Commons Sitting of 8 July 1993

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

PRIVATE BUSINESS
BRITISH RAILWAYS (No. 4) BILL (By Order)
Question, That the British Railways (No. 4) Bill be now read a Second time, put and agreed to.
Read a Second time, and committed.

CROYDON TRAMLINK BILL [Lords] (By Order)
  EAST COAST MAIN LINE (SAFETY) BILL (By Order)
    WOODGRANGE PARK CEMETERY BILL [Lords] (By Order)

      LONDON LOCAL AUTHORITIES BILL [Lords] (By Order)
      Orders for Second Reading read.
      To be read a Second time on Thursday 15 July.

Oral Answers to Questions
  AGRICULTURE, FISHERIES AND FOOD

    GATT
    Mr. Illsley: To ask the Minister of Agriculture, Fisheries and Food if she will meet her American counterparts to discuss the impact of GATT on agriculture.
    The Minister of Agriculture, Fisheries and Food (Mrs. Gillian Shephard): I hope to find an opportunity for a meeting. GATT, negotiations would certainly figure in such discussions.
    Mr. Illsley: I thank the Secretary of State for that reply. While she will be aware that the Labour party has consistently supported a GATT agreement, is she also aware that we share the concern of the National Farmers Union that the Blair House accord could involve much higher rates of set-aside? Will she make it clear, in any meeting with her American counterparts, that we find that totally unacceptable?
    Mrs. Shephard: On the whole, I would share the hon. Gentleman's misgivings, were such rumours likely to be true. I think that they are unfounded. I believe that the GATT agreement on agriculture, based on the Blair House accord between the European Community and the United States, is likely to be a good outcome for the EC and I hope that the ground rules laid down in that accord will prove to be the foundation for the GATT agricultural agreement.
    Mrs. Ann Winterton: Will my right hon. Friend continue to support and fund Food From Britain, which champions the cause of exporters in this country? Is she aware how important exporting is to our producers, as they export approximately 25 per cent. of their produce and, to do so, need the openness in trade that an eventual GATT deal will engender?
    Mrs. Shephard: It is encouraging that such good progress has been made on GATT negotiations in Tokyo and I am delighted that my right hon. Friend the Prime Minister has played such an important part in achieving that. Like my hon. Friend, I champion the export achievements of Food From Britain and the work of that excellent organisation. As she says, exports are an important part of our agricultural trade. We are not doing well enough, though. Our £6 billion trade gap is far too big and I hope that all our producers, and especially those represented by Food From Britain, will tackle the unacceptably large gap.
    Dr. Strang: Is the Minister aware that the Labour party warmly welcomes last night's agreement as an important step along the tortuous route to a GATT agreement? Will she confirm, however, that although the French Government have endorsed the Blair House agreement on oil seeds, they have refused to accept the agriculture agreement, which would be essential to an overall GATT package? Will she give the House an assurance that there will be no question of the British Government agreeing concessions to French farming that would discriminate in any way against British agriculture and British jobs?
    Mrs. Shephard: I am more than happy to give the House that assurance. I have already taken the opportunity of making those points to my French counterpart. I expect to meet him in about a fortnight, when I will repeat them. Since France is third in the world for exports, the French will surely recognise that their own interests would be served by a successful outcome to the GATT round.

    Integrated Administration and Control Scheme
    Mr. Fabricant: To ask the Minister of Agriculture, Fisheries and Food how much subsidy has been distributed to farmers following the implementation of the IACS scheme.
    Mrs. Gillian Shephard: Payments under schemes covered by IACS forms are expected to amount to £1·2 billion for British farmers this year.
    Mr. Fabricant: I am grateful to my right hon. Friend for her interesting answer. Does she accept that farmers have encountered considerable difficulty in filling in the IACS forms and considerable cost in obtaining maps from the Ordnance Survey? Will she confirm that next year's procedures will be considerably easier to follow than this year's? Will she also acknowledge the debt that we owe the National Farmers Union, which has consistently helped farmers to fill in their forms?
    Mrs. Shephard: I agree that the NFU has played an important part in giving advice to farmers who had difficulty completing their IACS forms. The NFU has also praised the effort of MAFF staff in area offices who have performed an equally useful and helpful role. There was a

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    problem with maps. In cases where people genuinely could not obtain the relevant maps, the IACS forms were acceptable without them.
    I entirely accept my hon. Friend's point about next year's forms. By then, we shall, of course, have established a database, but we are asking the industry to suggest ways in which the forms can be made more user-friendly and entirely sensible for next year.

    Fishing (Days At Sea)
    Mrs. Ewing: To ask the Minister of Agriculture, Fisheries and Food when she last met representatives of the fishing industry to discuss compulsory days-at-sea legislation; and if she will make a statement.
    The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. Michael Jack): On 8 June, my right hon. Friend the Minister and I met representatives of the National Federation of Fishermen's Organisations and I recently met the fishermen of Brixham. Further meetings are planned.
    Mrs. Ewing: Does the hon. Gentleman accept that I speak on behalf of all hon. Members who represent fishing constituencies in welcoming his announcement yesterday evening that there would be a relaxation, or at least a postponement, of the tie-up regulations under the Sea Fish Conservation Act 1992? May I plead with him to recongnise that the most sensible way forward now would be to suspend the Sea Fish Conservation Act and use the ensuing period to ensure that there is a reasonable dialogue between all sections of the industry and the Government and then to introduce a conservation package that has the support not only of the Government and the Community but of the fishing industry itself?
    Mr. Jack: I thank the hon. Lady for the conciliatory tone of her question and in particular for her welcome for the postponement of the introduction of the days-at-sea policy. We are all joined in the common purpose of finding ways to sustain the availability of fish for the benefit of the fishing industry. I certainly accept the hon. Lady's point about dialogue. In fact, I am urgently filling my diary with engagements, including meetings with representatives of the Scottish fishing industry, and will take into account some of the important points raised by hon. Members representing Scottish constituencies in last night's debate.
    I cannot, however, suspend our policy for ever or even beyond the period that I have specified because we have to find ways of achieving our multi-annual guidance programme and that set of targets is narrower than the overall desire, which hon. Members on both sides of the House share, to conserve our fish stocks.
    Mr. Marland: Does my hon. Friend agree that all parties involved in the fishing industry accept that some steps must be taken to conserve fish? Will he confirm that limiting days at sea is only one of the ways in which the Government are seeking to restrain fishing effort? Will he further confirm that studies have shown that, in some instances, more than 300 days at sea have been allocated in response to fishermen's applications and that the threat of limiting days at sea is not as fierce as some Opposition Members may want fishermen to believe?
    Mr. Jack: My hon. Friend speaks with a sure knowledge on these matters. I can confirm that some
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    fishermen have received days-at-sea allocations up to that level. The particular concern, though, is for those fishermen who may have received the minimum allocation and are uncertain about their future. There may be problems with records, but we have already indicated many different ways in which those fishermen can submit further appeals to see whether their days-at-sea allocation can be enlarged. My hon. Friend is entirely right to say that we are pioneering other ways in which to limit fishing efforts. That is why the House last night approved a decommissioning scheme with a budget of £25 million attached to it.
    Mr. Austin Mitchell: I am a little disappointed to find the Minister resiling somewhat on what seemed to be the hopes of last night. Does he agree that it would be far better to provide for proper conservation by stopping the pillaging of our grounds by foreigners—in particular, Spaniards—than by stopping our vessels putting out to sea? In that connection, is it correct that, although as many infringements of fish conservation provisions in our grounds are being discovered by the fisheries protection fleet, fewer of them are being brought to court this year because his Department does not have the money for litigation? Is it also correct that the Irish Government are doing far more than ours to stamp out the secret fish holds that the Spanish are using?
    Mr. Jack: We are spending some £20 million on the enforcement of fishing regulations and policy. I wish that we did not have to. I wish that people would play by the rules and not hide fish in hidden and dark holes, as every time somebody cheats on the fishing rules they deny another fisherman a living. As to prosecutions, the hon. Gentleman will realise that I cannot comment on specific cases. It is important, though, that when people break the rules they are properly prosecuted and that that information is made available.
    Mr. John Townend: May I join the hon. Member for Moray (Mrs. Ewing) in congratulating my hon. Friend on his statement last night. It clearly shows that, in the Ministry of Agriculture, Fisheries and Food we now have Ministers who listen. That is welcome. What proportion of the fleet is affected by the maximum limit of 80 days? If it is a relatively small proportion—I assume that it will be —could not the limit be increased to, say, 100 or 120 days without a significant effect on fishing efforts?
    Mr. Jack: First, may I welcome my hon. Friend's kind comments about our announcements last night? On the subject of the number of vessels affected by the minimum allocation of days at sea, approximately half the applications that we have received are affected. I am pleased to be able to tell my hon. Friend that some 84 per cent. have already appealed against the minimum allocations. He will be aware that his proposition to increase the minimum number of days at sea was one of many helpful ideas that were put forward during the debate. Right hon. and hon. Members were invited to explore that among themselves and with their fishermen and to put forward their ideas during the period of consultation so that we may consider them.

    Land Access
    Mr. Bennett: To ask the Minister of Agriculture, Fisheries and Food if she will make a statement about improving access to set-aside and country stewardship land.
    Mrs. Gillian Shephard: We have issued proposals for a scheme to open up new areas of suitable set-aside land for public access to the countryside. Strictly speaking, as I think the hon. Gentleman will know, the countryside stewardship scheme, which makes provision for access to a significant proportion of sites, is a matter for my right hon. Friend the Secretary of State for the Environment.
    Mr. Bennett: I thank the Minister for that answer. Does she agree that, if land is not used for intensive farming, it is important that it is used for the community at large and that giving people an opportunity to walk peacefully across the land is important? Will she confirm that it is possible for farmers to receive income from the schemes in exchange for supposed access, but that the general public do not know that they have rights of access to that land?
    Mrs. Shephard: Mistakes have been made in the countryside stewardship scheme, some of which were about giving adequate publicity. We will certainly learn lessons from the way in which the scheme has worked. However, there is no question of forcing farmers to allow access to land beyond public rights of way, as there are costs involved. The meadowland scheme, which is a new scheme proposed under the agri-environment regulation will provide an incentive and, as the hon. Gentleman has said, the public will benefit.
    Mr. Duncan: Does my right hon. Friend agree that most farmers are perfectly reasonable when it comes to people requesting access to their land so long as their behaviour is legitimate? Does she further agree that when people invade their land, farmers have far too few powers under the law to remove people who disrupt lawful activity? Will she therefore undertake to liaise with the Home Secretary to improve the powers of farmers to remove new age travellers and those who wish to disrupt a lawful hunt?
    Mrs. Shephard: I agree with the examples that my hon. Friend gave to illustrate his point. I am happy to liaise with the Home Secretary on that and other points about law and order in the countryside. Most farmers are reasonable about allowing public access to their land. It is a two-way process. Those who seek access should treat it as though they were going, for example, to a place of work. They should be expected to behave responsibly and in return we would expect farmers to be reasonable.
    Mr. Skinner rose—
    Hon. Members: Stone-age traveller.
    Mr. Skinner: At least I am not a barrel of lard like the Parliamentary Secretary.
    Hon. Members: Oh!
    Madam Speaker: Order. I am missing all the fun.
    Mr. Skinner: Is not it an indictment of our society that the set-aside schemes were set up by the Common Market in order to destroy food and to allow farmers to watch the grass grow at £100 an acre while millions of people in the
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    Sahara, other parts of Africa and other countries are starving to death? Is not it a fact that the royal family, including the Queen and the Prince of Wales, have had more than a quarter of a million pounds out of those tax avoidance schemes? It is no wonder that the Queen has offered to pay tax; she is using taxpayers' money to do it.
    Mrs. Shephard: The fun was quickly over. Far from it being a case of a barrel of lard, it is one of sour milk. The hon. Gentleman has been second to none in requiring surpluses and intervention to be tackled firmly by the EC and set-aside and the CAP reforms do just that. I am amazed that the hon. Gentleman is not welcoming this move forward.
    Mrs. Browning: Is my right hon. Friend aware that farmers in my home village of Whimple in the constituency of Tiverton have been refused permission to hold fund-raising public events on set-aside land, the money from which would go to registered charities and the local church, for the sole reason that it is set-aside land? Will my right hon. Friend look at that case?
    Mrs. Shephard: I was not aware of that, but I shall certainly look at it.
    Mr. Morley: While the Secretary of State is considering the question of public access, I draw attention to the review group considering the possible privatisation of Forestry Enterprise and the Forestry Commission, on which her Department is represented. Is the right hon. Lady aware that the Countryside Commission's submission to that review group stated that public ownership has been an effective means of achieving public benefits? It went on to say that the disposal of some or all of the freehold estate, which comprises 40 per cent. of all forested land in Britain, is likely to lead to the loss of unrestricted, free of charge public access to the land in question. Does the right hon. Lady agree that public access to woodlands is best preserved by public ownership and will she ensure that her Department makes representations to the review group to that effect?
    Mrs. Shephard: I was aware of those views and I think that the hon. Gentleman is aware that the review will consider forest land from the point of view of its commercial management, public access—which is important—and the protection of our heritage. Those three aspects are at the heart of the review and I keep an open mind about its findings.

    Small Producers
    Mr. Nigel Evans: To ask the Minister of Agriculture, Fisheries and Food what steps are being taken to help small producers.
    Mr. Jack: An important source of help to small producers is their ability to be able to claim arable area payments under simplified arrangements that do not require any land to be set aside.
    Mr. Evans: I welcome my hon. Friend's reply and the assistance to small producers, but could not more assistance be given to some of our organic farmers, many of whom are small producers, perhaps via lower limits through the organic aid scheme?
    Mr. Jack: I am pleased that my hon. Friend mentions organic farming, which is an important and developing area. However, it is equally important that, in developing, it does not swamp the available market for its excellent produce. A recent consultation document that we put out showed that a minimum eligible area of 10 hectares, and 50 hectares in the less-favoured areas, might be a possibility. As a result of the responses that we have received to that consultation document, we are considering whether a lower limit might be possible without excessive administrative cost.

    Common Agricultural Policy
    Dr. Howells: To ask the Minister of Agriculture, Fisheries and Food what recent meetings she has had with her European counterparts to discuss financial aspects of the CAP.
    Mrs. Gillian Shephard: I have recently had a number of such meetings.
    Dr. Howells: Will the Minister confirm that the common agricultural policy costs each family in Britain approximately £18 per week extra in food bills and that part of the money is due to the absurd subsidies that continue to be paid into areas such as the tobacco mountain, which, even two years ago, cost £70 million? Does she agree that the Government's reluctance to address those absurd subsidies is a result of the sweetheart arrangements that they have with tobacco companies?
    Mrs. Shephard: I entirely agree with the hon. Gentleman—the cost of the CAP is far too high. I am sure that he will be delighted that the United Kingdom has consistently argued that its cost is too high and that it hampers the efficient allocation of resources in the economy. May I take it that his enthusiasm for lower costs shows a change of heart by Opposition Front-Bench Members over the whole range of policy?
    I reject entirely the hon. Gentleman's accusation of sweethearting. Certainly tobacco excesses and tobacco mountains should be tackled in the same way as other surpluses have been tackled in the EC.
    Sir Roger Moate: Does my right hon. Friend agree that good financial control depends on the famous level playing field, or level ploughing field in this case? Did she see the letter in Farming News recently which described a British farmer visiting a French farm after 20 years and finding that nothing had changed, that the farmers had never heard of the set-aside scheme or health and safety regulations, that they were still making butter in the kitchen and selling it at the farm gate and that the village slaughterhouse had not changed either? How can we be more certain under the new rules that financial control is to be applied equally across the European Community?
    Mrs. Shephard: I totally agree that we should aim for a level ploughing field as well as a level playing field. One hears the accusations that nobody keeps the rules but us in every member state in the Community and in every policy area. However, there is no doubt that the agreements reached at Edinburgh will help the tightening-up and monitoring of the rules, and not a day too soon.
    Mr. Jim Marshall: The Minister confirmed that the average cost to a family arising from the CAP is £18 a
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    week. She has congratulated herself many times on the recent renegotiations of the CAP. Will she confirm that the renegotiations have increased the figure to more than £18 per week?
    Mrs. Shephard: It is the case that the figure has increased and much of that is to do with exchange rate mechanism realignments. The package was negotiated within the agricultural guideline that expects and looks forward to agriculture taking up a decreasing amount of the EC budget.
    Sir Peter Tapsell: Does my right hon. Friend accept that one of the worrying aspects of the set-aside scheme is its adverse effect on the employment propspects of workers in agriculture? Do the financial arrangements of the CAP, to which we, as a nation, make such huge contributions, make any provision for paying compensation to agricultural workers who lose their jobs because of set-aside?
    Mrs. Shephard: No. There are no such arrangements in the CAP. However, my hon. Friend will know that while in this country, as elsewhere, agricultural employment is declining, growth of population in rural areas is increasing and, with it, prosperity and jobs.
    Mr. Campbell-Savours: Has the Minister had the opportunity to discuss with her European partners the free-market pricing arrangements that exist in New Zealand, which have some support in the British farming community and some support in interested quarters of the House of Commons? Has she any preliminary views on those matters?
    Mrs. Shephard: The hon. Gentleman is aware that the recent CAP reform package represented a move towards more market-orientated arrangements. I recently met representatives from New Zealand and I was most interested to hear from them about the way in which things were working. I lose no opportunity to press on my EC colleagues the need for farming and agriculture generally to look towards the markets because that is the only sure way in the future.

    Fish Conservation
    Mr. Ward: To ask the Minister of Agriculture, Fisheries and Food what plans she has to consult further the fishing industry over its current concerns about the requirement to reduce fishing effort.
    Mr. Jack: I announced last night a postponement of the introduction of days-at-sea restrictions which will give us the opportunity to consult the industry about the need to reduce fishing effort. I already have plans to visit fishermen in Humberside next week, and further visits and meetings are being arranged. I look forward to an early and positive response from the industry.
    Mr. Ward: Is my hon. Friend aware that the fishermen of Poole will welcome the opportunity to make their contribution to devising sensible—I underline the word "sensible"—conservation measures? Will he assure the House that he will not introduce conservation measures in this country until he has a firm and binding agreement that our EC partners will introduce them at the same time? It

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    is ridiculous that our fishermen should have to watch fishermen from other EC countries blatantly flouting regulations that they are expected to obey.
    Mr. Jack: I very much welcome my hon. Friend's kind comments on our announcements last night. Everyone in the industry shares the desire to conserve fish stocks. I can give my hon. Friend the assurance on the policy announced, especially with reference to days at sea., that we should not dream of going beyond the proposals I outlined last night without clear signs that our Community partners are making an effective attempt to reduce their fishing effort.
    Dr. Strang: Is the Minister aware that, having read carefully his remarks last night, I realise that my hon. Friend the Member for Great Grimsby (Mr. Mitchell) is right to point out that the hon. Gentleman is today putting a different gloss on his announcement? Surely he understands that the fishermen are considering bringing forward additional technical conservation measures as an alternative to compulsory tie-up. Will he accept that, during the postponement, the Government should look at all the options? Can he give us an assurance that one of the options is the complete abandonment of the days-at-sea restrictions?
    Mr. Jack: I cannot give the hon. Gentleman an assurance on the complete abandonment of days-a t-sea restrictions. I remind him of the words in his own document "Marine Harvest", in which he couples with his support for a decommissioning scheme the need for effort reduction. Days-at-sea restrictions have an important contribution to make.
    However, I said last night that we should look at all the ideas put to us for modifications of the details of the days-at-sea restrictions. I gave the undertaking, which I am happy to repeat this afternoon, that we should continue to work with, for example, the National Federation of Fishermen's Organisations, which is undertaking a conservation review. We shall also look at any ideas that others put forward on the subject of technical measures which might be tradeable against effort reduction. However, I make it clear that we cannot say whether those ideas will be accepted in terms of our multi-annual guidance programme target. The only people who can do that are the Commissioners. However, I give the hon. Gentleman the undertaking that we shall discuss sensible ideas with the Commission.
    Mrs. Lait: Is my hon. Friend aware that, this morning, the wives of the fishermen in Hastings and Rye marched through the town and presented a petition warning of what they think will be the hardship that they will face because of the introduction of days-at-sea restrictions? Does he agree that that is a welcome sign of a vibrant democracy? Will he please give me some idea of what reassurance he would give the wives, who are very disturbed at the thought of the impact of the restrictions?
    Mr. Jack: I had some flavour of the feelings of fishermen's wives when I met them today after my right hon. Friend the Minister and I had given evidence to the Select Committee on Agriculture. They were forceful in the views that they put to me and I was left in no doubt of their feelings. However, I was able to reassure them, as I hope I can reassure my hon. Friend's constituents, about the minimum 80 days, which worried them. I pointed out to
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    them that those who, for example, did not have complete logs or who had been fishing for non-precious stocks, such as crabs, would have an opportunity to have their allocations reviewed. I also said to them that we were interested in a sustainable and viable fishing industry. I said that if there were good ideas, in terms both of fishing policy in general and of modifications to days-at-sea restrictions in particular, we should look at them. I urge the wives in my hon. Friend's constituency to sit down with their papers and to let us have their ideas without delay.

    Animal Transport
    Mr. McAvoy: To ask the Minister of Agriculture, Fisheries and Food what plans she has to improve the welfare of animals transported from the United Kingdom to the rest of the EC.
    The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Nicholas Soames): We have maintained strict national rules to safeguard the welfare of animals during transport, both within this country and for export.
    We are pressing for these rules to be extended throughout the Community.
    Mr. McAvoy: As there are no official figures that show the number of British farm animals that are exported, we must rely on the estimates of the trade, which suggest that there has been a huge increase.
    Does the Minister accept that at risk are not only the welfare of animals but the jobs of British meat processors? Instead of watching a year-on-year increase in the number of animals making long journeys abroad, will the Minister fight for meat to be exported on the hook rather than on the hoof, for slaughter to occur as near to the point of production as possible and for a maximum journey time of eight hours?
    Mr. Soames: The hon. Gentleman did a good job in getting all the salient points into his question—I congratulate him. The British trade in animals is important. Statistics for 1992 show that the live export trade—mainly of cattle, sheep and pigs—is worth more than £160 million. The hon. Gentleman knows that there is a strong demand for British beef and lamb because they are outstandingly good beasts which command a premium on the continent.
    Our European friends prefer that the animals be slaughtered on the continent because they particularly like their butchers' cuts. The hon. Gentleman should be equally aware that the export trade keeps a great number of people employed on farms to raise the animals. I take the point that the hon. Gentleman makes about abattoirs, which is a regrettable side effect. On balance, the trade is important for British farmers.
    Mr. Colin Shepherd: Does my hon. Friend agree that the incomes of lowland livestock producers have fallen dramatically during the past few years and that those producers are worried about the future of their industry? In his future negotiations with EC colleagues, will he take great care to agree to nothing that could disadvantage the United Kingdom livestock producer?
    Mr. Soames: My hon. Friend has my complete assurance that the Government would never do such a

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    thing. As I said to the hon. Member for Glasgow, Rutherglen (Mr. McAvoy), the trade is important and expanding. Nevertheless, the point that the hon. Gentleman made about the welfare of animals during travel is relevant and is one of which we are most mindful. We intend to bring the rest of the EC up to the same high standards of animal welfare that we have in this country.

    Woodland
    Mr. Tipping: To ask the Minister of Agriculture, Fisheries and Food what discussions she has had about introducing long-term non-rotational set-aside relating to woodland.
    Mrs. Gillian Shephard: I have received many representations about the importance of allowing woodland planting on non-rotational set-aside. As recently as last week, I raised the matter at the informal agriculture council in Denmark, and I shall continue to press for it to be allowed.
    Mr. Tipping: Does the Minister appreciate that a higher rate of set-aside may be necessary to establish environmentally friendly schemes, such as the Greenwood community forest in north Nottinghamshire? Will she continue to press the EC to have such a scheme established quickly?
    Mrs. Shephard: The European Commission at the moment is rather negative. It feels that such a scheme might allow marginal land to count against set-aside. We do not agree. The way forward is to make a link with the community forestry measures and arrangements for set-aside to allow farmers to enter the land in the farm woodland premium scheme. The farmers would not receive set-aside payments as well, but they would have a long-term guarantee. I shall continue to press that case.
    Mr. Ashby: My right hon. Friend will know that the new national forest in the midlands is centred on my constituency of Leicestershire, North-West. Additional incentives are required if farmers are to set aside land to encourage the creation of the wondrous new forest. Will my right hon. Friend impress on those in Brussels that the forest is of national and European significance?
    Mrs. Shephard: There is a link between those proposals and the proposals for non-rotational set-aside on which we expect the Commission to introduce proposals by the end of July. My hon. Friend may rest assured that I will continue to press that case, not only for woodland but for rules on set-aside that our farmers need now.

    Common Agricultural Policy
    Mr. George Howarth: To ask the Minister of Agriculture, Fisheries and Food what representations she has received on financial aspects of the common agricultural policy.
    Mrs. Gillian Shephard: I receive many representations on all aspects of the CAP.
    Mr. Howarth: Given that the Minister conceded earlier that the scheme costs £18 per family in Britain and as the CAP serves the interests of neither agriculture nor the
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    consumer, is it not time that she stopped merely talking about it and took some action to get rid of that obscenity of a policy which suits no one, least of all Britain?
    Mrs. Shephard: I find that fairly rich, coming from an Opposition Member. The cost is too high, as the Government agree. It would be good if, for once, someone from the Opposition supported us when we wanted to cut costs in any area.
    Mr. Mans: Has my right hon. Friend received any representations about the financial aspects of CAP in association with incentives to create environmentally sensitive areas?
    Mrs. Shephard: Part of the CAP reform package included several incentives for what we call the agri-environment package. We have consulted widely on that package and we expect to announce some schemes in the autumn.
    Mr. Stevenson: In the light of the Minister's response on the costs of CAP, will she confirm that the costs are due to increase this year by £1·3 billion and that it is expected that by 1995 they will have increased by some £4 billion? How does that equate with the statement made by her predecessor that the CAP reform was good for the taxpayer and the consumer? Will she give us an assurance that the Government will oppose those unacceptable and unjustified increases?
    Mrs. Shephard: I explained to the House that the £1·3 billion increase was the result of various exchange rate mechanism realignments. The hon. Gentleman may possibly have missed that. The important thing is that agriculture continues to take a decreasing proportion of the European Community budget as a whole—which it is doing—and that it keeps within the guidelines set by the EC and approved by the House. That is also happening, but I agree that the cost is too high. I am delighted to have such support from the Opposition in cutting public expenditure.

    Produce Marketing
    Mr. Clappison: To ask the Minister of Agriculture, Fisheries and Food what progress is being made with the marketing of British agricultural produce.
    Mr. Soames: The Government are committed to encouraging the agriculture and food industries to improve and enhance their marketing. That is why we have established the market task force within the Ministry, introduced the group marketing grant and promoted the Agriculture Bill.
    Mr. Clappison: Does my hon. Friend agree that even though food exports are now increasing at a faster rate than food imports, it is vital that we improve our trade position in food? Does he further agree that, given the competitive exchange rate, all the help that is given to producers with marketing and processing and all the help from Food From Britain, it is up to food companies to make the most of the opportunities that are available to them?
    Mr. Soames: My hon. Friend makes an extremely good point. There is no doubt that dazzling and glittering prizes are available for the food industry in its export markets. It

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    is one of the industries in which Great Britain truly leads the world. I wholly endorse my hon. Friend's view that we look to the industry for greatly enhanced performance in marketing.
    Mr. OIner: I refer the Minister to his earlier answer on the welfare of animals that are transported in awful conditions. Those conditions have no place in today's modern society. Is the Minister aware that the export of sheep from Britain has led to the closure of a modern abattoir in my constituency with the loss of 35 jobs? Surely the Ministry should encourage the export of farm produce chilled rather than on the hoof.
    Mr. Soames: I explained to the hon. Member for Glasgow, Rutherglen (Mr. McAvoy) why our continental friends prefer the export of animals on the hoof. The hon. Gentleman must understand that the business is important for our farmers. Equally, he is perfectly right to highlight the important welfare aspects of the business. That trade can take place only if the conditions in which it operates are honourable and have the integrity of properly enforced rules. I deeply regret the closure of the abattoir in the hon. Gentleman's constituency. I am afraid that that is a function of the marketplace and, for the moment, the very admirable British stock is commanding very high prices abroad.
    Sir Donald Thompson: When my hon. Friend meets those who buy British goods in this country, will he urge them to plan their purchases carefully and as gently as they do when they plan purchasing goods from abroad?
    Mr. Soames: I am grateful to my hon. Friend. Naturally, we always hope that our British—[interruption.] I am grateful to the House. We always hope that our British goods, which are so very reasonably priced and so excellent in quality, will always command the support of the housewife wherever she buys them.

