministers virtually conceded that that will have to be done sooner or later but, for reasons that perplex us, they have refused to do it now.
    On Second Reading, the Minister of State said:
    "Whatever may happen in the future, at a time when local authorities are taking on so many extra responsibilities in relation to community care, it is surely a mistake to add to those responsibilities a duty to manage cash."—[Official Report, 15 March 1993; Vol. 221, c. 42.]
    However, local authorities will have to "manage cash", whether they are making payments to their own employees, other organisations, or the disabled themselves. Making it possible for local authorities to pay money to the disabled where they think that is right will not add to their burdens. On the contrary, it will make their task easier if some people can organise their own services rather than rely on their local authority to do that for them.
    In Committee, the Minister was even more forthcoming:
    "No one who has stayed in close touch with the work of the independent living fund can be unaware of the importance of cash, as opposed to services, to empower disabled people to have control over their lives … current legislation does not enable local authorities to dispense cash ….I suspect that that argument will be pursued with vigour by my hon. Friends, as well as by Opposition Members, who hold strong views on the matter, which will not go away. I recognise that the provision of cash maximises the freedom, the choice and the empowerment of disabled people. Current legislation does not provide for that and the Bill does not deal with it. However, I have noted carefully the hon. Gentleman's remarks."—[Official Report, Standing Committee A. 25 March 1993; c. 52.]
    The Bill cannot deal with that point because of the narrow drafting of its long title—hence the amendment's indirect wording. However, there is nothing to prevent the Minister from giving an undertaking tonight that that point will be dealt with by suitable legislation at the earliest opportunity. We are only asking the Minister to confront the logic of his own persuasive arguments.
    6.45 pm
    The Minister for Social Security and Disabled People (Mr. Nicholas Scott): I recognise the importance of debating this subject, which is in many ways central to community care. However, a number of problems confront me in respect of particular amendments. As the House will be aware, we are four weeks into the new care in the community arrangements. It would be unrealistic for the House to expect me to accept this evening amendments introduced at such an early point in those new arrangements.
    Nevertheless, I acknowledge the debate's importance and the powerful speeches made by hon. Members on both sides of the House in support of the narrower point—although I understand why the amendment was drafted in the way that it was—of whether cash alone, a mixture of cash and services, or just services should be the response to meeting the needs of disabled people.
    If I were tempted to accept the amendment and it were passed, that would involve changes to the activities of the trustees, who have all been appointed, and would involve the Charity Commissioners. That would not be an overriding consideration, but it would present problems, given that the trustees have held their first meeting and are deciding the way ahead. For those narrow reasons—I will come to the broader issues—it would be inappropriate to accept the amendment.
    Mr. Alan Howarth: I appreciate my right hon. Friend's point about the practical difficulties of altering the terms of the trust just after it has been established—clearly the new trustees and their staff want to get on with the job on the terms already defined. However, is not the important issue of parliamentary accountability in question, in establishing the rules of the fund by way of a trust deed? Does my hon. Friend agree that it is important that there should be accountability to Parliament for publicly provided funds and that there should be scope from time to time to change the trustees' terms of reference?
    Mr. Scott: There may be occasions during the life of the fund when, if there were strong and overwhelming feelings in the House, it would be necessary to alter the terms on which trustees settle matters. But it would be somewhat premature and untidy if, four weeks into the new arrrangements, we were to be persuaded to go down that route. Incidentally, I am not saying that I necessarily believe that the arguments being advanced at the moment will in due course be necessary, but at least for the time being I can rest on the fact that the timing would be singularly inappropriate at the moment.
    The main debate that we have had today, however, is on the question of cash. Illumination has been provided by the debate in another place and by debates in Committee and the debate this evening has brought home how cash delivered by the predecessor independent living fund empowered people to make choices about the care with which they were provided. I, too, have read the reports and views of Ann Kestenbaum, Pauline Thompson and others. Nobody can read them without being impressed by the power of their arguments. They are extremely moving as well as persuasive. But I hope that the House will be prepared to accept that, persuasive and moving though the arguments may be, we are at present in a new situation. with care in the community operating in its infancy.

    899
    The hon. Member for Huddersfield (Mr. Sheerman) and other hon. Members have made the point that, all too often in the past, the provision of care services by local authorities has tended to be inflexible. Sometimes, as in the example quoted by the hon. Member, it has even been uncaring and unresponsive to the varying needs of disabled people. I accept that such cases are in the minority and that many social service workers and carers employed by local authorities are immensely committed to their task and carry out their duties carefully and with flexibility.
    Overall, however, I believe that the attitudes of local authorities have been changing and will continue to move away from what one might call the rather authoritarian attitude that has characterised some provision in the past, with local authorities deciding the disabled persons' needs and how they will be met. That is not a total caricature of the attitude of some local authorities to the provision of care, whether it be because of budgetary constraints or because of attitudes among some professionals, who believe that they can say what is best for those in their care.
    We must recognise that, under the new community care arrangements, local authorities will increasingly become enablers rather than providers in the care business. They will be looking to organisations, private organisations, perhaps specially set up to provide care, perhaps voluntary organisations that can move into the business of providing care. We already know of some national organisations that are establishing schemes for looking after the group of disabled people in their particular remit; in some ways that could be a better path than local authorities seeking to provide all the services themselves. Local authorities becoming facilitators rather than providers will therefore be a very important part of this new approach. The fact that they must spend some 85 per cent. of the ring-fenced money in the non-public sector will be an important encouragement to move in that direction.
    As we discuss this matter today we share a common aim: that the people who need help and caring services receive them. I do not apologise for repeating what I have said before: my colleagues in the Department of Health and I, as Minister for Disabled People, are anxious to see that package of services are arrived at after proper consultation with the recipient of the care packages and that local authorities will assess the needs through their own social workers and will then explain to the disabled person what they feel able to provide, but ask for his views and offer to make such changes as they feel they can.
    Above that package of care, if the needs are in excess of the benchmark, the independent living fund, the 1993 fund, will be able to come in and provide the necessary extra cash. That will introduce the element of flexibility which has been so important.
    The cash argument is unlikely to disappear simply because I am unable to accept these arguments. I am trying to deal with the matter on its merits at the moment. I believe that we should give the new arrangements a fair and clear run-in. But nobody who has been involved in the workings of the independent living fund over the whole of its life could fail to understand the importance of cash in the lives of many disabled people. It is important that instead of the fund coming entirely to an end when community care was introduced a month ago, we were able to have both the extension fund and the 1993 fund, in order to preserve this concept.
    The Government will certainly monitor the impact of the new arrangements. Bearing in mind the strength of the
    900
    views expressed across the House this evening, I have a feeling that I will be constantly reminded of the arguments that have been put forward and that the Government will have to reconsider this from time to time to see whether the new arrangements are bearing up or what changes may be necessary.
    I thank all those who have contributed to the debate this evening. I end by reminding the House that although some examples have been put forward of local authorities being able to make cash payments, in general—Scotland is an exception—it is illegal for local authorities to make regular cash payments to individuals. They can make one-off payments in certain circumstances, but the concept of regular cash payments inherent in the arguments put forward this evening is at present generally illegal. If local authorities can devise schemes that are lawful, I will certainly not oppose their working with disabled people to work out innovative ways of giving disabled people more control over their care packages.
    I have tried to respond to the debate, but, because I am unable to accept the amendments or the idea of introducing changes so early in the life of the community care arrangements, I must ask the House to reject the amendments. I hope that I do so with some tone of sympathy in my voice and some understanding of the arguments that have been put forward.
    Mr. Sheerman: We are disappointed that the Minister has been unable to accept the amendments. Sometimes one listens to the speeches of the right hon. Gentleman and one tries to decode them as he is speaking. I feel that what he has said this evening needs some decoding. There is a sense in which he seems to be saying to the House, in a very quiet voice buried somewhere in the speech, that he is convinced of what the hon. Member for Stratford-on-Avon (Mr. Howarth) said in a very good speech and that he accepts that the moral case, as debated here and in Committee, has been made for accepting the principle embodied in the amendment. So I am encouraged by that voice in the right hon. Gentleman's speech.
    However, we are not very impressed by some of the reasons for failing to act now. I am tempted to quote the immortal bard and say, "It's not our fault, guy," when the Minister points out that we are a month into community care and it is all too late. He could have prepared for this a year ago. He knew that the independent living fund was coming to the end of its five years and he had plenty of time to prepare. He has had a year since the general election. So he has no excuse not to have all this up and running, thought through and implemented a long time before now. He says that it is all very difficult because we are a month into community care and all the problems there.
    There is an argument to be made—I will not elaborate too much, because we will come back to it on Third Reading—that the independent living fund was seen pragmatically as a great success, a great empowerer of disabled people. The independent living fund ran with great success for five years and the principles embodied in it could have been part of the doctrine that has now been introduced.
    Another point about planning is that the Government —knowing that the independent living fund was coming to the end of its five-year life and that the community care package was coming in at the same time—could have extended the independent living fund for a short time until the community care package had bedded down. That is an

    901
    argument that we have heard time and again from professionals—allow community care to bed for a period and access the match or mismatch between that and the independent living fund. I know that the Minister has heard that argument many times from many quarters.
    The minister said that his imagination had been illuminated by the debate, but he has given a catalogue of reasons for not being able to implement any of the suggestions at the present time.
    7 p.m
    My final point concerns the changed nature of local authorities. It is interesting that a Minister in the present Government should acknowledge that local authorities actually can and do do a good job. The Labour party has been saying that for 14 years, long and hard. Local authorities believe that cash payment is the best way to enable and facilitate this group of severely disabled people.
    Consequently, local authorities, the Association of Metropolitan Authorities, the Association of Directors of Social Services and all the other organisations that have been quoted by hon. Members on both sides of the house are telling the Minister that the most effective way for severely disabled people to be helped is by the provision of cash by local authorities. I was encouraged by the Minister's closing remark—and I will be reading his speech very carefully tomorrow—that if arrangements were made by local authorities, by way of a trust or whatever, which will facilitate certain kinds of payments, he would not wish to stop that.
    That is the only encouragement that I have been given, however, so we will be pushing this amendment to a vote.
    Question put, That the amendment be made:—
    The House divided: Ayes 193, Noes 259.

    Division No. 250]

    [7.2 pm

    AYES

    Adams, Mrs Irene

    Connarty, Michael

    Ainger, Nick

    Cook, Frank (Stockton N)

    Ainsworth, Robert (Cov'try NE)

    Cook, Robin (Livingston)

    Alton, David

    Corbyn, Jeremy

    Anderson, Donald (Swansea E)

    Corston, Ms Jean

    Armstrong, Hilary

    Cousins, Jim

    Ashton, Joe

    Cryer, Bob

    Austin-Walker, John

    Cummings, John

    Banks, Tony (Newham NW)

    Cunliffe, Lawrence

    Barnes, Harry

    Cunningham, Jim (Covy SE)

    Barron, Kevin

    Cunningham, Rt Hon Dr John

    Bayley, Hugh

    Dafis, Cynog

    Beckett, Rt Hon Margaret

    Davidson, Ian

    Beith, Rt Hon A. J.

    Davies, Bryan (Oldham C'tral)

    Benton, Joe

    Denham, John

    Betts, Clive

    Dewar, Donald

    Blunkett, David

    Dixon, Don

    Boyce, Jimmy

    Dowd, Jim

    Boyes, Roland

    Dunwoody, Mrs Gwyneth

    Bradley, Keith

    Eagle, Ms Angela

    Brown, Gordon (Dunfermline E)

    Eastham, Ken

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

    Enright, Derek

    Byers, Stephen

    Etherington, Bill

    Caborn, Richard

    Ewing, Mrs Margaret

    Callaghan, Jim

    Fatchett, Derek

    Campbell, Ronnie (Blyth V)

    Fisher, Mark

    Campbell-Savours, D. N.

    Flynn, Paul

    Canavan, Dennis

    Foster, Rt Hon Derek

    Carlile, Alexander (Montgomry)

    Foster, Don (Bath)

    Chisholm, Malcolm

    Foulkes, George

    Clarke, Eric (Midlothian)

    Fyfe, Maria

    Clelland, David

    George, Bruce

    Coffey, Ann

    Gerrard, Neil

    902

    Godman, Dr Norman A.

    Mitchell, Austin (Gt Grimsby)

    Griffiths, Win (Bridgend)

    Moonie, Dr Lewis

    Grocott, Bruce

    Morgan, Rhodri

    Gunnell, John

    Morley, Elliot

    Hanson, David

    Morris, Rt Hon A. (Wy'nshawe)

    Hardy, Peter

    Morris, Estelle (B'ham Yardley)

    Harvey, Nick

    Morris, Rt Hon J. (Aberavon)

    Heppell, John

    Mudie, George

    Hill, Keith (Streatham)

    Mullin, Chris

    Hinchliffe, David

    Murphy, Paul

    Hoey, Kate

    O'Brien, Michael (N W'kshire)

    Hogg, Norman (Cumbernauld)

    O'Hara, Edward

    Home Robertson, John

    Olner, William

    Hood, Jimmy

    Pendry, Tom

    Hoon, Geoffrey

    Pickthall, Colin

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

    Pike, Peter L.

    Howarth, George (Knowsley N)

    Pope, Greg

    Hoyle, Doug

    Powell, Ray (Ogmore)

    Hughes, Kevin (Doncaster N)

    Prentice, Ms Bridget (Lew'm E)

    Hughes, Robert (Aberdeen N)

    Prescott, John

    Hughes, Roy (Newport E)

    Primarolo, Dawn

    Hughes, Simon (Southwark)

    Quin, Ms Joyce

    Ingram, Adam

    Raynsford, Nick

    Jackson, Glenda (H'stead)

    Redmond, Martin

    Jackson, Helen (Shef'ld, H)

    Robertson, George (Hamilton)

    Jamieson, David

    Roche, Mrs. Barbara

    Jones, Barry (Alyn and D'side)

    Rogers, Allan

    Jones, Lynne (B'ham S O)

    Rooker, Jeff

    Jones, Martyn (Clwyd, SW)

    Ross, Ernie (Dundee W)

    Jowell, Tessa

    Sheerman, Barry

    Keen, Alan

    Short, Clare

    Kennedy, Charles (Ross, C&S)

    Simpson, Alan

    Kennedy, Jane (Lpool Brdgn)

    Skinner, Dennis

    Khabra, Piara S.