  PRIME MINISTER

    Engagements
    Ql. Mr. Tipping: To ask the Prime Minister if he will list his official engagements for Thursday 8 July.
    The Lord President of the Council and Leader of the House of Commons (Mr. Tony Newton): I have been asked to reply.
    My right hon. Friend the Prime Minister is attending the G7 economic summit in Tokyo where he has played an important part in bringing about a major step forward in resolving the GATT round.
    Mr. Tipping: Given the citizens charter, is the Lord President concerned that Regional Railways has cut its publicity budget by 30 per cent? As a result of that, many small stations in the east midlands and East Anglia no longer appear on the timetable. Can the right hon. Gentleman assure rail users that those stations will stay open after privatisation? Does the right hon. Gentleman understand the problem? With no platform, no timetable and no sense of direction—that surely sounds like this Government.
    Mr. Newton: The Government's sense of direction is very clear with regard to the vigour with which we have
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    carried the rail privatisation proposals through the House to pave the way for further improvements in rail services. That is what we shall see.
    Mr. Spring: Does my right hon. Friend agree that, as a result of the Government's trade union reforms, substantial power has been handed back to individual trade union members? Does he believe that there are other parts of union activity that could benefit from the introduction of one man, one vote?
    Mr. Newton: I very much agree with my hon. Friend's point about the effect of the trade union reforms that we have carried through in respect of returning power to individual members. I can think of quite a number of other reforms that should be carried out, but, unfortunately, they depend on the success of the leader of the Labour party, which he is not exactly having.
    Mr. John Smith: Bearing in mind that pensioners already face value added tax on their heating bills and the prospect of having to pay prescription charges, why is the Prime Minister in his speech in Tokyo adding to their very genuine fears by threatening even further curbs on social spending?
    Mr. Newton: I must say that I am not suprised, in view of the contrast between my right hon. Friend's success in Tokyo and the right hon. and learned Gentleman's catastrophe in Bournemouth, that the right hon. and learned Gentleman should—[Interruption.] In Tokyo, my right hon. Friend was making the point that all western countries face rising pressures on their welfare budgets. Few would argue in this country that the current Department of Social Security budget of almost £80 billion is necessarily spent in the best way possible and that any Government are not entitled and right to review policy and spending patterns. If the right hon. and learned Gentleman disagrees with that, may I say that I have just been quoting, to all intents and purposes, the hon. Member for Glasgow, Garscadden (Mr. Dewar).
    Mr. Smith: Is not it now absolutely clear from the Prime Minister's speech in Tokyo and the documents issued by the Secretary of State for Social Security that the Government have embarked on a blatant attempt to soften up the public for cuts in public spending? Does he not appreciate the justified anger of pensioners who have paid tax and insurance all their lives and hear these threats to their pensions? Does he not think that it is monstrous that these people should be asked to pay the price of the Government's economic improvidence?
    Mr. Newton: What my right hon. Friend the Secretary of State for Social Security has published this morning is a range of information to inform the debate which, in my view, everybody in this country agrees must sensibly be had. It is a debate which the right hon. and learned Gentleman undertook in setting up his social justice commission and in his own manifesto statement for the Labour party leadership. Pensioners have an absolute guarantee from the Government that we will maintain our commitment to uprate the basic retirement pension in line with prices and that we will not do what the right hon. and learned Gentleman's Government did—fiddle the uprating figures and abolish the Christmas bonus two years running.
    Mr. Smith: On the subject of guarantees, can the right hon. Gentleman remind us of what the Government said at the election about guarantees on value added tax?
    Mr. Newton: The Government made it clear at the election that they would maintain the commitments to pensioners that I outlined. What I want to hear from the right hon. and learned Gentleman, and have not yet heard at any stage, is why the Labour party left VAT on fuel out of the list of those things that it was determined not to do.
    Mr. Knapman: The whole House will wish to congratulate my right hon. Friend the Prime Minister on his considerable success at the G7 economic summit—[HON. MEMBERS: "No."]—the sensible ones, anyway. Will my right hon. Friend, on his return, look at the ever-increasing number of directions and regulations coming from Brussels, because, surely, what we really need to meet and beat world competition is a lightly regulated, free-trading economy?
    Mr. Newton: I very much agree with my hon. Friend. That, indeed, is another of the points that my right hon. Friend the Prime Minister has underlined, not only time and again in discussions in Europe but now in the discussions in Tokyo in relation to the G7 summit. It is clear from the response from one country after another, most recently from President Clinton and the United States, that that crucial British message about the need to ensure the competitiveness of our economies is beginning to hit home all around the world.
    Mr. Fraser: To ask the Prime Minister if he will list his official engagements for Thursday 8 July.
    Mr. Newton: I have been asked to reply.
    I refer the hon. Member to the answer I gave some moments ago.
    Mr. Fraser: I remind the Leader of the House, in relation to the questions put by my right hon. and learned Friend the Member for Monklands, East (Mr. Smith), that the Government were absolutely explicit about not extending the ambit of value added tax. Now they impose a hypothermia tax, which will mostly hit people with modest savings and small pensions and people on the margins of poverty. Because the Government did that, why should anyone believe what they say about not whittling away pensions and making pensioners' incomes means tested? Surely the Government's problem is that their clock has now struck for the 13th time.
    Mr. Newton: The reason that pensioners should believe the commitments that we have made about their pensions is that we have consistently honoured our commitments to pensioners in a way that the right hon. and learned Member for Monklands, East (Mr. Smith), the hon. Gentleman and other hon. Members cannot possibly claim to have done.
    Mr. David Howell: Will my right hon. Friend join me in welcoming not only the excellent news from Tokyo about the proposed tariff cuts—which will, of course greatly increase trade and jobs—but the fact that at present the pound is regarded as the strongest currency in Europe? Does he agree that the right response to those two positive developments is to do everything possible, not to manipulate the exchange rate up or down but to maintain
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    our competitiveness, build a good infrastructure, keep down inflation and manage our costs very tightly, and that that is a very promising way forward for this nation?
    Mr. Newton: Again, I very much agree with my right hon. Friend. Alongside my right hon. Friend the Prime Minister's success in contributing to a further step forward in an important deal for world trade is his success—and that of the Government—in emphasising and carrying through in Britain the policies to which my right hon. Friend has referred, and which will leave us particularly well placed to take advantage of the increase in world trade that will result.
    Rev. Martin Smyth: Can the Leader of the House, speaking on behalf of the Government, tell us whether, at the intergovernmental conference today, the Government will contend that the democratic rights of the people of Northern Ireland should not be ridden over roughshod any longer but that those people should be treated as part of the United Kingdom?
    Mr. Newton: I can assure the hon. Gentleman, and he would expect no less from me, that the Government remain totally committed to the principle that any change in the constitutional status of Northern Ireland would come about only with the consent of a majority of the people who live there, and I repeat that commitment this afternoon.
    Mr. Peter Robinson: Did the Leader of the House read in The Guardian this morning an article that stated that the Foreign Affairs Minister of the Irish Republic attempted to pour petrol on Ulster fires by endorsing the Labour party proposal for joint authority and putting forward a further proposition for a commission, with representatives from the Dublin Government, Her Majesty's Government and the European Community, taking charge of Northern Ireland? Will the Leader of the House rebuke, as strongly as the Prime Minister did last week, the Irish Foreign Affairs Minister for making such a suggestion?
    Mr. Newton: I have noted that report. My right hon. and learned Friend the Secretary of State for Northern Ireland is meeting Mr. Spring this afternoon and will seek clarification of what he said. What I can do, and have just done for the hon. Member for Belfast, South (Rev. Martin Smyth), is to repeat clearly and emphatically the British Government's position in this matter. The right hon. and learned Member for Monklands, East (Mr. Smith) can no doubt speak for the Labour party, but the British Government deplore the Labour party's position as well.
    Mr. Ashdown: Do the Government yet understand that typhus and cholera are shortly to be added to shells and bullets as the means by which the people of Sarajevo will be condemned to die? Does the right hon. Gentleman really believe that mere words from the G7 in Tokyo will be sufficient to save them?
    Mr. Newton: The G7 summit in Tokyo has clearly reaffirmed our and other countries' commitment to the territorial integrity of Bosnia and to a negotiated settlement based on the principles of the London conference. It has made it absolutely clear that we cannot agree to any solution for Bosnia dictated by the Serbs and Croats at the expense of the Muslims. As the whole House

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    would wish it to do, the summit has underlined our commitment to the urgent implementation of safe areas and to improving the flow of humanitarian aid.
    Mr. Patrick Thompson: Does my right hon. Friend agree that during the past 14 years the Conservative Government have shown real determination and courage in carrying through their reforms with the trade unions? Does he agree that the Leader of the Opposition singularly lacks those qualities in dealing with the same matters?
    Mr. Newton: The right hon. and learned Member for Monklands, East probably wishes that he was in Tokyo and had not had to go to Bournemouth. Since he left Bournemouth with what looked to me on the television news last night as a rather sheepish expression on his face, he has, of course, suffered a further significant reverse with the vote that the Transport and General Workers Union took this morning to reject his plans.
    Mr. Gordon Prentice: To ask the Prime Minister if he will list his official engagements for Thursday 8 July.
    Mr. Newton: I have been asked to reply.
    I refer the hon. Member to the answer I gave some moments ago.
    Mr. Prentice: What would the Lord President say to the firefighters in Pendle who, over the past 14 years, have seen their pay formula scrapped and the imposition of a 1.5 per cent. pay limit, when the chairman of North West Water has received a 43 per cent. increase, taking his salary to £267,000 a year? Why is it that those who douse the flames are worth so much less than those who provide the water?
    Mr. Newton: I would say to the firefighters of Pendle or anywhere else that they should not listen to the kind of overheated rhetoric in which the hon. Gentleman indulges.
    Mr. Cormack: Reverting to the issue raised by the right hon. Member for Yeovil (Mr. Ashdown), may I ask my right hon. Friend to accept that reaffirmation of itself is a cruel hoax unless it is followed by action? There is nothing to stop Sarajevo being saved. Can something now be done?
    Mr. Newton: My hon. Friend has taken a long and honourable interest in these matters. He knows the difficulties of proceeding in quite the way he has often suggested. I would do no more at this stage than repeat what I said in an earlier answer—the British Government will continue to do everything that they properly and responsibly can to achieve a settlement that will stop the bloodshed in Bosnia.

Local Government (Scotland)
3.31 pm
The Secretary of State for Scotland (Mr. Ian Lang): With permission—[Interruption.]
Madam Speaker: Order. Will right hon. and hon. Members take their seats? The Secretary of State is waiting to make a statement.
Mr. Lang: With permission, Madam Speaker, I will make a statement about local government in Scotland.
The Government's proposals for local government reorganisation in Scotland have been the subject of detailed consultation and discussion for the last two years. Throughout that time, support for the concept of single-tier local government has been strong and sustained. I have received a great deal of valuable comment from a wide range of individuals and organisations.
I am publishing today a White Paper which sets out our decisions on the new structure. I am also publishing a leaflet, which will be made widely available in Scotland, and summaries of the responses that I received to our second consultation paper on local government reform and our paper about the future of water and sewerage services. I have placed copies of those documents in the Vote Office, where they will be available in the usual way when I have completed this statement.
The Government have decided to establish a single-tier structure of local government throughout Scotland, comprising 28 authorities. The details of those authorities are set out in the White Paper. The new authorities will vary significantly in size and character, reflecting local wishes, circumstances and requirements.
We intend to re-establish the four Scottish cities as unitary councils and to create powerful new authorities on their outskirts to act as a counterbalance. In the more rural areas of Scotland, the new authorities will inevitably cover substantial areas, but areas for which our consultation has shown there is an established identity. The three islands authorities will remain unchanged.
The new authorities, whatever their size, will be encouraged and expected to pursue actively the adoption of schemes of decentralised management and administration to ensure that decisions are taken at the most local level practicable, enabling people to discuss problems with their council without having to make a long journey to its headquarters. I shall be asking authorities to prepare and publish comprehensive schemes of decentralisation.
The new authorities will all be responsible for providing the full range of local authority services, including education, housing and social work. The Government consider, however, that the reporter service for children's hearings would be more effectively provided as a national service, and I am proposing to establish a new body for that purpose. In addition, economies of scale available in the water and sewerage industry point to fewer, rather than more, bodies responsible for those services than we have at present. Further, customers should be able to benefit from the efficiencies and investment in the water and sewerage infrastructure which can be provided by the private sector.
The existing police forces and fire brigades will be retained. Some statutory co-operation will be required for their oversight and for the management of the Strathclyde
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passenger transport executive. In all other respects, it will be for individual authorities to make appropriate arrangements for the delivery of services in their areas. I shall expect to see a considerable development of the enabling role of authorities and a willingness to explore further the possibilities of co-operation with the private sector as they explore new ways of delivering services more efficiently. I shall be looking also for a greater willingness to share the expertise of specialist staff.
The changes I have announced will, of course, have implications for local government staff. I have already announced the Government's intention to establish a staff commission in Scotland to oversee the transfer process and to provide me with appropriate advice. Early retirement or redundancy compensation will be available in cases where particular staff are not required by the new authorities under the new structure and further decisions about those arrangements will be taken in due course.
I have, of course, made it clear that I expect the new structure to cost less than the present two-tier system. Savings of up to £65 million per annum can be expected from the new structure and those savings are likely to pay back the inevitable transitional costs within four or five years. The actual level of savings achieved by the new structure will ultimately depend upon the actions of the new authorities themselves.
The main objective of the reorganisation is not:, hòwever, to cut costs; it is to increase the effectiveness of local government in arranging the delivery of services and responding to local needs and concerns. I believe that the new structure will make local authorities more accountable and responsive to the people they serve and will help all authorities to achieve the standards already reached by the best. It will remove the confusion which undoubtedly exists over which council is responsible for which function, so that users know where to go when they are dissatisfied. It offers local government in Scotland the prospect of a bright, dynamic future. It will give a major boost to the implementation of the citizens charter in Scottish local government.
My intention is to introduce a Bill to implement those arrangements. Subject to the parliamentary consideration of the arrangements being completed, I hope that it will be possible for elections to the new authorities to take place in the spring of 1995, to give them until 1 April 1996 to establish themselves and to prepare for the assumption of responsibility from existing authorities on that date. Thereafter, election to the new councils will take place every three years.
The proposals I have announced today are of the utmost importance to everybody in Scotland. They reflect the strong and growing support for all-purpose councils in Scotland. They represent a tremendous opportunity to improve and strengthen our local government system and the delivey of local services and they are a great stride forward for local democracy in Scotland. I commend the White Paper to the House.
Mr. Tom Clarke: We have listened to a statement from the Secretary of State and we are being asked to consider a White Paper for which there is no consensus in Scotland, no support and no demand, and which runs counter to the stories from the Treasury that it faces—because of its policies—a £50 billion deficit. Where

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will the right hon. Gentleman find the money for his absurd and unwanted proposals? Which services does the Scottish Office intend to cut?
On water privatisation, the people of Scotland are entitled to claim that at least this unlistening Government have, in some respects—but some only—heard their voice, but only because the Secretary of State has abandoned his ludicrous proposals for outright privatisation—[Interruption.] If that is not the case, and if the Scottish Under-Secretary, the hon. Member for Eastwood (Mr. Stewart)—who appears to have undue weight in these matters—takes a contrary view, perhaps we will hear it before the end of our questions on the statement. The Government's ludicrous extremes over water have at least been restricted for the moment. Nevertheless, in the light of Government betrayals over so many Scottish issues—from Rosyth to Ravenscraig—we are entitled to ask specific questions on water, and we do.
Why has the Secretary of State taken water out of local authority control? How will board appointees keep charges down even when they must provide profits for private financiers? What guarantees can the Secretary of State give on the future ownership of water and on protecting Scottish consumers from the threat of water disconnections—a subject that the right hon. Gentleman seems reluctant to discuss?
Why does the Secretary of State disregard the overwhelming view of the people of Scotland when he says that he takes that as much into account in Eastwood as in Edinburgh? Eighty-nine per cent. of the people oppose water privatisation. Why does not the right hon. Gentleman end the argument by saying that the matter is finished and final?
The Secretary of State's somewhat thin statement is in contrast with a document of 30 pages that reeks of dogma, centralisation, and policies that the Scottish people utterly reject. That dogma involves education, social work and essential local services and does not disguise—and nor can members of the Government Front Bench—the hidden agenda of centralisation, commercialism and privatisation which flies in the face of the wishes of the overwhelming majority of the people of Scotland.
I ask the Secretary of State, who represents a minority party in Scotland, to justify his statement that there will be no joint boards, when he intends to have police and fire services in Strathclyde run by joint committees from 10 different councils. How can he justify the massive destruction of Scottish local government on the ground of the efficient provision of social services, and at the same time take upon himself the power to impose joint boards where he thinks fit? Where is democracy and accountability there? Who in Scotland made representations to the Secretary of State in response to his document, saying that is what they wanted?
How can the Secretary of State justify the centralising of reporting to children's hearing services in advance of producing comprehensive legislation later this year, as he promised earlier?
Of less importance to people's lives but more outrageous is the gerrymandering that the Secretary of State's proposals represent for Scotland's future. They are unashamedly and undisguised not proposals for local government reform, improving the quality of the delivery of service, cost efficiency or local democracy. No one in Scotland is fooled into thinking that. The proposals are
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about Tory revenge on the Scottish people and on Scottish local government, which the Government clearly utterly detest.
As the hon. Member for Eastwood has often said, Thatcherism still rules—and it is no more acceptable in Scotland today than it ever was. How can the right hon. Gentleman expect the House to take seriously the Eastwood solution to these important matters—the creation of safe havens for the beleaguered minority of Scottish Tories, which at present account for an absurd 16 per cent., seeking to impose dictatorial policies on us?
How can he expect anyone to take seriously his plans for Greater Eastwood, Greater Berwickshire and Greater Milngavie, and his plan to put Stirling district and Perth district on a par with Fife and with Highland region? How can we take seriously proposals for the reform of local government that ignore the thoughtful and constructive Wheatley commission, and the thoughtful and constructive debate that followed?
This is a disgrace to local government and to the way in which we deal with national government throughout the United Kingdom. This is a bankrupt policy from a bankrupt Government, unrepresentative and unworthy of the Scottish people. It will be as utterly rejected today as the Tories were in April last year.
Mr. Lang: The hon. Member for Monklands, West (Mr. Clarke) said that there was no consensus for the policy for the reform of local government. I suggest that he look at some of the submissions that we have received in response to the consultation process, which has gone on in great detail over the last two years. They have shown increasing support for single-tier local authorities.
The hon. Gentleman referred to the Treasury, as though seeking to imply that the exercise was Treasury-driven. I have come under no direct pressure from the Treasury in regard to my proposals. The Treasury, like other Government Departments, has taken an interest in the proposals and has expressed itself content with them. I am not surprised, because we are not talking about an additional cost of £600 million, as the hon. Gentleman claimed; there will be transitional costs which, on the greatest present estimates, will be less than a third of that. We are talking of savings of up to £65 million a year—over £1 million a week—as a result of the contraction of local government that we are comtemplating.
As to water, the kindest thing that can be said about the hon. Gentleman's remarks is that he must have written his response before he had even read last week's issue of The Scotsman, let alone heard my statement today. The hon. Gentleman has totally misjudged this campaign, and has attributed to the Government a policy that we have not adopted. Like the grand old Duke of York, he has led his men up the hill, and now he must turn round and lead them down again.
What we are proposing is a sensible way forward for water in Scotland. The hon. Gentleman asked why it was being taken out of local authority control. The answer is that 28 water authorities would be extremely inefficient, lead to wide variations in costs and impose extra burdens on consumers. What we are proposing with the three authorities, using the private sector for future capital investment, will lead to the efficient delivery of water and raise the necessary investment, without imposing an

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unnecessary burden on the taxpayer. It was the Leader of the Opposition who said that the question of ownership was irrelevant.
The hon. Gentleman said that I was reluctant to speak about disconnections. I draw his attention to what I said as recently as yesterday, which is that we have no plans for any change to the present arrangements.
The hon. Gentleman questioned the future of the reporter to children's services. We are anxious to deliver an efficient service without imposing excessive burdens on local authorities, many of whose departments in this regard would consist of only one or two individuals. That would not be a cost-effective way of delivering the services.
As to joint boards, I know that the hon. Gentleman is disappointed because, yet again, we have shot one of his foxes. We do not intend to increase the number of joint boards in Scotland; we see no need for more boards. We will continue to have joint boards for fire services, for police services, for the passenger transport executive and for the assessors. We are leaving the rest to local authorities to arrange what best suits their needs and the interests of their residents. The right way forward is to encourage responsible behaviour in local authorities.
As to the map, I encourage the hon. Gentleman to study our proposals more carefully before he rushes into a judgment. There will be no safe havens for bureaucracy, for duplication or for waste of taxpayers' resources.
The whole story of the hon. Gentleman's reaction to our important proposals for the reform of local government over recent months has been one of scaremongering. Last autumn, he claimed that we had a hidden agenda for a national police force, water privatisation, spending cuts, job losses, greater central control and a Treasury veto. On every one of those issues the hon. Gentleman is now seen to be wrong. What we are proposing is for the best future of local democracy in Scotland in the 21st century.
Mr. Phil Gallie: Is my right hon. Friend aware of the warm welcome from my constituency and the constituencies surrounding mine for the abolition of Strathclyde regional council? My constituents have never identified with that council. I thank my right hon. Friend for listening to the responses, which have allowed the establishment of a Kyle and Carrick council. My constituents will identify with that council and will feel that they can influence the activities and accountability of the councillors elected to that body and exercise some control. Will my right hon. Friend confirm that?
Mr. Lang: I am grateful to my hon. Friend. I am sure that, like me, he will welcome the re-emergence of many of the old county names in what we are now proposing for the future structure of local government. I agree with my hon. Friend, as, I am sure, does the Labour party, on the abolition of Strathclyde region. The right hon. and learned Member for Monklands, East (Mr. Smith), the Leader of the Opposition, said:
"When we look at all the services provided by local government—both personal and protective—there can be no possible justification for the size of the Strathclyde region. It varies from being two and a half times to five times too big."
—[Official Report, First Scottish Standing Committee, 25 January 1973; c. 207.]
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I am sure that the right hon. and learned Gentleman will welcome the replacement of Strathclyde region with no fewer than 10 independent local authorities.
Mrs. Ray Michie: Well, well, was it all worth waiting for? After all the hype we have a document that has been lying on the press desk for the past week and is only now being presented to the House.
Is the Secretary of State aware that he has no right to introduce single-tier local authorities in Scotland without setting up a Scottish Parliament to look after the affairs that he now holds undemocratically in his hands? With hindsight, does he agree that this will be a costly exercise, that he has laid himself open to the charge of political manipulation and that he should have had an independent commission to investigate all the matters of local government reform?
I believe that the Secretary of State's announcement about water is just the beginning of the road to privatisation. Is he not aware that 94 per cent. of the submissions to his office were against his plans for water? How many letters and submissions does it require for him to listen to what the people of Scotland have said?
This is a complete mess. We have overlapping councils and parliamentary seats and overlapping local enterprise companies. We have mixed-up water and police authorities and there is no coherence or stability. I reject it, and I believe that the people of Scotland will reject it also.
Mr. Lang: I am surprised that the hon. Lady has made no mention of the future of Argyll and makes no attempt to reflect the interests of her constituents. Argyll district council expressed its keenness to have a single-tier structure and a willingness to take into Argyll pieces of neighbouring territory if that were thought appropriate.
The hon. Lady asked whether the statement was worth waiting for. My answer is an emphatic "Yes". I am certain that the people of Scotland will warmly welcome the implementation of these proposals and the improved delivery of services that they will bring.
The hon. Lady mentioned the setting up of a Scottish Parliament before local government can be reformed. The policies of the Labour party for setting up a separate Scottish Parliament would drain power from local government. I have it on the authority of Mrs. Jean McFadden, the leader of Glasgow district council, that
"There may well be a tendency for a Scottish Parliament to suck up power from below."
That is the fact. These proposals will be welcomed in Argyll, as they will be welcomed elsewhere in Scotland.
Several hon. Members rose—
Madam Speaker: Order. I shall try to call as many hon. Members as possible but I ask for the House's co-operation in the form of brisk questions and brisk answers to help me to do so.
Mr. George Kynoch: In welcoming the advent of the proposed single-tier local authorities and my right hon. Friend's sensible and realistic proposals for water services, may I ask whether he will fully consider any representations that he receives from constituencies such as mine about the effective local delivery of services in larger rural areas? During the Committee stage of the Bill, will he be willing to reconsider the splitting of the Mearns from the former local county of Kincardineshire?
Mr. Lang: I am grateful for my hon. Friend's welcome for the underlying thrust of our proposals, which I am sure will be of great advantage to the north-east of Scotland and, indeed, to the rest of Scotland. As for the detailed proposals, such issues will come up for consideration as the Bill goes through the House and, in due course, once Parliament has decided on the map, the Local Government Boundary Commission will immediately go to work on them. There will be plenty of opportunity for my hon. Friend to advance any thoughts that he may have on the precise nature of the boundaries.
Mr. Dennis Canavan: Who does the Secretary of State think he is kidding? Does he not realise that the overwhelming majority of the people of Scotland will recognise this as a squalid job creation scheme for Tory councillors and quango members and that everyone responsible for it, including the Secretary of State, is corrupt and unfit to hold public office?
Mr. Lang: I hope that the hon. Gentleman will carefully examine the proposals for his part of Scotland and for the rest of Scotland. We are removing unnecessary bureaucracy and duplication, improving local accountability and creating greater accessibility and clarity in the delivery of local government services. If the hon. Gentleman does not share my objectives, he should be considering his own priorities.
Mr. John Marshall: On a point of order, Madam Speaker.
Madam Speaker: I take points of order after statements. If the House were not so noisy, we could hear what hon. Members said. I think that there is some concern that the hon. Member for Falkirk, West (Mr. Canavan) used the word "corrupt". I did not hear it—[Interruption.] Order. If the House were quieter, we could all hear what was going on. I did not hear the hon. Gentleman. He may have used the word but if the House were quieter, I could hear. Unless the Speaker hears, there is nothing I can do about it, so I ask the House to remain quiet so that I and everyone else can hear what is going on.
Mr. Raymond S. Robertson: Is my right hon. Friend aware that his announcement will be met with a thunderous roar of approval by the people of the city of Aberdeen, who have long campaigned for an all-purpose city council, and that includes the ruling Labour group of the present city district council? Does my right hon. Friend agree that what he has announced is subsidiarity in action, giving local decision makers the right to make local decisions in local communities, which is far removed from what is on offer from the Opposition, who would take decision making away from local communities and transfer it to a central belt in Edinburgh?
Mr. Lang: I am grateful to my hon. Friend. I am sure that the city of Aberdeen will be a strong and effective all-purpose authority. I also believe that the surrounding area of Aberdeenshire will provide an effective counterbalance and that there will soon be a vibrant and extremely efficient local government system in north-east Scotland.
Mr. Robert Hughes: Is the Secretary of State aware that his wish that the White Paper should be regarded as a sensible reform of local government would carry more credence but for his ill-conceived
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decision to have the whole process carried out by the Scottish Office, not by means of a proper inquiry? Does he accept that there will be considerable dissatisfaction in the Grampian area about the break-up of Grampian regional council, which I hope he will concede has done a great deal for fishing and the rural areas of north-east Scotland? Although there will certainly be great satisfaction at the restoration of a single-tier authority for the city of Aberdeen, what is the rationale for the new addition of Westhill, other than his determined gerrymandering to dilute Labour control of the city?
Mr. Lang: Yes, Grampian has been an efficient region, but we had to make decisions as we examined the map of Scotland. We were told at one stage that the whole excercise was a plan to abolish the regions of Scotland. It was no such thing—indeed, four of the regions will survive under our proposals, some in slightly reduced form. We have sought to find the most effective pattern and structure for each part of Scotland. We are not imposing a blueprint, but considering the circumstances of each area and finding the right solution. Although Grampian has been a successful and effective region, I believe that the new authorities that we shall set up in the north-east will be more effective. I should say that there was little support for the continuance of Grampian region.
Mr. Andrew, Welsh: Does the Secretary of State understand that everyone can see that the document is a paving Bill for stealing Scotland's water through Tory quangos? This is the end of the road for the Westminster system, and the Secretary of State has no place left to hide. His gerrymandered map is an insult to democracy and an affront to Scotland. Every Scottish Member of Parliament worth his or her salt should oppose it. It is an insult, a betrayal of democracy and a betrayal of Scotland. It must be rejected.
Mr. Lang: May I say to the hon. Gentleman—[Interruption.] By leaving the Chamber, the hon. Gentleman and his colleagues have not only scored an own goal, but have left me with an open goal. He left because he was so deeply embarrassed about the fact that Angus district favoured a single-tier authority based on Angus, which is what we propose.
Mr. John Marshall: Is my right hon. Friend surprised that those who were reluctant personally to pay for the cost of local government are so interested in the structure of local government?
Mr. Lang: My hon. Friend is right. It is incumbent on all parties in the House to raise their horizons above party self-interest and to look to the future interests of Scottish local government.
Mr. George Galloway: Does not the document represent a kind of "electoral cleansing" —a desperate effort by a discredited Government to sweep together as many Tory voters as can possibly be found to form a kind of East Renfrewstan, as we have in Eastwood? Would it not be better if the Government went the whole hog and allowed Tory voters to opt out of the local authority in whose area they live and to choose another more suited to their political tastes? Better still, why do they not rent an island somewher off the coast of Scotland

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—Rockall, for example, would be big enough—where all the remaining Scottish Conservatives could be collected, and could live in the wild blue yonder thereafter?
Is not the truth that a Government without popular support—they have less popular support now than the risible amount that they polled in April 1992—cannot possibly command the authority for proposals of such magnitude? Is not the only way forward a referendum for Scotland and a parliament in Scotland, so that the Scottish people can decide how and where they are governed?
Mr. Lang: The hon. Gentleman cannot have it both ways. Fifteen months ago, he and his hon. Friends were talking about the Tory party being wiped out in Scotland. Now, simply because we are reforming local government, they seem to think that we are suddenly going to sweep the country. The Conservative party has always been a modest participant in local government in Scotland, and the suggestion that we could construct a scenario to benefit us at the expense of other parties is preposterous. I am surprised that the Labour party seems so uncertain of its prospects at the next local government elections under the new arrangements.
Mr. Bernard Jenkin: May I draw my right hon. Friend's attention to the fact that many of his colleagues in England will look enviously on the new streamlined structure of local government in Scotland, and that we hope to catch him up soon? If my right hon. Friend is thinking of renting islands, as the hon. Member for Glasgow, Hillhead (Mr. Galloway) suggested, will he rent a Greek island and put the socialists—what is left of them —on it?
Mr. Lang: I shall leave my hon. Friend's latter suggestion hanging in the air, but I welcome his support for my proposals. I believe that they represent an effective, coherent and clear-cut solution which will meet Scotland's needs. I hope that England will be as successful in its activities as we shall be in ours.
Mr. John Maxton: Can the Secretary of State explain to the House the principles according to which he links Eastwood and Barrhead, which are five miles apart and have no direct bus link, instead of putting Eastwood where it ought to be, in the city of Glasgow, where its people work and where they use the leisure facilities and the halls? Under his proposals, the people of Eastwood will pay nothing towards those services. Is it not an act of political cowardice—giving in to his junior Minister and to those selfish, greedy electors he represents, who are not prepared to pay for the services they use?
Mr. Lang: I am glad that we have been able to revive the county of Renfrewshire, and that it is of a size that enables us to propose two authorties in that county, as we are doing in Ayrshire, Lanarkshire and other parts of Scotland. I believe that what we are proposing is the right way forward for those areas and for Scotland as a whole. Those matters will be fully debated as the Bill goes through Parliament.
Mr. Ian Bruce: Can my right hon. Friend confirm that there was wide support for single-tier authorities, and that he has listened carefully to
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representations? Does not the success of Conservative Members of Parliament, in their representations on behalf of their constituents, show the difference between the right honourable whingers on the Opposition Benches and Conservative Members who put forward logical cases?
Mr. Lang: I am grateful to my hon. Friend and I can assure him that there was substantial support for single-tier authorities in our initial consultation process. That support has increased considerably and, in the most recent opinion poll, was shown to stand substantially higher than that for alternative solutions.
Mr. Norman Hogg: The Secretary of State's undistinguished statement this afternoon says little or nothing about jobs and inward investment. It is not clear to me how local enterprise companies will sit with the new authorities. Will the right hon. Gentleman say something about that? Is it not the case, for example, that the new towns with development corporations will be covered by local enterprise companies? Where will Dunbartonshire enterprise boundaries end in the new structure as it affects the new town of Cumbernauld? Will the Minister say something generally about the new towns?
Mr. Lang: I am glad to do so, and the hon. Gentleman mentions a significant point. We shall consider the boundaries of local enterprise companies, health boards and other such organisations and, where appropriate, we shall propose the rationalisation of boundaries.
Under our proposals, there will be one new town—Cumbernauld—in north Lanarkshire, and one new town —East Kilbride—in south Lanarkshire. The new towns will benefit from the change because they will deal with one local authority instead of with two, and that will also improve inward investment relationships with local government.
Mr. Graham Riddick: I congratulate my right hon. Friend on his carefully crafted proposals for local government in Scotland, but is he aware that some Conservative Members will be a little disappointed that the water industry is not to be speedily privatised? Can he confirm that the resources necessary for the much-needed investment in the water industry in Scotland will not come from the public sector pot—where obviously the priorities should be schools, hospitals, roads and so on—but rather from the private sector?
I hope that you have noticed, Madam Speaker, that I have followed the advice you gave me yesterday about the need for moderate language. I have not said a word about Monklands.
Mr. Lang: I am happy to reassure my hon. Friend. He will appreciate that the circumstances in Scotland are different from those in England, where water authorities had existed for some years. At present, water in Scotland is a local authority service. We are proposing the establishment of water authorities, but they will raise most of their resources for new capital investment from the private sector, which will reduce the demand for resources from other areas of Government expenditure.
Mr. John Home Robertson: The Secretary of State talked about reviving Scotland's counties. Does he accept that East Lothian can never be part of the Borders, let alone part of West Lothian, and

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that he has no right to split the historic county of East Lothian in two? What community of interest is there between Cockenzie and Coldstream, and what about the non-existent link between Prestonpans and Livingston, for goodness' sake? Is he aware that the geographical centre of his proposed Tory mini-Bantustan, composed of Berwickshire and the eastern part of East Lothian, is a place 1,000 ft up in the Lammermuirs called the Hungry Snout, which is quite a good description of the expensive, unworkable and squalid set-up that he is proposing?
Mr. Lang: For all I know, it forms part of the hon. Gentleman's estate. East Lothian is not part of the Borders under our proposals, any more than it has been historically. What we propose is broadly in line with what used to be a parliamentary constituency and—most interestingly—seems to conform to what the independent Boundary Commission now proposes for the future parliamentary constituency.
Sir David Steel: Does the Secretary of State recall that yesterday his ministerial colleague rebuked me for extravagant language and urged me to wait for the proposals? Now that I have seen them, I marvel at my moderation. They are the most corrupt proposals presented to the House by any Government during my time in this place.
As regards the Borders area, the Secretary of Stale will remember putting two options in his consultation document. What he now proposes is neither of those options. How does he justify that? What was the point of the consultation? As he has always told us that the Borders region is doubtfully viable, with a population of 100,000, why does he now propose to chop it up and take Berwickshire out to satisfy a few local government Tories?
Mr. Lang: We made it clear when we published the consultation paper that we were including four illustrative options and that we were not suggesting that the choice need be confined to them. We are talking not about a handbook for six-year-old schoolchildren, saying, 'Pick one of the four," but about illustrative options from which guidance could be given to people replying to the consultation exercise and making their suggestions.
The right hon. Gentleman used extreme language today. I note that he used similar language in his criticism of the Boundary Commission following its proposals for the area containing his constituency and that of his neighbour. I have to suspect the hon. Gentleman and his party of gerrymandering the future parliamentary boundaries in their area.
Mrs. Irene Adams: Will the Secretary of State join me in congratulating the people of Scotland on the magnificent fight that they have put up against his proposals for all-out water privatisation? Will he be assured that they will not be fooled by his proposals for privatisation by the back door?
Will the Secretary of State justify the fact that there is no commission to look at Scotland's local government boundaries, and explain to me how, in his reforming of Renfrewshire, he has come up with proposals for two councils, one of which consists of the only Tory constituency in Renfrewshire plus the only two Tory-held wards in Paisley and the other of which consists of four Labour-held constituencies, with populations of 88,000 and 265,000 respectively?
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Will the right hon. Gentleman further confirm that in reality he put his proposals not to this House today, but to The Scotsman last week?
Mr. Lang: I can confirm to the hon. Lady that I did no such thing. I deplore the leaking of any Government document. As the hon. Lady knows, we never comment on allegedly leaked documents.
For water, what we propose is a Scottish solution suitable for Scottish circumstances. I believe that it will be effective in the delivery of water services in future.
The hon. Lady referred to Renfrewshire. I should have thought that she would welcome the restoration of Renfrewshire as an area of all-purpose authorities in its own right. I am glad, too, that we have been able to divide it into two authorities. They do not need to be numerically equal any more than they need to be geographically equal. What we need is a proper and sensible division between east and west Renfrewshire, and that will no doubt be debated further as the Bill proceeds through Parliament.
Mr. Ernie Ross: Before the Secretary of State reminds me of the fact, may I make it clear that I have always advocated an all-purpose authority for the city of Dundee, but we do not want it under the present gerrymandered proposals.
Do you, Madam Speaker, feel as disturbed as I do at the fact that Ministers preface every statement that they make about Northern Ireland by making it clear that no change will take place without the consent of the majority in Northern Ireland, but that we get no such statements from the Secretary of State for Scotland? Is it not extremely relevant that, in the period leading up to 22 July, it is repeatedly being emphasised that change will not take place in Northern Ireland without the consent of the majority? Why does not the Secretary of State fight his and Scotland's corner in the Cabinet?
Mr. Lang: I am grateful to the hon. Gentleman for welcoming what the Government propose for Dundee. I suppose that he will be accusing me of gerrymandering next. As we have eight Conservative councillors out of 40 in the area that will form Dundee council, I hardly think that such a charge would be credible.
Mr. Thomas McAvoy: It would be less than honest of me not to welcome one part of the White Paper—the recognition that Cambuslang and Rutherglen are separate communities in their own right. However—as the saying goes—let me assure the right hon. Gentleman that my hon. Friends and I will be defending the continued existence of Strathclyde regional council, which is one of the best councils in the history of local government in Scotland. If the process is not to be devalued and defiled as a gerrymandered issue, will the Secretary of State explain why no separate council has been recommended for Cambuslang and Rutherglen, which are in my constituency and have a similar population to Eastwood, Stirling and Berwickshire? What is the difference?
Mr. Lang: That area is traditionally part of Lanarkshire and it will go into south Lanarkshire. I am surprised to find the hon. Gentleman defending Strathclyde. I would be surprised if he found strong support for that among his constituents. I believe, as does the Leader of the Opposition, that Strathclyde is too large.