    Smith, Andrew (Oxford E)

    Kilfoyle, Peter

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

    Kirkwood, Archy

    Smith, Llew (Blaenau Gwent)

    Leighton, Ron

    Smyth, Rev Martin (Belfast S)

    Lestor, Joan (Eccles)

    Soley, Clive

    Lewis, Terry

    Spearing, Nigel

    Livingstone, Ken

    Steel, Rt Hon Sir David

    Lloyd, Tony (Stratford)

    Steinberg, Gerry

    Llwyd, Elfyn

    Stevenson, George

    Loyden, Eddie

    Stott, Roger

    Lynne, Ms Liz

    Strang, Dr. Gavin

    McAllion, John

    Taylor, Mrs Ann (Dewsbury)

    McAvoy, Thomas

    Taylor, Matthew (Truro)

    McCartney, Ian

    Trimble, David

    Macdonald, Calum

    Turner, Dennis

    McKelvey, William

    Tyler, Paul

    Mackinlay, Andrew

    Wallace, James

    McLeish, Henry

    Warden, Gareth (Gower)

    McMaster, Gordon

    Watson, Mike

    Madden, Max

    Wicks, Malcolm

    Mahon, Alice

    Wigley, Dafydd

    Marek, Dr John

    Williams, Rt Hon Alan (Sw'n W)

    Marshall, David (Shettleston)

    Williams, Alan W (Carmarthen)

    Marshall, Jim (Leicester, S)

    Wilson, Brian

    Martin, Michael J. (Springburn)

    Winnick, David

    Martlew, Eric

    Worthington, Tony

    Maxton, John

    Wright, Dr Tony

    Meale, Alan

    Young, David (Bolton SE)

    Michael, Alun

    Michie, Bill (Sheffield Heeley)

    Tellers for the Ayes:

    Michie, Mrs Ray (Argyll Bute)

    Mr. Jon Owen Jones and Mr. Eric Illsley.

    Milburn, Alan

    Miller, Andrew

    NOES

    Ainsworth, Peter (East Surrey)

    Baker, Rt Hon K. (Mole Valley)

    Alexander, Richard

    Baker, Nicholas (Dorset North)

    Alison, Rt Hon Michael (Selby)

    Baldry, Tony

    Allason, Rupert (Torbay)

    Banks, Matthew (Southport)

    Amess, David

    Banks, Robert (Harrogate)

    Ancram, Michael

    Bellingham, Henry

    Arbuthnot, James

    Bendall, Vivian

    Arnold, Jacques (Gravesham)

    Beresford, Sir Paul

    Arnold, Sir Thomas (Hazel Grv)

    Blackburn, Dr John G.

    Ashby, David

    Body, Sir Richard

    Aspinwall, Jack

    Bonsor, Sir Nicholas

    Atkinson, Peter (Hexham)

    Booth, Hartley

    903

    Boswell, Tim

    Hampson, Dr Keith

    Bottomley, Peter (Eltham)

    Hargreaves, Andrew

    Brandreth, Gyles

    Harris, David

    Brazier, Julian

    Haselhurst, Alan

    Brooke, Rt Hon Peter

    Hawkins, Nick

    Brown, M. (Brigg & Cl'thorpes)

    Hawksley, Warren

    Browning, Mrs. Angela

    Hayes, Jerry

    Bruce, Ian (S Dorset)

    Heald, Oliver

    Budgen, Nicholas

    Heathcoat-Amory, David

    Burns, Simon

    Hendry, Charles

    Burt, Alistair

    Heseltine, Rt Hon Michael

    Butler, Peter

    Higgins, Rt Hon Sir Terence L.

    Butterfill, John

    Hill, James (Southampton Test)

    Carlisle, John (Luton North)

    Horam, John

    Carlisle, Kenneth (Lincoln)

    Hordern, Rt Hon Sir Peter

    Carrington, Matthew

    Howard, Rt Hon Michael

    Cash, William

    Howell, Ralph (North Norfolk)

    Chapman, Sydney

    Hunt, Sir John (Ravensbourne)

    Churchill, Mr

    Hunter, Andrew

    Clappison, James

    Jack, Michael

    Clark, Dr Michael (Rochford)

    Jackson, Robert (Wantage)

    Clarke, Rt Hon Kenneth (Ruclif)

    Jenkin, Bernard

    Clifton-Brown, Geoffrey

    Jessel, Toby

    Coe, Sebastian

    Jones, Gwilym (Cardiff N)

    Colvin, Michael

    Jones, Robert B. (W Hertfdshr)

    Congdon, David

    Jopling, Rt Hon Michael

    Conway, Derek

    Kellett-Bowman, Dame Elaine

    Coombs, Anthony (Wyre For'st)

    Key, Robert

    Coombs, Simon (Swindon)

    Kilfedder, Sir James

    Cope, Rt Hon Sir John

    King, Rt Hon Tom

    Cormack, Patrick

    Kirkhope, Timothy

    Couchman, James

    Knapman, Roger

    Cran, James

    Knight, Mrs Angela (Erewash)

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

    Knight, Greg (Derby N)

    Curry, David (Skipton & Ripon)

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

    Davies, Quentin (Stamford)

    Knox, David

    Davis, David (Boothferry)

    Kynoch, George (Kincardine)

    Day, Stephen

    Lait, Mrs Jacqui

    Deva, Nirj Joseph

    Lamont, Rt Hon Norman

    Devlin, Tim

    Lawrence, Sir Ivan

    Douglas-Hamilton, Lord James

    Legg, Barry

    Dover, Den

    Leigh, Edward

    Duncan, Alan

    Lennox-Boyd, Mark

    Duncan-Smith, Iain

    Lidington, David

    Durant, Sir Anthony

    Lightbown, David

    Eggar, Tim

    Lilley, Rt Hon Peter

    Elletson, Harold

    Lloyd, Peter (Fareham)

    Emery, Rt Hon Sir Peter

    Lord, Michael

    Evans, David (Welwyn Hatfield)

    Luff, Peter

    Evans, Jonathan (Brecon)

    Lyell, Rt Hon Sir Nicholas

    Evans, Nigel (Ribble Valley)

    MacKay, Andrew

    Evans, Roger (Monmouth)

    McLoughlin, Patrick

    Evennett, David

    McNair-Wilson, Sir Patrick

    Faber, David

    Maitland, Lady Olga

    Fabricant, Michael

    Malone, Gerald

    Fairbairn, Sir Nicholas

    Mans, Keith

    Fenner, Dame Peggy

    Marland, Paul

    Field, Barry (Isle of Wight)

    Marlow, Tony

    Fishburn, Dudley

    Marshall, John (Hendon S)

    Forman, Nigel

    Marshall, Sir Michael (Arundel)

    Forsyth, Michael (Stirling)

    Martin, David (Portsmouth S)

    Forth, Eric

    Mawhinney, Dr Brian

    Fox, Dr Liam (Woodspring)

    Merchant, Piers

    Fox, Sir Marcus (Shipley)

    Milligan, Stephen

    Freeman, Roger

    Mills, Iain

    French, Douglas

    Mitchell, Andrew (Gedling)

    Fry, Peter

    Moate, Sir Roger

    Gale, Roger

    Monro, Sir Hector

    Gallie, Phil

    Moss, Malcolm

    Gardiner, Sir George

    Neubert, Sir Michael

    Garnier, Edward

    Newton, Rt Hon Tony

    Gill, Christopher

    Nicholson, David (Taunton)

    Gillan, Cheryl

    Nicholson, Emma (Devon West)

    Goodson-Wickes, Dr Charles

    Norris, Steve

    Gorst, John

    Onslow, Rt Hon Sir Cranley

    Greenway, Harry (Ealing N)

    Oppenheim, Phillip

    Griffiths, Peter (Portsmouth, N)

    Ottaway, Richard

    Grylls, Sir Michael

    Paice, James

    Hague, William

    Patnick, Irvine

    Hamilton, Neil (Tatton)

    Pattie, Rt Hon Sir Geoffrey

    904

    Pawsey, James

    Taylor, Ian (Esher)

    Peacock, Mrs Elizabeth

    Taylor, John M. (Solihull)

    Pickles, Eric

    Taylor, Sir Teddy (Southend, E)

    Porter, David (Waveney)

    Temple-Morris, Peter

    Portillo, Rt Hon Michael

    Thomason, Roy

    Powell, William (Corby)

    Thompson, Sir Donald (C'er V)

    Rathbone, Tim

    Thompson, Patrick (Norwich N)

    Renton, Rt Hon Tim

    Thornton, Sir Malcolm

    Richards, Rod

    Thurnham, Peter

    Riddick, Graham

    Townend, John (Bridlington)

    Rifkind, Rt Hon. Malcolm

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

    Robathan, Andrew

    Tredinnick, David

    Roberts, Rt Hon Sir Wyn

    Trend, Michael

    Robertson, Raymond (Ab'd'n S)

    Trotter, Neville

    Robinson, Mark (Somerton)

    Twinn, Dr Ian

    Rumbold, Rt Hon Dame Angela

    Walden, George

    Ryder, Rt Hon Richard

    Walker, Bill (N Tayside)

    Scott, Rt Hon Nicholas

    Waller, Gary

    Shaw, David (Dover)

    Wardle, Charles (Bexhill)

    Shaw, Sir Giles (Pudsey)

    Waterson, Nigel

    Shephard, Rt Hon Gillian

    Watts, John

    Shepherd, Colin (Hereford)

    Wells, Bowen

    Sims, Roger

    Wheeler, Rt Hon Sir John

    Skeet, Sir Trevor

    Whitney, Ray

    Smith, Tim (Beaconsfield)

    Whittingdale, John

    Soames, Nicholas

    Widdecombe, Ann

    Spencer, Sir Derek

    Wiggin, Sir Jerry

    Spicer, Sir James (W Dorset)

    Wilkinson, John

    Spicer, Michael (S Worcs)

    Willetts, David

    Spink, Dr Robert

    Wilshire, David

    Spring, Richard

    Winterton, Mrs Ann (Congleton)

    Sproat, Iain

    Winterton, Nicholas (Macc'f'ld)

    Stanley, Rt Hon Sir John

    Wolfson, Mark

    Steen, Anthony

    Yeo, Tim

    Stephen, Michael

    Young, Sir George (Acton)

    Stern, Michael

    Stewart, Allan

    Tellers for the Noes:

    Streeter, Gary

    Mr. Timothy Wood and Mr. Robert Hughes.

    Sweeney, Walter

    Sykes, John

    question accordingly negatived.
    7.15 p.m
    Mr. Keith Bradley: I beg to move amendment No.2, in page 1, line 16, at end insert—
    '(2A) Any grant made to the Independent Living (1993) Fund shall be subject to the condition that the secretary of state shall have exercised his power under Clause 15 of the deed establishing that fund to revoke Clause 4(1)(d) of that deed.'.
    Mr. deputy Speaker: I understand that it will be convenient to discuss at the same time the following amendments: No. 3, in page 1, line16, at end insert—
    '(2A) Any grant made to the Independent Living (1993) Fund shall be subject to the condition that the relevant maximum sum referred to in Clause 4(1)(a) of the deed establishing the Independent Living (1993) Fund shall be not less than £500.'.
    No. 4, in page 1, line 16, at end insert—
    '(2A) Any grant made to the Independent Living (1993) fund shall be subject to the condition that the secretary of State shall have exercised his power under Clause 15 of the deed establishing that fund to revoke Clause 4(1)(c) of that deed.'.
    Mr. Bradley: I am pleased to explain amendments Nos. 2,3and 4, which have been grouped together. As with amendment No. 1, it will be noted that these amendments command all-party support. Because of that, I hope that the government will yet again listen carefully to the arguments on the amendments and that they will view their consequences sympathetically, with a view to accepting them and incorporating them in the successor funds to the independent living fund. [Interruption.]

    905
    The three amendments cover three important areas of consideration, which—[Interruption.]
    Mr. Deputy Speaker: Order. A few sub-committees seem to be taking place throughout the Chamber. I am having difficulty in hearing the hon. Member for Manchester, Withington (Mr. Bradley). Will those hon. Members who are leaving the Chamber please leave quietly, and will those who intend to remain here please listen to the hon. Gentleman?
    Mr. Bradley: Thank you, Mr. Deputy Speaker. The amendments are extremely important for disabled people. I hope that those hon. Members who stay in the Chamber intend to make a contribution to the debate and to support the needs of disabled people, since the passing of these amendments would improve their lives in the future.
    The amendments cover three different areas, but they have been linked because of the detailed debate in Committee on these issues. At this point, we should pay tribute to the many organisations that represent disabled people. They have done an immense amount of work in support of the amendments. I must also thank the Committee and those who spoke on Second Reading. I pay tribute to Age Concern, the Alzheimer's Disease Society, the Carers National Association, Caring Costs, The Spinal Injuries Association, the all-party disablement group and many other organisations that have worked so hard to ensure that there is detailed and informed scrutiny of the legislation, in particular these amendments.
    The amendments cover three crucial matters. The first is the outrageous fact that the successor 1993 fund will not apply to anyone over working age, which basically means anyone over 65. The second is that a £500 limit is to be set on the total package of care from the local authority and the independent living fund together. The third is the important fact that, if the total package of care exceeds the £500 limit, the total burden of care falls back on the local authority. The problem is that there is no opportunity for the local authority to top up the care package above the £500 limit, and I shall deal in more detail with that issue later. I want especially to talk about the important concept of the sandwich, which was introduced in Committee.
    Amendment No. 2 deals with the appalling situation identified by all the groups that represent disabled people in any way—that the successor fund will not apply to anyone over the age of 65. There is absolutely no justification for excluding older people from help with the extra costs of disability. The Government's decision amounts to unwarranted discrimination and penalises people for being old and for being disabled.
    Statistics relating to the old independent living fund show that one in three—or 34 per cent.—of people who received help from the fund were over 65. Therefore, under the old fund the Government recognised the needs of people over 65 but are now denying them future help from the successor fund. That must be severely condemned on Report.
    Disability should not be considered an inevitable part of aging. The majority of older people are not disabled. The Office of Population Censuses and Survey's disability study showed that only a third of people over 60 have a disability and that many older people live full and active
    906
    lives into their 70s and beyond. For the minority who are disabled, their special needs and extra expenses do not decrease as they grow older.
    The Government have made their own estimates of the cost of extending the fund to the over-65s. It is staggering that they estimate that extending the successor fund to new cases to cover people over retirement age will cost only £2 million in 1993–94, £6 million in total in 1994–95 and only £9 million in total in 1995–96. That information was provided in a written answer on 5 December 1992. In the context of the overall needs of disabled people, they are extremely modest sums in terms of the Government's total expenditure, and I urge the Government to think again about extending the scheme to the over-65s.
    Again on their own estimates, the Government are expecting a total of only 1,500 cases a year to benefit from the fund. Extending the fund to the over-65s is hardly going to take public expenditure through the roof. I know that the Government have had to reign in public expenditure but, surely, the modest sums that I have mentioned could be included in that expenditure and the total package of care for disabled people.
    On Second Reading and in Committee the Government argued that they thought it right to target resources on those who had become disabled earlier in life, who have higher care costs than older people and who have not been able to build savings or acquire pension rights. The Government have repeatedly stated that pensioners have had large increases in average incomes and that more people have had an opportunity to build sufficient income for their retirement to be able to afford the extra costs of disability. That is why the Government believe that they should not extend the fund to the over-65s.
    However, many older people have not had that opportunity or the opportunity to benefit from the state earnings-related pension or the growing availability of occupational personal pension schemes. Many older people have been unable to acquire significant entitlement for their retirement because of unemployment, low pay, caring responsibilities or illness, so the evidence refutes the Government's argument that people over 65 have extra resources and will be able to look after themselves. That is clearly not the case. The Government should think again and try to include the over-65s in the successor fund.
    Mr. Dafydd Wigley: Does the hon. Gentleman agree that it is ironic that, because of the recent reduction in interest rates, some elderly people who have made personal provision by way of savings are finding that their savings are generating much less income and that they are now in difficulty? Does not that support his argument?
    Mr. Bradley: The hon. Gentleman is absolutely right. It is ironic that, as inflation comes down, the amount of money on which people have become used to living also falls dramatically. Many elderly people have come to my advice surgeries recently, asking how they will manage on a reduced income which they have no way of boosting. They have their total capital on which they can receive interest and they have no other resources to help them with the escalating costs of disability as they get older. I hope that the Government will listen carefully to our arguments with a view to extending the fund to the over-65s.
    As we made clear in the debate on amendment No. 1, we believe that the decision to limit the fund to the

    907
    under-65s was Treasury-led. The Treasury has limited the amount of money and told Ministers that they must find a way of fitting the number of claimants into the pot. I do not believe for a moment that Ministers have done so with any great optimism or welcome, but they have used age as the cut-off mechanism for reducing the money involved. I hope that Ministers will put pressure on the Treasury to allow them the meagre extra resources to extend the fund to the over-65s.
    I deal briefly with amendments Nos. 3 and 4, which would avoid the arbitrary limit of £500 being set on available care. We believe strongly that such a limit flies in the face of the purpose of the successor fund, which is to allow people to live independently. If there is a £500 limit and if it is exceeded, local authorities will obviously have to consider the relative and comparative costs of independent living and residential care. If it is found that the latter is cheaper than the costs that exceed the £500 limit, there will be pressure on local authorities to push people into residential care which flies in the face of the philosophy behind community care and any continuation of the independent living fund.
    There was absolute uproar about the comments by the Minister for Social Security and Disabled People In an Adjournment debate on the independent living fund, introduced by my right hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris) on 25 February. The Minister said:
    "I do not believe that … there is anything offensive in our setting an upper limit beyond which it is not unreasonable that people who need help should have to look to other sources to maintain their independence in the community, or to decide, sometimes reluctantly, that the time has come for them to go into residential care."—[Official Report, 25 February 1993; Vol. 219, c. 1126.]
    The Minister may regret his words because of the outrage expressed by many groups representing disabled people. They know that those resources do not exist and that residential care is probably the only option. We should be doing all in our power to ensure that that is not the consequence of limiting to £500 the amount that can be spent.
    7.30 pm
    It is crucial that we consider how the allocation will operate within the £500. There was much debate about that in Committee, but I believe that there is still confusion among local authorities, care groups and disabled people's groups about how things will work in practice.
    As I understand it, the £.500 care package is split into two key elements, one of which consists of £200 worth of services provided by the local authority. The previous debate has thrown a little light on that matter, and it may now be possible for local authorities to translate that £200 into cash. We shall work closely with local authorities when we have carefully read the report of the debate, to work out how the arrangement will operate. The second element is a top-up of £300 in cash from the fund.
    However, if the total package of care assessed for an individual will cost more than £500 the whole cost of that care falls back on the local authority and no contribution will be made from the independent living fund (1993) We believe that the concept of the sandwich that the Government have introduced is not real. As we said in Committee, it may be a Danish sandwich—an open sandwich with no slice of bread on the top. It will certainly not be a good British sandwich with a piece of bread, a
    908
    filling and another piece of bread on top. I know that we are all moving into Europe, and that Maastricht is almost behind us, but there is a limit on how far we shall push our European credentials tonight.
    I want the Government to be clear about the fact that the sandwich concept does not exist, because there is no opportunity for the local authority to come back and put a top layer on to the £300 element from the independent living fund. There is no opportunity for the local authority to top up the bread base—the £200—again. It is absurd not to allow the local authority to top up the sum to £600 or £700 if the cost goes beyond £500.
    I emphasise again that, if that does not happen, the real consequence may be that the individual—we are talking here about the most disabled people, whose care packages may be the most costly—and indeed the whole group will be forced into residential care because of the comparison between the costs of the package of care put together by the local authority and the costs of residential care. Because local authorities are working within cash-limited budgets they will be forced to consider seriously the residential care option rather than the option of real independence, which we should all strive to bring about, and the empowerment of the individual—that is a phrase that we have heard many times—to ensure that he or she gets the best care possible in the community.
    We have advanced strong arguments both in Committee and on Report about why the Government should think carefully again about the amendments. When we discuss the future of community care and how the independent living fund relates to it we all have the interests of disabled people and their carers at heart. I hope that the Minister will respond in the spirit in which the amendments were tabled, and according to the spirit in which the Government are shifting rapidly towards agreement on cash payments. I hope that he will recognise that, within the assistance provided by the local authority, there should be a cash element and also an opportunity for the local authority to come back and top up the total package, while the £300 contribution from the independent living fund continues to be made. Most crucially, all those arrangements should be extended to cover people over 65.
    Mr. Alfred Morris: For the severely disabled people they seek to help, every one of this group of amendments is profoundly important. They are all about protecting independence and freedom of choice for people whose claim to the attention of this House should be the priority of priorities.
    Amendment No. 2 gives the House an opportunity to debate again an upper age limit which the organisations that work to help severly disabled people over 65 condemn as discriminatory and in conflict with natural justice. The Alzheimer's Disease Society, of which I am an honorary officer, says:
    "We believe the age-limit for applications to the successor bodies of the ILF penalises people for being old".
    It makes that sad comment by reference to the cases of elderly disabled people of very high dependency which the Bill, as drafted, will totally exclude from the help they need, and the Society adds:
    "Such age discrimination is a crude example of a Government minimising public expenditure at the expense of an extremely needful group of people".
    Some of the organisations that speak for elderly disabled people of high dependency feel so strongly about

    909
    the age limit imposed by this Bill that they are already said to be thinking of involving the European Court of Human Rights if the Bill reaches the statute book in its present form. That must be of deep concern to right hon. and hon. Members on both sides of the House. I hope that it will also persuade the Government to think again about their stance on this issue both at Second Reading and in Committee.
    Ministers will know that there is equally strong feeling in the voluntary sector about the maximum sum of £500 imposed by the Bill on help for personal assistance services to enable severely disabled people to live, as they undoubtedly want to live, in their own homes instead of being shut away in institutions. The Government have been told by the British Council of Organisations of Disabled People, for example, that it is actively considering a reference of this further issue to the European Court of Human Rights if the Bill goes unamended into law.
    In the Adjournment Debate I initiated on the future of the independent living fund on 25 February, the Minister for Social Security and Disabled People said—I make no apology for recalling his words again—that in cases where severely disabled people need more than £500 to retain their independence, there is nothing
    "offensive in our setting an upper limit beyond which it is not unreasonable that people who need help should … decide, sometimes reluctantly, that the time has come for them to go into residential care."—[Official Report, 25 February 1993; Vol. 219, c. 1126.]
    All the major organisations of and for disabled people, as my hon. Friend the Member for Manchester, Withington (Mr. Bradley) said, have reacted with anger and disbelief to that statement. The Spinal Injuries Association, for example, which is held in the highest regard on both sides of the House, has described the statement as "most shocking" and asks whether "£500 is now the going price for freedom in this country?"
    Mr. Scott: That has been quoted twice, but the fact is that that is not the only option available at that juncture. It is still possible for the local authority that would resume responsibility for the provision of care at that stage to decide, taking account of the needs and of the finances available, that it still wishes to retain the independence of that person within the community rather than making provision for residential care. That is still a choice open to the local authority at that stage.
    Mr. Morris: I have heard about the "sandwich" concept and even more about the resource constraints on local authorities. They put it to me, as they do to other right hon. and hon. Members, that they are already finding it extremely difficult to meet their legal duties under existing law. I shall come in more detail to the difficulties of local authorities as I proceed.
    The Spinal Injuries Association is not alone in bitterly criticising the imposition of the £500 limit. Other organisations have described it as "forced incarceration" and "imprisonment without crime". At the very least, I hope that the Government will accept that it will be demeaning not only for them, but for this House as well, if the question of what is permissible treatment of severely disabled people in this country has ultimately to be decided not here but in the European Court.
    910
    There is widespread concern and dismay not only about the ceiling of £500 which the Government are imposing, but also the effects of this policy for severely disabled people who have been receiving direct payments from their local authorities to buy in the personal help they need to remain living in their own homes. Again as the Government must know, some authorities have been making direct payments for this purpose over a long period. Will they be allowed to go on doing so? If not, will they be required to provide personal assistance themselves or to arrange for a third party to do so in lieu of the direct payments they have been making to disabled people?
    If provision by the local authority is to continue, will disabled people be able to select their own personal assistants as they do now under the existing ILF arrangements? If they are not to have this right, then ipso facto the Government are seeking to create two classes of disabled people. That local authorities overwhelmingly support direct payments, the House should be in no doubt. In a recent survey by the Disablement Income Group of 68 directors of social services, it was found that 58 supported the principle of direct payments.
    There is, however, an even more fundamental objection to the Government's apparent determination to end the direct payments that local authorities have been making to disabled people. It is a legal one of which the right hon. Gentleman, if no one else here tonight, must be fully aware. I say this because he will have been advised, as I was as the Minister, that when a local authority has identified and accepted a disabled person's need, it is the legal duty of the authority to meet that need. That is the legal advice given to me as the Minister, as I informed the House in the debate on the Second Reading of the Chronically Sick and Disabled Persons (Amendment) Bill at column 1923 on 2 February 1979. I have checked, on several occasions since then, that identical legal advice has been given to all my successors as Minister since 1979, including the Prime Minister when he was Minister for Social Security and the Disabled in 1987.
    The direct payments made by local authorities have been made, in each case, after identifying and accepting need. Moreover, for them now to reduce or withdraw that help could put them in conflict with the law. This is because, like me, all my successors as Minister have been legally advised that for a local authority to withdraw, or even to reduce, help it has been giving a disabled person is unlawful if there is no diminution in his or her needs.
    Yet this is the position into which many local authorities may be forced by what the Government are proposing. Indeed the trustees of the independent living fund (1993) are being asked to participate with local authorities in the taking of decisions that could be legally challenged. Their- power to provide financial assistance is strictly prescribed as follows:
    "The Trustees will negotiate and agree the financial assistance they provide pursuant to the Power (in the Deed) on the basis that:
    if the relevant local authority ceases to provide the Threshold Sum (as defined in the Deed) the Trustee will cease to provide such financial assistance … the Trustees may cease to provide all or any such financial assistance without notice if they think fit."
    So if a local authority fails to provide at least £200 a week, the trustees will cease to provide assistance and the need the local authority has identified, and for which a disabled person has been assessed, could go unmet, in straight conflict with the legal advice given to me and all