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The 10 independent self-governing local authority areas that we propose will be widely welcomed throughout the Strathclyde area.
Mr. Michael J. Martin: I was brought up in Glasgow, and have lived in the north side of the city all my life. I am not all that familiar with the south side, but it has always been my understanding that King's Park and Toryglen were part of the city of Glasgow. Why has the Secretary of State sought to take those areas out of Glasgow when he claims that he is trying to make local government more accessible to the people?
I mean no disrespect to the people of Giffnock and Newton Mearns, but the vast majority of those who are lucky enough to be in a job work mainly in the Glasgow area—sometimes in businesses, sometimes in lawyers' firms—sometimes in the Strathclyde region. Why is the Secretary of State allowing Eastwood to become an authority? The only conclusion that I can reach is that his ear has been bent day after day by the Under-Secretary of State, the hon. Member for Eastwood (Mr. Stewart). If the Secretary of State accepts that all of us are equal, why does the Under-Secretary of State have more say than any other hon. Member?
Mr. Lang: As the hon. Gentleman can imagine, Toryglen is a place after my own heart. I understand that, historically, some 85 per cent. of Toryglen and King's Park have formed part of Lanarkshire. The hon. Gentleman suggests that we propose to make Eastwood an all-purpose authority on its own. That is not part of our proposals.
Mr. John McAllion: Is the Secretary of State aware that the private sector is already describing his proposed water authorities as business units which will promote the franchising and market testing of Scotland's water by as early as 1995? Does he not yet understand that, having failed his own market test in Scotland at the last general election, he has no democratic authority whatever for any of the changes that he has announced this afternoon? Therefore, when he introduces the Bill, he can expect not just token opposition from us, but unrelenting hostility, resistance and obstruction to ensure that these measures never see the light of day in Scotland.
Mr. Lang: I am grateful to the hon. Gentleman for promising to take a close interest in these matters.
Mr. Alistair Darling: Will not the reforms result in Scotland being run largely by quangos staffed by Tory party members and those prepared to pay into Tory party funds? Does the Secretary of State accept that, by attempting to gerrymander councils that the Tory party can control, he is corrupting the political system in Scotland in a way that would have done the former eastern European communist system proud?
Mr. Lang: The hon. Gentleman is quite wrong on both points. I feel certain that Edinburgh, which has been widely welcomed in the area as an all-purpose authority, will be extremely successful in advancing the interests of his constituents.
Mr. Adam Ingram: Scotland will see the statement for what it really is: a piece of political chicanery of the worst kind. As others have said, it is a form of political corruption.
Will the Secretary of State explain why it is right for Stirling, with a population of 81,000, and Eastwood, with a population of 88,000, to be given an authority in their own right while my area of East Kilbride, which has the same population and is economically stronger, is denied that right?
Mr. Lang: In drawing up the map we took account not just of individual areas but of their relationship to neighbouring areas and the way in which they fitted in to the overall map for Scotland. I believe that it is right that we should be willing to reflect the diversity and variety of the demography and geography of Scotland. We have sought to do that with the proposals. We have always made it clear that size, in geographical and population terms, would vary. I believe that that is generally widely welcomed.
Mr. Martin O'Neill: Will the Secretary of State bear in mind the fact that, if he wishes to retain the links between communities, the severing of the links between Falkirk, Alloa and Stirling stands ill beside the retention of Fife region virtually in its entirety? Could that be because he is more concerned about the political fate of his ministeral colleague than he is about the good governance of the area? Will he also reflect upon the fact that, within Clackmannan district, there are Catholic children who go to school at St. Modan's high school in Stirling, and there is no provision in the White Paper for cross-boundary help for youngsters for whom there is no educational provision in the proposed areas?
Mr. Lang: It is always the case with boundaries between local government authorities that some services overlap and sensible relationships are quickly and easily arrived at. Clackmannan and Falkirk are compact and industrialised areas, widely different from Stirling, which is largely a rural area. Our proposal to revive much of the old Stirling county will be warmly welcomed there. I was most impressed by Stirling district council's submission to me.
Mr. Jimmy Wray: Does the Secretary of State for Scotland think that the House believes that this document is about local government democracy? Is it not a cost-saving exercise? The Secretary of State for Scotland has gone on about the saving of £65 million, but he does not tell us who will pay the penalty. Thousands of employees, men and women, in Strathclyde and all over Scotland have dedicated their lives to local authorities. If the right hon. Gentleman was really serious as Secretary of State for Scotland, he would have set up a commission similar to that in 1975 when Wheatley considered management and corporate structures.
In going for option D on water privatisation, the Secretary of State is inviting the private sector to invest, but the people of Scotland do not want anything to do with the private sector, franchising or anything else. Nor do they want anything to do with this gerrymandering, this jumble sale of boundaries, which has nothing to do with democracy, and we shall oppose it. If anybody is to do anything about local government reorganisation, it should be a Scottish Parliament.
Madam Speaker: Order. This is question time. I did ask for brief questions.
Mr. Lang: I shall certainly answer the two new points that the hon. Gentleman raised. First, with regard to whether this is a cost-saving exercise, the hon. Gentleman should have a word with those on the Opposition Front Bench who for the past few months have been busy trying to persuade everyone that this exercise will cost a fortune. The fact is that it will save money. It will save up to £65 million per year—about £1 million a week. With regard to redundancies, there will be fewer employees in local government, because we are contemplating reducing the number of authorities from 65 to 28. That means less duplication and less bureaucracy. But we estimate that the number of employees will be reduced by less than 1 per cent.
Mr. Jimmy Hood: The Secretary of State has now confirmed that when the Prime Minister said after the last general election that he would take stock, what he really meant was that he would take the mickey. That is what this gerrymandering statement means to us today. Yesterday, the Secretary of State asked me to contain my soul in patience until the statement was made about the number of councillors that he proposed in the new local authorities—
Madam Speaker: Order. I am trying to contain my patience, but I am now listening for a question rather than a statement. Will the hon. Gentleman come to a question, please?
Mr. Hood: Will the Secretary of State now tell us what he refused to tell me yesterday—the number of councillors that he proposes for the so-called new local authorities?
Mr. Lang: I envisage that, taking districts and regions as they are at present, the number of councillors will fall from over 1,600 to over 1,200.
Mr. Brian Wilson: Will the Secretary of State accept a warm welcome for the fact that water will remain in public ownership and that there will be no law of disconnection in Scotland? Does he accept that the people of Scotland, led by the Labour party and everyone else who is prepared to campaign in that direction, will keep it that way this side of a general election, and that the general election in Scotland will be fought largely on that issue and on the issue of returning water to public accountability?
Will the Secretary of State also consider that, when I say that the ludicrous proposal to call Ayrshire north Ayrshire when it stretches all the way down to Dumfries and Galloway is a falsehood, an absurdity and an offence to reason, I am joined not just by everyone in the Labour party, not just by everybody with any common sense in Ayrshire, but by the right hon. Gentleman's colleagues in the Tory party? Does he further accept that there will be an intensive cross-party campaign against the gerrymandering of Ayrshire?
Mr. Lang: The hon. Gentleman need not bother campaigning for the return of water to public accountability, because it will not have left it. On his point about the name of the Ayrshire authorities, the document makes it clear—I appreciate that the hon. Gentleman has not had the opportunity to read it—that the Government will welcome suggestions for any changes of name.
Mr. William McKelvey: I have an inkling towards all-purpose authorities. An obvious all-purpose authority would have been Ayrshire, with Kilmarnock as its capital. I cannot see for the life of me—[HON. MEMBERS: "Ask a question."] I cannot understand why the Secretary of State saw fit to divide Ayrshire into north and south. Is that divide amendable, and if there is to be a separation, may we propose that Ayrshire should stand as a single, all-purpose, tiered authority? Will the Secretary of State assure us that he will give that consideration? I am sure that the majority of people in Ayrshire would wish to suggest that, if they have not already done so.
Mr. Lang: The combined population of what we propose to be north Ayrshire and south Ayrshire will be 376,000. We felt that that would be too large for a local authority covering that geographical area, and that it was possible to divide Ayrshire to create a more accountable local authority and to enable Kilmarnock, in the hon. Gentleman's constituency, to become a central town in the Ayrshire local authority structure. I believe that that is right. In seeking to divide Ayrshire, we decided that one of the best boundaries was one that was established by Lord Wheatley and his commission.
Mr. George Foulkes: Will the Secretary of State answer this question honestly—I know it will be a change: will he confirm that, during the consultation, the vast majority of people from Ayrshire wanted an all-Ayrshire authority, including Enterprise Ayrshire, the health board, the chamber of commerce and most of the MPs and councillors, and that the only people who wanted the Kyle and Carrick authority were the few discredited Tories there and the hon. Member for Ayr (Mr. Gallie)? Will he therefore pay attention to the consultation? It is not a question of names or viability—Ayrshire is a viable authority. Will he accept the views of the people of Ayrshire and agree to an all-Ayrshire authority?
Mr. Lang: The hon. Gentleman was sufficiently honest to concede that there had been support in Ayrshire for Kyle and Carrick as a unitary authority. Kilmarnock and Loudoun also supported its proposed unitary status. What we propose strikes the right balance between local loyalties and the need for authorities to be large enough to ensure the efficient delivery of services.
Mr. Tom Clarke: Even the Secretary of State will agree that nobody in the House would accuse me of over-statement, but there is almost unanimous agreement that we have heard a pathetic response to the demands of the people of Scotland to have a say in their own affairs. The Secretary of State for Scotland has waved a paper, a document, to the House that represents appeasement of Scotland's interest which we find utterly repugnant.
For that reason, and in view of his weak and pathetic response, may I say, through you, Madam Speaker, and with great respect to you, that my hon. Friends will proceed to Downing street to ask for the resignation of this pathetic Secretary of State. He has yet again destroyed Scotland's interest. In the words of Leo Amery to Chamberlain's Government:
"You have sat too long here for any good you have been doing … In the name of God, go!"—Official Report, 7 May 1940; Vol. 360, c. 1150.]—
[Interruption.]
Madam Speaker: Order. I call the Secretary of State to reply.
Mr. Lang: I am not sure whether there is very much to reply to. There are certainly no Scottish Labour Members to whom to reply. They will be disappointed. I suppose that they will reach Downing street about 10 minutes from now, but they will find that my right hon. Friend the Prime Minister is not there. As most of the rest of the country knows, my right hon. Friend is still in Japan. I am sure that the messenger on the door will be happy to take a message.

Business of the House
4.30 pm
The Lord President of the Council and Leader of the House of Commons (Mr. Tony Newton): With permission, Madam Speaker, I should like to make a statement about the business for next week.
MONDAY 12 JULY—Report stage of the Finance (No. 2) Bill.
Motion on the International Development Association (Tenth Replenishment) Order.
TUESDAY 13 JULY—Remaining stages of the Finance (No. 2) Bill.
Motion on the Education (Assistend Places) (Amendment) Regulations.
Motion on the Partnerships and Unlimited Companies (Accounts) regulations.
WEDNESDAY 14 JULY—Assuming that Scottish Labour Members are back from Downing street, Opposition Day (17th allotted day).
Until about seven o'clock, there will be a debate on Scottish local government and water privatisation, followed by a debate on debt, trade and development after the G7 summit. Both debates arise on Opposition motions.
THURSDAY 15 JULY—Until about seven o'clock, remaining stages of the Welsh Language Bill [Lords]s.
Motion on the Appropriation (No. 2) (Northern Irealand) Order.
FRIDAY 16 JULY—Debate entitled "Tackling Fraud and Abuse in Social Security" on ass motion for the Adjournment of the House.
MONDAY 19 JULY—Supplemental timetable motion on and consideration of Lords amendments to the Education Bill.
I regret that I am not in a position today to announce the precise dates of the summer recess. However, it may be for the convenience of the House to know that Government business will be taken in the week commencing 26 July.
The House will also wish to know that European Standing Committees will meet on Wednesday 14 July at 10.30 am to consider European Community documents as follows: Committee A, document No. 6744/93 relating to non-rotational set-aside and document No. 7033/93 relating to arable land set-aside. Committee B, document No. 4148/93 relating to the legal protection of biotechnological inventions.
[Wednesday 14 July:
European Standing Committee A—Relevant European Community documents: 6744/93, non-rotational set-aside; 7033/93, arable set-aside. Relevant European Legislation Committee reports: HC 79-xxix ( 1992–93 ) and HC 79-xxx ( 1992–93 ).
European Standing Committee B—Relevant European Community documents: 4148193, patenting of biotechnological inventions. Relevant European Legislation Committee reports: HC 79-xix ( 1992–93 ).]
Mr. Nicholas Brown: I thank the Leader of the House for telling us the business for next week. Will he consider again the amount of time being allocated to the Education Bill? As I understand it, there are 622 Government amendments and 14 amendments that have been tabled against the wishes of the Government. Apparently the amendments include 34

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new clauses. If the Education Bill is so bad that it already requires so many amendments, surely it is a mistake to try to bulldoze it through the House by force of numbers. Surely it would be better to get it through by force of reason. That would require more discussion than the Leader of the House seems to be willing to allocate. However, at least we shall have some discussion on education matters.
The Government tell us that public expenditure is the largest single concern of the Chief Secretary to the Treasury, yet we have not been allowed to discuss the details of the Government's public expenditure plans for last year, let alone for this year. A debate is long overdue. I reiterate the Opposition's call for such a debate.
May we also have a debate on some of the reports now emanating from the Public Accounts Committee? There is a report on major defence projects and especially on the AR1 scandal, or HMS De Lorean, as I understand it is known in the industry. May we have a special debate on the National Audit Office report on the Welsh Development Agency, which will be considered by the Public Accounts Committee?
In particular, I ask the Leader of the House how it is possible for a man with three previous criminal convictions for deception to be appointed to a senior post in the Welsh Development Agency. Does the Conservative party regard that as qualifications? How can a former international director of that agency not only work as a private consultant as well, but be paid off with a £230,000 golden handshake? Those are outrageous states of affairs which the National Audit Office has uncovered. The House should discuss them at an earlier moment. Will the Leader of the House at least assure me that Doctor Gwyn Jones will be suspended from his other public appointments, pending a further inquiry into the matter?
Finally, I wish to raise an issue that ought to command consensus in the House. May I draw the attention of the Leader of the House to the Opposition's support in principle for the unified budget statement and for the investigation into the procedures that will be adopted by the Procedure Committee? However, I deplore the fact that the Government are trying to pre-empt the Procedure Committee's work by making amendments to this year's Finance (No. 2) Bill that effectively take some of the major decisions well before the House, or even the Procedure Committee, has had a chance to consider the matters. Even at this late stage, I urge the Leader of the House to persuade his colleagues on the Treasury Bench to drop the offensive clause 202 from the Finance (No. 2) Bill pending its consideration by the Procedure Committee.
Mr. Newton: I cannot guarantee to find more time for discussions on the Education Bill, but of course I am, as ever, content for the matters to be further discussed through the usual channels. I say that with perhaps some scepticism about what the hon. Member for Newcastle upon Tyne, East (Mr. Brown) said about allowing the forces of reason to prevail. The Government, of course, always allow the forces of reason to prevail. There has not been much reason shown by the hon. Gentleman and his hon. Friends on this and other matters.
I cannot add to what I have said about public expenditure on previous occasions. But I draw attention again to the fact that there will be a substantial opportunity to debate those matters on Third Reading of the Finance (No. 2) Bill next week. The hon. Gentleman's
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points about the Public Accounts Committee and the National Audit Office will be noted, I am sure, by my right hon. and hon. Friends. They may also be noted by the Chairman and the members of the Liaison Committee in considering what other subjects should be recommended for any estimates days at some future stage.
I would not want to pre-empt the consideration that my right hon. and hon. Friends will give to the various reports, and they will respond in due course. In return, I hope that the Opposition will acknowledge that, while it is right that the report should be studied, it should not detract from the fact that the Welsh Development Agency, for example, has a record of outstanding achievement in promoting new investment and jobs to the benefit of the people of Wales.
I will make sure that my right hon. and hon. Friends are made aware of what the hon. Gentleman said about the unified budget. It must be right to take advantage of the fact that we are passing a Finance Bill to make changes that are seen to be necessary to the process on which we are embarking. That is without prejudice to my right hon. Friends having their attention drawn to what the hon. Gentleman said.
Sir Anthony Grant: Is any progress being made towards the implementation of the all-party Jopling report? Is my right hon. Friend aware that the way that we conduct our affairs in the House is regarded with derision by the public and with bewilderment by other countries? Most hon. Members want the reforms—
Mr. Dennis Skinner: They don't.
Sir Anthony Grant: With the exception of a minority of jurassic dinosaurs, hon. Members of all parties want the reforms. It is high time that they were put into effect.
Mr. Newton: My hon. Friend speaks for many hon. Members on both sides of the House. He will be aware, as I mentioned last week, that there have been disturbing reports of the proceedings on the matter in the parliamentary Labour party.
The right hon. Member for Derby, South (Mrs. Beckett) has written to me about the matter, although not with the straightforward yes that my hon. Friend would have wished to hear.
Mr. Archy Kirkwood: Does the Leader of the House accept that the statement about local government in Scotland made this afternoon by the Secretary of State for Scotland was deeply controversial, to put it mildly? Notwithstanding the welcome half Supply Day that the official Opposition will have next week, will the right hon. Gentleman give us an undertaking that, in the spillover Session when we return from the summer recess, once people have had a chance to digest the proposals for local government in Scotland, and before Second Reading, there will be a debate in Government time? That would enable the force of feeling in Scotland to be brought to bear on the Government about the results that some of the proposals will have.
I assume that the Government will give an assurance that, if local people demonstrate beyond peradventure that they are against the proposals, their objections will be borne in mind before the proposals are finalised and the Bill is introduced.
Mr. Newton: I can safely observe at least that I did not need the hon. Gentleman to tell me that the proposals were controversial. I had observed that in the past few minutes. In response to his specific question, I cannot give him the undertaking that he requests. Let us see how we get on in the debate next week. Then we can give further consideration to these matters.
Mr. James Couchman: Will my right hon. Friend find time for a full debate on the proposal to extend the selected list scheme for pharmaceuticals? The matter has not been discussed in the Chamber since the Government proposed the scheme in November last year. It is widely rumoured that the Government intend to lay three orders next week which will extend the list. The methods used by the committee are causing considerable anxiety to doctors and patients and, indeed, to the pharmaceutical industry. I remind the House that I have an interest in the matter.
Mr. Newton: I am grateful to my hon. Friend for his comment. His interest in the matter is well known. The proper thing for me to do is to draw his remarks to the attention of my right hon. Friend the Secretary of State for Health.
Mr. John Hume: Given that an event took place yesterday which has fundamental implications for the rule of law and for justice and democracy in this country, and that an action was taken by the Home Secretary which is usually taken only by dictators, why has no statement been made to the House and why has no time been allowed to debate the issue? I refer to the case in which a young constituent of mine who had been held for months on a serious charge with no evidence was told by a magistrate in Britain's so-called respected courts that he left the court without a stain on his character. Before he got to the door he was handcuffed. The Secretary of State for Home Affairs had signed an exclusion order. There has been no debate of any description on the matter.
More than 3,000 people have died on the streets of Northern Ireland. Does the Leader of the House agree that if that were happening on the streets of Britain, it would be discussed every day of the week by a packed House until the problem was resolved? Does he agree that the fact that it is discussed only occasionally late on a Thursday night to let British Members have a long weekend shows clearly that, in spite of the repeated guarantees that the Government give—such guarantees were given often in the past week to buy votes on 22 July—[Interruption.] No, on 22 July—the social chapter. Is not the lack of discussion a clear sign that the Government have psychologically withdrawn from Northern Ireland?
Mr. Newton: No, I do not accept the hon. Gentleman's interpretation of those matters. I can only say, as my right hon. and learned Friend the Home Secretary has said, that for him to make an exclusion order he has to be satisfied, in accordance with criteria laid down by Parliament, that someone has been involved in the commission, perpetration or instigation of acts of terrorism connected with Northern Ireland. My right hon. and learned Friend reviewed all the information before him, including material that would not be admissible as evidence in court proceedings. On the basis of that information, he was satisfied that the statutory criteria were met.
Mr. Rupert Allason: My right hon. Friend will recognise that the defence White Paper published on Monday was one of the most important documents published in the post-second world war era. Does he agree that Britain is at a crossroads in defence terms? It either remains a global power with a right to a seat on the Security Council or it becomes a backwater—a small island off the north coast of Europe.
Bearing in mind the importance of that defence White Paper and the implications for Britain's defence needs in the future, does my right hon. Friend accept that there is an urgent need to debate the issue? Will he give an assurance to the House that he will break with convention and that we shall not have to wait for 12 months to have such an important debate?
Mr. Newton: May I make two points which echo something that I said last week? I think that I am right in saying that the convention is that, following the publication of the defence estimates—I entirely accept that the White Paper is a significant document—the first step is for the Defence Select Committee to consider it and, if it wishes to do so, to make a report. That is appropriate in this case. I shall certainly make every endeavour—I underline that—to ensure that the new defence estimates are debated rather more rapidly than proved possible with the previous set of defence estimates.
Mr. Eddie Loyden: Will the Leader of the House invite the Home Secretary to make a statement to the House next week following the statement made by the High Court about Derek Bentley? I believe that it is the wish of the House that the Home Secretary makes a statement about the case. There is widespread support both in the House and outside for a posthumous pardon.
Mr. Newton: The hon. Gentleman will understand that my right hon. and learned Friend the Home Secretary is considering the text of yesterday's court judgment and will decide what action to take in the light of it. He clearly needs to give it proper and careful consideration. I would not want to go beyond that this afternoon.
Mr. John McWilliam: Will the Leader of the House prevail on the Secretary of State for Defence to come to the House next week to make a statement on the ammunition ordering programme for the next five years in the light of the short-time working announced today at the royal ordnance factory Birtley?
Mr. Newton: I cannot undertake to bring my right hon. and learned Friend here to make such a statement next week, but I understand the reasons why the hon. Gentleman raises the point. I shall ensure that it is drawn to the attention of my right hon. and learned Friend.
Mr. Paul Flynn: Does the Leader of the House recognise the urgency of the need for a debate on the Welsh Development Agency? The Public Accounts Committee report is a remarkable account of corruption, incompetence and nepotism in a public body. The great urgency arises because the two men responsible still hold public office. One is the chairman of the Broadcasting Council for Wales. The other is the Secretary of State for Employment. We must root out those two people. The report proves that neither of them is fit to hold public office.
Mr. Newton: I made some comments on that matter earlier in these exchanges and I shall not add to them. The report has been published. The hon. Gentleman referred to it. My right hon. Friend the Secretary of State for Wales has issued a press release today in which he makes it clear that he will examine carefully what the report says. That must be the right course.
Mr. Alan Williams: Will the Leader of the House think again about the request from my hon. Friend the Member for Newport, West (Mr. Flynn) for a debate on the WDA and the report published today by the Public Accounts Committee? While I endorse what the right hon. Gentleman said about the excellent industrial record of the WDA, will he bear in mind the fact that it had that excellent record before it introduced rip-off, expensive, private motoring schemes for executives, before it introduced a quarter of a million pound redundancy package complete with gagging clauses, before it spent a third of a million pounds on privatisation proposals that were concealed from Parliament and before it appointed a professional conman as marketing director to join the amateurs who were already at the WDA?
Mr. Newton: Whatever may be appropriate in terms of careful examination of the recommendations and comments made in the report, it is rather unfortunate that the right hon. Gentleman should use language of that nature about people. He would probably have to be rather more careful with his language if he were speaking outside the Chamber. Leaving that aside, I repeat that my right hon. Friends, not only in the Welsh Office but elsewhere, will carefully study what the report says. That is the right course.
Mr. Max Madden: Will the Leader of the House press the Prime Minister to make a statement next week on the Government's policy on Bosnia quite separate from any statement on the outcome of the G7 conference? Does the right hon. Gentleman understand that, bearing in mind the fact that the people of Sarajevo have been hit by an average of 500 artillery shells a day over the past year and are now without water or electricity, his description of Government policy at Prime Minister's Question Time will be judged as pathetically inadequate?
Will he impress on the Prime Minister the fact that it is now time for the British Government to press on the international community a course of decisive action that will lift the siege and allow the people of Sarajevo to overcome the attack on them by Serbian forces over the past year?
Mr. Newton: As the hon. Gentleman acknowledged, the issues to which he adverts have been discussed at the G7 summit in Tokyo and have been the subject of comments and statements from there. It would seem to be appropriate, if the hon. Gentleman so wishes, to raise the matter in relation to any statement that my right hon. Friend the Prime Minister may wish to make about the G7 summit as a whole. I am certainly not in a position to give the hon. Gentleman undertakings beyond that at present.
Mr. Skinner: Will the Leader of the House give us some Government time to discuss the coal industry, and in particular the Coal Industry Social Welfare Organisation? If the coal industy is privatised, many dependent disabled miners and others will lose out if that organisation is dismantled. When the right hon. Gentleman provides that
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time, could he drop a little note to the leader of the Liberal Democratic party, who made that special effort in Hyde Park in October to support the miners, and tell him to turn up to vote for the miners because, on a vital vote last Monday, he was nowhere to be found?
Mr. Newton: The second part and punchline of the hon. Gentleman's question appeared to be directed at the Liberal Democrat Bench behind him, where I see that there is an appropriate messenger in the form of the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood), the Liberal Chief Whip, to transmit that message to the right hon. Member for Yeovil (Mr. Ashdown), and no doubt he will do so. As to the first part of the hon. Gentleman's question, I am sure that he will be able to raise that matter further in the context of any discussions we may have in due course about the Government's privatisation proposals.
Mr. David Winnick: May I press the Leader of the House about the need for a statement from the Home Secretary in respect of the case of John Matthews? Is the right hon. Gentleman aware that the Opposition Members who have consistently made clear their total detestation of all forms of terrorist violence, not least from the provisional IRA, nevertheless remain very concerned indeed about the exclusion order made against Mr. Matthews, bearing in mind what was said earlier—that that person left the court without a stain on his character? The case is very serious and it concerns civil liberties. I hope that the Leader of the House will try to persuade the Home Secretary to come to the House on Monday and explain precisely why he decided on the exclusion order.
Mr. Newton: I will, of course, in line with my usual practice, draw the Home Secretary's attention to what the hon. Gentleman has said. However, I must repeat what I said earlier—that Parliament provided the power of exclusion as an exceptional measure against the grave threat of terrorism. My right hon. and learned Friend the Home Secretary has set out how he has acted in accordance with the requirements of the law in that case.
Mrs. Barbara Roche: Will the Leader of the House make time for a debate when the Government reply to the report of the National Heritage Select Committee on privacy? As I am sure the Leader of the House is aware, that report deals with the work of the Press Complaints Commission. Will the right hon. Gentleman join me and take this opportunity to congratulate a member of that commission, Mr. Gerald Isaaman, on his 25 years as editor of the Hampstead and Highgate Express, which is a very fine local newspaper?
Mr. Newton: While I cannot immediately undertake to arrange another debate in that area at the moment, I am happy to join the hon. Lady in her tribute to the editor of the "Ham and High". As it happens, in the interval in my life when I did not live in Essex, I lived in Hornsey. My children started their schooling in Highgate, and I am well aware of the standing of that newspaper and its editor in her part of London.
Mr. John Spellar: About a year ago, the House debated the excesses of cowboy wheel clampers and the end of May marked the closing date for submissions to the Home Office. Will the Leader of the House prevail on

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the Home Secretary to bring proposals to the House before the summer recess so that the clampers know, during the summer, that they are on notice?
Mr. Newton: I cannot undertake that my right hon. and learned Friend will be able to do that, but I am sure that he will wish to reach conclusions as soon as possible in the light of the consultation and announce them in an appropriate way.
Mr. Harry Barnes: Some of us were privileged to hear in the House my hon. Friend the Member for Tottenham (Mr. Grant) describe the plight of two of his constituents, the London taxi drivers whose taxis were turned into living bombs, and their brave and public-spirited action. Some of us are very concerned that the right people should be convicted for those offences.
According to the magistrate in the case of John Matthews, there has been no stain on his character. However, the Home Secretary then immediately placed a massive stain on his character. That assassination of character is very worrying. Indeed, even more dangerous might be the assassination of John Matthews himself, as the Home Secretary may have pointed the finger at him so that Protestant paramilitaries might take action against him. The Home Secretary should come to the House to answer questions on this very serious subject that affects an individual's civil liberties.
Mr. Newton: I make no complaint about the fact that the hon. Gentleman has felt it right to raise that matter again. However, quite clearly, I cannot add to what I have already said on two previous occasions.