    911
    my successors as Minister. I am not being hypothetical but addressing an existing difficulty for many local authorities, and the legal implications are extremely serious. Indeed, in a recent survey of directors of social services, who were asked how confident they were that their local authorities would be able to provide help at the £200 level for everyone who was assessed as needing at least that much, only one director was "very confident", 25 were only "fairly confident" and 32 were "not confident".
    7.45 pm
    Thus, many local authorities could find themselves in legal difficulties through no fault of their own. For this I do not directly blame the Minister; indeed, I was very kind to him at Second Reading in saying that this is, in truth, a Treasury and not a DSS Bill. It is incontestably a Treasury Bill in the sense that it was the Chancellor who decided how much would be spent on independence and choice for disabled people. He decided what Peter Large, speaking for the Disablement Income Group, has described as the "beggarly" sum of £4 million to be allocated to the ILF (1993); and it is the Chancellor who must take main responsibility for what the Bill proposes.
    It is, however, for the Minister for Disabled People or his nominee to reply to this debate tonight and I trust that he will address the very real concerns of disabled people and their organisations. as well as those of local authorities, that I have raised. I commend the amendments to the House.
    Mr. Alan Howarth: The House will be relieved to know that I do not intend to speak on this group of amendments at anything like the length I spoke on amendment No. 1. However, there are one or two arguments to which I wish to draw attention and others that have already been put forward which I wish to reinforce.
    Amendment No. 2 concerns the ineligibility of people over 65. I appreciate my right hon. Friend's concern to provide better help to younger, severely disabled people. The whole House must endorse that objective. However, I say with respect that it is not clear to me that that provides an argument for excluding people over 65 from becoming eligible for receiving support from the new independent living fund.
    After all, if the argument for supporting younger people is that they will not have had the opportunity to build up savings, we should remember that elderly people who would be eligible for support from the independent living fund would not have been able to amass substantial savings. As I understand it, they must be eligible for income support, and they would not be eligible for income support if they had accumulated substantial personal capital. I do not quite follow my right hon. Friend's argument on this point.
    I find it hard—indeed, impossible—to see how we can justify denying people who become severely disabled after the age of 65 the opportunity for independent living. The Government's continuing insistence that they are not prepared to allow social services departments to make direct payments is relevant to this. I contend that independent living in the proper and full sense involves having control of one's own resources.
    Although, as my right hon. Friend said during an intervention in the speech by the right hon. Member for Manchester, Wythenshawe (Mr. Morris), it would be possible for social services departments to support people
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    to live in the community, my fear is that if those severely disabled people who were so supported did not have control of their own budgets and were not able to design and manage their own care packages, they would be in danger of being effectively institutionalised in the community. That is not care in the community in the sense that any of us understand it.
    I do not understand why the Government want to create two categories of people over 65: those who might in some sense—it is a strange use of the term—be regarded as "fortunate" because they became severely disabled before 65 and are, therefore, eligible for financial support from the fund, and the rest. It seems to be an arbitrary distinction and I cannot imagine any satisfactory defence for it.
    If the argument is about cost, it does not seem to be a sufficiently powerful one because, on the Government's figures, the cost of extending eligibility to people over 65 to become recipients of grants from the new fund would not be exorbitant. On the Government's figures, it will be an extra £2 million in the first year, rising to £9 million in 1995–96. While I fully appreciate the importance of firm discipline in controlling the costs of the massive social security budget, the figure of £9 million of 1995–96 is effectively invisible in the context of a Department of Social Services budget of £80 billion.
    Amendments Nos. 3 and 4 relate to the £500 limit. I put it to my right hon. Friend the Minister that he and his colleagues, especially those in the Treasury, need not fear the cost of lifting that limit because the numbers in question are small. In the context of total public expenditure on welfare, we are talking about something that will be hardly discernible.
    Indeed, while we must always seek to find solutions that are cost-effective as well as humane, domiciliary care is cheaper and therefore more cost-effective than residential care in almost every instance. I cannot understand the argument for setting the limit, which seems to be an arbitrary one, on £500 with the combined value of the package of services from the Department of Social Services and grant from the independent living fund. On the contrary, it seems to be a waste of public resources effectively to drive people into residential care.
    The most important argument is a morale one. Surely, if anything, there is a greater moral imperative to enable the most extremely disabled people to live independently in the full sense that I described earlier. I ask my right hon. Friend this question: has any similar ceiling been set for any other category of clients? I am not aware that it is so. If no such ceiling has been set, why do the Government propose to set a ceiling on the package of support from those two sources which would be available to severely disabled people?
    Mr. Wigley: I shall intervene briefly because, unfortunately, I have had little opportunity to take part in this debate, not having been on the Committee. I support the amendments which have been tabled. I shall refer to a few points that have been made and perhaps elaborate on them.
    The argument against an arbitrary cut-off at the age of 65 is strong. There is a growing concern among elderly people and those organisations campaigning on their behalf that there appear to be more instances of this approach—a cut-off at a certain age, at the age of 65 or thereabouts. We are familiar with a cut-off on age with

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    regard to the mobility allowance in the past and the mobility element in the present disability living allowance. Such a cut-off causes considerable rancour. All hon. Members will have had constituents coming to them and saying, "I am aged 67 or 68. I have identical circumstances to another person who is a few years younger who has suffered a disability. He or she gets a mobility allowance: I do not."
    A cut-off based on age can be unfair. We know, from the representations that we have received from organisations on behalf of elderly and disabled people, of the feeling that there is discrimination in the national health service against older people. There is an assumption that when people reach a certain point they are bound to start disintegrating and may well have to live with worse circumstances than would have been acceptable at a slightly younger age. That is causing concern.
    For a cut-off at the age of 65 to be built in merely to make a modest saving of less than £10 million a year, the Government must re-examine the matter. After all, the policy relates to care in the community and the changes are meant to take into account the needs of individuals. Packages are meant to be tailored to individual needs and enable people to stay in the community. That should be equally applicable to a large number of people over the age of 65, as it is to people below the age of 65. Sixty-five is not an age at which one should expect life to come to an end or a significant deterioration to take place thereafter. Many people over 65 have an active life and a major contribution to make. The fact that some disabilities may impinge on some aspects of those lives should not mean that they are regarded as needing less support than those at a slightly younger age.
    Reference has been made to the cost of disability in general. Certainly, it is a significant cost. However, many aspects of life cost more as people get older—for example, the cost of heating—and, inevitably, people of a greater age face a greater burden. That will not be helped by the imposition of VAT on fuels that the Government have introduced, which will hit elderly people especially hard. I had hoped that the Government would take on board the need to ensure that there is no unnecessary demarcation against people above a certain age threshold. The cut-off seems to be an unnecessary demarcation. I put it to the Minister that, perhaps in another place, the Government can re-examine the matter if they cannot accept the wording of the amendment tonight.
    I was impressed by the argument put forward by the right hon. Member for Manchester, Wythenshawe (Mr. Morris) with regard to the possibility of legal cases. The last thing that local authorities need is to be tied down with fighting legal cases. They have enough on their hands in ensuring that client groups get the necessary services and attention and the full focus of their attention, rather than being sidetracked into such cases. We seem to be spoiling this specific ship for a penn'orth of tar. I implore the Minister to re-examine the matter.
    Mr. Flynn: The three fine amendments deal with many aspects of the Bill, which has been discussed at various stages. The Government's view is unclear. It is difficult to deal with this uncanny situation in which hon. Members
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    from four parties are saying the same thing in remarkably similar speeches and only the Government are opposing them.
    Amendment No. 2 provides an opportunity to remove the indefensible age limit. In Committee, the Minister of State defended the age limit on the ground of priorities, arguing that, first, younger disabled people were more likely to need longer-term care and, secondly, those who were disabled early in life had lost the opportunity to earn or save, have occupation pensions or provide for their own retirement. For the reasons given eloquently in previous speeches, I will not go into much detail about the faulty thinking behind those two conclusions.
    The implication of the Government's thinking is still not clear. Is it that local authorities, in deciding what needs will be met, will give lower priority to those over 65 so that funding from the independent living fund is not required by that age group because their needs will remain unmet? If it is implied that local authorities will discriminate against those over 65, it makes a mockery of the whole community care strategy for elderly people.
    There is an alternative interpretation—that local authorities will give equal priority to those over 65 but will bear the whole cost, rather than sharing it with the independent living fund. If that is the implication, it is unrealistic: it will not happen. In deciding what services local authorities can provide, they are bound to be influenced by the availability or non-availability of grants from the independent living fund. Therefore, in practice elderly people will receive less adequate services than younger people with precisely the same needs. That cannot be fair or just.
    Where part of the domiciliary service is met by the independent living fund, the local authority will have less incentive to remove people from their home and place them in institutions. So the age limit on ILF payments will make elderly people more likely to be offered institutional care than younger people with similar disabilities. Can that be what the Government intend? Is it their view that institutions are a bad thing, but that they are good enough for the over 65s? I look forward to the Minister's reply to that question.
    Amendment No. 3 deals with clause 4(1)(a) of the trust deed, which says:
    "No candidate shall be paid more than the relevant Maximum Sum in respect of any week".
    The maximum sum is £300 or a larger sum fixed by the Secretary of State. That is on top of the £200 threshold sum paid by the local authority. That makes in total a maximum of £500 per week that can be spent on any individual.
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    In Committee, an amendment was tabled requiring the Secretary of State to rescind clause 4(1)(a) of the trust deed, thus removing the maximum sum altogether. Sadly, the amendment was defeated. Hence we have tabled this more modest amendment, which would raised the maximum sum to at least £500, making a total of £700 when the local authority's £200 contribution was added.
    The Minister of State told the Committee that there would be only a handful of cases in which the total cost would exceed £500. So the number of cases in which the total cost would exceed £700 would be very small.

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    Therefore, the effect of amendment No. 3 would be virtually the same as if there were no maximum sum. The consequences in monetary terms would be slight.
    As all payments from the 1993 fund will be made at the trustee's discretion, doing away with the maximum would not mean that every application, however large, would be met in full. It would simply mean that the trustees would be allowed to decide each application on its merits. It would give them a little more flexibility, taking into account the size of their annual budget and the number of applications received. Amendment No. 3 is an eminently sensible amendment.
    Amendment No. 4 deals with the concept that the Minister of State introduced in Committee. It would be helpful for the House to consider what happened on the two days of the Committee. During the first day, the Opposition Front-Bench spokesman moved an amendment to remove the £300 maximum sum. My hon. Friend the Member for Manchester, Withington (Mr. Bradley) concluded his speech at five minutes to one. The Minister of State proposed that the debate be adjourned so that he could give "a considered response" at the next sitting. Between that sitting and the next, the Minister had the vision of a sandwich which he introduced to us at the beginning of the proceedings at the next sitting on 25 March.
    So the concept of the sandwich was not an off-the-cuff reaction but a carefully prepared response. He assured the Committee that the effect of the maximum payment would not be to force people into residential care. In introducing the concept of the sandwich, he said:
    "I shall give the Committee a concept, which should be easily understood, of how the new system will work. The independent living (1993) fund will, in a sense, be the filling of the sandwich, with bread on both sides, which will be provided by local authorities, Below £200, the local authority will have the responsibility to provide the services that disabled people need in order to maintain themselves in the community. Once the £500 maximum is reached., the responsibility will again revert to local authorities, which will have to decide whether domiciliary or residential care would be the most appropriate support." [Official Report, Standing Committee A, 25 March 1993; c. 36.]
    Later in the debate, the Minister had to amend his concept. Perhaps it is fair to say that he admitted that there had been inaccuracy in what he had said. Certainly, he had got the concept wrong, even if it was not inaccurate. He said that if the total cost was more than £500, far from the ILF providing the filling in the sandwich, it would not be allowed to make any contribution. Instead of a sandwich there would be two slices of bread with nothing in the middle.
    That is very different from the concept of the open sandwich—the rather non-communautaire suggestion made by my hon. Friend the Member for Withington. It would be a vegetarian sandwich, a dieter's sandwich or a Chelsea sandwich. It would be an entirely unsatisfactory sandwich, because it would have no filling. That is the' effect of clause 4(1)(c) of the trust deed, which amendment No. 4 seeks to remove.
    It is not surprising that the Minister got it wrong. The sandwich concept is a revealing visual aid. It not only makes sense but it is the only way in which the fund could operate fairly and effectively as a support to the most severely disabled people and to the local authorities responsible for providing them with community care.
    Amendment No. 4 would not affect the £300 maximum payment. If the total weekly cost of care was more than
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    £500, the ILF could still pay only the £300. But the local authority would be able to decide whether to provide the top slice of the sandwich or alternatively to offer institutional care. The Minister told the Committee that there would be only a handful of cases in which the total cost would exceed £500. So the sums of money involved are relatively small. The money would be spent on enabling a handful of severely disabled people to live independently. The view that they should be able to do so is shared by hon. Members in all corners of the House.
    One hopes that the amendments, which are supported by all parties in the House except the Government—or one might say that they are opposed only by the Treasury—will be accepted.
    Ms Lynne: Like other hon. Members, I shall not speak for long on the amendments. I cannot understand the reason for the age limit. There seems to be no rhyme or reason for it. The Government's figures, which have already been quoted, show that extending ILF to people over 65 would cost £2 million in 1993–94, rising to £9 million in 1995–96. That is hardly an enormous sum of money when one considers the budget with which the Government are dealing in the Bill. It can be classed as peanuts.
    The Government argue that they should target resources on younger people. They argue that older people have had time to save. I argue the reverse. Many people with disabilities have not had time to save. Many of them have been unemployed. Many of them have not been able to work for their living, or they have been on low pay. Many have had caring responsibilities. It does not necessarily follow that someone who is older has been able to save a great deal of money, or even any money.
    The income of older people with disabilities continues to be lower than that of people below pension age. Surveys have shown that the income of single disabled pensioners is 88 per cent. that of younger disabled people. Furthermore, older people have already suffered discrimination in the benefits system. For example, they cannot claim disability living allowance. They cannot claim invalid care allowance for the first time after reaching 65 and are thereby excluded from claiming carer premiums. Therefore, I urge the Government to change their mind.
    I also urge the Government to change their mind on the £500 limit. Again, I cannot understand the reason for it. It would not cost the Government a great deal of money to remove it. The fund will assist only if local authorities provide £200 worth of services. I should like some clarification of that. It appears from Government guidelines that if the cost of meeting needs goes beyond £500, the ILF will not provide any money and the disabled person will have to rely on the local authority.
    I see no justification for that. How was that £500 limit decided upon? Was it an arbitrary figure plucked out of the air? It certainly appears to have been. In an article on 4 February in Social Work Today, a Department of Social Security spokesperson was quoted as saying that fewer than 1 per cent. of current ILF clients claimed more than £500. The Minister has agreed that the number of claimants is small, so it would not cost the Government a great deal of money to remove the cash limit of £500.
    Is there any evidence that residential accommodation will be a cheaper option? I doubt it very much. The

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    Minister also appears to believe that it will not be cheaper, so why will the ILF be cash-limited? I hope that the Minister will answer those questions.
    In terms of caring for people with learning difficulties, the ILF client costs, on average, £140 a week. Those in residential care cost, on average, £272. Once again, no saving is involved. Surely the savings made in the vast majority of cases will more than offset the extra costs of a few exceptional cases.
    I do not believe that people's civil rights should be cash-limited, but I fear very much that that is what the Government will end up doing unless they accept the amendments.
    The Parliamentary Under-Secretary of State for Social Security (Mr. Alistair Burt): I am glad to have the opportunity to reply to the debate, which has, once again, been characterised by contributions from a succession of speakers who have a knowledge and understanding of disability and matters related to it.
    Those hon. Members are beguiling in their different ways. I particularly enjoy the speeches of the hon. Member for Newport, West (Mr. Flynn). He sets up such outrageous false premises about what the Government intend to do that no reasonable individual could gainsay what he said if there was a ha'penny of truth in the case that he set out. That is why he is so beguiling. I shall seek to reassure the House that there was not a scintilla of truth in what he suggested were the Government's proposals. There is no need for us to be beguiled by his arguments.
    A variety of hon. Members have spoken with their usual care and passion. The hon. Member for Manchester, Withington (Mr. Bradley), who moved the amendments, has good knowledge of this subject and we had good debates in Committee. The right hon. Member for Manchester, Wythenshawe (Mr. Morris) is well known for his experience in this subject. My hon. Friend the Member for Stratford-on-Avon (Mr. Howarth), who made a significant contribution on Second Reading, also spoke, as did the hon. Member for Newport, West, to whom I have already referred. The hon. Member for Rochdale (Ms Lynne), my constituency neighbour, speaks well on these matters for her party.
    Mr. Alfred Morris: The Minister has forgotten the hon. Member for Caernarfon (Mr. Wigley).
    Mr. Burt: I am a doctor's son and bad handwriting is hereditary. I did not see that I had written the name of the hon. Member for Caernarfon (Mr. Wigley). I apologise to him. He always speaks with knowledge and great integrity on this matter. I enjoyed his comments.
    I preface my remarks by repeating what I said on Second Reading, because the idea that community care does not exist tends to lie behind all the amendments. It is felt that the ILF is the only thing upon which people may depend when they are in need. I stress, once again, that the ILF is a sandwich—I shall talk about that in detail later —which is additional to care that is now provided in a different way.
    Community care will provide individual, specialised care for those who need it. It will be based on an assessment of need. It does not imply residential care beyond a certain financial limit, but that local authorities and those responsible for the care of the elderly and the
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    disabled will be able to consider people individually in a way that was not possible before. The ILF is a useful adjunct to that process, but the arrangements for that fund cannot in any way be considered as independent of community care. I sometimes feel that the misapprehensions about the National Health Service and Community Care Act 1990 are based on that basic misunderstanding of Government policy.
    Although the three amendments under consideration could be taken together, I shall deal first with amendment No. 2. That amendment would extend the eligibility of the 1993 fund to those over the age of 66. I am unable to accept that amendment. Once awarded, payments for the fund will continue until they are no longer needed. There is no cut-off to those who have been awarded that payment once they reach the age of 66 and they will continue to receive the payment for as long as it is needed.
    The community care reforms which have been made since April 1992 are designed to ensure that the care needs of all disabled people, including those who are severely disabled, are catered for by local authorities. Those authorities have been adequately resourced to meet the needs. The right hon. Member for Wythenshawe made some disparaging comments about the amounts in the ILF budget, but it is wrong to look at that budget in isolation from the community care provisions.
    8.15 pm
    As well as the £4 million for the 1993 fund, we will spend a further £120 million on the extension fund and an extra £26·8 million on local authorities. That amounts to spending of more than £150 million, a significant increase on current estimated expenditure on the ILF of under £100 million. In addition, the £565 million allocated for community care, once added to that total, creates a significant package. I do not believe that it is fair to isolate a small amount for the new fund and to say that that represents total funding.
    Mr. Alfred Morris: I am grateful to the Minister for giving way and I shall intervene briefly. My main point is that local authorities have said that in very many cases they will find it difficult to find the sum of £200. If they cannot find it, the process of helping many severely disabled people does not even start. It is only what local authorities tell me and other hon. Members on both sides of the House about their resource problem that makes us speak as we do in debates such as this.
    Mr. Burt: I understand the right hon. Gentleman's point, but, like me, he has some experience of local authorities and what they say to a Government when they ask for funds. I maintain what I have already said: that the total amount that has been put into community care is considerable. I have already cited the figures. All local authorities constantly wish for more. Recently, I listened to a radio programme in which the director of social services in Newcastle said that local authorities would always want more but that they would work with what they have. The Government have made a substantial commitment to community care and I do not believe that the right hon. Gentleman's concerns will come to pass.
    Given the limited resources that remain available, we believe that it is reasonable to limit the scope of the 1993 fund to people aged between 16 and 65, because people in that age group are the most likely to have longer-term care needs. Those disabled early in life have often lost the

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    opportunity to earn and save. We believe that the highest priority for independent living must be given to those for whom the usual pattern is to live and work in the community. That does not mean, however, that those over the age of 65 are abandoned in terms of receiving help or being given the opportunity for independent living.
    There is no suggestion that, simply because an application to the ILF cannot be made after the age of 65, the sort of domiciliary care that might be needed or requested cannot be made available by a local authority. It can and will be. That is the raison d'être of community care. The care will be tailored more neatly to the requests of an individual. That will apply to someone who asks a local authority for care and assistance at whatever age, including beyond 65 years. The mere fact that the ILF is not available does not disqualify those over that age from the individual care and provision that they would want.
    The hon. Member for Caernarfon said that he was concerned about parameters and the 65 age limit creeping in. There are good reasons and historical precedents for setting age limits. When mobility allowance was originally introduced by a previous Government, an upper age limit and a cut-off point were set, after which the allowance would not continue. This Government changed that rule to enable the allowance to continue beyond the upper age limit. There is nothing unusual or wrong in a Government setting upper limits or parameters. Bearing in mind the support mechanism that community care provides in itself, our policy of making the fund available before the age of 65, and allowing it to continue beyond that age for those who needed it, provides an answer to those who are worried about the age limit and eligibility.
    Mr. Alan Howarth: My hon. Friend said that the independent living fund was a useful adjunct to the resources of social services departments to enable them to provide the necessary help to severely disabled people. Why is it a useful adjunct for some people over the age of 65, but not for others?
    Mr. Burt: It is simply that there is a requirement to set parameters for the fund. For the reasons that I have given, we believe that it is right to target the resources between the ages of 16 and 65 for applicants, but we want the availability to continue, which is perfectly fair. The trouble with an adjunct is that, once set up, people see it, not as an adjunct, but as an integral part of the system. The basic system is community care, and we have produced something extra to help those who qualify.
    Mr. Bradley: Part of the difficulty of denying the fund to those over the age of 65 is that they will be denied access to £300-worth of cash, which could be tailored to their own needs. That reinforces the argument and I hope that the Minister will reconsider the argument for allowing local authorities to provide cash so that there is no discrimination between under-65s and over-65s.
    Mr. Burt: The hon. Gentleman seeks to reopen a previous debate on cash, and I cannot respond to him. However, I stress that we see the best of community care provision coming in the independent care package, which will be available to those of all ages, with or without the independent living fund. The necessity of limiting the age of eligibility in no way denies the opportunity for local
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    authorities to provide just as individul, just as caring and just as home-based a package for those over 65 as for those under 65.
    Amendments Nos. 3 and 4 deal with finance, the parameter of £500 and the sandwich of care. Amendment No. 3 would place an unreasonable restriction on the fund's operation. In the past, the ILF used to relax or restrict the rules according to budgetary constraints. It is quite proper that that flexibility should be available in future to the trustees. Trustees have a legal responsibility to ensure that the fund's resources are appropriately distributed in a manner consistent with the trust's purposes. The £500 limit is one of the parameters that has been set around the new scheme to help to focus the trustees' attention on the client group targeted by the 1993 fund. To remove their ability to reduce that limit would effectively remove some of their discretion. I cannot imagine that the trustees would want to reduce that limit, but it would be wrong to take away their power to do so.
    Amendment No. 4 aims to undo the main feature of the new fund: the partnership with local authorities. Nothing stands still, but some hon. Members seem unwilling to acknowledge that, in the sphere of independent living, the world has changed and we have to move with the times. The old independent living fund had to work independently of local authorities, but now we have the new community care arrangements in place.
    One of the problems that the old ILF faced was the fact that its existence provided an incentive to local authorities to offload their responsibilities on to the fund. At that time, local authorities were not ready to provide flexible and personalised care services and severely disabled people instead looked to the independent living fund for help. Now local authorities have been given a special transitional grant for community care, which in Great Britain includes an extra £27 million—rising to £100 million in 1995–96—to meet the costs of those clients who would have gone to the ILF under the old arrangements, and the costs of meeting the first £200 of services for those who receive help from the 1993 fund. That last point answers the question of the right hon. Member for Wythenshawe.
    Mr. Sheerman: I know that the Minister may have a pressing engagement, but the Opposition take the new arrangements covered in the Bill seriously. The Minister should not gabble through his speech as though he had an important engagement. We want to listen to the arguments. It is not good enough for the severely disabled people in this country for the Minister to rattle through the speech with no feeling. It gives no hope for disabled people.
    Mr. Burt: Every time I am tempted to give the hon. Gentleman the benefit of the doubt and presume that underneath that extraordinary exterior lies a reasonable man, I am proved wrong.
    Dame Elaine Kellett-Bowman: I was appalled at the intervention of the hon. Member for Huddersfield (Mr. Sheerman). The only passage of his speech through which my hon. Friend the Minister rattled was that giving the terms of the deed. The rest of his speech was given at a perfectly normal speed. We understood it, and if the Opposition did not, that is their bad luck.
    Mr. Scott: Ignore the hon. Gentleman's intervention.
    Mr. Burt: I am extremely grateful to my hon. Friend the Member for Lancaster (Dame E. Kellett-Bowman) and perhaps I would do best to take the advice of my right hon. Friend the Minister for Social Security and Disabled People and simply ignore the intervention of the hon. Member for Huddersfield.
    Local authorities have been properly resourced for their responsibilities and it would be wrong for the 1993 fund to find itself taking on the full burden of a task which is the primary responsibility of the local authority. The key feature of the new fund is the partnership arrangement with the local authority. The visiting social workers of the ILF have built up expertise in the assessment of needs for people with severe disabilities which is rightly admired. But it is the local authority's social worker who is best placed to identify the resources and services available locally to translate that assessment into a viable care package. The requirement for the local authority to pay for the first £200 of services ensures that the care package is one that reflects the best that can be provided for the particular client in his or her locality.
    Clients coming to the old ILF had to take as given whatever the local authority was willing to provide, and the ILF social worker would suggest a package of care to fit around and supplement those services. Under the new system, the whole package of care will be designed as one, from the start, by the fund and the local authority working in partnership.
    I was asked questions about the sandwich. I do not know how the hon. Member for Withington recognises a sandwich, but we in Bury recognise a butty when we see one. The butty that we are discussing is straightforward. It has a bottom layer—the local authority provision of care up to £200, which is the basic threshold—then the independent living fund, which can be included as a discretionary element, and the top slice of the butty is the local authority's responsibility to take on statutory responsibilities for the elderly over the £500 limit. The middle element consists of the provision that can be made up by the independent living fund.
    Mr. Bradley: If a butty in Bury consists of two pieces of bread and a filling that is removed if it goes above the £500 limit, the people of Bury will be disappointed that their Member of Parliament does not feed them better. Clearly, if the ILF element goes beyond £500, it is removed. Someone cannot eat that element and then eat another part of the local authority provision. The Minister must recognise how the system will work. We cannot pretend that someone can pass through the £500 limit and still retain the £300 from the independent living fund. Everyone, including the Minister for Social Security and Disabled People, has made that clear, and the Parliamentary Under-Secretary is trying to confuse the issue yet again.
    Mr. Burt: Culinary expertise is better in Bury than in Manchester. I always thought that a butty contained a bottom, a middle and a top. The bottom layer here up to £200 is covered by the local authority. The top layer, above £500, is also provided by the local authority. The independent living fund can be used in the middle and that is the middle of the sandwich. The care sandwich is made up of what the local authority provides top and bottom, with the ILF in the middle. That is as clear a definition of a sandwich as I have heard.
    8.30 pm
    Mr. Bradley: Is the Minister now saying that one can have £200-worth of services from the local authority, plus £300 in cash from the ILF, plus an element of service on top of that from the local authority? Is that the butty he has in mind?
    Mr. Sheerman: That is a good butty.
    Mr. Burt: What a Yorkshireman knows about a butty nobody can guess. The situation is as clear as I have explained. Whatever sort of concoction Opposition Members are trying to create, I have presented a straightforward sandwich of care—[Interruption.] The layer of care up to £200 is wholly local authority money. The layer over £500 is totally local authority. The middle of the sandwich is money available from the ILF. That is the care package.
    I am referring not to an individual case, but to the total package of care. That involves local authority assistance below £200 and local authority assistance above £500, with the ILF working in the middle. That is the definition of the sandwich which came through in Committee and it is that which the hon. Member for Withington is seeking to distort.
    Mr. Morris: I have some experience of living within reach of Bury. Is not it a fact that butties from Bury are usually filled with black pudding?
    Mr. Burt: And they are grand. I am describing the package of care in the form of a sandwich and I am not relating it to an individual—[Interruption.]
    Mr. Flynn: The Minister is making a meal of it.
    Mr. Burt: I am talking about—
    Mr. Bradley: A Bury sandwich?
    Madam Deputy Speaker (Dame Janet Fookes): Order. We must have fewer sedentary interruptions, or it will be a case of too many cooks spoiling the broth.
    Mr. Burt: The case being made by Opposition Members is based on their perception that the failings of the new ILF, because of a failure of community care, will discriminate against those whom they wish to protect. I am describing where the ILF fits into the community care package for local authorities. It is only when the two are taken together that what the Government are doing becomes clear and that is the best way to reassure those who are concerned.
    It is in that area that the analogy of the sandwich came into play in Committee. When it is viewed in that light, one appreciates that below £200 the cost is dealt with wholly by the local authority. Above £500 the cost is again, right the way through, dealt with wholly by the local authority.
    Mr. Sheerman: The hon. Gentleman is wrong.
    Mr. Burt: I am not wrong. It is clear that we are at odds over the concept of the sandwich. I suspect that we shall not make progress on that front, even though I have described it as clearly as I can.
    Mr. Bradley: I do not want to labour the point, but it is important for organisations outside to understand how the systems will work. Let us deal—this is the crux of the