ESTIMATES DAY
[3RD ALLOTTED DAY]
ESTIMATES AND SUPPLEMENTARY ESTIMATES, 1993–94
  Class XIII, Vote 4
  Department of Social Security

  Pensions
  [Relevant document: First Report from the Social Security Committee of Session 1992–93 on The Operation of Pension Funds: The Recovery of Assets ( House of Commons Paper No. 189)]
  Motion made, and Question proposed,
  That a further sum, not exceeding £1,505,632,000, and including a Supplementary Sum of £810,000, be granted to Her Majesty out of the Consolidated Fund to defray the charges that will come in course of payment during the year ending on 31st March 1994 for expenditure by the Department of Social Security on administration, for agency payments, and for certain other services including grants to local authorities and voluntary organisations.—[Mr. Hague.]
  4.56 pm
  Mr. Frank Field: It is a pleasure to open this afternoon's debate on a vote that takes note of a report by the Select Committee on Social Security and which draws attention to the grants in aid to the occupational pensions advisory service and to the Maxwell pensioners' trust.
  I begin the debate by putting on record the Select Committee's thanks to a number of individuals and organisations. When the Committee began what is now turning out to be a mammoth task, considering the ownership and control of Britain's occupational pensions schemes, we were blessed—I use that word advisedly—by the services of Philip Chappell as one of our specialist advisers. Some months ago, Philip Chappell died after bravely trying to ward off brain cancer. While that death was a total blow to his family, it was also a severe knock to radical forces in this country.
  Some hon. Members will be aware that Philip Chappell and Lord Vinson formulated a number of very important radical ideas about why and how individuals should own their own pension funds. Those ideas stemmed from those two individuals. Philip was not only a most courteous and careful attender of our Select Committee gatherings; there was about him a boyish enthusiasm for ideas which endeared him to each and every member of the Committee on both sides of the table—if I may use that phrase. When one met Philip, one stretched across to meet him because his moral earnestness was totally attractive.
  There is a sadness about our debate today as we have lost a great radical champion on pensions and capital ownership in this country. As my grandmother would say, "Dark clouds have silver linings." The Committee has similarly been blessed by an initiative of the National Audit Office which has allowed us to have seconded to the Committee one of its staff—Mr. Jonathan Cable.
  All members of the Committee would wish me to say that the quality of our work in this area and related areas is very much determined by the high standards that Jonathan brings to his work. He does that in conjunction

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  with our new special adviser, Peter Mills. The Committee is thankful to both those people as it is to the House of Commons Library for the care and diligence that it shows us when answering our inquiries.
  I begin one part of the debate by recapping for the House the reports of the Select Committee and the work that it has undertaken, not merely in the field of the ownership of pension funds, but specifically relating to the plight of the Maxwell pensioners. Some hon. Members were not in the House when we made our first report on the theft by Maxwell of much of the pension fund.
  Following the publication of that report, the Government responded very quickly to one of our main proposals, which was to establish the Goode committee. This will report in late September. If it does not report on the key question of the ownership and control of pension funds, that will be seen by many of us to be a cop-out and the loss of a great deal of parliamentary time. I hope that that initial report helped to sharpen and focus the debate that has ensued.
  Secondly, the Select Committee reported two persons to the House for contempt. It is not advisable to dwell on that report for contempt now. I merely wish to record that at some stage the Select Committee, which has a long memory, will wish it to be debated in the House.
  Thirdly, the Select Committee has already reported on the recovery process. It said that that was an initial report and part of today's debate is about it. Shortly, however, we shall be making a much more major contribution to the study of the recovery process, when we will look at three of the four agents deputised for the task of recovering both assets which were stolen and assets which were misappropriated or are in disarray as a result of Robert Maxwell's behaviour, and then his death.
  It is true to say that, while we have rightly been concerned with the Maxwell pensioners, and it has been totally proper for the Select Committee to put them at the centre of its consideration—indeed, they have looked to the Select Committee to champion their cause—the Committee has not been concerned only with their plight. We have tried to use what has happened to those tens of thousands of people as a barium meal is used for an X-ray; we have been concerned to draw out the weaknesses of occupational pensions, to enliven and inform the debate, and to draw general policy conclusions from our considerations, not being concerned only—I emphasise the word only—with the Maxwell pensioners, important though they are.
  I turn now to what the Government have done in this area. I hope that I do not embarrass the Under-Secretary —whom I welcome for the first time in this debate to his post on the Treasury Bench—by going through the various moves that the Government have accomplished.
  First, very soon after the extent of this awful theft became apparent, the Government agreed to drip-feed the pension funds to ensure that pensions were paid. The Government are to be congratulated on that and on using taxpayers' money—not their money—to good effect. That initial sum has already been spent.
  The second move made by the Government to help to minimise the horror of this enormous theft of pension funds was, in effect, to give the pension funds a loan of £100 million or so, which the Government have every right to call in now. to underwrite the guaranteed mint mum pension under the relevant social security Act. So they are to be congratulated on that.
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  Next, they deserve congratulation on setting up the Maxwell pension units and, above all, on appointing Sir John Cuckney to an overseeing job in this whole area. Our friends who sit elsewhere in this Chamber have been slow to wake up to the importance of this initiative. When we look at the initiative that the Government have taken in trying to combine public responsibility and private initiative, the Maxwell pension units and the role of Sir John Cuckney will, I believe, be at the forefront of the debate.
  I am sure that the whole House joins me in emphasising the thanks that I now pay publicly to Sir John for the work that he does and the skill that he brings to that task. He is a public servant of considerable distinction. Many Maxwell pensioners are particularly grateful to him, because it is from the trust fund that he established that they are now being paid their weekly or monthly pensions.
  The next reason for which we have to record thanks to the Government is that, through the initiative of Sir John Cuckney, we now have in place Sir Peter Webster, a retired High Court judge, who is attempting to build up some expertise in the area of mediation in this country. It is fair to say that he is probably the first person of that standing to attempt such a task and our thanks go to him.
  Next, the Government have established the Goode committee, and we await patiently, but anxiously, its findings, due in September this year.
  Lastly, the Government have taken the initiative, through the Board of Trade, to investigate the Mirror group prospectus. The Select Committee believes that that has very important repercussions for many of the pensioners.
  I shall end by calling for some Government action, but it is right and proper that, in looking at this today, we should record what the Government have done. I shall watch with considerable interest how schizophrenic the Under-Secretary is when he comments on the Government's record. He knows that, if he is too boastful about what the Government have done, he will clearly be committing them to an interventionist line, from which they have tried to shield themselves. So I am sure that we shall have that pleasure before too many hours have passed.
  There are two topics on which I shall not comment, because I am anxious that every hon. Member who has played a part in previous debates and in the Select Committee should have a chance to speak.
  The first is the cost of the recovery process. It will probably reach something like £50 million before the task is finished, which is a ginormous sum. I will not dwell on it, because I know that my hon. Friend the Member for Liverpool, Broadgreen (Mrs. Kennedy), who hopes to catch your eye, Mr. Deputy Speaker, intends to concentrate on that aspect. The second area of real concern relates to the two pensioner groups that have been left out in the cold. I guess that the hon. Member for Dover (Mr. Shaw) will be dealing with that.
  I will end by looking at the actions that we now want the Government to take, or not to take.
  The first crucial necessity is that pressure is kept up on the main players in the Maxwell saga so that it is brought to an end as quickly as possible. There are a number of ways in which we as Members can help—by having debates such as we are having today, the work that the Select Committee can do, the statements that Ministers and Opposition spokespersons can make in their

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  contributions to these debates, and the comments that Ministers can make both throughout the country and in letters that are published.
  It is essential that none of the main players—whether it be those who are, in a sense, in the dock for playing a part in the theft of these assets, or those committed by the courts to the recovery of the assets—believes that they can relax, sit back and take their time, because the patience of the pensioners is clearly running out. Keeping up the pressure, therefore, is a very important task, in which this debate will play some part.
  Secondly, there is the question of the distribution of the common investment fund. As I expected, the hon. Member for Hertfordshire, South-West (Mr. Page) is in his place. Given that he has given the parties to the common investment fund such a good old shaking in the past, and a justifiable one, I need not dwell too long on that. I leave the common investment fund and its main participants to his gentle but firm boot.
  Thirdly, I hope that we are not going to hear today that the Government should call a halt to the whole proceedings and shovel out large sums of taxpayers' money. There is something that the Government. can do, but I am not in favour of their taking over the entire deficit and suggesting that the taxpayer should meet the total cost.
  The recovery process is in operation and other forces are at work to gather funds for the depleted pension funds. However, I believe that, in the near future, the Government should make a statement on what they believe to be the likely shortfall when the whole process has been concluded, which may not be for three or four years, and at that stage to suggest how they envisage that sum being made up.
  Some of us noted that the Securities and Investments Board recently fined Invesco MIM £750,000 for malpractices over its stewardship of some of the Maxwell pension funds. I hope that the Government will be asking the SIB to pay that fine, and other fines that we shall hear about shortly which will make £750,000 mere chicken feed, and that those funds will be paid into the Maxwell pension funds to help rebuild the capital stock.
  I hope that the Government will judge the situation carefully and, if they consider that it would be useful to bring the parties together soon, to suggest a round table meeting. There will be three parties to that round table meeting.
  Thanks to the hon. Member for Hertfordshire, South-West and others, the Government need not concern themselves too much with the distribution of the common investment fund. The money is there; the question is when the assets are realised and how they are distributed. I am sure that the process will take its natural course.
  There is also the disputed ownership of some assets. Sadly, it is now clear that those disputes will probably end in the courts, will cost a great deal of money in legal fees and, at the end of the day, will be settled. I hope that rightful restitution will ensue from that activity and that the assets will be returned to Maxwell pension fund holders.
  There is another matter on which the Government may be able to act. There are already some writs out, but there will be many more on those City institutions which were
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  only too willing to work with Robert Maxwell and take his fees. Some of them are grand institutions, and I am sure that they now wish that Mr. Maxwell had never crossed their path.
  They know perfectly well that, if matters are not settled, they will be dragged through the courts and that process will be time-consuming and immensely expensive. Their professional reputations will suffer and some may be fatally flawed as a result of those cases. At some stage soon they may well have an interest in settling, and I hope the Government will keep a watching brief so that, when the minds of those people are concentrated—as Doctor Johnson said, being hanged in the morning concentrates the mind wonderfully, and so does losing one's professional reputation—the Government will act swiftly to bring the parties together.
  When they know what the shortfall will be, the Government may consider what small, modest contribution the taxpayer should make, but they should suggest to those professional bodies that the time has come for them to contribute and make good whatever shortfall there is when the recovery process and the legal proceedings have been completed.
  I end as I began, by underlining our commitment to the Maxwell pensioners.
  Mr. David Porter: The hon. Gentleman will recall that I was briefly a member of the Select Committee in the last Parliament. May I ask him just two questions? First, will the Committee keep a watching eye on Maxwell victims who are part of British International Helicopters and who had a particular problem which made them different from other Maxwell victims?
  Secondly, in its first report, the Committee suggested that, if the Government did not produce a Bill on occupational pensions, the Committee itself might do so. Is that still the hon. Gentleman's intention?
  Mr. Field: I hope that, following the Goode committee. the Government will bring forward its most radical proposals. If not, I hope that they will at least seek to amend those proposals.
  On the hon. Gentleman's second point about those caught in the sale of the helicopter company, when the hon. Gentleman was a member of the Select Committee, he was a doughty champion of his and some other Members' constituents, and his intervention underlines that point. However, I understand that the hon. Member for Dover will deal with that point if he is lucky enough to catch your eye, Mr. Deputy Speaker.
  I end as I began by focusing our attention on the Maxwell pensioners. Since the House last debated the plight of Maxwell pensioners, a considerable number of them have died. That should concentrate our minds on the task of maintaining pressure and trying to seek settlements without resort to the courts.
  We should also expect the Government, who do not have a bad record in protecting the interests of the Maxwell pensioners, not to be frightened by their record but to build on it and, if the timing is right, to try to get those professional organisations which grew fat on fees from Robert Maxwell to pass on some of that fat to rebuilding the pension funds, so that, when we next debate the plight of Maxwell pensioners, it will be in celebration of reaching a conclusion instead of recording that more of them have died awaiting a resolution to their plight.
  5.6 pm
  Mr. Richard Page: If have two reasons for speaking in the debate: first, I have been fortunate to catch your eye, Mr. Deputy Speaker; and, secondly, my constituency abuts that of Watford, the one-time print centre of the United Kingdom until Robert Maxwell operated upon it, leaving a considerable number of unemployed people and a large number of pensioners. When I heard of his death late in 1991, little did I know the difficulties and the effect that his passing would have not only on me but, more important, on my constituents.
  It is ironic that, three months before Robert Maxwell's death, I saw a line diagram of the management structure of the Maxwell empire. I remember thinking that it was a management structure designed for purposes other than ease of management control. Little did I know that within a few months I would be among those trying to unravel where the money had gone. I believe that the behaviour of some British institutions in that affair requires the type of examination to which the hon. Member for Birkenhead (Mr. Field) referred.
  The House can imagine my horror and dismay when I found that hundreds of pensioners in my constituency were in danger of having the roof taken from above their heads. When the truth began to filter through, I cursed the man for what he was doing to my constituents. However, now that there is some stability for those pensioners" I can see, perhaps with a little more tolerance, part of the reasoning behind his actions.
  It is true that Robert Maxwell was an egotist, a bully and a thug, but. I can understand what drove him to try to save his empire. I make that comment because Robert Maxwell is not unique. In future, there will be other Maxwells; I hope that they will not be as big but will be teeny ones. The House should face the fact that other pensioners in other occupational schemes are going short, and will go short, of their pensions because we have not closed the loophole that allows pension funds to be raided in that way.
  Fortunately, in this case, a large number of Maxwell pensioners were involved when the shortfall in funds began to show in early 1992. I say "fortunately" because, had there been only a small number of them, the case would not have received the same publicity and they woulld not have been in the fortunate position that they are in today. They were also fortunate in that Maxwell was a flashy character who commanded plenty of newsprint before and after his departure. But, as I say, other pensioners in other occupational schemes have not been so lucky.
  The Government's position is simple, and I understand and support it. They cannot be expected to bail out every pension scheme that goes wrong. It would be morally wrong to use vast sums of taxpayers' money in that way. But in the Maxwell case, with such large numbers descending on the social security services for support—to pay mortgages and make up for lost pensions—more money would have been lost had the Government not contributed.
  When I first examined the position of the pensioners, I thought of R. A. Butler. If an hon. Member went to Rab with a problem, one of his first questions always was, "How many of you are there?" If the reply was, "Just me," the chances of achieving a favourable response or a change
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  of Government policy were slim. But a reply such as, "I have a large number of people outside demanding action," focused Rab's mind on the issue in hand.
  I admit to being a mere spear-carrier in the great Conservative party. I appreciated early on that, if I was to be of real help in the pensioners' cause, I needed the strength of numbers around me. I did a trawl through the House and was fortunate to persuade more than 70 hon. Members to attend the first Maxwell pensioners' meeting. I thank the hon. Member for Birkenhead for joining me as co-chairman of the group, which helped to make it an all-party affair and to lift it out of the endless possibilities of party bickering that the situation could have engendered. I also appreciate the efforts of other hon. Members who supported my idea of a lifebelt.
  I shall not go into the details of the many meetings that took place. I am grateful to the Secretary of State not only for taking up the suggestion that was made in that context but for going much further and setting up the pension units and seconding senior civil servants to enable moneys to be traced. Setting up the Cuckney fund was of great assistance, and I am grateful to Sir John Cuckney and Mr. Ballard, both of whom dealt with some of the trustees of the fund in a more delicate fashion than I did at various stages of the affair.
  With the partial distribution of the common investment fund, we have a breathing space, but it is only that and we must look to the future urgently. We cannot relax and say. "We need not worry. Nothing will happen for another two or three years." We must press on with all speed.
  Looking to the future and to the position of Government on pensions, it is clear that they face a huge dilemma. A study of the demographic profile of this country reveals an aging population, a subject on which my hon. Friend the Member for Dover (Mr. Shaw) will speak if he has an opportunity to address the House. He has done research and majored on that issue and has expressed much concern about the future.
  In 1901, only 17 per cent. of men and 22 per cent. of women lived to be 75. The figures are now 52 and 70 respectively, and it is calculated that the 4 million people involved will grow to 6 million in the next four decades. The numbers aged over 85 will triple in those four decades. The Daily Mail today points out that one in five are over 60, an increase of 8 per cent. in 10 years, and that the trend will continue.
  The dilemma facing the Government is horrendous. They must persuade as many people as possible to accept the full responsibility of pension payments, getting them into occupational schemes as well as disclaiming financial responsibility for those schemes.
  The Government want to get people into occupational schemes for obvious and sensible financial reasons, but surely they have a moral responsibility to ensure that those people are protected. The Government cannot say, "You are now out of the state scheme, into occupational schemes, and on your own." They must accept that, when people are moved from one to the other—let us not forget the contributions of 2 per cent., or whatever the figure was, which encouraged people to move from SERPS to occupational pension schemes—they retain some responsibility.
  Some may point to the work of the Investment Management Regulatory Organisation, and I agree that it has received some criticism during the Maxwell affair. I fear that it was a stable door closing operation, the horse

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  having bolted; the door being closed, the remaining horses are locked in the stable. Unfortunately, the horse that got out has caused an immense amount of damage and hardship to pensioners.
  We are awaiting the Goode report and cannot predict what it will contain, but it must propose some form of safety net. What I am suggesting is not like a bolt from the blue. There is already in place, for example, the air travel trust. Under that, if people book a package holiday and the airline on which they are to travel fails, there is a £30 million fund to pick up the costs of the failure. That money is made up of a levy on the industry, authorised by the Government. With the recent collapse of the International Leisure Group, a great chunk of that £30 million was absorbed. It is now being rebuilt and the Government are guaranteeing it.
  I see no reason why another fund, paid for by the pension companies, should not be established. The levy need not be vast, bearing in mind the billions of pounds that go into occupational pension funds every year. Whatever form it takes, a safety net organisation should be established to pick up the Maxwells of the future to prevent pensioners falling on hard times.
  I shall detail only one of the many cases that have come to my attention, literally that of the proverbial little old lady. In no way could she have survived in her house without her pension money. Her small mortgage was coming to an end and she needed money to pay the mortgage if she was to remain in her home.
  It is incumbent on the Government to ensure that a scheme is established involving the whole pensions industry. The House has a duty to make sure that, should there be Maxwells in the future, pensioners will be protected.
  5.27 pm
  Mr. John Gunnell: It is clear to me as I look around the House that the overwhelming majority of hon. Members who will take part in the debate are members of the Select Committee and have therefore developed a certain expertise in the subject. My only expertise comes from frequently meeting many of the Maxwell pensioners who live in Leeds.
  Leeds is the home of the former printers, E. J. Arnold, the company which was taken over by Robert Maxwell and which was the basis of the Headington pension fund, one of the funds that is less happy just now. There are also in Leeds a number of other printers who were taken over by Maxwell, but the pensioners in those companies come under the Maxwell works scheme and are more fortunate than their fellows, although they attend the same meetings as pensioners from the Headington scheme.
  Those pensioners meet about once a month and I often attend their meetings. I am always struck by the way in which they cannot take for granted the almost everyday matters that we accept as normal. For example, we assume that at the end of the month there will be a salary cheque waiting for us. Most of us also assume that, having put in our claims, we shall receive our travel allowances, and so on. We know that those will come at the end of the month so we do not worry about them.
  As Robert Maxwell has been gone for 20 months, but pensions have nevertheless been paid, we might expect
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  pensioners to believe that they will continue to be paid. My hon. Friend the Member for Birkenhead (Mr. Field) was right to praise the actions that have been taken to ensure that. However, the Maxwell pensioners are not entirely certain that their pensions will continue to arrive.
  That might seem strange, given existing guarantees, but it is not really that strange, because the original £2·5 million that was properly made available is now exhausted and the money is coming from the £6 million that Sir John Cuckney was able to raise through voluntary donations. Obviously, the pensioners can estimate the length of time that that is likely to last before it, too, is exhausted.
  Elderly people rely on their pension cheques arriving for the rest of their lives and they need to be reassured that that will happen. Hon. Members concerned about the matter should meet pensioners and talk to them. Indeed, the Minister represents a seat not so far from Leeds—I welcome a Yorkshire Member in the office that he holds —and the Maxwell pensioners would be happy to meet him. Although some things have not gone as they hoped and they have had disappointments, I am sure that they would not shout at him. They would have a sensible discussion about the issues on the table and the best way forward.
  The whole community of Leeds have been involved in supporting the Maxwell pensioners. I pay tribute to the work of the Yorkshire newspapers, particularly the Yorkshire Evening Post, which continually emphasised the injustice suffered by the pensioners and our obligation to ensure that their pensions were paid.
  I pay particular tribute to one blind pensioner in my constituency, Ivy Needham, who leads the Leeds pensioners. When we think of Robert Maxwell and his wealth and of Ivy Needham struggling in her council house in Middleton, it is clear that Ivy is an apt symbol of the injustice that the pensioners have suffered. I knew Ivy before all this arose. She put pressure on me because a class for the blind and partially sighted in a local school faced a rent increase. She certainly let me know what she thought of that. In some ways, the injustice of the events surrounding Robert Maxwell inspired Ivy to lead the Maxwell pensioners, despite her physical handicap.
  As the Minister knows, Ivy was recently granted up to £7,500 legal aid for her application to the European Court where, as the symbolic pensioner, she is pursuing a claim against the Government for failing to implement EC directive 80/897, which requires member states to take the steps that are necessary to protect the pensions of former employees of insolvent companies. The legal aid covers the preliminary work needed to establish whether there is a case to be heard.
  I believe that it is in the Government's interests that that case is heard. It would be valuable to know whether the directive applies. I regret that the Government are not committed to ensuring that the case is heard so that we can know what judgments will be made. To have knowledge of such judgments would be helpful not just to Ivy Needham, the symbolic pensioner, but to the Select Committee—which, I am sure, would want to see European judgments on the matter—and the Government.
  There are one or two matters that I hope will be resolved in today's debate. I recognise that setting up the Maxwell pension unit is an achievement for the Government. The civil servant who heads that unit is leaving—or he may have just left. As he gave good and clear leadership to the unit, I want the Minister to assure

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  me that the fact that he has returned to his native department does not mean any lessening of the Government's commitment to the work of that unit. As my hon. Friend the Member for Birkenhead said, there are tasks still to be carried out. There is a clear co-ordinating job for the unit as the distribution of the Cuckney investment fund is arranged and assets are recovered. The unit's excellent leadership has been especially helpful in that process.
  I want the Minister to clarify the position on the state earnings-related pension scheme. We recognise that not having to pay to get back into SERPS is a positive move by the Government, and it should be seen as such. However, people are a little uncertain about when and whether that money will become payable. We need to know what the shortfall will be between the money raised and the money required. The £100 million involved in that is clearly relevant.
  We must look at pension funds that are especially disadvantaged. People in Leeds come from two different schemes, so they are able to compare one with the other. The Maxwell pensioners had hoped for a 5 per cent. increase but are to get 3 per cent. When they compare their position with that of pensioners in the other scheme, who are to have no increase, perhaps they will not feel too badly about not getting the full 5 per cent. There should be justice between the schemes and I hope that the Minister will say something about that.
  As hon. Members have said, at the end of the day there will be some shortfall. Assets have been identified and there are now mechanisms to ensure that they are recovered. That fact gives some validity to the Government's assertion that had they underwritten the necessary money from the start, that information would not have been discovered and the assets identified and recovered.
  It becomes less valid as more information is received. At some point there will be a gap, and I want to be certain that when it is reached, the matter will be positively resolved. I do not want my pensioners, who worry week by week, to continue worrying into the distant future. The time must come when Maxwell pensioners in Leeds will be able to celebrate and to say, "We can stop meeting on the basis that we meet now, because we are assured that our pensions will continue to arrive in the post for as long as we need them."
  5.40 pm
  Mr. David Shaw: Eleven million people have occupational pensions, and 5 million have personal pensions. That is a major success story and a tremendous achievement by the Government, which has contributed to a true capital-owning democracy, greater security in retirement and a better understanding by many more people of the economic processes by which this country creates wealth.
  When the history of the Thatcher and Major Governments is written, people will pay great attention to the fact that so many members of the public were able to increase their ownership of the community by home ownership, pension ownership or other assets.
  Mr. Paul Flynn: Is the hon. Gentleman aware that, in the final quarter of 1992, 44,000 owners of personal pensions allowed them to lapse? What
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  will they think when they look back on the age of Thatcherism? They have no personal or occupational pension or SERPS.
  Mr. Shaw: There will always be people who, for one reason or another, do not continue their payments. Sadly, many people are oversold individual schemes—but they can obtain restitution under the Financial Services Act 1986. A lapse of 44,000 pensions schemes out of 5 million is not enormously significant—and it occurred at the peak of a recessionary period, when many people may have felt that it was difficult to keep up their payments. I have every confidence that many of them will return to their schemes, and that a large number of them may be members of other schemes anyway. Some people discover that they are in too many schemes and that the Inland Revenue has rules that prohibit that. There are several reasons why membership of schemes is cancelled.
  I have not even mentioned the number of people who have life assurance policies and who save through unit trusts. A major change has been achieved and I look forward to the day when the Labour party will join that debate on an equal footing and will welcome that development.
  Many of the 16 million pension scheme members have no problems or fears, whether their schemes are personal or occupational. They will pursue worthwhile careers while they save for their years of retirement and will then enjoy many years of happy retirement with no problems. However, members of the Social Security Select Committee recognise that some schemes have problems.
  The Select Committee has examined several schemes, including the Harland and Wolff scheme in Northern Ireland, which has problems, and has discussed the Belling and Lucas schemes. The Select Committee is also concerned about the Dormobile scheme, with which I had a particular problem, because a number of my constituents were concerned about a mysterious loan that had been made.
  Sadly, some schemes have been brought to the Select Committee's attention and they need careful investigation and review. However, it surely cannot be the long-term role of a Select Committee to become involved in problems of that kind. We must establish a mechanism that allows for problems to be resolved in a better way.
  A number of organisations are involved, including the occupational pensions advisory service, and they do the best job that they can in the circumstances. Perhaps the Goode report will recommend that a better way be found of structuring the various advisory bodies and support mechanisms. I hope that the Government will always play an active role in supporting them. Given that there are 16 million pension scheme members, it is incumbent on the Government never to abandon or be accused of abandoning those people, but always to examine better ways of protecting the interests of scheme members and of ensuring that this country's pension system remains one of the best in the world.
  The Select Committee began examining occupational pension schemes in general in July 1991. When the Chairman and I began discussing with colleagues our producing a report on occupational schemes, little did we realise that Mr. Maxwell was at that very moment already secretly ripping off his company's pension fund to the tune of £220 million. As our report got under way, that figure was to grow to £450 million. We must have had a sixth

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  sense in July 1991. Mr. Maxwell went overboard—jumped overboard, as it would now appear—in November 1991, and within a month it was apparent that the Maxwell fund was encountering serious difficulties. The Select Committee therefore extended its investigations.
  Following the Select Committee's initial work in the last Parliament, the Department of Trade and Industry announced that the Mirror Group prospectus would be investigated, and the Government established the Goode committee to investigate aspects of occupational pensions. The Securities and Futures Association—unbeknown to some, but this is now know to all—investigated Goldman Sachs and its role in the Maxwell dealings.
  The Investment Management Regulatory Organisation appeared before the Select Committee, and there came to light a number of deficiencies in the way that it had treated the Maxwell companies. As a consequence, IMRO examined its own organisation and the role of its members, and that led to Invesco MIM recently being fined £2 million including costs. There is no question but that, in just those four areas, the Select Committee had a considerable impact on initiating serious examination of some of the problems surrounding the Maxwell affair.
  I am delighted with the Government's response to the Select Committee. There is no question but that the action of my right hon. Friend the Secretary of State for Social Security in establishing the Maxwell pension unit displayed remarkable sensitivity in recognising that a serious problem existed that required special attention. That unit has been an incredible success. The Maxwell pension trust, which my right hon. Friend also initiated, has also been enormously successful, with the Government paying its administrative costs, so that it has not been a burden on any pensioners. That trust has helped to raise a considerable amount of money, to ensure that Maxwell pensioners have their legitimate current needs met for the foreseeable future.
  The Government's contribution of £2·5 million to support certain pensioners in pension schemes in financial difficulties is an important and compassionate measure that has helped a number of pensioners—including a small number who were direct pensioners of companies that went into liquidation. There was therefore no pension scheme to pay them and they were dependent on those companies' survival. Once the companies went into liquidation, the pensioners were left without any money. The Government's £2·5 million certainly came to their rescue.
  More important than anything else, the Government have, in effect, lent £100 million to the Maxwell pension schemes by deferring collection of state scheme premiums. Many of us have difficulty in understanding how it operates, and I will not attempt to explain the complexities of that particular transaction. It is one that, even as an accountant, I find difficult to follow; it is very intricate. There is no doubt that the Maxwell pensioners have benefited a great deal from collection being deferred and that there is no interest payable.
  Mr. Frank Field: It is worth putting on record the fact that both the hon. Gentleman and I have sounded sycophantic when talking about the Government. That is because the Government did many of the things that we asked them to do.
  Mr. Shaw: I am grateful to the hon. Gentleman, as an Opposition Member, for pointing that out. It is a delight that hon. Members on both sides of the House recognise that there has been an all-party move on this issue to keep it off the main political agenda. Inevitably, there are differing political views about certain aspects and individuals involved, but there has been tremendous cross-party agreement. My hon. Friend the Member for Hertfordshire, South-West (Mr. Page) made great efforts, together with the hon. Member for Birkenhead (Mr. Field) and myself, to avoid getting to a point where the Maxwell pensioners lost because of political wrangling.
  Mr. David Lidington: Does my hon. Friend agree that there is considerable concern—particularly among the deferred pensioners involved in the Maxwell schemes—that the Government's intention might be to postpone premium and interest payments only until the pension funds are able once again to meet their liabilities to pensioners currently in receipt of pensions, rather than until the schemes are able to cope with their liabilities to deferred pensioners? It would be reassuring to many of the deferred pensioners, including those whom I represent, if the Government responded generously this evening.
  Mr. Shaw: I commend that course to my hon. Friend the Minister. We welcome him to the Front Bench for his first major debate on this issue, which I hope will be one of many—although not too many!
  My hon. Friend the Member for Aylesbury (Mr. Lidington) makes a strong point about deferred pensioners. There will be considerable concern if the Government cannot find a way of bridging the gap. The Committee has increasing confidence that that can be done, if the institutions that have done wrong meet their commitments to make restitution. Moreover, because of the various events that have taken place with the pension funds, the Committee feels that it might be possible to reconstruct the position and enable much of what has been lost to be recovered. That can be achieved, as my hon. Friend has pointed out, only if we get to a point where the Government can ensure that there is enough support in the intervening period.
  I hope that the institutions that are to blame will come forward, in the not too distant future, and recognise their responsibility. That would ensure that the public-purse commitment would not continue for long. We have to consider the many other pensioners, the many disabled and other people who need help from the public purse. If the institutions and companies involved with Mr. Maxwell have done wrong, they should be made to pay out soon. We could then get on with the business of government and Parliament and ensure that the £300 billion a year of public spending goes to those in need, and not to finance those financial institutions that may have done wrong.
  I am particularly concerned about two pension schemes. One is the Maxwell Communication Corporation works pension scheme, and the other is the British Island Helicopters pension scheme. My hon. Friends the Members for Waveney (Mr. Porter) and for St. Ives (Mr. Harris)—both former members of the Select Committee—have taken considerable interest in that matter during the last year and a half.
  Those two schemes are in a terrible position. Mirror Group Newspapers issued a prospectus that said, in paragraph 3(a) of the accountant's report, that the works

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  scheme would be incorporated into the Mirror Group Newspapers pension scheme. The prospectus was issued in April 1991; by the time Mr. Maxwell had jumped overboard in November 1991, a commitment to the board of directors, in a prospectus—a doctrine issued under the Companies Act—had not been carried out. That is an appalling state of affairs for someone like myself who has been involved in the issuing of prospectuses; it is appalling that a commitment should have been given and, many months later, not been carried out.
  There is no doubt that the directors of Mirror Group Newspapers—many of whom are still directors—must address the issue of meeting the commitment in the prospectus, or should resign and cease to hold any public or corporate office in the land. They are unfit to be directors of public companies—as Mr. Maxwell was described—if they cannot meet the commitment in the prospectus.
  There is also an appalling situation with British Island Helicopters. Mr. Maxwell said that he would bring those pensioners into the Mirror Group Newspapers scheme, and in that instance he did so. There was a substantial liability, therefore, to pay pensions to British Island Helicopters employees. What has happened is that the old Mirror Group Newspapers scheme has effectively been closed and a new scheme started, but the British Island Helicopters members are not included in the new scheme.
  A clear commitment was made by Mirror Group Newspapers and its pension fund to British Island Helicopters' members. There is clearly a moral commitment, even if legal devices enable the fund to get out of it. It is totally unsatisfactory that an existing legal and moral commitment like that could be avoided by closing down an old scheme and opening a new one.
  I turn now to the issue of whistleblowing and corporate governance. As I said at the beginning of my speech, this has cost the Government money. The Government have, compassionately, come up with money, but they should not have had to do so. If the Maxwell empire had been properly run—and the people who know about the irregularities in it had spoken at an earlier stage—we would not have had this problem.
  Deborah Maxwell is no relation to any of the Maxwell family—it is coincidental that she has that name—but she is a solicitor, a member of the Law Society, and on 19 November 1990 she wrote three memoranda. Having read the memoranda, I think that she is a very competent solicitor, with considerable skills and abilities.
  In one memorandum, Deborah Maxwell points out that there are implications in the share dealing involving MCC shares that concern the takeover code. She refers to stock exchange compliance in relation to family private companies and their shareholdings in public companies and also to section 134 in part VI of the Companies Act 1985, which deals with the 3 per cent. disclosure rules in regard to shareholdings in public companies. She mentions that there had been a panel ruling in relation to Maxwell family companies and their concert-party relationships, and she refers to the put option by Goldman Sachs and the notification to the stock exchange of the implications arising from that put option. That was a substantive and well-produced memorandum.
  A second memorandum states:
  "The failure to disclose this holding could have consequences under section 47 of the Financial Services Act
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  1986, a copy of which I attach. This concerns, inter alia, the making of misleading statements to and the concealment of any material facts from the investment community."
  The memorandum goes on to state:
  "Trevor Cook has I believe advised you separately on the IMR0 aspects of this holding … The other matter of this which you must be satisfied about is that the trustees of BIM"—
  Bishopsgate Investment Management—
  "have properly carried out their duties, inter alia, to act in the best interests of the various pensions funds in making these investment decisions."
  Deborah Maxwell was querying whether investment decisions were being made properly by the trustees of BIM, or whether investment decisions were being made by Maxwell in his personal or family interest.
  The third memorandum states:
  "Following my conversation with Robert Maxwell on Saturday, it has as you know been agreed that, with effect from today, I am relieved of any compliance responsibilities in relation to BIM and MCC generally.
  I am attaching two files relating respectively to the private holdings in MCC (the family and the Maxwell Foundation)"
  in Liechtenstein, of course—
  "and BIM's holding in MCC. Each file has a summary on top to show the present status. I will tomorrow let you have such other files as I keep relating to other companies in which BIM owns shares.
  I recommend that you give the BIM file to Trevor Cook who is already up to date with the position. I consider that the MCC private side holdings file should go to Robert Bunn who knows all the background information and has up to date details."
  Those are three very good memoranda. They are clear and to the point. As I have just shown, in the third memo, Deborah Maxwell gave up her duties. She resigned. Hon. Members may be sad to know that, according to another memorandum, when she resigned she moved down the corridor and was given a salary increase of some £75,000 a year. She was also paid £50,000 in cash for leaving her job as compliance officer. She used £40,000 cash to repay her mortgage with the building society.
  Hon. Members will no doubt be concerned that this person, who on 19 November 1990—a year before Mr. Maxwell jumped overboard—had substantial knowledge about the fact that Mr. Maxwell, in a host of areas, was potentially breaking the law or breaking City codes and regulations, had received a substantial sum and ceased her duties when whistleblowing could have occurred. It is a great tragedy for the pensioners, who, in the end, have lost many hundreds of millions of pounds, that £50,000 managed to secure her silence in a way that could have been critical in the circumstances.
  We should not blame Deborah Maxwell alone. There were many other potential whistleblowers who could have prevented the enormous cost that the Government have incurred in helping the Maxwell pensioners. A number of directors of MCC knew of the problems. Sadly, they did not know of much else. I have seen the board minutes of that corporation. It is difficult to envisage what the board thought was the business of MCC. I understood that it was publishing, but the board minutes show no reference to publishing. All one can see is a number of transactions with banks as Mr. Maxwell was rapidly renegotiating his loans.
  As I have said, we know that Deborah Maxwell knew. We also know that Goldman Sachs had immense knowledge of the Maxwell empire. It knew that he was a desperate man from the way in which he was structuring

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  his deals. It knew that he was short of cash and was involved in strange deals. It knew that there was a severe risk of a false market developing for MCC shares. Indeed, many people believe that there was a false market. We also know that Lord Donoughue knew of irregularities involving stock lending.
  There were many more who knew about problems in the Maxwell empire because there were many resignations in Maxwell companies in the last two years. In many instances, the money involved, as with Deborah Maxwell, was only £50,000. In other instances, people received £100,000. In the Maxwell empire, £100,000 here or £100,000 there was nothing if it secured silence. It was £250,000 that secured the silence of Lord Donoughue.
  Mr. Deputy Speaker. (Mr. Geoffrey Lofthouse): Order. The hon. Gentleman is probably aware that he must not criticise Members of the other place.
  Mr. Shaw: It has been difficult. I have tried merely to state fact and avoid criticism. A payment of £250,000 was made and, in the view of many, it did secure silence.
  Occasionally, the sums involved were greater than £250,000. Jean-Pierre Anselmimi, as far as one can make out from documentation, knew virtually everything that went on in the Maxwell empire up to his resignation. It took £300,000 to buy his silence.
  My final point concerns restitution. Who will pay back the pensioners' money? Enough information about wrongdoing is now emerging. I do not think that we need to see a trial next year in order to establish whether serious wrongdoing has occurred. Common sense shows that there has been some wrongdoing by some parties who must, in many instances, remain nameless for the purposes of this debate and for legal reasons.
  The Government have committed no wrong. As I said earlier, they have bent over backwards to try to assist in different ways. The reality is that private individuals and the private sector have failed the Maxwell pensioners. There is no justification for public expenditure being taken away from important Government programmes in order to continue bailing out those involved in this affair and so that some institutions and private individuals can be let off the hook. The City firms that failed in their duties in their enthusiasm to do business with Maxwell, and the private individuals who were directors of his companies and took large sums of money on resignation simply because they knew too much, must make their contributions to restitution for the pensioners.
  I believe that a list should be prepared showing all those involved. Contributions should be invited and every lawful method should be used to ensure that contributions are made. It may be that the largest contribution should be £100 million. Many hon. Members know what sort of financial institution should be contributing at that level. Smaller contributions should also be made, right down to £50,000 or so from some private individuals who have benefited enormously from the Maxwell pension problems.
  I hope that the Government will do everything that they can to continue to help the pensioners. I hope that they will take a particular interest in the plight of the MCC works pensioners and the British Island Helicopters pensioners, who have particular problems, even worse than those of
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  many others. I hope that we are not far away from a resolution—perhaps on the second anniversary, or just before it, of Mr. Maxwell going overboard—to this awful and appalling problem that has upset so many people in their pension years.
  6.9 pm
  Mr. Malcolm Bruce: I apologise to the House, and especially to the hon. Member for Birkenhead (Mr. Field), for being a little late. I was hosting a reception for Deaf Accord, which overran slightly. I did not hear everything that the hon. Gentleman had to say but I heard some. As other hon. Members have done, I thank him for the work that he has done since the sad story broke and I also thank the Select Committee on Social Security for the progress that it has made.
  May I reverse the sycophancy and say that, although it is good to witness the hon. Gentleman's good nature in his thanking the Government for their response, the House must nevertheless be grateful to him for his work and for ensuring that the arguments were presented in a way that would secure that response. I shall not break the spirit of all-party accord, but I believe that the Government have a little more responsibility for certain aspects of the matter than has been acknowledged.
  I pick up where the hon. Member for Dover (Mr. Shaw) left off. He spoke of those who should contribute to reinstating the Maxwell pension fund. It is deeply disappointing that the City of London appears to have lost sight of just how much damage has been done to its interests, and that it has shown so little concern about what it could and should do to repair that damage.
  In the last Parliament, I was a member of the Select Committee on Trade and Industry, which compiled a report on financial services and the single market. We travelled to the main European financial centres such as Paris, Madrid, Milan and Frankfurt. There was no doubt that the credibility of British financial institutions had been deeply undermined by the Maxwell experience. That was especially so in Germany, where we have had considerable difficulty in getting our way of managing pension funds accepted. If the Germans had their way, our system would not be admitted in the European Community.
  I acknowledge that considerable benefits have accrued from the way in which the reputable life and pension institutions in the City of London make a pound work much harder than almost any other comparable institutions in the world. We do not want to lose that, so I wish to make it clear that my remarks are not designed to undermine those institutions, although I suppose that one could argue—and the Germans surely would argue —that, if our pension administration followed their law, the Maxwell case could not have arisen.
  We must complete the reform of our pension fund law to ensure that such an occurrence is almost impossible in the future. If we can achieve that, we might eventually be able to ensure that the pensioners who have been defrauded will receive full compensation, including contributions from the City. I accept that the Government should not jump straight in and pay for the consequences of fraud, but on behalf of the pensioners I am obliged to say that, although the bit-by-bit access to funds is better than nothing and although it ensures that the day-to-day bills can be paid, it does not make for a long, happy and

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  planned retirement. It seriously undermines the plans that many people had for their retirement, and we can all have a great deal of sympathy for people in that situation.
  Mr. Page: I understand the hon. Gentleman's concern about the mental processes of pensioners who are wondering where the next penny will come from, but does he accept that it is incumbent on the unit to ensure that the money was supplied only to the various pension funds when it was needed—in other words, to continue to apply pressure on to reach a decision, because some were not over-hasty in, for example, resolving the common investment fund allocations?
  Mr. Bruce: I accept the hon. Gentleman's point, but individual pensioners are still left in a difficult position. Such pressure was regrettably necessary to produce some results.
  Mr. Mark Wolfson: Does the hon. Gentleman agree that it is important that one of the messages that goes out to the pensioners from this debate is one of reassurance that the House is ultimately determined to ensure that restitution in full is made but that we are also adamant that payment, as far as possible in full, must be made by those who made mistakes or were responsible for wrongdoing?
  Mr. Bruce: I entirely agree. Having had numerous meetings with Ministers, I understand their difficulty in saying that in such terms although I think that many would like to. All we can ask is that they say nothing that undermines the sentiment that the hon. Gentleman has expressed.
  The hon. Member for Morley and Leeds, South (Mr. Gunnell) referred to members of pension schemes with annual reviews but no guaranteed increase. I have been contacted on their behalf, and I understand that more than 1,000 people are members of two or three such schemes. Following on from what I said earlier, it is understood that getting a payment is better than not getting a payment, but their concern is that, had the money not been stolen, they could reasonably have been assured that they would have received at least a cost of living rise every year for the foreseeable future.
  For those who retired recently and perhaps took early retirement, the thought that their pension is fixed for the next 20 or 30 years, if they live that long, or even for 15 or 20 years, is a further worry. I therefore hope that full restitution might include returning to those people the money that they might reasonably have expected to get from the fund if it had not been stolen. I have been asked to make that suggestion to the House.
  I echo the points made about deferred pensioners. There appear to be different views. The claim that the £100 million to which the Secretary of State referred is effectively an interest free loan cannot be squared, but the issue was raised in an intervention. I am sure that the Minister has taken note, and I merely want to reinforce the point.
  My hon. Friend the Member for Bath (Mr. Foster) has members of three different former Maxwell schemes in his constituency and has asked to be associated with my remarks. He has been active on their behalf and has made representations to try to ensure that they get full refund of that to which they are entitled.
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  My particular point of constituency interest has already been mentioned by the hon. Member for Dover. I do not mean to criticise him in his absence, but the correct name of the firm to which he referred is British International Helicopters, not British Island Helicopters. The firm has its headquarters in my constituency. I have been very much involved with the company—more involved than I might have wished—since it was sold by British Airways.
  When selling the company, British Airways' management behaved dishonestly and despicably towards its work force. The management, especially the then chairman and the current chief executive and chairman—I do not need to name them because everyone knows who they are—treated members of all parties with absolute contempt.
  They convened a meeting shortly after I was elected. They invited me, the then hon. Member for Banff and Buchan, Sir Albert McQuarrie who was a Conservative, and the present hon. Member for Aberdeen, North (Mr. Hughes). In front of an audience of several hundred employees, they asked us to campaign for the Nott assurances to be implemented and for British Airways to be privatised as a single entity, specifically on behalf of the work force of British International Helicopters.
  Before the ink on the privatisation agreement was dry, we discovered that the management were in secret negotiations to sell the company, initially to a Mr. Meade —a person at least as disreputable as, if not more so than, the person to whom it ultimately was sold. I managed to blow the whistle on that deal when I heard about it, because I happened to be due to ask the Prime Minister a parliamentary question that day, and the negotiations were broken off 24 hours after the matter was raised during Prime Minister's questions. According to information brought to my attention more recently, Ministers had intervened to say that that sale should not go through.
  That is a pertinent point. Hon. Members with a particular interest in British International Helicopters have had numerous meetings with Ministers, and we believe not only that the employees have been appallingly treated, but that the Government have a responsibility rather different from any responsibility that they may have for the other companies.
  Basically, the Government gave their approval to the sale to Robert Maxwell, whom they had previously designated as a person unfit to run a public company. I am sure that the Minister is already aware of the fact, but I should like to make it clear to him that the hon. Members apart from myself who have a constituency interest in the company include the hon. Members for St. Ives (Mr. Harris), for Waveney (Mr. Porter), and for Kincardine and Deeside (Mr. Kynoch), my hon. Friend the Member for Orkney and Shetland (Mr. Wallace), the hon. Members for Aberdeen, North (Mr. Hughes) and for Angus, East (Mr. Welsh) and the Secretary of State for Transport. So it certainly is an all-party group.
  I do not expect the Minister to acknowledge the belief that the Government have a moral responsibility arising out of the sale—indeed, some of his colleagues have refused to accept that. Nevertheless, everyone in the all-party group believes that that moral responsibility exists. That is not simply a personal view of mine. The hon. Member for St. Ives, in particular, has vigorously expressed the same view.
  The hon. Member for Dover has to some extent brought us up to date on the way in which the Mirror Group has treated BI H pensioners. Those pensioners were

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  induced by an agreement between Maxwell and British Airways to transfer from the British Airways pension fund to the Mirror Group pension fund. They then contributed to the Mirror Group fund, and the day that Robert Maxwell fell overboard the company went into administration because of the way it had been managed. I should like to put on record the fact that the company has been bought out by its management and staff and is now trading successfully. Nevertheless, not only those people's pensions but their entire livelihoods were put at risk. Indeed, a number of them lost their jobs.
  I find it breathtaking that the directors and management of the Mirror Group can simply expel a group of people from the pension fund with impunity. I read with some interest the exchanges between the hon. Member for Dover and the chairman of the trustees, Mr. Colin Cornwall, and the brittleness of the atmosphere comes through even on the printed page. I have met Mr. Cornwall, and I appreciate his compromised position, but I am concerned by the fact that he felt unable to speak out in a more forthright way as a trustee of the original fund.
  In response to the question asked by the hon. Member for Dover in the Select Committee, Mr. Cornwall said that the decision effectively to freeze the old scheme and to set up a new scheme to which the employees were not party
  "was a decision of MGN. The trustees really had no status in the matter of who should or who should not be eligible for the Past Service Scheme … we simply are not in a position to bandy words with MGN, which has the sole control over who is and who is not admitted in their Past Service Scheme".
  That may be the literal and legal truth, but in terms of moral justice it is an outrageous position for the trustees to have taken. I certainly hope that it may yet be possible to resolve the matter without recourse to the courts, but legal action is still not ruled out.
  At a meeting between the all-party group and the present Parliamentary Under-Secretary of State for Employment, the hon. Member for Maidstone (Miss Widdecombe), who was then a Minister responsible for social security, it was suggested that we might try to secure arbitration. Sir John Cuckney was approached, but he felt unable to arbitrate.
  I have been told that representatives of the BIH pensioners have now briefed officials of the Maxwell pension unit on their legal claims, and we are now waiting to see whether that will secure some kind of mediation. The legal claims being made by BIH staff against the Mirror Group and its professional advisers have been shown to me and, although I am not a qualified lawyer, they seem to me to have a strong legal case. They certainly believe that they have.
  I repeat that the moral responsibility seems to me incontrovertible, and I should regard it as most regrettable if the case had to go to court. I hope that we may be able to secure some justice, and anything that the Minister can do behind the scenes to bring that about would be much appreciated by all the parties involved in and concerned about BIH. I repeat my belief that the Government have more responsibility here than they have for some of the other schemes.
  Arthur Andersen, which acted as the administrator for BIH, has accepted liability under section 58(b), covering contracting back into SERPS, and the negotiation concerns only the size of that liability. The firm has
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  approached the Inland Revenue because the Revenue is a preferred creditor in the liquidation of BIH, ahead of the trustees, and there is an £11 million corporation tax bill. The firm has asked the Revenue to allow payment, once the figure is decided, to be tax deductible.
  The current position is that the Revenue has said:
  "tax credits, having been given once, cannot be repeated".
  The sources in BIH to whom I have been talking say that they understand that argument, and that in normal circumstances they would accept it, but that if the Government could re-assess the matter, that would be of enormous assistance in enabling the transition to take place. I know that such a procedure would be exceptional, but I argue that the Government's involvement is exceptional, and it would be a gesture that might help to move the matter forward.
  Each debate that we have had in the House and in the Committees has enabled us to secure progress. I am grateful for the cross-party nature of the support and for the constructive attitude of Ministers. Even if the questions that I have asked cannot be answered in a forthright manner at the Dispatch Box today, I hope that they will be taken fully on board, and that ultimately we shall be able to ensure that every pensioner who has been affected will have his or her rights fully restored.
  6.28 pm
  Mr. David Willetts: I begin by congratulating the Chairman of the Select Committee on Social Security, on which I serve, on the way in which he has conducted the Committee's deliberations on this subject. Many members of the Select Committee, of all party loyalties, are surprised that the hon. Member for Birkenhead (Mr. Field) is not yet the leader of the Labour party. If he ever gets fed up with waiting for that distinguished post, the outstanding way in which he has conducted our investigations into the Maxwell affair over the past two years suggests that he would make an ideal candidate to run the Serious Fraud Office, which clearly needs improved management. The training and expertise that the hon. Gentleman has developed in investigating fraud make him the ideal man to take on that responsibility.
  I am a layman in such debates. I have no accountancy or legal expertise, so some of the arguments and investigations of the tangled affairs of Mr. Maxwell have been beyond me. Three or four points, however, emerged strongly from the Committee hearings.
  First, I was surprised at how easy it is in the City simply to transfer securities from one holder to another and from one physical location to another. Because so many securities are bearer certificates—there is no stamp on them saying who they belong to or what organisation claims their ownership—it seems to be possible to pick them up, carry them somewhere else and claim to own them, or to dispose of them. That surprised me.
  Secondly, I was surprised by the way in which apparently elementary tricks, such as calling one firm BIM, Bishopsgate Investment Management, and another BIT, Bishopsgate Investment Trust, makes it possible to shuffle shares around with no one noticing what is being done, because BIT and BIM look so similar on a transaction document. Robert Maxwell did not need to develop extraordinary accountancy skills to carry out some of his frauds. Elementary techniques of that kind were used.

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  Thirdly, it appears that the regulatory organisations let Maxwell pensioners down. The Investment Management Regulatory Organisation has already accepted some responsibility. Many of us have been rather surprised at the narrow role that the Occupational Pensions Board has played in the affair. I hope that the Goode committee—an ingenious and suitable name—will examine the possibility of establishing a new regulatory authority to supervise pension funds. However, any new organisation that is established must displace an existing one. It would be a pity if there were a multiplicity of organisations.
  Sir Donald Thompson: I have just joined the debate, having been about my duties in other parts of the House, and I shall intervene only briefly. Committee members will know that, by nature, people who have retired are getting older and worry more and more, once they have retired, about their pensions going wrong. Does my hon. Friend think it a good idea, not only that there should be an ombudsman, but that there should be a system whereby pensioners could appeal, for example, to special commissioners? They could then give evidence and at least get that worry off their chest and into the open.
  Mr. Willetts: My hon. Friend's suggestion is an interesting one, which I hope that the Minister will consider and perhaps deal with in his speech.
  My final observation about the investigation of the Maxwell affair is simply on the extraordinary cost of professional fees, which are clocking up at a very high rate. That is an additional argument to the many already advanced in our debate for a negotiated settlement, which does not involve years of elaborate wranglings in the courts. I understand that many of the organisations involved are ready for a negotiated settlement, but a problem has arisen because of insurance entitlements. Many insurance companies will pay out only if a final legal case has resolved liability. I hope that Sir John Cuckney —who has made such a distinguished contribution to solving those problems—is able to solve that one as well.
  There is a danger of these debates—we have fallen into that trap a little today—ending with exchanges of mutual admiration in which different members of the Select Committee agree on how marvellously it has done. So I was thinking of something controversial and outrageous to say.
  Mr. Alan Duncan: Uncharacteristically so.
  Mr. Willetts: I thank my hon. Friend for that. I was thinking of saying something uncharacteristically outrageous and controversial.
  We have better prospects for a sensible pensions policy in this country than almost every other advanced western country.
  Mr. Paul Flynn: Outrageous.
  Mr. Willetts: Yes. What an outrageous remark. I was afraid that it would stir up dispute.
  I was very surprised by the remarks made by the hon. Member for Gordon (Mr. Bruce), who committed the classic Liberal Democratic assumption that it is all better in Germany; they have all got it sorted out on the continent. We heard eloquent praise of how German pension regulation would have made the Maxwell affair impossible here.
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  However, the extraordinarily high self-investment in the German system is shocking, with company pension funds investing in the companies for which the employees work. That is one reason why Germany does not have a healthy takeover market for its firms. The only way in which they can manage to run the risks of self-investment is by pension funds insuring against the risk that the company in which they invest does not go bankrupt.
  Such insurance is only possible in a stable economic environment. It will be interesting to observe, as Germany goes into deep recession, whether the insurance premiums that German pensioners have to pay rise and whether that forces a change in the behaviour of German pension funds, by opening up German capital markets so that they more closely resemble those in Britain and America. We have a healthy system of properly funded private pension arrangements, which is much better than in most other advanced countries.
  Secondly, the public sector has avoided making the bogus promises that have brought state social security arrangements into such disrepute in many other countries. We have not been trapped in the seductive politics, but dangerous economics, of the chain letter, which has bedevilled state pension arrangements in other countries. Ending the link between the basic pension and earnings and linking it solely with prices has been crucial.
  Thirdly, in this country we do not face the dramatic demographic change that is in prospect for some other advanced western nations. Although there will be an increase in the number of old-age pensioners in the 21st century, I think that it is manageable. I do not think that it is, of itself, a reason for crisis measures.
  The Government surely should base their approach to pensions policy on the fundamental principle that we in the Conservative party believe that it is best that claims on future resources should be registered in the form of private contracts wherever possible. I appreciate that one could not imagine that slogan on the blue baize of the Conservative party conference platform—it might need to be put rather more crisply—but it is a fundamental principle.
  It is better if people's claims on the resources on which they are to live in retirement can be registered through the ownership of private assets—through their personal pensions, savings or occupational pensions. That is more reliable than relying on the state's promise that it will tax future generations to pay for pensions.
  Mr. Frank Field: The hon. Gentleman promised that he would be controversial. At what part of his speech will that start?
  Mr. Willetts: One of the other pleasures of serving under the hon. Member for Birkenhead on the Social Security Select Committee is that occasionally he comes up with ideas so radical and imaginative that we Conservative members find ourselves acting the role of the boring old greybeards. I know that we have in prospect an exciting pamphlet for him on pensions policy, which may be an example of that.
  Mr. Page: If my hon. Friend wants to be controversial, I find some of his remarks extremely controversial. His laid-back approach towards the demographic profile is unwise and unjustified. If I were him, I would be exceedingly careful about projecting that profile as a solution to our future.
  Mr. Willetts: I will not detain the House with a learned debate on the nature of the demographic change confronting the country. Suffice it to say that, in the 1960s and 1970s, we had an age-dependency ratio rather worse than the average for OECD countries. In the next century, we face the prospect of an age-dependency ratio rather better than that in other advanced OECD countries. That subject is obviously being discussed at the G7 summit this week, and quite rightly so. Anything that can be done to shift the burden of pension provision from the public to the private sector makes sense, but we do not face the sort of demographic crisis which confronts countries such as Japan.
  I hope that, in his concluding remarks, the Minister will range also into the wider aspects of the debate on occupational pensions. We look forward with keen anticipation to his first speech from the Dispatch Box—the first of many, no doubt. As occupational pension provision is covered by the estimate, I hope that he will give a signal to the occupational pension industry, which is seeking clear guidance on what will happen to the pension age.
  Almost all experts agree that the case for equalising the pension age at 65 is unassailable. That is widely accepted. I have not come across a single expert on social policy who, if he were given £3 billion by Father Christmas, would spend it on pensions for men aged 60 to 65. That is not a sensible priority. It is much more sensible to move towards a higher equal pension age of 65 for women. That is the trend in other advanced western countries and I hope that we shall participate in that trend.
  I hope also that there will be progress on establishing an age-related bonus for people who opt out of the state earnings-related pension scheme. To achieve success in encouraging people to opt out of SERPS and to take out personal pensions, a sensible framework of incentives is required. That means that the incentives have to be age-related. I hope that we shall hear more on the encouragement of personal pensions.
  I am concerned that the personal pension regime will experience the same difficulties as the Government's policy on share ownership. They had enormous success in spreading share ownership more widely, but insufficient success in making that share ownership deep. Similarly, the Government have had enormous success in increasing the take-up of personal pensions—5 million new personal pensions have been taken out. But those personal pensions need to be substantial. They need to be deep and valuable investments. That means encouraging employers wherever possible to contribute to personal pensions.
  I have been told by people in the industry that, at the moment, group personal pensions, which would provide the right incentive for employers to contribute to personal pension arrangements, are virtually impossible to organise in Britain because of the absurd regulations under the Financial Services Act 1986. It would be marvellous if encouragement could be given to group personal pensions as a way of ensuring that personal pension provision was deep as well as wide.
  I hope that the important connection between the occupational pension provision and the tax regime will be recognised in this debate. Having served for several years as the Chancellor's PPS, the Minister is in an ideal position —I can see him perking up—to have a broad view and to bring together the fundamental considerations of tax policy and those of pensions policy.
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  Is it right, for example, that tax rules oblige people when they retire to take the full income from their occupational pension immediately? There might be a lot of sense in allowing people to take a rather lower income initially and to continue to accumulate savings in their pension scheme so that if later they need nursing home provision or greater social services provision, they can take a higher pension. I hope that, in his keenly awaited debut, the Minister will be able to address some of those questions.
  6.42 pm
  Mrs. Jane Kennedy: As my hon. Friend the Member for Birkenhead (Mr. Field) will confirm, I am too new a Member of the House to remember the beginning of the Select Committee's review of pensions. When I joined the Committee last October, many months of work had already been completed.
  First, let me echo the welcome that has been given to the establishment of the pension law review committee, which I suspect has given rise to a sense of relief among those serving on the Select Committee. Had the Government not accepted the case for the establishment of that committee and had we been committed to doing the work ourselves, I for one would have felt many years older by now.
  I have been comforted by the fact that members and non-members of the Select Committee alike have confessed to finding the subject complex. I enjoyed our interview with Sir Peter Webster two days ago. Sir Peter was able to tell us little—in fact, he came to tell us how little he could tell us, as it is in the nature of his job as mediator that he shares confidential information with the parties between whom he is mediating—but he did tell us that this was the most complicated affair that he had encountered.
  I may not feel any less at sea, but it is a comfort to know that others also feel at sea in this very complicated affair. I commend Sir Peter's appointment as a mediator. I wish him success in his endeavours, and I feel that his role will be vital in persuading those who hold disputed assets to seek resolution of the disputes rather than allowing the matter to drag on in the courts.
  The criminal aspects of the affair have greatly curtailed the work of the Select Committee and have caused us problems. I shall not refer to those aspects except to say that, as a member of the Select Committee, I am very concerned about costs. Thousands of hours are being spent by lawyers, receivers and administrators and their support staff on work that is clearly essential, and it is worth putting on record the real fear that the money being recovered on behalf of the various creditors—not just the pensioners—is being quickly eroded. As my hon. Friend the Member for Birkenhead explained, he estimates that the figure will reach £50 million. I think that that is a conservative estimate, although I hope that it will not greatly exceed that.
  There are one or two people who regularly attend our open sessions, whose faces tell their own story—I refer to the representatives of the pensioners, who listen carefully to the comments of those whom we interview. I can see Mr. Ken Trench—the chairman of the Mirror Pensioners Action Group—in the Gallery, listening carefully to our debate.