    923
    matter—with an individual disabled person. An assessment is made of such a person. That assessment in total of the care required is, say, above £500. Will the Minister confirm that the total package will have to come from the local authority and that there can be no element of ILF? In other words, there will be no sandwich for that individual. The filling of the ILF is removed, with the total having to come by way of services from the local authority. Is that correct?
    Mr. Burt: I am delighted that the hon. Gentleman now understands the position. What he says is exactly right. Over the cost of £500, it is dealt with wholly by the local authority—
    Mr. Bradley: That is not what the hon. Gentleman said.
    Mr. Burt: The hon. Gentleman must read the Official Report tomorrow to see that I said that the whole total for those who need care over £500 is dealt with by the local authority, in exactly the same way as those who need care under £200 have their care needs met totally by the local authority. In the band in the middle, between £200 and £500, the ILF comes into play. That is the filling of the sandwich.
    I see no reason why we should be at odds over the matter. My description of the way in which the sandwich concept fits into community care is right and I have explained it to the point where we have made progress, to the point where the hon. Member for Withington understands the position. In any event, if his concept of a sandwich does not include a bottom, middle and top, I do not know what sort of sandwich he has in mind.
    Mr. Malcolm Wicks rose—
    Mr. Burt: I suspect that I should move on and not continue to give way. Does the hon. Gentleman have something substantial to say?
    Mr. Wicks: I rise simply to suggest that, when the Department makes the training video on the ILF, it does not use the sandwich analogy, in the interests of clarity, because, like many sandwiches one buys that look good, they often fall apart in the hand.
    Mr. Burt: I know that that intervention was kindly meant. I will just draw a veil over it.
    The place of the ILF in the whole area of community care does not leave those about whom we are most concerned without support. It has been suggested on several occasions that the mere fact that there is a limit of £500 necessarily places those who need care above that level into institutional care. That allegation has been made by a number of Opposition Members. It is absolutely not the case.
    When individuals are in the care of a local authority, it has primary responsibility for the community and residential care of disabled people. Local authorities will make the decision whether to opt for domiciliary or day care, bearing in mind the needs of the client and the costs of the option. If the disabled person would prefer domiciliary care and it is cheaper than residential care, that is surely what the local authority will provide. Where domiciliary care is more expensive, the local authority will need to decide whether it can afford to spend more to help that individual to remain in the community.
    There is no logic in the argument that, because of insufficient funding, people will be forced into residential
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    care. A recent report confirmed that caring for people in the community often proves the most cost-effective way of providing for their care needs, and that applies just as much above as below £500.
    Ms Lynne: Is the Minister aware that, on discovering that it will cost more to keep people in their own homes, many local authorities will opt to put them in residential accommodation, whether or not the disabled person chooses that course? That will happen because of the cash limits on community care and the fact that the Government have not provided enough money for community care as a whole.
    Mr. Burt: As the hon. Lady pointed out earlier, only 1 per cent. of current ILF grants are in excess of £500 per week. That shows that the majority of people who require that size of award are not living independently. But they can do so. Where it is cost-effective for a local authority to use its money to keep someone at home, it will do so. But, naturally, a local authority will come to a decision about whether it is cost-effective. Bearing in mind its own position and that of others whom it has to look after, it may be impossible to provide domiciliary care. But the sheer fact of a cut-off point at £500 can in no way be taken to imply that merely because a person is above that limit he must be in residential care. Time and again, the Opposition have implied that or expressed it directly. It is not correct and it is not fair for them to do so.
    This has proved to be a more lengthy debate than was originally expected. It has taken us down a road that I suspect I shall remember for many years to come. I have tried to deal with why the amendments cannot be accepted by the Government. As I have sought to make clear, we do not believe that the age limit is detrimental to those who would not be eligible for the independent living fund. They will be covered by community care in a manner too often and shamefully neglected by Opposition Members.
    The £500 limit and the need for local authorities to contribute up to £200 is not wrong. Taken in the round with the other aspects of community care that the Government have introduced, it is the right way for the independent living fund to proceed. This should be recognised as a package of individual care which is a considerable advance and improvement on social security care in the past. The independent living fund will continue to provide a more than helpful and useful adjunct to community care in Britain. Accordingly, I ask the House to reject the amendments.
    Mr. Bradley: I am grateful to the Minister for his response, although I am clearly disappointed that he is not prepared to accept our amendments. I have listened to the excellent speeches from hon. Members on both sides of the House and from all political parties who support the amendments and it is a great disappointment that the Government do not see their merits.
    The amount of money involved in accepting the amendments would be so small in terms of the total social security budget and so beneficial for disabled people that I find it difficult to accept that their rejection is not Treasury-led. The Minister's heart is in the right place, but he has clearly been overwhelmingly constrained by the Treasury tonight.
    We shall not seek to press the amendments to a vote because it is important that these matters should be taken

    925
    up again in the other place in order to clarify how the fund operates in practice in relation to the local authority. Their Lordships will read the proceedings of this debate with great interest and will take up the matters in their own inimitable way when they discuss the culinary delights of the independent living fund.
    I am disappointed with the Government's response, but the quality of debate has made its own points. Therefore, I beg to ask leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    Order for Third Reading read.
    8.43 pm
    Mr. Scott: I beg to move, That the Bill be now read the Third time.
    We have covered a great deal of ground this evening and I do not want to reiterate those comments in my closing remarks. The Bill fulfils a manifesto commitment which we gave at the general election to maintain a fund to meet the needs of disabled people. The Bill builds on the tremendous success—which has been acknowledged in all parts of the House—of the independent living fund, which operated under the arrangements pre-community care, in the new context that has now been provided from 1 April this year.
    I am happy to report to the House that the new funds are now operational with a full board of trustees. The handover from the independent living fund to the extension fund went smoothly, with all clients continuing to receive their payments, as I undertook to the House when we discussed the matter earlier. The case load of nearly 22,000 people is now being operated by the new extension fund. The new director is in post and the director and staff are now building the bridges towards the relationship with local authorities which will allow the new partnership between the 1993 fund and local authorities to work smoothly in future.
    I hope that, whatever differences there may have been between us in Committee, on Report, or now on Third Reading, we can all wish the trustees, director and staff well in the work that they will be undertaking to improve the quality of life of disabled people in Britain.
    The Bill also seeks to put motability on a firmer statutory footing. The motability scheme, as we all recognise—I pay tribute to the right hon. Member for Manchester, Wythenshawe (Mr. Morris) who launched the scheme in the first place—is an extremely successful joint enterprise with the Government, the voluntary sector and the clearing banks. It has served and continues to serve to increase the quality of life of an ever-increasing number of disabled people and commands widespread support throughout the House. I know that both sides of the House will wish to support the provision that puts motability funding on a statutory footing to ensure its continued financial support. Many hon. Members will remember my right hon. Friend the Prime Minister recently handing over to the recipient the keys of the 350,000th motability car, and that is a measure of the scheme's immense success and popularity.
    The Bill is part of the Government's overall strategy for improving quality of life for disabled people in our society. I think that anyone would recognise that an immense amount has been done in the past 10 years. I do not
    926
    disguise from the House, and never do, the fact that we have a long way to go. There is still much work to be done, but any fair-minded person recognises the improvements that have been made in terms of benefits, delivery of services, accessibility of our buildings—we still have a long way to go—and the growing opportunities for employment of disabled people as new technology, in particular, enhances their ability to acquire the independence that employment can give them.
    The funds that the Bill provides are an addition to the overall provision—an important one. It is a small Bill, as I said when I launched it on Second Reading, but it is very important for a considerable number of disabled people. I commend it to the House.
    8.47 pm
    Mr. Sheerman: I, too, have no wish to delay the House long. We have had a good debate this afternoon and this evening. The Minister has just described the Bill as small. It is small, but it is also vital because, as the Opposition have tried to show, it goes to the core of how we treat severely disabled people in Britain—and moreover, how we treat disabled people.
    Before saying anything controversial, I want to pay tribute to those who have so successfully run the independent living fund during the past five years. As a slight criticism, I would say that they have not been as well treated by the Minister as they should have been, because many of them should have been offered the chance to continue that success. However, we wish the new people running the two new funds well. We want them to do the job that has to be done for severely disabled people. There is no alternative.
    I also add my voice to the praise for my right hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris) who, single-handedly, did so much to get motability off the ground all those years ago. Perhaps, when we reach a really big number, such as the 500,000th, we will have someone important—not just the Prime Minister, but the initiator of the scheme—to hand over the key.
    I shall end on a note that my right hon. and hon. Friends and Ministers will understand. It has been an important Bill and an important debate, but we consider it a missed opportunity. It was one of the few occasions when we tried something that worked. The Government introduced the independent living fund and it worked. In Committee and throughout the Bill, with no ideological preconceptions—indeed, we had cut off some of our shackles of previous years—and using only one criterion, we were asking the Government to consider how good it was for severely disabled people. The experience of the indpendent living fund left us with one important message.
    Some of us have said that there are two things to which we shall never allude in any debate for the rest of our careers: we shall never talk about sandwiches—I think that the Under-Secretary of State will learn that lesson—or about empowerment. I shall mention empowerment one last time and say, yes, we have learnt through the independent living fund that we need to empower and to provide the enabling and facilitating role to which the hon. Member for Stratford-on-Avon (Mr. Howarth) referred in his excellent speech in Committee. That role is so important in the lives of individual severely disabled people.

    927
    In the last few minutes of the Bill, let me say what we would have accepted, what would have quietened our voices and our criticisms: if the Minister had come to the House with a different Bill, learning from that experience and building it into the new arrangement for community care and said that the Government had learnt their lesson and would empower people in a different way and that, having learnt the lessons of the independent living fund, they would now allow local authorities to give cash payments.
    In other words, they should have taken the essence of the independent living fund and spread it like the mediaeval physic throughout local government social services departments, which would then have become mini independent living funds. If the Government had learnt from the lessons of the independent living fund and clone the job for disabled people in our community—
    Mr. Deputy Speaker (Mr. Geoffrey Lofthouse): Order. This is Third Reading. I wish that the hon. Gentleman would speak on what is on the Bill. That is what a Third Reading speech should be.
    Mr. Sheerman: Absolutely. It was my peroration—the last gasp at the Dispatch Box— just to say that we opposed many aspects of the Bill constructively, we offered alternatives and tried to ensure that the Bill left the Chamber improved, having learnt the lessons of the independent living fund. We are disappointed that the Government missed their opportunity, because disabled people in the community will be less well off than they were under previous arrangements.
    At the end of the day, we have had a constructive debate. Some of us learned a great deal about the opinions of the people that matter—the severely disabled people who increasingly are telling the country and the House that they want to be the vital essence in all legislation that affects their lives.
    Question put and agreed to.
    Bill accordingly read the Third time, and passed.

    ESTIMATES
    Question put forthwith, pursuant to Standing Order No. 131 (Liaison Committee),
    That this House agrees with the Report [22nd April] of the Liaison Committee.—[Mr. MacKay.]
    Question agreed to.

    Maltby Colliery
    Motion made, and Question proposed, That this House do now adjourn.—[Mr. MacKay.]
    8.54 pm
    Mr. Kevin Barron: I raise the issue of Maltby colliery for the third time since the announcement last October that the British Coal Corporation had different designs on the coal mine than those that had been planned for many years.
    I should like to make it clear that, in raising the question of Maltby colliery I am in no way seeking to affect the future of any other colliery that has been either a victim of the recent review or is currently working without knowing where its market will be in the not too distant future.
    Hon. Members on both sides of the House will agree that in recent months the Government have treated the British coal industry with contempt. Last October, the President of the Board of Trade, under pressure from what seemed to be the majority of the British public, promised a thorough review of the British coal industry and its markets. Those deliberations and that review took many months but produced what I and many others can describe only as a shabby compromise with no increase in the market for coal.
    Now the Government hide behind the cloak of the British Coal Corporation to cover their failure to do their duty and carry out the wishes of the country. Through that lack of political will, thousands of miners and their families are bitterly disappointed and deeply concerned about the future. In Maltby colliery, more than 800 miners are still unsure about their future.
    The colliery has been known for many years as a British Coal showpiece. It was sunk in 1907 and has extensive reserves. It was reconstructed between 1951 and 1961, the main features being the deepening of the shafts and the construction of a new pit bottom to serve the Barnsley and Swallow Wood seam. Production from the Swallow Wood seam replaced that from the Barnsley seam in 1969.
    The current major project, the Parkgate project, was finally approved in 1981 and it is designed to increase the capacity of Maltby colliery to 2·5 million tonnes a year. The project is currently scheduled for completion in December. It has involved some major development work on a scale usually seen only at new coal mines. It included the sinking and equipping of a new shaft which has the biggest capacity in Europe, the deepening and equipping of existing shafts, the construction of a new pit bottom to serve the Parkgate seam, drivage to establish two faces in the seam and the installation of all the necessary equipment, the construction of a new coal preparation plant and all the associated surface works. The estimated total cost of the project is about £180 million.
    The first phase came on stream in April 1992, and the second, retreat, phase was scheduled for completion in December this year. People working at that mine and at other coal faces were looking forward to moving to the new Parkgate seam, to begin retreat mining.
    The colliery currently employs 1,300 people, including contractors. The threat to jobs is obviously felt deeply by them. The colliery is situated in the Rotherham and Mexborough travel-to-work area, which encompasses Maltby and has unemployment of more than 16 per cent. and male unemployment of nearly 26 per cent. There are

    929
    already 42 people chasing every vacancy recorded at job centres. Many vacancies are located in Doncaster and Sheffield, which have serious economic problems of their own without a further threat of redundancies at Maltby colliery.
    Since 1990, my constituency of Rother Valley, which covers one third of Rotherham metropolitan borough, has lost nearly 2,000 jobs either in coal mining or at a local coke works. One mine closed in 1991 was Thurcroft. Rotherham metropolitan borough council undertook a study last year, when Thurcroft miners were involved in an unsuccessful initiative to restart Thurcroft colliery as a mineworker-owned company. That study revealed that only one quarter of miners had found work outside the industry, and one half had not worked since becoming redundant after the colliery's closure in December 1991.
    Mr. Peter Hardy: My hon. Friend will be aware that Thurcroft is just outside my own constituency, and that many men from the eastern part of my constituency have long been employed at Maltby colliery. Many miners from the western part of my constituency and further afield moved to Maltby colliery in the past three or four years, having worked at as many as half a dozen other pits. Will my hon. Friend confirm that they moved to Maltby in the belief that it would do superbly well for a very long time? Does my hon. Friend agree also that every time that people glimpse from a great distance, as they can, the headgear of Maltby colliery, they and many others in South Yorkshire regard is as a monument to one of the most foolish and profligate decisions made by the Government for a long time?
    Mr. Barron: My hon. Friend is absolutely right. I visited the colliery last Friday and spoke to one young coal miner with a young family. He thought that he was moving to that investment to work there for the rest of his working days, in a trade that is exclusive in our particular region. He felt very let down and disappointed. No matter what happens to Maltby in the future, many families will feel that it is a monument to a disastrous decision.
    The Minister will be familiar with the attempt to reopen Thurcroft colliery, because I corresponded with him frequently last summer on that subject. The study of ex-mineworkers from Thurcroft found that the average period of unemployment for miners was seven months—and the higher the job losses, the longer that period will become.
    A study by Rotherham training and enterprise council was also made. After last October's statement, local TECs were asked to play a major part in finding employment for those likely to be made redundant from the coal industry.
    A study commissioned from Sheffield Hallam university business school of total job losses resulting from pit closures, which was updated after the publication of the White Paper, estimates that in addition to 950 job losses in mining at Maltby, there will be 600 supplier jobs losses and more than 400 redundancies resulting from reduced local and national consumer spending—making a total of 1,950 local job losses.
    That estimate does not take into account a possible further 1,000 job losses if the work force at Kiveton
    930
    colliery, which is also in my constituency, do not secure markets for their coal and the colliery closes within the next couple of months.
    Mr. Jimmy Boyce: Is my hon. Friend aware that on top of these particular job losses, which narrow the field of employment for people in the whole of the metropolitan borough of Rotherham, the figure that he mentioned of 2,000 in his own constituency is probably multiplied by more than 300 per cent. when the whole of the metropolitan borough is taken into account? Is he further aware that this narrowing of employment opportunities in the borough means that there are people who have never had a proper job and who now have teenage children who have no opportunity of ever having a proper job as a result of the loss of jobs not only in mining but in the associated industries of steel and mining engineering—skills that have almost disappeared for ever as a result of the profligate policy of this Government?
    Mr. Barron: I am grateful to my hon. Friend for his intervention. He is absolutely right. In the past decade the job losses, not just in mining but in steel and engineering, in South Yorkshire as a whole and in our borough have been colossal. The major point that my hon. Friend rightly made is the loss of skills. We had exchanges at Question Time today about apprenticeships. They have disappeared from an area that was known to have some of the finest industrial apprenticeships in the country. My hon. Friend is also right to point out that such job losses always go a lot wider.
    Last October, in announcing the Government's coal review, the President of the Board of Trade said in a written answer:
    This review will consider views and evidence on the future of each of the pits in question".
    He appointed consultants to report to him on the viability of the pits,
    "including any alternative markets that may exist for coal". —[Official Report, 26 October 1992; Vol. 212, c. 522.]
    The consultants were J. T. Boyd, a firm of independent consultants. They ranked Maltby colliery as one of the top five mines in the country, with the potential to achieve consistent profits of over £12·5 million each year. That is not just the top five of the 31 collieries under review but the top five including the 19 which were not in the review and which were to remain open.
    That is not surprising. The coal that they have now opened up the roadways to get is, in the J. T. Boyd report, some of the best coal in Britain. the consultants ranked Maltby coal 14th for low sulphur content which, in an age of debate on the environment, is very important. It was eighth in low ash content. If Members want to know the value of that, they should talk to the electricity generators or anyone who burns coal in bulk. It was sixth in low chlorine content. It was second in high calorific value out of the 51 collieries studied. In other words, some of the best coal in Britain is being left under the ground, at least in the short term.
    In its two tables of economic ranking, Boyd listed Maltby as first in both case 1 and case 2. These were of the 21 pits under review. Case 1 showed that 25 collieries had higher estimated costs—these included the 19 that stayed open—and 25 had lower projected profits. Case 2, if we put the 20 along with those under review, showed 31 collieries with higher costs and 36 with lower profits. Boyd

    931
    reported that the colliery was primarily a producer of power station coal but also produced a minor amount for domestic use.
    They are debating at the moment in the Department of Trade and Industry, I am sure, the question of energy in Northern Ireland. Maltby colliery supplies house coal there. West Burton, Thorpe Marsh, Drax and Cottam power stations all receive Maltby coal. There are never any problems in selling this coal. It is used as a sweetener for Selby coal. Everyone says that the great complex at Selby represents the future of the British coal industry. On occasion, it uses Maltby coal so that it can sell coal of the required quality to the available market.
    Recent tests in relation to the coking market have proved positive. According to those tests, in March this year production costs in the coal faces in the Swallow Wood and Parkgate seams amounted to £1·20 per gigajoule. The Minister must have examined the markets to which Maltby sells its coal; he must know that no coal sold on the world market can be brought to the point of use more cheaply than the coal that is currently being produced at Maltby, given the transport costs involved.
    Maltby also has a new, state-of-the-art coal preparation plan. It was the first in the United Kingdom to gain the British Standard 5750 quality assurance accreditation, which increased its potential for steelworks and other premium-price non-power station sales. The report prepared by the Government's own advisers gave Maltby a glowing reference, but that testimony to its future seems to have been ignored—certainly, in the short term.
    In his statement on 25 March, the President of the Board of Trade announced that Maltby would be given "development status". He spoke as though a new plant would be involved. The investment programme was begun as a result of the Labour Government's plan for coal; as I said earlier, it is scheduled for completion in December this year. It is not a new invention of the current Government's review.
    I am not sure how much the investment programme will cost. Last week, the Minister said that £29 million would be invested in the development phase of Maltby; the President of the Board of Trade mentioned £30 million, and, according to British Coal's Coal News, £40 million is to be spent on completing the programme. That, however, is not new money; it is money committed a long time ago to development of the reserves for retreat mining of the Parkgate seam.
    The Minister shakes his head. Let me tell him that I spent 20 years working in that coal mine. I left it in 1983 to enter the House of Commons, but I had a vested interest in its future, and I know exactly how much was invested. I know that, in 1981, it was agreed that the Parkgate seam should be developed for retreat mining by the end of this year. I emphasise that no new money was involved in that agreement.
    The most interesting feature is that, over the past two years, the colliery has been paying back from its profits some of the capital investment. It made more than £10 million in 1991–92, and more than £7 million in 1992–93. Now that production is to end, no revenue will be available for the colliery to continue paying back that investment. It does not make sense to throw away such profit margins and continue to favour capital investment on such a scale.
    At the beginning of this month, I went with the leader of Rotherham council, Sir Jack Layden, to meet the chairman of British Coal. He failed to justify the plans for
    932
    Maltby colliery then, and the Government have similarly failed to do so since. Surely savings to taxpayers would be secured by keeping Maltby in production, making profits and paying back some of its capital investment. That would also save public expenditure on state benefits: whatever redundancy arrangements are reached, if job losses on the proposed scale go ahead the people concerned will be eligible for unemployment benefit.
    There remains only one justification for this decision —privatisation. That was flagged up in last month's statement. The Government had been sent away to find wider markets for the British coal industry; they returned to the Floor of the House with none, but, at the mention of the word "privatisation", all their Back Benchers' eyes lit up. They all started to cheer. That is what it is about; it must be. That is not just my view. The same view was expressed by the Dinnington and district branch of the Rother Valley Conservative association in its letter to the Prime Minister last October, in which it said—little has been done to disprove it:
    "In view of the fact that during the last few years the near-by Maltby colliery has had a multi-million pound modernisation packet … we are finding difficulty in arguing against the accusations that this money has been spent only with a view to privatisation."
    The Minister's own political party said that last October, when the balloon first went up and the Government said that they were going to mothball the colliery. It is possible that privatisation has already taken place, since the bulk of the jobs that are to remain at the colliery during the development phase are likely to be done by private contractors.
    The Government have told us over the years that privatisation is good for the work force. I had a go at the Minister last Wednesday at Trade and Industry Question Time. After I had sat down, he asked me to point to the advantages that lie ahead for my constituents because of this so-called development phase that Maltby is going through. I invite the Minister to come to my constituency, see the people at Maltby colliery and explain to the men —more than 800 of them—who face redundancy exactly what the advantages of privatisation are, when it looks as though they are faced with the dole.
    Last week I wrote to the Minister about the prospect of redundancy payments for mineworkers at Maltby. The Minister responded that it was a matter for British Coal. However, on 21 October of last year the President of the Board of Trade told the House of Commons, from the Dispatch Box, that no miner should be disadvantaged by the consultation on closures. British Coal has suggested that 500 jobs could be retained to carry out the development work, but it will not specify the make-up of the reduced work force.
    The only correspondence that the work force has had relating to these plans is a letter that was sent to the Yorkshire NUM on 9 April by the group director. Talking about the likely levels of redundancy, the group director said:
    "At present, it is proposed that up to the total number of employees presently employed at the collieries if and when Rossington is placed on care and maintenance and Maltby on a development only basis. That will, of course, be subject to any employees being transferred to other collieries where there may be vacancies,".
    The one thing that this area director has done is keep his sense of humour over the past six months, unlike most people who work in the British coal industry, since he referred to employees being transferred to other coal