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  We interviewed representatives of Price Waterhouse, Robson Rhodes, Buehler Phillips and Arthur Andersen —the four agencies referred to by my hon. Friend the Member for Birkenhead. We know the fees that are being charged by those four reputable and highly thought-of companies—fees no doubt commensurate with their standing—and I get the impression that the pensioners are not yet convinced that the labourers are worthy of their hire.
  The people representing those four agencies must be able to demonstrate not just to the Select Committee but to the pensioners that the work that they are doing justifies the costs that they are bringing in this case. They have some way to go in doing that, although I particularly commend the representatives of Arthur Andersen, who have impressed me by the openness of their approach and their readiness to share with us the details of their work.
  As a member of the Select Committee, my second concern is about the recovery process being undertaken in relation to Maxwell Communications Corporation. It became clear that the Law Debenture Corporation, as trustees for the pensioner group, is not being given observer status on the creditors' committee.
  I accept that there is not an organised conspiracy among the other creditors to keep the pensioners' representatives off the committee; however, the thought that, in trading the millions and millions of pounds worth of debt related to this whole sorry affair, major banks—including Barclays and banks in America—are swapping places on the creditors' committee at a time when representatives of the pensioners cannot participate in it, leaves me with a bad taste in my mouth. I hope that that can be rectified in the near future.
  I should like to touch on the situation in the north-west, where almost every constituency has pensioners or deferred pensioners who are affected, either directly through the Mirror Group or through the hundreds of other companies that Maxwell bought up.
  As a member of the Select Committee on Social Security, I put on record my thanks to those hon. Members of all parties in the north-west who have worked to represent pensioners, although few pensioners in my constituency were affected. I am grateful to other hon. Members for the knowledge and expertise that they have brought to this matter.
  I do not wish to score a political point, but Robert Maxwell did not lay the ground rules as to how pension funds could be raided. I hope that the Government will take that on board in their dealings with the pension funds of the state enterprises that they currently own and are considering privatising.
  6.50 pm
  Mr. Mark Wolfson: I would describe myself as one of the lay members of the original Maxwell pensioners group of Members of Parliament. More than 100 of us were active immediately the situation arose. Since then, much work has been done, particularly by the hon. Member for Birkenhead (Mr. Field) and by my hon. Friends the Member for Hertfordshire, South-West (Mr. Page) and for Dover (Mr. Shaw). On behalf of my constituents, I should like to thank them for their continuing work and assiduous approach.
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  I have a number of pensioners from a variety of Maxwell companies who were subjected to his blandishments, not only through written submissions to them when he took over their companies, but by his video film, which encouraged them to think that he, of all people, would look after them from the cradle to the grave. They faced an appalling situation and there has been real progress since those early days by the Government and the agencies that they established to deal with the problem. I congratulate my right hon. and hon. Friends on that action.
  Many points have been well covered in the debate and I shall not go over them again except to emphasise what has already been said: that the standing of the City took a terrible beating by the Maxwell example and it behoves the City to continue to play a full part in righting that wrong. The standing of particular companies in the City also took a beating, as did that of individuals. I support the strictures of my hon. Friend the Member for Dover concerning individuals who should not be running companies where they clearly carried out wrongdoing over the Maxwell pensions.
  Equally, in addressing the broader issue of pensions, it is important that, ultimately, the independence of more trustees on pension funds from the companies whose pensions they are running is established. It is difficult for staff representatives, for example, or company directors, who may also be pension trustees, to stand up against even more powerful people in a company who may wish to take action that is not correct in pension terms. I ask for a better balance in trustees.
  I used to work for Hambro's bank. All of us, as prospective pensioners, were grateful for the good offices of the senior people there who were trustees of the fund, because they handled it extremely well. We want to keep them doing that, but we also need to take action to deal with those who may not handle pensions properly. That needs to be covered for the future.
  As I said in an intervention, hon. Members cannot rest easy until all those pensioners receive restitution in full for what they are owed. By that, I mean not only current pensions, but pensions in the future. The roll-up of interest would have enabled those pension funds to keep pace with increases in the cost of living, or other commitments that those pensions had in them when people joined them in terms of improvements over the years. These are big targets to achieve, but I believe that, on the progress achieved so far, their achievement is not out of our reach.
  I congratulate the Government on their action so far. I welcome my hon. Friend the Minister who is to make his first contribution on this important issue. I hope that he will prove to us that the Maxwell pensioners' future will be safe in his hands and those of his right hon. and hon. Friends.
  6.55 pm
  Mr. Paul Flynn: I shall resist the temptation to be sycophantic towards the Government. That will not be difficult because, with the exception of the hon. Member for Havant (Mr. Willetts), Conservative Members have spoken with an air of complacency and self-satisfaction which is misplaced.
  The hon. Member for Havant valuably suggested that the demographic time bomb will not be as great as expected. At most, it will occur for a 10-year period, and after that there will be no problem. But that demographic

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  time bomb was the reason that the Government degraded SERPS. The Maxwell pensioners, the deferred Maxwell pensioners and everyone else are now in considerable peril. The great problem is that the Select Committee's report might well dissuade people from some of the advantages of occupational pensions and put them into the difficult waters of personal pension schemes.
  Conservative Members have boasted about the 5 million in those schemes. When 4 million were in the schemes a distinguished actuary, Bryn Davies, said that at least 1 million had been persuaded against their financial interests and they should opt back into SERPS. Neither the Government nor anyone else will advise them on that.
  The situation is far worse today. I gave examples of those who have not kept up their contributions. We know about only a tiny group in one quarter of last year who had been in schemes for fewer than two years. Of them, 44,000 have allowed their schemes to lapse. They have no personal pension scheme, no SERPS and no occupational scheme. They can look forward to the future with fear.
  Choice is a fine thing, but it means nothing unless one can make an informed choice. It is virtually impossible to make the choices that are necessary now. On joining a personal pension scheme, the first matter to consider is age. Generally, a lower age should be a great advantage. Last week, the distinguished firm of actuaries Bacon and Woodrow produced the valuable expert calculation that the pivotal age was 47 for men and 39 for women. Even more valuably, it went through what advice was on offer from the insurance companies. That varied from 40 to 52 for men and 30 and 47 for women. That means that on that crucial decision, on the so-called best advice, many women will be going into pension schemes nine years too soon and others eight years too long.
  But age is not the only factor when deciding whether to join the scheme. Other decisions and calculations have to be made that are impossible for a lay person. On the question of terminating contributions to a personal pension scheme—a serious matter because the schemes have been in existence for only a short time, a maximum of six years—Bacon and Woodrow said that many firms are charging two years' premiums for people to pull out. Those who have been bribed to come out of the scheme by all kinds of incentives, by attacking SERPS and denigrating its value, find themselves in that dilemma.
  A fortnight ago, a financial adviser from Independent Financial Services in Paignton, Devon, gave a typical example of that. It is a remarkable story. He wrote:
  "We are acting for a client who effected an Albany Life retirement annuity seven years ago for a monthly contribution of £40. So far the value built up within the contract amounts to just over £4,100.
  The client wishes to transfer, because of changes in his circumstances, to another fund provider. The transfer value offered him is £2,700. A huge £1,400 is being deducted by the existing provider.
  The firm concerned asks how the company could justify the equivalent of three years' contributions from a retirement annuity that has been in force for just seven years. It asks:
  "Do the financial advisers selling Albany's products realise how high the charges are?"
  The implications of that question are serious, because companies such as Albany Life are giving advice.
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  On Monday, while I was driving to the House of Commons, I heard a splendind programme, "Money Box", on which a man rang in to describe his situation. I was so surprised to hear it that I checked with the producers of the programme to see whether the figures given where right.
  The firm that the person described was a reputable body, the Scottish Amicable Life Assurance Society, which was behaving in a rather less than amicable way with him. He is in business on his own; he took out a flexible retirement plan and paid £3,000 in the first year. He had trouble in the second year with the recession and his contribution to the flexible plan was £1,500. He has just discovered that the society deducted commission of £1,700 from the total because he had disturbed the scheme. That is little short of criminal, but it is not unusual.
  Virtually all the 5 million people who joined personal pension schemes have seen almost the whole value of their bribe, the initial contribution given to them, disappear in the first year as a result of commission charges taken by commission-hungry salesmen and by administration charges. The pensioners' funds are virtually worthless after that period. They will live to regret their decision to join the personal pension scheme.
  They will not look back with satisfaction, although the hon. Member for Dover (Mr. Shaw) claimed that they would. By joing such personal pensions, they have been cheated out of SERPS, which was a sound scheme, which could have been amended and which would have got through the demographic changes in the next century.
  We have a generation of people who should be looking forward to their retirement and to an income that is assured. Instead, there are 5 million people who are not looking forward to a pension scheme—they are not pension schemes—but who are contributing to saving schemes with no assured outcome. They cannot work out what changes there will be in the stock market by the time they retire. They could lose dramatically. We have a generation of people on personal pensions who can look forward to an uncertain future and a future of fear about their finances in their retirement.
  7.2 pm
  Mrs. Llin Golding: I welcome the hon. Member for Richmond, Yorks (Mr. Hague) to his first debate as Under-Secretary of State for Social Security. I think that I have worked out the significance of my hon. Friend the Member for Birkenhead (Mr. Field) immediately transferring him back to the Treasury team; it was to remind him to bring money.
  This evening, the Government should take the reputed advice of the Foreign Secretary and do something for once just because it is the right thing to do. They should give justice to the victims of the massive Maxwell fraud. The members of the Maxwell pension schemes, especially the majority who are not yet pensioners, need us to continue to give attention to their plight. They are concerned that the impression is being given that their problem has been solved. That is far from being true.
  I congratulate the Select Committee and especially its Chairman, my hon. Friend the Member for Birkenhead, on their continuing effort to obtain justice for the members of the Maxwell pension scheme. The Maxwell Pensioners Action Committee is anxious that we and the public understand that enormous problems remain.

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  Those problems are the failure so far to recover the assets taken from the pension funds by Maxwell, which found their way into the banks and other financial institutions, the refusal of the insurance companies to settle the claims from the trustees, the difficulty of sorting out who is entitled to what from the common investment fund, uncertainty about section 58B settlements and the bulk transfer claims, such as that undermining the AGB scheme. One trustee pointed out that the returns so far have been small and has put the amount still outstanding at £440 million. He points out that pension funds that are being wound up need even greater assets than those that are continuing.
  A considerable amount of the assets taken by Maxwell has been tracked down—to the value, I am told, of £188 million. However, it is one thing to discover where the money is and another thing to get it back. Except for NatWest, the banks and other financial institutions holding assets given as security against loans are reluctant to part with them.
  The trading debt has increased the difficulties. Whatever the rights and wrongs of the situation, one thing is certain. On present form, the matter will take a long time to settle. No writs of claim have yet been issued by the trustees. The insurance companies appear to be adamant that they will not pay up the £75 million claimed by the schemes because of material non-disclosure. As the action group put it, that amounts to saying:
  "fraud was going on at the time of the renewal. You did not tell the institutions about that fraud. Therefore the policy is void and you cannot claim for the fraud."
  As I have said, there is even difficulty about the allocation of moneys in the common investment fund, although it is thought that that will be sorted out fairly shortly. I have been told that there are difficulties with the implementation of section 58B of the Social Security Act 1990 which makes any deficiency in pension funds that have to be wound up a debt on the employer company. Will the Minister clarify what payments have been made when he winds up the debate?
  Given all the problems that threaten the viability of the Maxwell pension schemes, is it any wonder that those who depend on them, especially the deferred pensioners, are so worried? Their worries were not dispelled when they read that the trustees of the various Maxwell pension funds had told the Select Committee that they were guardedly optimistic that, within three to five years, recoveries would be sufficient to cover in full the pensions of all current pensioners and those of most deferred pensioners.
  Those pensioners ask the obvious question. What happens until the recoveries are made? What about the annual increases? Which deferred pensioners will not be covered? What happens if, as at least one trustee believes, the hopes expressed by the other trustees are too optimistic? Whether one takes an optimistic or pessimistic view, it is clear that there is an obvious need for the Government to give substantial further aid.
  Some help has been given by the Government which has been acknowledged by many hon. Members who have spoken tonight. A £2·5 million grant was initially given to tide over the funds, but that has now all gone. Help is now being given from a trust fund which was created under the chairmanship of Sir John Cuckney, to whom tribute has been paid by many hon. Members tonight.
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  The fund has raised just over £6 million from outside voluntary donations. When it was established, the chairman of the National Association of Pension Funds, Brian Macmahon, said:
  "We hope that the trust fund will grow to make up most, if not all, of the eventual shortfall in the Maxwell funds."
  I am afraid that the City has not been very generous.
  The Secretary of State announced the deferral of state scheme premiums to the national insurance fund in respect of the payment of guaranteed minimum pensions for as long as he is satisfied that
  "it would not be in the best interests of scheme members to enforce payment."
  A press release claimed that that was equivalent to an interest-free loan of £100 million. However, according to outside experts, the value of that depends on whether it means postponement until after the liabilities to deferred members as well as those to existing pensioners have been met.
  If it means only deferment until the liabilities of existing pensioners have been met, it will give nothing new—certainly not £100 million. To be helpful and for it to be something more than a public relations exercise, the Minister must defer payment until the needs of the deferred pensioners have been met. As the Minister has been asked by his hon. Friend the Member for Rutland and Melton (Mr. Duncan), what is the situation? The Minister must clear this up today. If the Government's claim to have lent £100 million interest-free proves to be wrong, there is even more reason why we should question their refusal to do more to clear up the unholy mess.
  The position of the Secretary of State has been clear from the start. He claims that no Government could accept a duty to make good losses resulting from fraud or theft of savings. Ministers have added the argument that in any case, if they were to underwrite those pensions, the banks and others who hold vast sums in security against loans would be under less pressure to make settlements. These arguments understandably are rejected totally by pension scheme members. They hold the Government to be as responsible for the loss of their savings as they were for those of the Barlow Clowes investors—who, incidentally, received £160 million.
  The Government were responsible in two ways. They provided a useless system of controls and failed to implement an EC directive. On the first point, there can be no doubt that their dogmatic and doctrinaire encouragement of the self-regulation of the occupational pensions sector proved to be a disaster. Given the massive potential for fraud which Maxwell exploited, there is no justification for the self-regulation of the conduct of pension funds.
  The Securities and Investments Board report showed that the Investment Management Regulatory Organisation's involvement with the Maxwell companies both before and after Maxwell's death was woefully inadequate. The SIB has not for legal reasons published the whole IMRO report. When it does so, pensioners believe that it will establish even further the responsibility of the Government.
  The second reason for holding the Government responsible for the plight of Maxwell pensioners is their refusal to implement Community directive 80/987 of 20 October 1980, which requires, among other things, that EC member states ensure that necessary measures are taken to protect the pensions interests of ex-employees. I know that the Government will argue that they have

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  complied because there are provisions in the Insolvency Act 1986 and statutory instruments that provide for the protection of contributions to pension funds. But these do not give required statutory protection for pension benefits. In view of that neglect, the pensioners are determined to get justice from the EC if they do not get it from the Government.
  Ministers will know that the European Court has made it clear that, if the Government have not implemented the directive, the employee is entitled to damages. They will also know of the several thousand petitions that were handed to the President of the European Commission in Strasbourg in January, and that Ivy Needham has now been awarded legal aid on appeal to have her case for damages against the Government prepared for presentation to the European Court. What nonsense it is that Ivy Needham, for a pension of £52 a month, should have to expose the incompetence and callousness of the Government before she can obtain justice.
  The culpability of the Government is clear. They share with Maxwell responsibility for the disaster. Clearly, had they not been blinded by their phobia of giving protection to employees, that would not have happened. They ought now to be doing everything that they possibly can to remove the anxiety from the members of the Maxwell pension scheme and to enable them to have a secure retirement.
  The Government must make it clear during the period of recovery of the missing money that they will make resources available to cover the pensions. Their argument that the financial institutions would be less likely to pay up does not hold water. Those banks, insurance companies and other institutions would be far more likely to pay up if they were faced by trustees who were actively supported by the Government. The need for the Government to accept responsibility goes to the heart of the matter.
  I am told, however, that there are other smaller actions which the Government could take to give help to trustees. One is to reduce even further the difficulties of the trustees in obtaining information from the liquidators and others to tackle the problem of VAT payments for schemes where the company has gone into liquidation.
  I know that the reference to the Occupational Pensions Advisory Service on the Order Paper is a peg on which to hang a wider debate. However, I would not like to miss an opportunity to thank that organisation for all the work that it is doing and particularly to those volunteers who do so much good work and give so much of their time and effort.
  A reference to occupational pensions in general is also included on the Order Paper. I will not, however, repeat all that I have said previously about the need to provide security for and meet the legitimate aspirations of members of pension funds. I await the report of the Goode committee with great hopes that it will end the scandal of employers who milk pension funds for their own purposes without care for their employees and of the Government who let them do it. In the meantime, I appeal to the Government to give help to those who suffered and still suffer from the Maxwell disaster.
  7.16 pm
  The Parliamentary Under-Secretary of State for Social Security (Mr. William Hague): This has been a wide-ranging and interesting debate with some fascinating features. Foremost among them was the fear of the hon. Member for Birkenhead (Mr. Field), who opened the debate, that it might degenerate into excessive sycophancy. A non-partisan atmosphere prevailed through most of the debate, despite the attempts of my hon. Friend the Member for Havant (Mr. Willetts) to inject some acrimony into it. In the end it took the Opposition spokesman, the hon. Member for Newcastle-under-Lyme (Mrs. Golding), whom I thank for her welcome to the Front Bench, to bring some real acrimony into the debate.
  Hon. Members on both sides of the House may think on reflection that to allege that the Government share with Robert Maxwell the responsibility for the problems of Maxwell pensioners is an allegation too far. It is certainly one that I wish to reject at the outset. The debate has also been interesting because some hon. Members have spoken up strongly on behalf of their constituents. I respect them for doing so.
  Some called on the Government not to do certain things as well as to do certain things. One or two called on the Government to adopt a certain policy but not to say so —a requirement that presents particular challenges for me in making a response from the Front Bench. But I shall do my best in the time available to respond to some of the points that have been made.
  The debate has highlighted some difficult issues and several aspects of occupational pension provision in which many right hon. and hon. Members believe that there is a case for changing the law. Not surprisingly, much comment has focused on the position of the Maxwell pension schemes, and I shall dwell on the Maxwell affair in some detail in a moment.
  It is worth remembering that the debate also takes place against the background of greatly expanded pension provision in Britain in recent years. The growth of occupational pension schemes has been of huge importance in lifting the living standards of the average pensioner well above the levels in the 1960s or 1970s.
  That is why the questions raised in the debate tonight are so important and why issues surrounding the future of occupational pension schemes—whether it be the equalisation of benefits for men and women, freedom of choice in pension provision, or the framework of regulation and law within which pension schemes operate —deserve detailed and careful consideration.
  The Government have clear objectives for the future of pension provision. They include encouraging individual responsibility and enabling the working population to make adequate financial provision for retirement; encouraging freedom of choice between alternative forms of pension provision; ensuring equality between men and women following the decision of the European Court of Justice in the Barber case; and improving the security of pension rights in response to the widespread and wholly understandable public concern in the wake of the Maxwell affair.
  Before I deal with what should be done in future, I remind the House that in recent years we have taken some significant steps in the direction of achieving the objectives that I have outlined. We have given individuals the right to opt out of their employer's occupational pension scheme,

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  to make voluntary contributions to improve their pension provision and to contract out of SERPS into an appropriate personal pension.
  The hon. Member for Newport, West (Mr. Flynn), who sadly is not with us for the moment, criticised the history of personal pensions. I draw the hon. Gentleman's attention and that of the House to a leaflet, entitled "Thinking about a Personal Pension", which was launched by my right hon. Friend the Secretary of State a couple of weeks ago. It was widely unpublicised despite the best efforts of the Department of Social Security. However, for all those contemplating a personal pension, it is well worth reading.
  Millions of people have used the opportunity presented by personal pensions to enhance their pension provision in a way that they could not have done before. In addition, we have tried to ensure that individuals can make a more informed choice about their pension provision.
  We may have further to go, but we have introduced regulations which place a statutory obligation on schemes to provide greater disclosure of information and there are more controls to provide for secure pension provision. Since 1990, employers have been unable to take taxable refunds from scheme surpluses if they have not first guaranteed pension increases in line with prices up to a maximum of 5 per cent. a year.
  Regulations now restrict to 5 per cent. the amount that pension schemes can invest in associated or connected companies and individuals can now obtain more help if they are dissatisfied with their pension provider. I join the hon. Member for Newcastle-under-Lyme in paying tribute to the work of the occupational pensions advisory service, which represents extremely good value for money for the grant in aid that it receives from the Government. It has now been given secure financial backing and the first pensions ombudsman was appointed in April 1991 to provide an independent avenue of redress for people who have suffered injustice at the hands of their pension schemes.
  The pensions registry has been set up to help scheme members trace past pension rights. The schemes must pay a levy which pays for the register and for consumer protection measures like the ombudsman. Considerable progress has been made on these issues, but I recognise that the principal concern expressed by all hon. Members has been the Maxwell affair and its aftermath.
  The Government welcome the Social Security Select Committee's continuing interest in the recovery of the Maxwell pension schemes' assets. We share its concerns over the plight of the pensioners and the need for the recovery process to move rapidly towards a conclusion. I understand the anxiety that Maxwell pensioners suffer thinking about the uncertainty of payments in future. The hon. Member for Morley and Leeds, South (Mr. Gunnell) referred to that anxiety. It is a considerable tribute to the hon. Gentleman's constituent Ivy Needham that, although I have not yet met her, her name is very familiar to me after only a few weeks in office.
  The hon. Member for Morley and Leeds, South asked whether I would be prepared to meet Ivy Needham and other Maxwell pensioners in Leeds. In a way, that will save me writing a letter, as I was about to write to Ivy Needham to tell her that I would be very happy to meet her arid her colleagues in Leeds. They are allowed to shout at me as much as they like, because I understand how strongly they feel about these matters.
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  The Government's response to the legacy of chaos left behind by Robert Maxwell has helped to facilitate considerable progress. We do not want—and have not tried—to give the impression that the problem has been solved. The hon. Member for Newcastle-under-Lyme referred to that impression. The problem has not been solved. However, the initiatives that we have taken have ensured that pensions continue to be paid while work continues to recover the missing pension scheme assets.
  Last summer, we made available £2·5 million in funding, which the hon. Member for Birkenhead rightly insisted on calling taxpayers' money. I only wish that he could sometimes make those on the Opposition Front Bench as conscious as he is that Government money is taxpayers' money. We provided that emergency funding last year to help pension schemes pay pensions.
  That role has now been taken on by the Maxwell pensioners trust which we set up under the chairmanship of Sir John Cuckney. The trust has raised more than £6·3 million—enough money to pay pensions for another three years. We have therefore created a substantial breathing space for the pension schemes to make further asset recoveries and to pursue such other claims for damages or against employers as the trustees and liquidators think fit.
  Last October, my right hon. Friend the Secretary of State announced a further important measure to help the Maxwell pension schemes when he agreed to use his discretion to defer the collection of state scheme premiums. It may be helpful if I say a few words about that, because several hon. Members, including the hon. Member for Morley and Leeds, South and my hon. Friend the Member for Aylesbury (Mr. Lidington), have raised that point.
  Currently, three of the Maxwell pension schemes, representing two thirds of all pension scheme members affected by Maxwell, have contracted back into the state earnings-related pension scheme. Currently some £2·7 million of annual pension entitlements of those scheme members are being met through SERPS. Those sums will increase as more pensioners reach pension age.
  My right hon. Friend the Secretary of State has exercised his discretion to postpone collection of the state scheme premiums that would normally be payable and which, for those three schemes, amount to some £100 million. That is important additional assistance to rebuilding the Maxwell schemes, particularly in the shorter term. As long as my right hon. Friend is satisfied that it would not be in the interests of scheme members to enforce payment, he can choose not to do so, but it would be quite wrong, and a considerable mistake on the Government's part, to give general guarantees or blanket assurances.
  I would not want scheme trustees to think that they can relax their efforts to achieve anything less than the maximum possible restoration of their assets. We will continue to discuss the exercise of that discretion with scheme trustees on a scheme-by-scheme basis. However, we have no intention of enforcing the payment of state scheme premiums automatically when a scheme has covered its liabilities for pensions in payment.
  As a result of the Government's initiative, the pension scheme trustees and the liquidators have not been left to untangle the web of confusion woven by Robert Maxwell alone. They have at their disposal the considerable services of Sir John Cuckney. Many hon. Members have referred to his outstanding work, and they were right to do so. He and the Maxwell pensions unit continue to encourage

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  informal methods of dispute resolution, such as mediation, rather than lengthy and costly legal action in the courts. The Maxwell pensions unit continues to be available to assist the pension scheme trustees and the liquidators and administrators in any way it can.
  Hon. Members have complimented civil servants on their good work in managing the Maxwell pensions unit. I can reassure those who raised the matter that the return to his native Department—as one hon. Member put it—of the civil servant heading the unit does not imply that the unit is ceasing its work. I expect its work to continue for some time. It is in very capable hands. The civil servant in question has become one of the trustees of the Maxwell pensioners trust and he will continue his work in that way.
  Over the 18 months that have elapsed since Robert Maxwell died, I am well aware that the long-term position of some of the pension scheme members remains uncertain. However, we have made visible progress. The Headington pension plan, for example, which was unable to make any pension payments, has been able to resume paying 75 per cent. of its pensions. The remaining 25 per cent. continues to be provided by the Maxwell pensioners trust. For the longer term, the pension scheme trustees recently told the Select Committee that they were now guardedly optimistic about meeting their pension liabilities in full.
  The Select Committee expressed concern in its report on the length of time that was being taken to release funds to the pension schemes from the common investment fund. Sir John and the MPU have given active encouragement to the trustees and liquidators who have recently been able to agree each scheme's minimum share of the £173 million currently held in the common investment fund. The minimum shares in total add up to 80 per cent. of the fund leaving only 20 per cent. in question.
  That has enabled an initial advance of some 16 million to be made to the pension schemes and it has provided the first step in the solution to this problem. I hope that agreement will soon be reached on resolving the remaining issues. That will enable a full allocation of the common investment fund to be made and will clarify the long-term asset position of the schemes.
  Some hon. Members referred to the gap and wanted to know what will happen when the extent of the gap is clarified. However, it is still too early to say what the gap will be. A substantial amount of work remains to be done. The Maxwell empire kept appalling records of what had happened to different transactions; they wove a very complex web.
  I join the chairman of the SIB, who appeared before the Select Committee yesterday, in urging City institutions to resolve speedily disputes over pension scheme assets. I hope that all parties involved will work constructively with the trustees and the liquidators over the next few months to secure a speedy resolution of all these complex claims.
  Mr. Frank Field: Would the Under-Secretary support the SIB if it paid over the fines of City institutions to the Maxwell pension fund?
  Mr. Hague: All that I am prepared to say for the purpose of this debate is that I very much support what the hon. Gentleman said about urging everyone to come to a resolution as speedily as possible. For tonight, I must leave
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  it at that. I know that other hon. Members wish to intervene and I do not wish to take too many minutes of the time that hon. Members are hoping to spend on education matters.
  Clearly, there is much work still to be done before the pensioners' distress and anxiety can be relieved. The Government will continue to support Sir John Cuckney in his efforts to bring a speedy conclusion to this affair.
  The Maxwell saga has contributed to the raising of wider issues about the regulation of pension funds, many of which have been touched on in this debate. The Goode committee is continuing its review of the framework of law and regulation within which occupational pension schemes operate. The Government look forward, as I am sure does the rest of the country, to receiving that report towards the end of September.
  Some hon. Members, including my hon. Friends the Members for Sevenoaks (Mr. Wolfson) and for Hertfordshire, South-West (Mr. Page), put strong views about what should happen after that. It would be wrong of me to second-guess that committee's recommendations or to comment on proposals that might pre-empt the committee's careful consideration of these important and complex issues, but the Government look forward to receiving and studying the report and hearing the comments of right hon. and hon. Members on both sides of the House on its recommendations.
  Within the lifetime of this Parliament, the Government and the House will need to take a number of decisions about different aspects of occupational pensions. Taken together, they will have far-reaching implications for tomorrow's work force, for future pensioners and for society as a whole, as we grapple with the consequences of demographic change. No doubt the Select Committee will play its part in helping us to cope with the intricacies of these decisions.
  There are many things that we need to do. We must legislate for equal state pension ages for men and women. Once the European Court of Justice's decision in the Coloroll case is available, we will need to address the implications for occupational pension schemes and take account of the consequences for contracting-out arrangements.
  Meanwhile, we are committed to ensuring that personal pensions remain attractive across the age range, and we are considering a structure of age-related rebates to achieve this. We also want to take into account recent work on the treatment of pension rights on divorce—a very important subject in its own right.
  We shall be seeking to bring about a framework for occupational pensions which is stable, while allowing pension vehicles of various types to develop and flourish; which is secure, in order to give people confidence, whatever type of pension provision they make: and which is fair to employers, employees, pensioners and deferred pensioners.
  This has been a constructive, though short, debate and has been helpful in setting the scene and identifying some of the issues. We are all indebted to the hon. Member for Birkenhead and the other members of the Select Committee for the careful attention that they have paid to pensions issues in recent months, and for providing the opportunity for this debate.
  The debate was concluded, and the Question necessary to dispose of the proceedings was deferred, pursuant to paragraph (4) of Standing Order No. 52 (Consideration of estimates).

ESTIMATES AND SUPPLEMENTARY ESTIMATES, 1993–94
  Class VII, Vote 8

    Education Spending
    [Relevant documents: First Report from the Education Committee of Session 1992–93 on The Department for Education's Expenditure Plans 1992–93 to 1994–95 (House of Commons Paper No. 305) and the Government Response thereto (House of Commons Paper No. 695); Report of the Department for Education and Office for Standards in Education: The Government's Expenditure Plans 1993–94 to 1995–96 (Cm. 2210)]
    Motion made, and Question proposed.
    That a further sum, not exceeding £15,520,183,000, be granted to Her Majesty out of the Consolidated Fund to defray the charges that will come in course of payment during the year ending on 31st March 1994 for expenditure by the Department of the Environment on revenue support grant, on residual payments of rate support grants, on payment of non-domestic rates to receiving authorities in England, on a grant providing support to certain receiving authorities affected by changes in the calculations underlying revenue support grant as a result of population change, on a grant providing transitional support for certain local authorities, on a grant to compensate 75 per cent. of the expenditure incurred by them on preparation work for the council tax, on payments to specified bodies and the Commission for Local Administration in England, on payments for Valuation Office Agency rating and valuation services, on payments to meet the expenses of valuation tribunals, and on payments in respect of expenditure by the Local Government Commission.—[Mr. Forth.]
    7.35 pm
    Sir Malcolm Thornton: This, of course, is a notable first for the Education Select Committee in so far as we have been able to secure our share of what is by any definition a very short period of debating time for two important subjects—the one about social security and now the one about education. I would like to see all Select Committee reports given time to be debated on the Floor of the House, so that the House would have the opportunity of sharing with the members of the Select Committees some of the evidence that they have received and the conclusions that they have drawn from that evidence.
    I am particularly pleased to see my right hon. Friend the Secretary of State for Education on the Front Bench. With his customary courtesy, he dropped me a line to say that he had been able to rearrange an engagement for this evening as he was particularly anxious to share in what he, too, recognises as a notable first. I thank him for giving up what is, after all, a very precious Thursday evening when he could be elsewhere. I also thank my hon. Friend the Under-Secretary, who, I understand, will be contributing to the debate a little later.
    Our report, which was published on 11 February 1993, followed the progression of reports which this Committee and its predecessor Committees made on Department for Education, formerly Department of Education and Science, expenditure. It follows, therefore, a pattern that
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    has been established over the years, in which we have sought to do a number of things. Perhaps the most important has been to try to improve the presentation of the figures so that they can be more readily understood by more people.
    As we discovered in our recent deliberations with the officials of the DFE, there is considerable difficulty in finding one's way through the tables of figures and the statistics which make up the running of a very intricate and complicated Department. I believe that my colleagues would wish me to pay tribute to the Department for the fact that improvements have been made in the presentation of the information. However, to use a term that we all know well, there is still room for improvement, and we hope to see continuing improvement in the future.
    I want to draw attention to three points which arise from our report and which I believe are worthy of attention.
    The first relates to plans. Although the total of local authority expenditure, nearly half of which goes on education, is now planned and controlled by the Government, the Department publishes no plans for spending by local authorities. We have recommended that the least that should happen is the breaking down of the total into sub-blocks—under-fives, primary, secondary, post-16, and other—and that we should be able to look at the outturn and spending for the coming year, which should be presented in terms of these blocks.
    We also stress the point of accountability. This was a matter that exercised the Committee quite considerably. It is vital for people at every level, whether they be school governors, parents, local councillors, Members of Parliament or whatever, to be able to identify quite clearly who is responsible for the various elements of expenditure within our education system.
    Questions have been presented to successive Secretaries of State on this subject which have left the Committee still unwilling to accept that this vacuum of accountability should be allowed to continue. The Committee is saying that there should be greater accountability and that efforts should he made to find out exactly who is responsible for what.
    As a former local authority man, I can understand the difficulties as regards what comes from the centre and is hypothecated by statute, or whatever, and what is delegated to the rim, as it were, in terms of the local authority, and now, with the changed legislation, is delegated to yet another rim, the schools. I know that my hon. Friends who have been members of local authorities will share my view that there is a vacuum. We all know that it is exploited by hon. Members on both sides of the House, as they can point the finger at someone else.
    In the crucial area of education spending, it is important that we should have direct accountability and the ability to ask those who make the decisions and are responsible for them some questions about the whys and wherefores. I hope that the Department will examine that issue so that we can anticipate some improvements next year.
    The Committee experienced some difficulties with the statistics in the report and we have considerable sympathy with the Department. The collation of the returns from local authorities is quite unacceptably bad. The fact that, some eight months after the turn of the financial year, we have fewer than 50 per cent. of the returns is not acceptable by any standards. If Parliament—and that means the

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    Select Committee—is to scrutinise the figures in any sensible way, we must improve the way in which the information is collected. That would allow us to look more critically at the outturn of education spending and examine accountability in a more sensible and meaningful way.
    Another point in our report concerns the amount of capital expenditure on grant-maintained schools. We concluded that there was certainly an imbalance as emphasis had been placed on capital expenditure for grant-maintained schools, and my right hon. Friend the Secretary of State said clearly that it was a matter of policy.
    Although I accept that there are other means available to local authorities, such as the use of capital receipts being transferred from one area of expenditure to another, the constraints under which the vast majority of local authorities operate are such that, in reality, that option is seldom possible or available to them.
    We are concerned about the disparity of funding as the gap is shown to widen over the next few years. That is unsupportable, given the state of repair of many of our schools—an issue which the Select Committee has considered for many years and which must be addressed.
    The principle of grant-maintained schools is very much part of the Government's policy, but in order to have fairness we should ensure that state schools—the local education authority maintained schools—are at least given the same opportunities.
    I ask my right hon. Friend to look critically at whether the expectation that the money will be there is to be realised. There was a distinct feeling among members of the Committee that the belief that that would happen was a triumph of hope over expectation.
    I shall now make one of two wider remarks. I recognise that we are short of time and other hon. Members wish to contribute to the debate. The debate is essentially about the estimates, and we spend vast sums of money on education. Therefore, any comments which affect education and the way in which money is spent must be valid.
    In recent months, we have seen problems right across the educational spectrum; problems arising from the main principles of the Government's legislation, the national curriculum and the issues that flow from it. I have said on many occasions and reiterate tonight that those principles are absolutely right. However, I find it inconceivable that, so many years after I believed the debate about the principles of a national curriculum, the principles of rigour, the principles of testing and assessment to be over, that debate still continues.
    I believe that there is evidence of widespread support in schools for the principle of the national curriculum and that the excitement about the entitlement of every child in the country to a certain basic level of education can be taken as read.
    Few people who work in education and in schools would dispute the need for rigour in the system and some means of testing and assessing. Those words assume different meanings for different people. Perhaps we all go back to our own childhood too often and try to relate to a world which, if it ever existed, is more in people's imagination than in reality.
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    Deficiencies have occurred in the detail and the implementation. I have said that putting legislation on the statute book is to some extent the easier part of the exercise. What is vital is how that change is managed and implemented. We have seen some polarisation in the implementation of the reforms which can be described only as unfortunate.
    It cannot work without partnership—the partnership that we all recognise to be vital between school and home and the equally essential partnership that I believe also to be vital between the Government and schools and those who work in education. We have to do everything in our power to ensure that the polarisation that has taken place is reversed and we must bring people together to talk about the implementation.
    A great deal is said about the Dearing review, which I believe is broadly welcomed. We await with great interest Sir Ron Dearing's recommendations. I believe that he is taking evidence from anyone who cares to give it, as well as seeking advice from various groups. At this stage, I have no reservations about the opportunities for people to contribute to that review.
    Sir Ron Dearing has shown himself to be a man of independent thought, and I know that my right hon. Friend the Secretary of State asked him to address four specific questions. I hope that the Dearing review presents more than just an opportunity to look at how the system is working; it should give everyone an opportunity to take one step backwards from the current confrontation.
    I hope that my right hon. Friend will acknowledge that, while there is clearly a short-term problem that has to be examined by Sir Ron Dearing, there are other problems which perhaps need medium and longer term solutions. If Sir Ron Dearing does the first part of his job as well as I hope he will—indeed, he must if we are to make progress in this debate—there will be other matters he can address also by continuing the vital consultation processes.
    As far as the reforms are concerned, we should see a continuous process of fine tuning and improvement. Above all else, the acid test has to be practicality. Will it work and, if it works, will it deliver what we want?
    The Secretary of State for Education (Mr. John Patten): I am listening with care to my hon. Friend's remarks. He will be aware that, as chairman of the School Curriculum and Assessment Authority, Sir Ron Dearing will, for the term of his office, have a continuing role in reviewing precisely the subjects to which my hon. Friend refers.
    Sir Malcolm Thornton: I am aware of that, and I am grateful to my right hon. Friend for confirming the point. Seeing Sir Ron as an independent figure—as a bridge over which people can walk to transfer views from one side to the other—is critical. It is also important for my right hon. Friend to realise that if Sir Ron is to do his job, he must continue to show, as he has shown so far, his independence.
    It is always open to Government to accept or reject advice. While that is right, so long as we can be sure that the advice is objective—I have in the past said that I have not always been sure that it has been objective—at least we shall know that the people concerned, about whom I have spoken, have had an opportunity to contribute.
    If we are really serious about having a mass, high level system of education, we must recognise that the changes implemented over the years have been vital. But I make no