    933
    mines. Does the Minister think that mine workers who do not want to leave the industry will be able to transfer to other coal mines? He went on:
    "or being required for a limited period for any salvage, maintenance or development work. Such employees will be selected on the basis of their skills and experience."
    There was a meeting last week at local level, at which the work force at Maltby asked for the pit to go into the modified colliery review procedure. Since that request was made, it has been impossible for the work force to get any information about the pit's future.
    Mr. Martin Redmond rose—
    Mr. Barron: I know that my hon. Friend has a coal mine in his constituency that is in a not dissimilar situation. I shall certainly give way to him.
    Mr. Redmond: I am grateful to my hon. Friend for allowing me to intervene. Rossington is one of the pits to be mothballed. I wrote to the Minister asking what mothballing meant. I do not know what it means but perhaps my hon. Friend can tell me. In any event, the Minister should be in a position to tell me although he did not do so in his one-paragraph letter in which he said that it was an operational matter for British Coal's chairman. Perhaps the Minister will now tell us what mothballing means, because the lads and lasses at Rossington colliery would like to know.
    It is because the term was not clarified when the Government published the White Paper that there are now problems in the industry. The economics are now those of the madhouse. The Government apparently have no concept whatsoever of the industry on which they have published a White Paper.
    Pensions are another issue that affects many people who have retired from Maltby. Before the election, we received assurance after assurance from Ministers and from the Minister for Energy since the election that pensions would be safe. Pensioners are not convinced that the Minister does not intend to dip in his sticky fingers and do a Maxwell-type operation on the pension fund. It is not good enough for a Minister deliberately to put such fears into the minds of retired members who have contributed over the years.
    Mr. Barron: I am grateful to my hon. Friend for his intervention. I shall hazard a guess about what mothballing means. Under the original review in October last year, Maltby was to be mothballed. I asked the mining engineers there what it meant but they did not know. They had been told that the colliery was to be mothballed along with three others but they did not know what it meant.
    For what it is worth, I think it means taking eight pits out of the closure programme to satisfy a few Conservative Back Benchers that everything possible is being done to keep the pits open. Rossington is to be mothballed, but the Government would have us believe that someone else could come along and run it if British Coal did not want to run it. Last week, the director of the south Yorkshire area issued a press release telling us that some people would be kept on at that pit to salvage equipment. How that is to be done is beyond me, but perhaps the Minister will tell us.
    On my hon. Friend's second point, the Minister will know that the House has made it clear many times that we
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    want any coal privatisation programme to include protection for people who pay into various schemes, such as those for pensions and staff superannuation. It is crucial that regulation is not so lax that people are able to buy into a business and, at the same time, into its pension scheme and use the money for purposes other than those for which it was originally intended.
    Before my hon. Friend the Member for Don Valley (Mr. Redmond) intervened, I was talking about trying to find out what the plans meant for Maltby colliery. At a meeting this morning with local senior management, representatives of the work force were told that, if they went ahead with their request to go into the modified colliery review procedure, they would not be informed of the plans for the future and that only if they withdrew their request, with no prior knowledge of the plans, there might be enhanced redundancy terms for the men to leave the industry. It is clear that they are being bribed to accept the proposition that the Swallow Wood seam should cease production at the end of this week and the Parkgate seam at the end of next month. Clearly, that will create severe personal difficulties for the miners who are trying to decide what is best for themselves and their families.
    I believe that it is for the Government to ensure that miners are fairly treated and that, if their jobs finally have to go, they get the best possible terms available. I have no dispute with that. The enhancement of redundancy terms for people who have to lose their jobs in the present unemployment situation in my area has my support, but it should be done without the duress that is now being brought to bear on people.
    This morning I faxed the Minister two specific questions. The first was: given that all coal mines both develop and produce simultaneously, why is Maltby to be given development-only status? I am fascinated by that concept. Of all the coal mines that were under review, and of all those that have a future at some stage, only Maltby will have development-only status. My second question was: given that up to 500 men are likely to work on the development, why can the work force not be told who will remain at the pit if production ceases? I hope that the Minister will answer those questions, and respond to the other points that I have raised tonight.
    There is a compelling case for continuing production at Maltby colliery. The onus is on the Government to produce equally compelling counter-arguments. There is still an opportunity to reverse their decision to stop production at that profitable, productive and modern pit, and to keep a highly skilled and motivated work force together. I hope that the Minister, and the British Coal Corporation, will seize that opportunity before it is too late. That would be in the interests not only of our constituents who work at that most modern of coal mines but of the nation as well. We should not squander the millions of pounds in revenue that could be earned from production at the colliery for the sake of a future prospect the main effect of which will be to line the pockets of people in the City and others who want to buy into the industry in two years' time, when we as taxpayers will have put more millions of pounds into development of the coal mine.
    9.26 pm
    The Minister for Energy (Mr. Tim Eggar): May I first say how especially appropriate it is that you should be in the Chair for the debate, Mr. Deputy Speaker. I am sure that you organised the preceding debates to fit in with your personal timetable. Of course it is appropriate that the hon. Members for Don Valley (Mr. Redmond), for Wentworth (Mr. Hardy), and for Rotherham (Mr. Boyce) are also present. I am acutely conscious of the interest of their constituents in the issue and in other issues relating to the mining industry and of the close personal interest that each of the hon. Members here—including you, Mr. Deputy Speaker—take in the mining industry and its future.
    As the hon. Member for Rother Valley (Mr. Barron) reminded me, we had a considerable amount to discuss last summer; the hon. Gentleman was so concerned, especially about Thurcroft, that I spoke to him several times when he was flat on his back in hospital. I am delighted to see that he has now fully recovered and can put forward a case on behalf of his constituents.
    It might help if I begin by setting the debate in context. It is important to remember that we have to take a view on Maltby in the context of the overall energy situation in which British Coal finds itself. We should not forget that last year British Coal produced about 77 million tonnes of coal, of which just under 63 million tonnes went to the generators in England and Wales. British Coal thought that it was unlikely to be able to sell more than about 40 million tonnes of coal to the generators from this April, and of course there were already massive stocks of coal both at the generators and at the pithead.
    That led to the announcement in October last year that 10 of the deep mines with no prospect of viability, and 21 pits with no prospect of a market, should close. As the House will remember, the Government accepted the proposals from British Coal. However, subsequently and in recognition of the concern expressed in the House and by the public more generally, we announced a review, to which the hon. Gentleman referred. That review and the report by the Select Committee on Trade and Industry led my right hon. Friend the President of the Board of Trade to make a statement to the House late last month. That statement coincided with publication of the White Paper and with the debate on it.
    Mr. Hardy: The Minister said that he intended to put the matter in a broader context. Will he consider the context that, 20 years ago, 16 collieries were mining under the metropolitan borough of Rotherham? Ten years ago, 14, if not 15, of those collieries were engaged in that activity. To plunge an area into the economic disadvantage that rapid closure would cause is unseemly and barbaric. Does the Minister understand that we and the people of our area are well aware that the reason for the difficulties which he has just identified is that, in recent years, the coal industry has been compelled to operate on a playing field that is far from level?
    Mr. Eggar: The hon. Gentleman tempts me into a very much wider debate—
    Mr. Deputy Speaker (Mr. Geoffrey Lofthouse): Order. This debate is about Maltby and is thus very narrow.
    Mr. Eggar: I shall, of course, concentrate my remarks on Maltby. Immediately after the war, Maltby was one of
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    650 collieries. About 800 men are now employed at Maltby because about 400 have taken voluntary redundancy over the past few months. I imagine that many more were employed immediately after the war. Those men were part of a British Coal work force of 750,000 people. I make that point only to show that there has been a sharp and consistent decline both in the number of pits in this country and in the number of people employed in them.
    To pay attention to the guidance that you gave me, Mr. Deputy Speaker, we must set the matter in that context, and we must also recognise that the future of Maltby is bound up with the recommendations which were included in the White Paper and approved by the House. The proposal in the White Paper was that British Coal, subject to consultation, was to close two pits which were nearing exhaustion; it was to cease coaling at six pits and place those pits on care and maintenance; and it was to put one pit, Maltby, on development only. That was in addition to the 10 pits that are the subject of consultation at present.
    I do not wish to risk offending or annoying the hon. Member for Rother Valley, but I must emphasise that decisions about production and development at Maltby are matters for British Coal, just as matters at the corporation's other collieries are a matter for it. Opposition Members and some of my right hon. and hon. Friends overlook the fact that neither my right hon. Friend the President of the Board of Trade nor I have any power to tell British Coal which collieries it should close, which collieries it should keep open or which collieries it should keep to develop in one way or another.
    Mr. Boyce: If British Coal proposed tomorrow to close all the pits, are the Government really telling us that they would do nothing about it and that it would be a matter for British Coal? Surely not.
    Mr. Eggar: I am saying, as the hon. Gentleman will be aware because the position is laid out clearly in the Coal Industry Nationalisation Act 1946, that neither I nor my right hon. Friend has the power to tell British Coal to take specific action. That action relates to specific collieries. The hon. Member for Rotherham may regret that. From time to time over the past few months, I have been tempted to regret it.
    The Act was laid down under the Morrisonian approach to a nationalised industry. When introducing that legislation, it was a definite decision of the then Labour Government to keep Ministers at arm's length, so to speak, from the day-to-day management and detailed decisions relating to the then British Coal Board. That is the background against which both Ministers and British Coal operate.
    Having said that—I note that the hon. Member for Rotherham smiled when I said it—I shall ensure that the attention of British Coal is drawn to this debate and its contents. The hon. Gentleman made some allegations about the pressure on miners to leave Maltby and other pits. The hon. Member for Rother Valley also hinted at that. That is an issue not just for British Coal: it is before the courts at present, so I cannot comment on that in detail.
    British Coal has proposed a forward strategy which involves substantial capital investment to create a lower cost base for Maltby in the future. In recognition of the advantages of Maltby coal to which the hon. Member for Rother Valley referred, that pit has been chosen to be

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    developed as a high-volume low-cost mine that is capable of producing more than 2 million tonnes of coal per annum compared to its current production of 1·2 million tonnes per annum. British Coal will invest up to £40 million in developing Maltby's extensive reserves for retreat mining over the next two years.
    The hon. Gentleman rightly said that, at Question Time, I mentioned a figure of £29 million. The difference is the estimate of the proceeds of coal sold from the development phase. The £40 million is new investment which was not previously scheduled. The Government are reflecting that new investment in British Coal's external financing limit, so that comes into the negotiation.
    Mr. Barron: If one is running a business, would it be wise to continue with the future investment plans and cut back on the revenue earning side of the business? That is exactly what British Coal proposes to do. If the proceeds from the development lessen by £11 million over two years, what would the figure be if it continued to produce one or two coal faces as well?
    Mr. Eggar: That takes us back to where I started my remarks: British Coal must examine and take all its decisions in the context of the overall market for coal. Clearly, when it takes its decisions, it must look at all the collieries and the existing market—in other words, the market in which they have some contractual undertakings; the 40/30/30/30/30 contract—and then the possibility or probability of additional contracts.
    If Maltby were run on full production—I cannot speak for British Coal, but I imagine that it is a possibility—it would effectively displace the coal being produced at another pit. The hon. Member for Rother Valley commenced his remarks fairly by saying that, although he wished to draw attention to Maltby, he did not wish in any way to do down, so to speak, the other pits in the area. I can understand that. It is very much in the character of the hon. Gentleman and the approach that hon. Members on both sides of the House have taken on the problem that British Coal faces. They do not want one pit to do well, only for another to do badly. When British Coal made the proposal to the Government as the most sensible way forward, we were prepared to make the necessary funding available and make investment approvals available.
    I do not challenge the hon. Member for Rother Valley when he says that Maltby has extensive reserves. It came out well in the Boyd review in just the way that he outlined. That upside of Maltby made British Coal wish to put it into development and ensure that in the future it could be a world-class mine producing high-quality coal, as we all wish it to do and know that it is capable of doing at low cost.
    Mr. Martin Redmond: A tremendous amount of finance—millions of pounds—is sloshing around. Will the Minister give an assurance to the Maltby pensioners and pensioners throughout the country in the various pension schemes that no funds will be used by the Government to subsidise any of the proposals in the White Paper?
    Mr. Eggar: I do not think that that is the assurance that the hon. Gentleman wants me to give. He wants me to give an assurance that we will make subsidies available to help
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    British Coal to compete. I give him an assurance, as I have given Opposition Members assurances on many previous occasions, that pensions will be safeguarded. I have said that frequently, and I give that absolute categorical assurance.
    The staff superannuation fund has attracted some attention. I understand that the matter is to come before the courts for a decision. In other words, an agreement has been reached that a ruling should be given because the trustees and British Coal have received differing legal advice. The Government are absolutely content, as I am sure that British Coal is, to abide by the judgment of the court. Given the understandable attention that has been given to pensions and the references to Maxwell and others, I believe that that is the appropriate way forward.
    I stress that British Coal's proposal is, of course, subject to consultation with the unions. Although the proposal does not involve closure of the colliery, it will inevitably entail some job losses during the period of development. It is right and proper that there should be full consultation with the unions on the proposal, in accordance with British Coal's legal obligations.
    Both in his fax and tonight, the hon. Member for Rother Valley suggested that I should make an announcement to British Coal's work force about who would remain at the colliery if the development proposal was adopted. He gave the impression that that was a matter for me. I know that from time to time the hon. Gentleman has, shall we say, exhibited a certain amount of creative tension with the National Union of Mineworkers, at least nationally—we admire him for the stance that he has taken. I do not believe that he wishes me or anyone else to appear to circumvent or, indeed, to circumvent decisions which are a matter for consultation between British Coal and the unions.
    Mr. Barron: I referred in my speech to what the President of the Board of Trade said about not disadvantaging any mineworkers while consultations went ahead. I put the facts to the Minister plainly and I put them to him now.
    Why have the men at Maltby, knowing that people will continue to be employed in the development work, not been told who is likely to remain working at the colliery before being forced to take a decision? It is a matter of common decency. They were asked to withdraw from the modified colliery review procedure before the plans were put before them and that has put them at a disadvantage in the consultation process. The President of the Board of Trade stood at the Dispatch Box and said that that would not happen, so he should now do something about it.
    There are things that can be done by those who stand at the Dispatch Box, no matter what we have heard tonight. The Minister and the President of the Board of Trade know that. That is why we had the review in the first place. My request should be met out of common decency, if nothing else—if there is any left.
    Mr. Eggar: The assurance that was given by my right hon. Friend the President of the Board of Trade in October referred in particular to the 10 pits. I am sure that the hon. Gentleman recognises that; he can check the record after the debate.
    I am in genuine difficulty in commenting on this matter. Not only is this, in practice, a matter for British Coal, in consultation with the unions, but it was also the subject of

    939
    a court hearing today. I also understand that the area around Maltby, if not that specific colliery, is also likely to be considered by the courts next week or the week after. Tempted as I might be to respond to the hon. Gentleman in detail, I do not believe that it would be appropriate for me to do so. I hope that the House will understand that. I assure the hon. Gentleman, once again, that his views and the report in Hansard will be seen by representatives of British Coal.
    The hon. Gentleman has been kind enough to recognise that the voluntary redundancy package, which has been made available to miners, is generous. I accept that he has also made it clear, however, that, given the employment circumstances in the area that he represents, he has understandable concerns about the future job prospects for those 400 individuals who have already taken the voluntary redundancy and others who will do so.
    Although I recognise that, for the purposes of the debate, the hon. Gentleman wants to highlight the problems that are associated with finding jobs in the area, it is fair to point out that, between 1987 and 1991, 84 per cent. of all those individuals who registered with British Coal Enterprise for jobs found them within a year to 18 months. It is appropriate to consider the optimistic side as well and to put it in perspective.
    When I visited the north-east just before Christmas, I met a number of men who had previously been employed by the Seaham and Vane Tempest pits who had taken voluntary redundancy. I was struck by the training that they had undertaken for jobs in a high-tech plant. I admit that they had to travel a considerable distance to reach their jobs, but their example suggests that it is reasonable to say that a significant number of individuals who were previously employed as miners will succeed in finding alternative work.
    The fact is that coal remains the largest element in the United Kingdom's diverse range of fuels for electricity generation. Most hon. Members recognise, however, that it probably never will regain the place that it once held in our economy. That is no criticism of the management or work force of British Coal. It is a fact and it illustrates the way in which the most profitable reserves have been worked out. It is also a fact that the new modern mines in other parts of the world have geological advantages over our pits, although they are not as great as sometimes claimed. Those mines also have an advantage over British coal because of the environmental quality of their coal, a quality which the coal produced by British Coal does not and is not likely to enjoy.
    Mr. Barron: What about the 1.5 per cent. sulphur content?
    Mr. Eggar: The hon. Gentleman rightly draws attention to the relatively low sulphur content of Maltby coal. I think that he mentioned a figure of 1·5 per cent. sulphur. Internationally traded coal almost always has a sulphur content of less than 1 per cent., and sometimes has a sulphur content of something more like 0·5 per cent. That is the standard against which all British coal mines have to operate. It is a difficult and competitive market, in which world production costs are falling.
    In the year or so that I have held my present post, I have been grateful for the way in which the hon. Gentleman has argued the case for his constituents. He has always advanced the arguments cogently, both publicly and privately. I have been conscious of his considerable personal experience, both as a miner at Maltby and as an hon. Member who has consistently taken a great interest in the mining industry.
    Mr. Barron: The Minister will be pleased to know that this is the last time that I shall intervene. I cannot let the occasion pass without saying—doubtless the Minister will not agree with me—that the development status that has been granted to Maltby colliery is nothing more than the foil towards privatisation. He may not even agree with Rother Valley Conservative association, which agrees with my analysis. In the House, the Minister asked me:
    "Why does not the hon. Gentleman for once point to the advantages that lie ahead for his constituents"?—[Official Report, 21 April 1993; Vol. 223, c. 314.]
    I should like to invite him to my constituency to tell the 800-plus miners who are to be made redundant in the next few weeks the advantages of the dole.
    Mr. Eggar: I am sorry that the hon. Gentleman finished on that note. He mentioned "the advantages of the dole". It is important to note that considerable amounts are being invested in Maltby to ensure that it is able to compete and that its good quality coal can be produced at low cost for a long time, which will enhance its prospects of long-term viability. The hon. Gentleman should stress that fact to his constituents, as it is a positive message.
    We have had a good debate, and I thank all hon. Members for participating in it.
    Question put and agreed to.
    Adjourned accordingly at eight minutes to Ten o'clock.