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    apology for reiterating my earlier point: that that cannot be achieved without co-operation. Secretaries of State have the right—I defend my right hon. Friend's right in the matter, just as I defended the right of a predecessor of his, Baroness Williams of Crosby—to put forward policies, and we and others have the right to challenge them. But once those policies have been put forward and the principles decided, it behoves everyone to try to make them work.
    The Secretary of State must lead from the front in that exercise. He knows better than anyone that the polarisation that has existed for some time must be undone. We trust the Dearing review will produce sensible proposals. I hope that everybody—including people in the trade unions who have perhaps used the present situation to exaggerate matters and undermine some of the basic principles to which I referred, about which I thought there had been agreement years ago but which have been dragged back into the arena—is serious about wanting to achieve what we all wish to achieve. If so, we must take a step backwards so that we may take several steps forward to meet each other.
    Too many people are adopting preconceived ideas about the reforms which most people agree are absolutely necessary. Teachers, Ministers, trade unionists and everybody else accept that only one group of people matters—not teachers or Ministers, but the children in our schools for whom the education system exists. If we can remember that, we shall make progress, and in doing so we shall achieve what everybody, inside and outside education, wants—a systematic and controlled improvement in an education system that must serve Britain into the middle of the next century.
    7.53 pm
    Mr. David Jamieson: The debate is helping to highlight the difference of view across the Floor of the House. Education is described in the document in the language of management, finance, systems and constant tinkering. In contrast, my hon. Friend and I see education not just as a means of enhancing individuals' life changes but as an investment for society at large.
    That is why we would have liked to see in the document a reference to spending on nursery education, because that would be giving the best possible start to all children. We want children to be taught by the best and most highly qualified teachers. We reject totally the notion of a mum's army. We want high-quality teachers and high-quality teaching, and we want people with the qualifications to bring that about.
    We contrast that with the spectre of the profession now, laden with bureaucracy. I shall concentrate my remarks on the need for the accountability of funds in the system of schooling. After all, we ate told in the document that next year nearly £l 7 billion of taxpayers' money will be spent on the education system. We want that money to be clearly accountable to the taxpayer in the proper manner. Even the document says that local authorities should be accountable to their electorates. We do not disagree with that.
    We believe that if a local education authority can be voted in to do a job, people locally should also have the power to vote an LEA out, if that is what they want. To have effective accountability of the substantial sums of
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    taxpayers' money about which we are speaking, it must be as near to the people as possible, and particularly near those who pay the taxes and receive the services. It is unquestionable that over the years LEAs have served us well, but unfortunately they are now being blamed for many of the supposed ills of the education system.
    The Government have created a need for change in the funding arrangements, with policies for opting out, by creating grant-maintained schools. I shall not tonight argue the principle of GM schools, although we have not seen the predicted avalanche. The policy is now progressing at a snail's pace, despite the cajoling that has occurred and the bribes that have been given.
    To fund the GM schools we need a funding agency, Which is yet another quango to be added to the long list of quangos. In recent years, the Conservatives have found a new enthusiasm for quangos that was not shared by former Governments. For example, Baroness Thatcher, when Prime Minister, said in answer to a parliamentary question in 1980:
    "We shall hope to make more progress in the future by reducing further the number of quangos".—[Official Report, 4 December 1980; Vol. 995, c. 424.]
    A few months later, the same Prime Minister, when again asked about quangos, said:
    "We were able to announce yesterday a further reduction of 140 or so in the quangos. That is very good news".—[Official Report, 19 May 1981; Vol. 4, c. 151.]
    Yet today, in the post-Thatcher renaissance era of Conservatism, the greatest growth industry in Britain is quangos. Who are the unelected, independent-minded people who are free from party politics and who sit on quangos?
    Mr. Don Foster: Is the hon. Gentleman aware that, according to latest estimates, quangos are now assumed to be responsible for one fifth of all public expenditure?
    Mr. Jamieson: I was aware of that and I am grateful to the hon. Gentleman for pointing it out. This week, a question was tabled asking about the representatives on the Further Education Funding Council and about their political affiliations. I gather that two members of that body, a Mr. Bennett and a Mr. Fallon, were both Tory Members until 1992. Mr. Bennett is described by Roth in Parliamentary Profiles as a
    "hard-Right Thatcherite educator".
    When the Tories fail at the ballot box in local elections, they then denigrate and undermine the work of councils. To regain local control, they dispose of the democratic institutions and replace them with quangos run by Tory placemen—in this case, failed Tory politicians. It is the new philosophy. If the Tories cannot gain the confidence of the people, they go through the back door and exercise control through quangos. Those quangos, freed from democratically accountable, meddling councillors, develop rather as the Welsh Development Agency has done.
    Of course, I hope that organisations will not develop that way because a report from the Public Accounts Committee published today claims that the WDA is run like a private fiefdom. Is that what we are to expect of the funding agency, which is charged with spending £17 billion of taxpayers' money? Will it be run as a private fiefdom for the benefit of those who serve on it, paying consultancy fees for a study into the possibility of privatising itself, with massive golden handshakes to its former members?
    The Parliamentary Under-Secretary of State for Schools (Mr. Eric Forth): Do I assume that, because the hon. Gentleman says that the funding agency is responsible for a £17 billion spend, he anticipates that all schools will shortly vote to become grant-maintained?
    Mr. Jamieson: That is the Minister's aspiration, not mine. Whether the figure is £1 billion or £17 billion, that is the hon. Gentleman's aspiration, not Labour's aspiration. We do not want any grant-maintained schools. Instead of a funding agency, we want councils to run their own systems, accounting for their own money, in the extremely good and democratic way that they have done that for many years.
    In Committee on the Education Bill, it became clear that the funding agency would meet in private. The public, whether they be parents, governors or other interested parties, cannot attend its meetings. It will be unsullied by public scrutiny, faithfully performing the will of its political masters in Sanctuary house. How appropriately named is that building.
    Much of the new legislation during recent years has resulted in a massive growth of bureaucracy, both in the classroom and in other aspects of school life. I have been a supporter of local management of schools for many years. Long before the Government introduced that, I felt that it would be a good system for running schools. It is a way of making better-quality decisions in schools, and where the system is running successfully that is happening.
    Local autonomy is very valuable, but we must accept that it does not necessarily lead to a reduction in bureaucracy and overall administration. The theory is that local management of schools moves administration from local education authorities to the schools; the myth is that the overall amount of bureaucracy and administration is therefore reduced. The sacrifice is in the economies of scale that cannot be achieved.
    Page 14 of the recent Audit Commission report states:
    "A number of schools increased administrators' hours quite sharply as they took over their budgets."
    Local management of schools has caused more duplication and administration. That is inevitable. In many cases, it is due to inexperience, so I accept that over the years there may be an improvement. The system was introduced too hurriedly, and there was too little training. Where is the evidence that the increase in administration in schools is matched by a reduction in the LEAs?
    In so many areas of policy, we are sailing into uncharted waters and are unclear about where responsibilities lie. We had an example of that at a meeting of the Education Select Committee only a few weeks ago. Senior officials from the Department for Education were asked a simple question: what was the difference between an authority in which 74 per cent. of schools had opted out and an authority in which 76 per cent. of schools had opted out? The answer was:
    "I think it might be wise if we offered a note on that question …we are at the edge of our expertise here, I think."
    [Interruption.] The Minister laughs. If he does not think that he is at the edge of his expertise, I hope that he will instruct some of his civil servants so that they can understand how the system will work.
    It was made clear at that Select Committee meeting that even his senior civil servants did not know how the system would work. I look forward to the Minister giving us the answer that his senior civil servants could not. If senior officials from the Department for Education do not
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    understand how the system will work, how can we expect local education authorities, governors, head teachers and parents to understand?
    At that same meeting, it also became clear that the financing of the bureaucracy and administration of the funding agency would come out of the aggregate school budget, not out of that part designated for grant-maintained schools. Therefore, it will be a burden on all schools, both LEA and grant-maintained.
    If the Government get their wish—which I doubt they will—pursue their policies and more schools become grant maintained, I fear that much of the £17 billion funding intended to be spent on our education system next year will fall into the hands of an unaccountable body. The education system needs clear, unequivocal lines of responsibility. With the way that things are going, we will not achieve that.
    8.7 pm
    Sir Paul Beresford: Our debate began on the right lines by looking at accountability. The different notions of accountability are interesting. For many of us who are parents of school-age children in London, especially in inner London, some of the points made tonight about accountability will cause a wry smile. As many people are aware, until recently education in inner London was under the control of the Labour-controlled Inner London education authority.
    That notorious authority had the biggest expenditure in the country per child, per teacher, per school, per anything we can imagine. Coupled with that, it consistently had one of the worst results in the country for GCSE and A-levels. Year in, year out, it had the highest expenditure and the second or third worst results in the country. Many of us saw that as a case of Labour local government playing progressive education with our children's future and using other people's money to do it. There was little or no real accountability.
    Spread across inner London were neighbourhood mixed-ability comprehensives, the best of which were bad and the worst indescribable. There was no diversity and no choice. We had to take our children to the neighbourhood school whether or not we liked it. There was no competition between schools or within schools. To hear an ILEA primary school teacher complaining that even on sports day no child was allowed to come first in the egg-and-spoon race was a classic example of ILEA's attitude.
    To cover those appalling results, ILEA decided to massage them and to introduce "disadvantage factors", to push that high-spending authority a little higher up the league. That meant nothing to the parents, when they thought about it—and even less to potential employers, who want to know about a youth's educational achievements, not about his or her environmental disadvantages.
    Until ILEA disappeared, there was no real feel about individual schools, no results, and no choice except to opt out completely. That happened in one instance. In division 10, around 46 per cent. of secondary school children who should have been in those schools opted out. Twice the national average attended independent schools. They stayed away in droves. Many others stayed away by truancy.

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    Many outer-London areas—including my own of Croydon, which borders Lambeth—viewed accountability differently. They introduced variety with Church, comprehensive and independent schools and, recently, two city technology colleges. They pioneered standardised testing years ago and published results. That helps with accountability to parents, who can then choose the school that they wish. It involved not only accountability but limited competition, which tended to force up standards.
    The demand for nursery education was also recognised and the number of places in Croydon is increasing from 600 to 1,800 next year. We anticipate that demand will be completely met very shortly. That will be done without any bleating for extra Government money.
    With the division of ILEA, different boroughs took different approaches. Lambeth and Southwark continued as before—using ILEA methods, achieving ILEA results, and incurring massive expenditure. Division 10, however, took a hint from Croydon and introduced variety and choice, published results and created competition. There is no geographical tie, but a range of comprehensive, Church and magnet schools, independent schools with assisted places, and CTCs.
    In that way, in just three years the 46 per cent. opt-out rate has fallen to 27 per cent., not including the CTCs; truancy is down; and every three or four-year-old child in division 10, in Wandsworth, is offered free nursery education. The budget has been cut by £20 million in real terms, to produce a better service. Schools are competing and results are improving.
    In just three years, the number of children with no GCSE passes has fallen to one in 10, from one in five at the tail end of ILEA. The number of children gaining one or more GCSE passes at grade A to C has increased from 50 per cent. to 60 per cent. and the number achieving five GCSE passes at grade A to C has risen from 17 per cent. under ILEA to 27 per cent. Those results are not good, but they are a lot better than under Labour-controlled 1LEA's unaccountable approach.
    The United Kingdom is already spending more per pupil than Germany or Japan, but to produce poorer results. It is a question not of how much is spent but of the way in which it is spent, and of the abuse that we see in Labour-controlled inner London. The answer must be to take a leaf out of a book of the hon. Member for Plymouth, Devonport (Mr. Jamieson) and go for accountability.
    There needs to be more variety and choice and schools must be encouraged to become grant-maintained. If they do, and we can move expenditure in such a way that those schools have revenue for capital plus revenue, they will be able to reverse the situation. I hope that there will be an opportunity soon to do that in such a way that we will be funding children, not schools, and that schools will be answerable to parents and children. We would then have real accountability.
    8.14 pm
    Mr. Don Foster: I congratulate the Chairman and members of the Select Committee on their excellent report, which primarily concerns state funding. The House may he interested to know that a predecessor of mine as Member of Parliament for Bath, Mr. A. J. Roebuck, was the first Member of Parliament to suggest, in 1884, state
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    funding of education. It took him 18 months to persuade the House to agree, but it did so eventually, and provided a sum of money somewhat smaller than that spent on maintaining the royal carriages.
    I suppose one could argue that from small acorns great oak trees grow. However, if Mr. Roebuck were able to return to the House today, I suspect that he would be very disappointed in state education. The great oak tree is beginning to lose a number of its branches through neglect and the increasing onslaught of Conservative policies.
    The hon. Member for Croydon, South (Sir P. Beresford) hit the nail on the head when he spoke about competition. Many Opposition Members fear that Conservative preoccupation with competition is creating much of the strife within the education service and believe that the co-operation and partnership that has been such an important feature since the Education Act 1944 must be re-established.
    The strife is such that many people wonder why the Secretary of State for Education kept his job in the mini-reshuffle while the Chancellor of the Exchequer lost his. Bearing in mind the fact that I defeated Mr. Christopher Patten in the general election, I explain it by paraphrasing Oscar Wilde's Lady Bracknell—to lose one Patten may be unfortunate, but to lose two looks like carelessness—[Interruption.] I am glad that Conservative Members liked that.
    The Chairman of the Select Committee touched on another matter of concern to many of usthe need for much clearer information on which to base such debates. I am sure that that view is held by right hon. and hon. Members in all parts of the House. It is possible to interpret the report's figures in many different ways. They have been used by Conservative Members to argue that expenditure per pupil has increased since 1979 by more than 40 per cent. Equally, the same figures can be interpreted—taking into account not ordinary levels of inflation but educational levels—as meaning that expenditure has increased by only 21 per cent.
    Furthermore, if one accepts that most costs are fixed or fairly fixed and do not vary significantly with a decline in pupil numbers, one can claim that, although expenditure per pupil has increased, additional expenditure since 1979 is, in real terms, only 2 per cent. higher. A more detailed inspection of those figures shows that the real-terms expenditure per pupil on secondary education has declined by 2 per cent. If we look at the funding in respect of further or higher education students, we can demonstrate a decline of 22 per cent. per student over that period.
    I am making the point not in order to start a debate between both sides of the House as to who is right and who is wrong, but merely to agree with the Chairman of the Select Committee that it is important to provide accurate statistics, and accurate interpretations of those statistics, with which we can all agree.
    Dr. Robert Spink: While the hon. Gentleman is talking about statistics, will he acknowledge not only that spending per pupil has risen by 45 per cent. since 1979, but that books and equipment are very important? Spending on books and equipment since 1979 has risen by 31 per cent. Both are real-terms increases and should be welcomed.
    Mr. Foster: The hon. Gentleman has made my point for me. It is possible for all of us to select from the mass of

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    statistics in the way that he has. However, he has not contradicted the figures that I quoted—for example, that there has been a decline of some 22 per cent. in the expenditure on higher or further education students. We could spend a lifetime bandying statistics across the Chamber, but that would be of no great benefit to anyone.
    What is more important is that we look at some of the specific areas of spending highlighted by the report. Much play is made in the report about expenditure on grant-maintained schools, one of the major planks of Government education policy. Very clearly stated in the report is the disparity between capital expenditure on grant-maintained schools and that on local education authority-maintained schools.
    What the report did not make reference to—because the information did not come to light until recently, but was in respect of the years considered by the report—was the double funding of many grant-maintained schools. That meant that many grant-maintained schools were not only getting increased money because of the greater devolution by the LEA to individual schools, but already getting an increased element in their assisted maintenance grant.
    Approximately 32 grant-maintained schools have received sums in excess of £100,000 per annum more than they would reasonably expect to receive because of that double funding. That, and double funding at lower levels, has meant that some 32 local education authorities have lost sums of money to those grant-maintained schools in excess of £250,000 each. In each of those local education authorities, there are many schools in desperate need of that money being spent on them and, more importantly, on their pupils.
    Accountability has been mentioned. The Chairman of the Select Committee, the hon. Member for Crosby (Sir M. Thornton), mentioned the difficulty of determining accountability for the different parts of the education budget. To be fair, the Department's response refers to its understanding of the Committee's frustration with the multi-layered nature of accountability.
    I agree with the Committee that there is a need for a separate inquiry into the matter. It may surprise the Minister that I also agree with him about the need to devolve more and more responsibility to individual schools. However, I would go further and say "within a local democratically accountable strategic planning framework". But we agree that there is a need to devolve more and more power to given schools.
    It is vital that we look carefully at the accountability of those responsible for making decisions within individual schools. I do not believe that that accountability can rely on governors' meetings—which can be, and often are, held in private—and on the annual governors' report that is very often presented to an empty school hall.
    I hope that the Minister will say whether he would be willing to find ways of opening up the accountability of the governing body. Will he consider asking the Office of Standards in Education to look at the governors' annual reports in addition to their four-yearly inspections of the schools?
    There are many other matters that we could address in this debate, but I shall not because many other hon. Members wish to speak.
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    It is not clear from the breakdown of the figures presented in the report precisely how the different tranches of money have been split up. We do not know what sums have been set aside for the implementation of the national curriculum in our schools. One thing is certain: a number of reports and studies have been undertaken to look at the true costs. Coopers and Lybrand has carried out detailed studies in this regard, and the figures that it has come up with demonstrate that sums well in excess of what is currently available will be needed for the overcrowded and over-prescriptive national curriculum to be successfully followed in both primary and secondary schools.
    Has the Minister studied the figure that Coopers and Lybrand has produced? Does he agree with those figures? If not, what alternative figures is he prepared to make available to us?
    Reference has been made to the absence in the budget of any significant sums for infant and nursery education. Many hon. Members—particularly Opposition Members —are concerned that there seems to be no real willingness by the Government to provide the significant boost to high-quality early-years education that is desperately needed.
    Many hon. Members and people outside will be aware of the recent studies that have demonstrated the benefits of nursery education, not only to the individual child but to the nation as a whole. Those studies have also demonstrated that there is a financial benefit to the nation. A recent study in the United States, which was carried out over a 30-year period, showed that, for every £1 invested in nursery education, the nation benefits to the tune of £7. It makes economic as well as educational sense to invest in infant and nursery education.
    May of us are concerned that not enough funds are currently being made available for spending on special educational needs. I should be interested to know if the Department has carried out any detailed costings of the money that would be necessary to carry out the recommendation in the report "Within Reach", which the Minister so roundly welcomed when it was published.
    Repair and maintenance is another important area that is seriously underfunded. Across schools, further education and higher education, it is now estimated that some £4 billion will need to be spent to bring our institutions into a reasonable state of repair.
    Let us consider areas in which money is wasted. They were referred to by the hon. Member for Croydon, Central. I ask the Minister to look again at the expenditure that the Department and the Government have wasted on the appallingly crude and inadequate standard attainment test. This year alone, some £35 million has been wasted.
    The years 1992–93 have not been a happy time for the education service and, sadly, the evidence suggests that better times are not around the corner.
    8.29 pm
    Mr. David Lidington: As a newly appointed member of the Select Committee, I am grateful for the opportunity to make a short contribution. I must declare that, as the husband of a primary school teacher, my household income is affected to some extent by the Government's expenditure plans.
    In their document on spending plans, the Government have set their own test of the effectiveness of their expenditure programme. To use the jargon, they have said

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    that they wish to be judged on outputs as much as on inputs. That is a healthy sign. The hon. Member for Plymouth, Devonport (Mr. Jamieson) criticised what he called the language of finance, accountancy and efficiency. [Interruption.] He certainly talked about accountancy. I can answer that criticism by saying that good accountancy and good book-keeping are necessary to ensure that the large, but finite, sums of taxpayers' money spent on education are properly used to provide education of the highest standard for children in every part of the country.
    In their document, the Government say that their paramount objective is to raise the standards of achievement across the curriculum. Over the past few years, that has meant a number of radical reforms, the most important of which was the introduction of the national curriculum and testing. They were enacted in the Education Reform Act 1988, introduced by my right hon. Friend the Member for Mole Valley (Mr. Baker). I shall come to that later.
    I welcome some of the other developments in the Government's policies. There is sufficient evidence, in terms of international comparisons of pupil achievement, to give everybody who is reasonably open minded cause for concern—I put it no stronger—about whether children in the United Kingdom could be achieving higher standards at school than they have on average in past decades. In a world economy that is becoming more competitive, Ministers are right to keep under permanent review the education system in this country and to be always vigilant and alert for new ways of ensuring that that system is better suited to the challenges that face our country.
    With that in mind, I welcome the Government's approach to teacher training which stresses school-based rather than college-based training. I welcome also the Government's insistence over the years on more information being made freely available to parents and the general public about the performance of schools. That involves HMI reports, school prospectuses and examination results. It is interesting that, on other occasions, Opposition Members are proud of their support for the principle of freedom of information, yet, whenever that principle has been tested in education policy, they have been, in their voices and votes, in favour of secrecy and against openness.
    I have the honour to represent a constituency in Buckinghamshire. Since my election, I have made a point of visiting as many schools as possible within my constituency. It is a diverse area. I have visited nearly 40 schools. I have been to village schools with one teaching head and a part-time teacher, large primary schools in an urban environment with a large ethnic minority intake, and grammar schools and upper schools taking many hundreds of pupils from within and outside the county. I have found dedicated teachers who enjoy the confidence and support of their governors and of the parents of the children in their charge.
    There might be cross-party agreement on the fact that one does not seek militants, revolutionaries or bolsheviks in Buckinghamshire. [Interruption.] I will disappoint the hon. Member for Devonport by saying that one had to search hard and long to find a notice from the National Union of Teachers in any of the common rooms that I visited.
    From talking to the heads and staff in those schools, I found a yearning for a constructive partnership with the
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    Government to ensure that the national curriculum and the system of testing work. That yearning has been coupled with a growing sense of frustration at the cumbersome and bureaucratic way in which the curriculum and, in particular, the system of testing have been implemented in practice.
    I believe that my right hon. and hon. Friends are aware, from the representations that have been made to them, of the fact that those concerns are not confined to their political opponents. They are felt widely, not just among moderate and responsible members of the teaching profession, but amongst governors and parents who have been life-long supporters, and often members, of the Conservative party. It is important that, through the Dearing review and the Government's response to it, we get the balance right for next year.
    The Government have a duty to insist that certain key skills—a core of basic knowledge—are taught consistently to a high standard in every school in the country. They have a duty to introduce a system of rigorous testing that ensures that measures of achievement can be made. I have found few teachers in Buckinghamshire who object to that as a matter of principle. However, that must be set alongside the fact that, in a thriving school, which attracts the loyalty and support of parents, and one in which the local community feel a sense of pride and identification —the Government wish to see that, and it is evident throughout my community—there must be room for the spontaneity of the enthusiastic teacher to explore other areas of learning that may not always require to be tested. Those two important principles must be balanced. I believe that the Dearing review and the Government's response to it will ensure that that balance is struck appropriately.
    We need a diverse curriculum but it must not be so prescriptive as to turn into an education straitjacket. For example, even in Aylesbury there are first schools in which the teachers are struggling with children from family backgrounds of material poverty, where there may not be many books or where there may be instability. Those teachers have to work hard to teach the basic skills of reading, writing and numeracy which are essential if those children are to take advantage of the education opportunities available in the country later on.
    I know that teachers in such schools will want to include elements of history, geography and other subjects in their teaching. However, they may fear that too prescriptive an approach to those other subjects might make it more difficult for them to give adequate attention to the basic tasks and set the children in those schools at a disadvantage compared with other schools in neighbouring districts where there is perhaps greater parental support for the traditional academic route.
    There is an opportunity for my right hon. and hon. Friends in the next year to build upon the tremendous willingness that I find within the teaching profession and amongst governors and parents to forge a constructive partnership such as that mentioned by my hon. Friend the Member for Crosby (Sir M. Thornton).
    I find no wish to return to the old days of the secret garden when information was kept within the confines of the classroom but a ready acceptance of the duty that the schools and the teaching profession have to the wider community. There is also a belief that practical and sensible reforms of the national curriculum and testing are necessary to make the system work as the Government

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    wish it to work and in a way that would be in the interests of pupils not only in my constituency but across the nation.
    8.40 pm
    Ms Mildred Gordon: The report of the Select Committee on Education observed that the Government's plans for capital spending on schools appear to favour grant-maintained schools over local education authority schools. The Minister freely admitted that that was indeed the case, reflecting the Government's commitment to the success of grant-maintained schools. It makes me wonder about the Government's commitment to the success of local education authority schools—to the continuing success of the those which are working well and to the improvement of those which have problems.
    For 1992–93, the difference in capital expenditure breaks down nationally into an average of between £110 and £116 per pupil per annum in the grant-maintained sector compared with £88 per pupil in the local education authority sector. It will fall to £75 per pupil in the LEA sector in 1993–94, to £71 in 1994–95 and to £66 in 1995–96, which is a serious decrease in funding. There is deliberate discrimination in capital funding, which ignores the pressures on local education authorities to replace and renew major elements of post-war education buildings which are predominant in many authorities.
    In Tower Hamlets, emergency repairs are necessary to some of the prefabricated and system built units. The delay in the repairs has exacerbated longer-term maintenance problems. The estimated backlog of repairs is more than £2 billion nationally. In 1992–93, London authorities received only 35 per cent. of the £86 million that was identified as needed for the basic building work.
    The decline in the school environment has a considerable impact on pupils' learning. I know that from personal experience, as I have taught in prefabricated huts which are freezing in winter and boiling in summer. Such conditions are not conducive to getting the best work from teachers or pupils. We hoped to do away with such temporary buildings, but the present capital funding regime means that they will remain until they rot.
    The Secretary of State claimed that local education authorities have access to capital receipts as a way of increasing scope for capital expenditure, but there has been a steady decline in local authority receipts which are deemed to derive from educational assets. They have decreased from £285 million in 1988–89 to a forecast of only £60 million in 1992–93.
    That is primarily due to the downturn in the property market, the residue of surplus assets being less straightforward in terms of disposal because of planning consents, location, lack of money and mortgage problems, and, above all, the threat of transfer to grant-maintained status when local education authorities want to reorganise and rationalise their schools. They are left with schools with a limited number of pupils and wasted space, and they cannot carry out plans which have been wored out in advance for the benefit of the whole education service—schools which are planned to close then opt out, and the plans are thrown into chaos.
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    At the same time, the Government restrict spending by capping controls which are forcing down LEA expen-diture. They are limiting the use of capital expenditure which is funded from revenue. As a result, the scope for enhancing future credit approvals has been substantially limited, so the argument that LEAs have free access to capital receipts is false—that access is severely restricted and declining.
    Mention has been made of the double funding for grant-maintained schools. An answer to a written question from my hon. Friend the Member for Bridgend (Mr. Griffiths) revealed that more than half of the 492 grant-maintained schools are being double-funded through their annual maintenance grant for activities such as advisory and library services which were previously provided by the LEAs.
    The higher level of grant which grant-maintained schools receive to cover the costs of services formerly provided by the LEAs has been maintained. The LEAs still have to provide those services, and the duplication is costing them nearly £2 million in London and, I believe, nearly £14 million across the country.
    The Government recently released two consultation documents on the common funding formula, in which they state that they intend to continue to allocate additional money for grant-maintained schools' extra responsibilities. The funding agency will be a quango and centrally controlled by the Government. It will increasingly transfer funds from the local authority sector to the grant-maintained sector, which will put the squeeze on local education authority schools.
    Schools that need funds for various reasons will be tempted, bribed and pressured to become grant-maintained, and the local education authority will be starved of funds. They will nevertheless have to maintain services for children with special needs and fund welfare officers and educational psychologists out of the continually decreasing funds. The services are bound to suffer, to the disbenefit of all children.
    In many areas, classrooms in local authority schools now have more pupils than before. I believe that there are advertisements in New Zealand and Australian newspapers for instructors. Hard-pressed schools have found a loophole—if they employ untrained instructors, they can pay them less than teachers. We have all heard the Prime Minister's advocacy of mum's army. Increasingly, unqualified people will be teaching our children in order to spin out the money. Experienced teachers are being given the push; they are being pressured and made to feel that it is time that they took early retirement because older teachers cost more and they are being replaced by new teachers.
    It seems strange to me that although a recent school inspectors' report said that in the past few years the crop of students who have become teachers are of an extremely high standard, we shall now have licensed teachers—we used to call such people unlicensed teachers—in our schools, and "instructors" from New Zealand and Australia. I have nothing against New Zealand or Australia, but I have something against the idea of unqualified people teaching our children.
    Sir Paul Beresford: Is the hon. Lady aware that the school system, certainly in New Zealand, and I believe in Australia, too, has taken into the primary schools non-university qualified but trained teachers, along the

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    lines that are now being suggested here? It might be relevant to mention that those two countries have a higher standard of literacy than this country, despite having the same sort of difficulties involving non-English speakers, especially from the Pacific.
    Ms Gordon: The hon. Gentleman may be correct. I do not know about the standard of literacy in New Zealand. If the standard there is higher, I should say that that must be despite the fact that there are unqualified teachers in the schools, not because of it. What is the pupil-teacher ratio? Are the unqualified teachers assisting qualifed teachers? We need to know the whole picture.
    The Government's doctrinaire approach to education clearly plans to set the clock back to before 1945, when we had a two-tier system of education. There were elitist selective schools and a much lower standard of education, with a lower proportion of highly qualified teachers, less money and worse school buildings for the average child. The funding agency and the move towards grant-maintained schools take the system in that direction again towards an elitist education for the minority and low standards of education for the majority.
    To that end, the Government are wasting a great deal of badly needed money. Perhaps the Minister will tell us how much it cost to pay external examiners to mark the tests that the teachers would not use—those tests that the teachers so clearly proved were badly designed and ill timed. How much money was spent on the publicity campaign to denigrate teachers and governors, and to try to convince parents that they were wrong? The campaign failed. That money was badly needed for books, buildings and other education purposes, yet the Government used it to bolster their doctrinaire approach and to try to push their policies forward.
    Yesterday, with other members of the Select Committee, I visited a city tech. Of the £12 million that had been spent to refurbish the school building, 20 per cent. came from business, but 80 per cent. of it was taxpayers' money. There were 170 computers for 400 children, and as for the pupil-teacher ratio, I saw one class of 13, but most classes consisted of two or three or seven children at the most. That was great. It would be wonderful if we could have those ratios throughout the country, hut when resources are limited, there must be some quality and some fairness in sharing.
    The Government's policies, especially their funding policies, are designed to limit quality and to reduce fairness, to provide a good education and wonderful provision for the elite and very little for the rest.
    8.53 pm
    Mr. Anthony Coombs: To someone who does not serve on the Select Committee, the one fact that emerges most clearly from the two documents—perhaps not surprisingly, as over the past four years the Government have increased expenditure on behalf of the taxpayer by no less than an annualised rate of £100 billion a year—is the enormous amount of money being spent on education by central and local government. The spending of the Department for Education, which has already increased by 5·8 per cent. since last year—more than the rate of inflation—is planned to increase by a further 11 per cent. over the next two years. Local education authority expenditure has risen from £13·2 billion to £17·6
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    billion—an increase of 30 per cent.—over the past four years. Those are very large increases, given the general state of the economy and inflation.
    I agree with the Chairman of the Select Committee, my hon. Friend the Member for Crosby (Sir M. Thornton), that the way in which the figures are presented needs to be improved significantly, if there is to be real accountability for parents, especially in individual local authorities. For instance, it is not right that we have to rely on standard spending assessments across the board and cannot break education spending down between the various local authorities. In particular, we cannot break down within education heads the sums that ought to be spent by individual education authorities. Of course, it is unacceptable that it takes eight months for local education authorities' outturn figures for current spending to emerge so that parents can use them as a performance indicator.
    Sir Paul Beresford: Does my hon. Friend agree that one of the difficulties is that many authorities, such as Lambeth, Southwark and Haringey, are years behind with their outturn figures anyway, in spite of the efforts of the Audit Commission?
    Mr. Coombs: My hon. Friend anticipates me slightly. I shall have something to say about Lambeth later.
    The average taxpayer, and indeed the average parent, does not want to know exactly how much has been spent on education; rather, he or she wants to know how effectively it has been spent and the kind of results that are being achieved in our schools. There is no doubt that expenditure at local and central Government level has risen significantly in real terms over the past five years— although there may have been a slight reduction in 1992–93—while pupil numbers have not risen significantly. Pupil numbers have risen by perhaps 5 per cent., whereas the real financial increase has been closer to 20 per cent.
    Pupil-teacher ratios have significantly improved. Early education has been mentioned in the debate, and over the past 10 years it is in early and primary education that the most significant improvements have been made, from 27:1 to 21:1. The latest social trends survey reveals that significant improvements have been made over the medium term—for example, in the number of under-fives who have had both playgroup and nursery education. The number of children being taught in large classes has fallen significantly in secondary schools, from 30 per cent. in 1977 to 24 per cent. now, and even more significantly in primary schools.
    Mr. Don Foster: I should hate the hon. Gentleman to mislead the House. I think that it was the Under-Secretary of State for Schools who told us at Education questions recently that the number of pupils in large classes, in primary schools had risen—albeit by a comparatively small proportion. Does the hon. Gentleman also agree that only 24 per cent. of children in this country are in nursery schools or nursery classes, and that that is the lowest percentage in any EC country except for Portugal?
    Mr. Coombs: It is also fair to point out that, over 10 years, there have been significant improvements, and that 90 per cent. of young people under the age of five now have the opportunity to attend either a playgroup or a nursery. That is a record figure. Similarly, teachers' salaries are better than they have ever been. An average classroom teacher now earns £20,600 a year. We spend a

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    greater proportion of our gross domestic product on public education than Germany and Japan, which produce much better results.
    Labour Members are in no position to lecture us on the resources given to education. When Labour was last in government—thank God, that is a long time ago—expenditure on education dropped by about £1·1 billion in real terms and fell as a proportion of GDP. Moreover, instead of rocketing as it has under the Conservatives, the number of people in higher education fell.
    Mr. Jamieson: Does the hon. Gentleman agree that the Government can make that claim because Labour authorities have spent more on education than Tory authorities? Nursery places are much more likely to be available under Labour authorities than under Tory authorities.
    Mr. Coombs: The point that ought to be made concerns the return that the charge payers are getting on that money. That additional expenditure is in direct proportion to Labour authorities' propensity to waste rather than their propensity to achieve higher educational standards. If one examines the increased expenditure and absolute levels of expenditure of authorities across the country, it is difficult to see any correlation between the level of expenditure—per pupil or not—and the kind of educational results that are being achieved.
    My hon. Friend the Member for Crosby talked about working against the polarisation that he saw in many education matters. My view is that parents want the school that their children attend to be more accountable to them and that, whether that happens by local management of schools, with a greater proportion of the local authority's budget going to individual schools, or via the grant-maintained route, the kind of system whereby local parents have more control of their own schools is likely to continue.
    I recall the hon. Member for Bath (Mr. Foster)—I know that he will intervene, although I am not necessarily saying that he was supporting grant-maintained schools —saying on 6 May 1992:
    "We would be very keen to see the benefits of grant-maintained status"—
    in terms of greater ability to control the expenditure at local expenditure—
    "being passed to all schools … Maybe what we should do is have all schools opt out instantly."
    Whether they opt out or whether they actually get a greater control of their own expenditure, they will wish to have more devolved power, more local control and more local responsibility. The hon. Gentleman looks as though he is itching—
    Mr. Don Foster: Let me set the record straight. I thought that I had explained my position. I do indeed believe that more power and responsibility should be devolved to individual schools, but those schools should remain within a strategic planning framework that is local and democratically accountable. I thought that I had made that clear.
    Mr. Coombs: The fairly non-controversial point that I seek to make is that, in a context in which more power and responsibility are being devolved to schools, local education authorities will have to rethink their role in a
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    very fundamental sense; indeed, many authorities, including Labour-controlled authorities, are doing that. They may not have education committees; they may devolve power through social services. The authorities will retain certain functions, such as special education, psychology, school attendance, transfers, transport and so on, but if they are to adapt to the new philosophy whereby the Government are steering rather than rowing, they will have to get used to a partnership with schools based on a new maturity—whether the schools are grant maintained or locally managed. If they do not, they will suffer the kind of fate that the National Association of Head Teachers talked about in connection with Lambeth, when it described it as a
    "classic example of an authority that may wither and die because of its own incompetence"
    and its inability to face the future.
    The standards of schools are what counts to parents, and there have been significant improvements in standards over the past few years. Since 1979, the number of people getting one or more A-level has increased quite dramatically—from 15 to 22 per cent., an increase of about 50 per cent. The number of people getting five GCSEs has also increased significantly.
    According to a national institute study recently acquired by the Library, we do not compare as well as we should with our competitors, Germany, France and Japan. In Britain, 27 per cent. of 16-year-olds reach the equivalent of GCSE grades A to C in mathematics, the national language and one science, compared with 62 per cent. in Germany, 66 per cent. in France and 50 per cent. in Japan. Such a record applies to mathematics for 13-year-olds.
    Mr. Derek Enright: Those statistics are interesting, useful and fairly well known. However, we do not have standardisation across the countries, which is important; otherwise, we may draw the wrong conclusions and concentrate on the wrong areas. We should concentrate on science—that is absolutely clear—but we need standardisation and a proper comparison.
    Mr. Coombs: The Select Committee will embark on precisely that. It will be worth while. Those are some of the arguments that it makes in its report. That is the difficulty of comparability. Nevertheless, the statistics cannot just be ignored. They come back to the culture that exists in many schools. Many teachers are not guilty of those problems, but, too often, they regard testing as discrimination and believe that it encourages a climate of failure.
    In the words of the hon. Member for Dewsbury (Mrs. Taylor), too many people regard measurement and reporting as unjustified criticism and too many regard league tables as divisive. I do not thing that they are. Most parents want to know how their children are doing compared with other children, and not just the absolute standards, which may or may not be rigorous.
    So far as the tests are concerned, it is interesting that the Office for Standards in Education talked about the quality of teaching and learning going up significantly. The Institute of Directors also shared that view, and—
    Ms Gordon: Will the hon. Gentleman give way?
    Mr. Coombs: Let me finish the sentence.
    Although we wish to see Ron Dearing streamlining the national curriculum and making the assessment procedures much more simplified than they presently are, the

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    one thing that would damage education more than anything would be if we went on to pick and mix testing, whereby tests were associated with the children who took those tests, rather than set a rigorous test across the country that all children had to take and that would produce precisely the uniform standards that the hon. Member for Hemsworth (Mr. Enright) mentioned.
    Ms Gordon: The hon. Gentleman mentioned that parents like to see how their children perform in league tables compared with other children. Does he not feel that our first concern should be for the well-being, education and development of children? Does he not know that those comparisons can severely damage those children who do not appear in the top 25 per cent. of the tables, whichever way they are counted or published? Has he not heard of the terrible damage that the 11-plus examination did to the confidence and development of 75 per cent. of the children in this country?
    Mr. Coombs: I believe, as do the vast majority of parents, that that is the greatest myth in education at the present time. Children are more naturally competitive than the hon. Lady gives them credit for, and I do not believe that they will be damaged in any way if we let parents know how their children are doing in comparison with other children.
    One of the problems that we have with reports from many schools is that they do not give parents any idea of how their children are doing in an absolute sense, and certainly not how they are doing in a relative sense. As evidence, I have a report here—I will not mention, from whom it comes, except to say that it is from a child aged 10 in a midlands school. It is the year report, July 1993. On science, it says:
    "In the investigations carried out, she has shown that she can complete a task, observe accurately and record the results in a variety of ways."
    On history, it says:
    "She is beginning to develop the ability to sequence events over a long period of time, to look at evidence and draw conclusions about the past."
    On geography, it says:
    She has continued to build upon skills already experienced and develop those, including physical, human and environmental geography."
    That is the only information that that child's parents will receive on that child in that year and I do not believe that such a report is sufficiently rigorous. If the Government wish to see the kind of improvements in accountability between schools and parents that we all wish to see, they will have to issue advice on reporting which makes such reports more specific and, I hope, encourages greater competition between children than is evident at present.
    If we are to improve standards in schools and maintain that improvement where it occurs, it is vital that schools do not focus on the lowest common denominator but become beacons of excellence for the children whom they serve.
    9.10 pm
    Ms Estelle Morris: Not being a member of the Select Committee, I too welcome this opportunity to discuss education expenditure on the Floor of the House, and I congratulate the members of the Select Committee on giving us the opportunity.
    I shall concentrate on a narrow subject that does not receive the attention it deserves, but which is of growing
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    importance in raising standards in schools today. I in no way condone or condemn education policy during the past two decades, but there can be no doubt that there has been a revolution in our schools. People who suddenly find themselves going back to school, not having been there since they were pupils 20 or 30 years ago, barely recognise what they see.
    During the past 20 or 30 years, there has been a revolution in the breadth of subjects studied, in the aspirations of parents from all social and economic walks of life for their children to succeed and to have career opportunities that they did not have, and in the aspirations for girls as well as for boys.
    There has also been a revolution in the relationships in education today. The relationship between teachers and pupils, between parents and teachers and, most significant of all, between the school and its community is not what it was 20 or 30 years ago.
    I approve of most of that revolution, but I am critical of some of it. It can be summed up in a phrase that I like but which, in itself, does not say a lot—the entitlement curriculum. In education, we have started to consider the curriculum that children are entitled to receive and say that that is the entitlement curriculum.
    But we must move on to consider the entitlement curriculum in terms not so much of what is being taught as of how that teaching takes place. It is that difference on which I wish to concentrate. The case that I want to make is that we have put far too little expenditure into support staff in schools in order for the entitlement curriculum and the teaching of it to be as successful and effective as it might be.
    Mr. Patrick Thompson: Will the hon. Lady give way?
    Ms Morris: I am conscious of the time, and I do not want to deny hon. Members the opportunity to speak. I shall happily talk to the hon. Gentleman after the debate.
    One great change is that we cannot go back to chalk and talk. Schools now use technology and computers. Children watch television outside the classroom and teachers must make the way that they teach as effective as the messages that children receive from various media outside school. There was the day when a poster of a dinosaur in a classroom was meant to motivate children to learn about prehistory. [Laughter.] It was not I who smiled at the mention of dinosaurs and looked at the Minister. Now that children watch films such as "Jurassic Park" and see dinosaurs alive in the streets, the poster in the classroom is a most ineffective means of getting the message across. That is another revolution that has taken place.
    According to the report that we are discussing, £40 million has been spent by the Schools Examinations and Assessment Council, the National Curriculum Council and other research institutions. I welcome that, but I bet that that money has been spent mainly on researching what should be taught. I bet that it has not been spent on helping teachers in schools to teach the national curriculum and I bet that it has not been spent on helping those teachers to come to terms with the revolution in content and methodology that they are being asked to implement. I maintain that insufficient funds are given for staffing in schools to reflect the changes that they are being asked to implement.

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    A Coopers and Lybrand report some time ago found that only 50 per cent. of a teacher's working week was spent in contact with the child. I worry greatly about that, because I still believe that the sign of a most effective school is that conversations between teachers and pupils are of a high order and of great frequency. It worries me that 50 per cent. of teachers' time takes them away from talking to and working with pupils in the classroom. A teacher now is a typist, a printer, a laboratory assistant, a designer of work sheets and booklets, a form-filler, a ticker of boxes and a sender of returns to faculty heads, to head teachers, to education authorities and to the Ministers at the Department for Education.
    In terms of the effectiveness of expenditure on education, we are spending an awful lot of money on training our teachers to do jobs that they should not be doing. We boast—and I welcome it—that, over the 80-year period covered in the report, there has been a 70 per cent. increase in graduates. Can we justify spending millions of pounds on increasing the number of people who leave education with degrees and then putting them into a workplace where we expect 30 or 40 or 50 per cent. of their working week to be taken up with photocopying, printing, filling in forms and conducting other basic administrative tasks?
    I contacted two schools in my constituency for which I have a high regard to find out what sort of support staff they have. In a primary school, 29 secretarial hours a week are allocated for all the local management of schools, for keeping accounts, for secretarial duties to the head, for answering the telephone and for working for the teachers in an administrative capacity. In a secondary school with almost 1,000 pupils, there are three staff members to do all those tasks.
    The reality is that in schools today teachers do not even expect administrative support for those tasks. They naturally think that their job includes a whole range of administrative and bureaucratic tasks that are needed to support them in their jobs. I also worry that the environment in which we ask teachers to carry out those tasks is not a professional one that is conducive to good teaching. In secondary schools, no one but the most senior staff, and in primary schools no one but the head teachers, has office accommodation.
    Other staff have nowhere to keep their books or to spread out their papers. They have no classroom of their own that they can use as a base from which to be effective teachers. The normal sight in schools today at the change of lessons is of teachers scurrying across the playground with their arms full of books, equipment, videos and even tape recorders which they move from one classroom to another. Our education system does not give them the stability of a classroom of their own.
    Money is wasted because teachers do not use the skills that we have enabled them to develop during their teacher training. There is a fall in teacher morale. Teachers go into teaching to teach pupils and not to be bureaucrats and administrators. They are constantly frustrated by the pressures to draw them out of the classroom and away from teaching.
    Most worrying of all is the fact that we have deprofessionalised teachers. That does nothing for teacher morale, it does nothing for the way in which other people
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    perceive teachers and it does nothing to make teachers more effective. I ask the Minister to consider any other professional body, whether politicians like ourselves, doctors in their surgeries, people in the legal profession or civil servants. The Minister should consider the support services that we give them to enable them to do their jobs. He should then consider the support services that we give teachers to enable them to do their jobs. Not one of us could claim that we could be effective Members of Parliament if we had the level of support with which teachers are expected to manage in schools. We had such a debate on our profession in the House almost a year ago this week.
    When we draw up expenditure plans, we concentrate far too much on developing policies on the curriculum at a distance from the classroom and on producing reports. We talk far too much about policies at middle and senior management level, and we concentrate far too little time and far too few resources on what teachers need to do the job as effectively as possible in the classroom. My criterion is that teachers should be left in the classroom to teach and to work with pupils for as much as possible of the working week and for as much of the child's time as is commensurate with good administration, good in-service training and a good professional regard to teachers working, meeting and talking with other teachers.
    The whole range of tasks with which the Government have landed teachers in terms of increased administration has served only to make wider the division between the fact that we train teachers to teach and put them in the classroom and the fact that we then take away the time in which they should be teachers and fail to give them the support that they need to be more effective teachers. Perhaps, in future reports, the Select Committee may draw that point to the Government's attention and may seek assurances that we shall begin to address that point seriously in financial terms.
    9.22 pm
    Mr. David Porter: We spend much time inside and outside Parliament discussing changes in our society. One thing that does not change is the argument about money. We have heard Opposition Members tonight talk about the great golden age that must once have existed when every school, every local authority, every special interest group and every body in the country had all the money that it required. The hon. Member for Bath (Mr. Foster) peddled that line in his speech today. It was the speech to which he treated the Education Bill Committee a number of times and at length. There was no golden age, and I do not not suppose that there ever will be.
    As my hon. Friend the Member for Croydon, Central (Sir P. Beresford) and other hon. Friends have said, it is not how much money is spent but how the money is spent that matters in the debate. In some schools, the cart has come before the horse. Many schools have long had fund-raising as part of their budget requirement. They are geared up to raise money effectively throughout the year. A number of schools raise money and appeal at an emotive level for parents to support their children's education. Having raised the money, they then decide how to spend it. That may be the wrong way round.
    I confess that from time to time I join in the general clamour to spend more money. Here I make common

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    cause with the hon. Member for Plymouth, Devonport (Mr. Jamieson) and others in the cry for nursery education. It is self-evident that, if we made a little investment now, the gains in educational value and in social terms later would be significant. I add my voice to that.
    The main burden of what I want to say is about spending and investment across the age range, and how we assess its value. In education, as with everything else these days, we are happy only when we are surrounded by jargon, acronyms, euphemisms and buzz words. One that I welcome with open arms is the phrase "added value". In education that is an all-purpose, all-embracing, all-things-to-all-people term. I suspect that, even in the fulness of time, it may not replace that strange creature of our times, the level playing field.
    In the light of the testing problems, boycotts and league table disagreements that we have had, it is obvious that raw examination data to lever up standards is not enough on its own. There has to be a context of wider home, school and community influences. We must also add the ability, experience and performance of teachers, and the stability, motivation and morale of the teaching service. So the assessment and appraisal of the profession by the profession becomes even more urgent both for its own sake, and as an ingredient in the "added value" as a tool in professional development.
    It is clear that the basic and constituent part of any "added value" has to be children, and what has been added to them and what potential they have developed. No apology is needed when we conclude that testing and monitoring their progress is self-evidently quintessential. I have heard no teacher, no union and no hon. Member say that they are against testing itself. Even testing at stages before the final testing at the age of 16 is no longer an issue. But the damage done by the boycott has been considerable. The damage has been to the continuous monitoring of children.
    Having won concessions on league table publications and also achieved the Dearing review, some teachers had the taste of blood and of flexing their muscles, which they liked. As a former teacher, I understand that feeling. But hon. Members must look beyond that. We showed the papers and we raised the question, "What was all the fuss about?" People asked how easy the tests were. People said, "Look at the way that standards have declined in our country that we can present such papers. How can teachers argue that they are overworked?"
    Of course, we did not win the argument with the parents, who tend to believe teachers and head teachers in the way that patients believe doctors rather than politicians. Many schools set their own key stage 3 English papers last month. Many of those papers were virtually identical to the Government's papers in style, structure and content. That proves my point about teachers tasting blood. Exam results, tests, monitoring—call them what we like—must be better defined. We are trying to show the progress that children make in time through each key stage.
    Key stage 1—the summer birthday children who have completed less than six full terms—must be borne in mind. Key stages 2 and 3—the different transfer ages of children at two and three-tier schools, high and middle—must also play a part. Special educational needs, socio-economic and demographic make-up of the area and problems of urban
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    and rural deprivation all must be taken into account when processing the raw data from schools. Other things such as extra-curricular activity must be added.
    But it is wrong to presuppose that most parents cannot make a judgment of sorts about their children, their schools and their teachers. To make that supposition is the equivalent of talking down to children. Research is going on apace into the "value added" concept, but I will not weary the House with it. The Library has provided me with an excellent summary of that research, with studies, papers and learned opinions from all over the country. That is one area that the Select Committee could look at in future.
    Having said that, let me add that there is a danger of over-intellectualising the debate with indices, indicators, snapshot determinators, residual deviation scores, expertise which becomes self-perpetuating and science which becomes deliberately blinding. In education, nothing is agreed for ever. Periodically, we rediscover the wheel, chalk, and the closed classroom door. We also rediscover bringing parents and business people back into schools. A lot of it goes round in circles, but when children leave our schools and go into the world, they find that the world has not gone round in circles at quite the same speed.
    The children will have to make their own way in their future life without the adjusted results of whatever value the education system has added to them. All I am saying is that we should keep the matter in perspective. The survival, prosperity and well-being of our children in school will depend on their ability to compete with their peers from other nations which are more determined to succeed than we are. That is the bottom line. If we strip away the self-interest and expertise, that is the only thing that matters.
    9.30 pm
    Mrs. Ann Taylor: I join other hon. Members on both sides of the House who have welcomed the fact that the debate is taking place. It is a step forward. The Secretary of State, whom I welcome back to the Chamber, missed some good speeches by hon. Members on both sides of the House. I hope that he will take the opportunity to read them in detail in Hansard.
    The debate has been wide-ranging. I begin by mentioning a few facts from the report. The first was mentioned by the hon. Member for Crosby (Sir M. Thornton). He talked about the difficulties that the Select Committee experienced in defining lines of accountability. That is a real problem, and one which should give cause for anxiety to both Opposition and Conservative Members. I hope that we all agree that in future greater attention should be paid to accountability. If we cannot have accountability, the House is failing in its job.
    We need accountability on two scores. First, there needs to be financial accountability. Secondly, there should be full accountability of decision-making because in education it is so much in the public interest.
    I have noticed that no one has mentioned that the report says that in real terms education spending fell between 1989–90 and 1990–91. That fall is significant. We shall look with interest to see what happens in future years and the extent to which the Secretary of State is able to defend the essential spending within his Department against the Treasury cuts which I am afraid loom over us all.

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    The other fact which has come out of the debate is that not only the level of spending but the nature of that spending and the priorities that the Government choose to emphasise are important. The hon. Member for Aylesbury (Mr. Lidington) made an interesting speech. He was the only hon. Member present from a Tory shire county. He reminded us of the salutary fact of our position in the international league tables.
    Only a few weeks ago, the National Institute of Economic and Social Research published its league tables. They showed that the number of French and German 16-year-olds who gain the equivalent of GCSE grades A to C in essential subjects is double the number in Britain. After 14 years of Conservative government, the Government would be wrong to be complacent about the direction in which standards are going.
    The problems that we face in education are widespread. Many hon. Members concentrated on the Government's priorities. I wish to say a word about them too, even though time is short. The Government have made it clear that one of their main themes and priorities is the centralisation of all decision-making in education in the hands of the Secretary of State. In the past few years, we have seen an increasing and unhealthy concentration of power in Whitehall. We shall soon consider the final stages of yet another Education Bill designed to give the Secretary of State more powers. That is a regrettable move.
    The concentration of power is wrong in principle and also clearly wrong in practice. It has become evident that those schools which have become grant-maintained—or Government-maintained, as Ministers now like to describe them—are finding it extremely difficult to deal with a central Department in all decision making. It was significant that in the middle of last month, 88 per cent. of all grant-maintained schools had not yet received their final budget for the current year. That could not have happened under the local authority system. That shows that the Secretary of State cannot even run 500 schools, let alone the 24,500 that he seeks to run.
    Returning to the specifics the report mentions the position of grant-maintained schools with regard to funding. Sometimes Ministers are quite honest and tell us openly that they intend to favour grant-maintained schools. Sometimes they say that there are bribes and sometimes they say that the extra money is simply there to reflect the extra administrative burdens facing grant-maintained schools. The report shows clearly that, with regard to capital, the Government have made a straightforward political decision to favour the schools that suit their particular political ideology.
    However, there are other issues involved in terms of ongoing expenditure. The point was referred to by my hon. Friend the Member for Bow and Poplar (Ms Gordon). Recently, we have seen that many grant-maintained schools are receiving double funding. The problem is not simple because schools which have become grant-maintained in the first instance receive the highest level of double funding. I understand that grant-maintained schools in one authority are funded on eight different formulae. That must be a recipe for chaos.
    One of the difficulties is that there is no proper accountability for grant-maintained funding. The Audit
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    Commission's writ does not run that far. It is important that the Select Committee should consider that point in future because it is an area of significant expenditure.
    Mrs. Alice Mahon: On the specific point of double funding, I am sure that my hon. Friend is aware that Tory-controlled Calderdale council has decided, as a result of the implications of grant-maintained funding and the way that is sucking money from the local education authority, to spearhead a national campaign to try to persuade the Government that the present formula is simply pumping money into grant-maintained schools at the expense of other schools.
    Mrs. Taylor: My hon. Friend is right to draw attention to the fact that many people outside this place, including Conservative councillors, are appalled at the priorities that the Government have given to grant-maintained schools because they understand the practical problems and what is happening on the ground. At the moment, the Government are creating a hierarchy of funding according to the political correctness of a school as defined by the Secretary of State.
    I want to refer to another area of funding which has not been touched upon today, but which is extremely important. That is the amount of money which the Government are spending on propaganda. The Government have recently spent more than £500,000 on producing booklets and glossy folders in an attempt to persuade schools to opt out. Indeed, the Government wasted £17,500 recently on a revised booklet which will be out of date before many people receive it because of the new Education Bill.
    The publicity budget of the Department for Education has risen dramatically in recent years. In 1979–80, the publicity budget was £103,800 which was just over one tenth of a million pounds. The publicity figure last year was more than £8.8 million. That shows the scale of the increase in the budget. There has been a staggering increase of 8,455 per cent.
    The Government are now spending more than £370 per school simply on publicity and just to tell the country what the Government believe should be happening. Such a sense of priority is wholly wrong; it shows that Ministers are not in touch with the reality of the problems.
    I would have liked to raise many problems. I would have liked to have referred to the Government's failure to stand by their promises on section 11 funding to provide additional help for some of the schools that need it most. I would have liked to comment on the fact that the Government have cut the budget for drug education, which could do so much to help young people and keep them away from the appalling tragedy that could befall them.
    One of my main criticisms, which I want to mention despite the shortage of time, is of the way in which the government deal with education expenditure as it relates to provision for the under-fives. The junior Minister who is to reply to the debate this evening has made his position clear. When I asked him at Question Time recently whether he agreed that nursery education provided the best start in education and should be available to all three and four-year-olds, he refused point blank to agree.
    The Secretary of State has kept very quiet on this matter. His predecessors had commitments to nursery provision. Surely Ministers can see that, if we spent more

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    on pre-school education and nursery education, we would be identifying problems at an earlier stage, helping children to settle better at school, helping them to perform better throughout their educational career, giving them a better chance of finding work later, and, indeed, ensuring that there was less chance that they would end up engaged in criminal activity.
    The Government seem incapable of viewing education expenditure as an investment in our future. Unless the Government can change their attitude; unless they can see that if they fail to spend money at certain crucial stages they will have to spend even more later on many of the problems that will arise, I do not believe that we will make real progress.
    I thought that the contributions from the hon. Members for Crosby (Sir M. Thornton) and for Aylesbury (Mr. Lidington), talking of partnership, saying that there should not be confrontation in education, echoed very clearly things that hon. Members on this side of the House have said on many occasions.
    During the last 12 months the attitude of Ministers, who seem to have adopted a confrontational approach whenever possible, has been extremely damaging to education. If other Conservative Members were vocal in the way that those two hon. Gentleman were tonight, we could make more progress in education. I am sure that members of the Select Committee from all sides of the House have an important contribution to make.
    9.42 pm
    The Parliamentary Under-Secretary of State for Schools (Mr. Eric Forth): This is an important and, regrettably in many ways, a rare opportunity for the House to consider this vital part of Government activities, education, in a thoughtful way. I congratulate the Chairman of the Education Select Committee, my hon. Friend the Member for Crosby (Sir M. Thornton), on initiating this debate, and all those who have taken part, even though over the past year some of us have become fairly familiar with each other's arguments. It may well be that the odd remark that I make will have been heard before. Nevertheless, the arguments are of such quality that repetition will not necessarily damage them.
    My hon. Friend the Member for Crosby asked some important and fundamental questions arising from his Committee's report and reflecting my Department's response to it. I will deal with them as quickly as I can, but try to do justice to them.
    My hon. Friend—and, indeed, my hon. Friend the Member for Wyre Forest (Mr. Coombs)—asked why we could not use the sub-blocks, or control totals, of expenditure on which our provision for local education authorities is based for planning purposes. The difficulty is that these control totals do not represent a planning breakdown of education standard spending; they are derived exclusively for the rather technical purpose of calculating standard spending assessments.
    They do not represent an indicative breakdown of how education should be deployed. They are not read or regarded as such by local education authorities. Therefore, I do not think that it would be right to attempt to compare outturn data with them. Although there might be a temptation to make that connection, I believe that it would be wrong to do so. I am certainly not persuaded that this would be the right way to use that information.
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    The Committee Chairman and other hon. Members made quite a point about the accountability argument. I believe that in many ways accountability—someone used the expression multi-layered; it is not a very elegant term, but it will do for this purpose—exists in a number of different forms in education expenditure. It certainly exists in a global sense, because the Secretary of State is responsible, through the normal procedures of the House, for establishing the correct and appropriate level of expenditure overall, and for the distribution of that expenditure.
    As for accountability, local education authorities, and, increasingly, grant-maintained schools are accountable in their own way and through their different procedures to their own electorates. That is as it should be. We cannot expect—and I would be surprised if hon. Members on either side of the House asked for it—the Government to accept accountability or responsibility for the details of how local education authorities spend their money in their own areas.
    In almost every regard, local education authorities are given a lot of discretion in how they spend money on education, and they are accountable for it to their own electorates. Equally, grant-maintained schools are accountable to parents and local communities through their audits, annual reports and elected governors, and that is as it should be.
    The accountability systems and mechanisms are strong and robust. It may be that it is not as easy as everybody would like it to be to draw direct lines of connection between the global figure and that established by local education authorities. One must make the point in passing that many local education authorities do not produce the returns of information as quickly as one would like, either to the Secretary of State or to their own electorate.
    My hon. Friends the Members for Crosby and for Wyre Forest asked why we do not receive information on education as quickly or comprehensively as we would like. We continue to strive to make that information available. We have strengthened the procedures and reminded local authorities of the need for accurate and timely returns, and we continually chase latecomers for information.
    The House may not believe it, but for the first time ever, we received a full return in respect of the 1990–91 financial year, and in respect of the 1991–92 financial year we received returns from all but five authorities by March. However, even by March, five authorities still had not returned their figures.
    In the Department we do our best to gather, collate and disseminate the information that the Select Committee and hon. Members want so much, but we rely completely on local education authorities to provide us with the basic information. If they cannot or will not, due to either inefficiency or recalcitrance, there is not much that the Department can do. We will continue to strive to improve, but we hope that the House will understand that we continue to rely very much on local education authorities.
    Mrs. Ann Taylor: Does the Minister acknowledge that the reason for the delay in setting grant-maintained school budgets was not the tardiness of local authorities in the majority of cases?
    Mr. Forth: I have discussed this with grant-maintained school heads and others, and if they want their budgets to be based on the most up-to-date information, inevitably

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    there will be some delay in establishing the final figures. They can have the figures much earlier if they want them to be based on previous year's information, but from the soundings that I have taken, it seems that they are content with the pace so far. We have improved on last year and we will seek to improve next year, but the truth is that, if we respond to their requests for basing their budgets on the most up-to-date information, the outcome will be as it has been. I believe that the balance is right, and the grant-maintained community accept that.
    I welcome the comments that the Chairman of the Select Committee made about the national curriculum, and in particular the work being carried out by Sir Ron Dearing at the invitation and request of my right hon. Friend the Secretary of State in reviewing the curriculum and the testing regime. My hon. Friend said that he had no reservations about the opportunities that Sir Ron has provided for people to contribute to his review and to the conclusions that he will draw from it. We welcome and admire the way in which Sir Ron Dearing has gone about the important and responsible tasks that the Secretary of State has set him.
    I emphasise—because my right hon. Friend the Secretary of State made the point in an intervention—that the fact that Sir Ron Dearing will soon take up his position as chairman of the School Curriculum and Assessment Authority means that he will have a continuing role. He will be in a position to continue his review of the curriculum and testing regime on an on-going basis in precisely the way that the chairman of the Select Committee requested. We can take reassurance from that.
    We are looking forward to Sir Ron's report, which will be available soon. The Secretary of State will then make his own judgment of what Sir Ron says, and my right hon. Friend will come forward with his response as quickly as may be. At that point everybody will be able to assess for themselves the way forward suggested by Sir Ron, and my right hon. Friend will then be in a position to bring forward his own proposals.
    A number of hon. Members, not least the chairman of the Select Committee, raised the point to which the House returns from time to time, namely, the concerns expressed about capital allocations to grant-maintained schools. I shall, as I have done on previous occasions to the Select Committee and elsewhere, quote from two letters. The first was sent by the Prime Minister in August 1991 to a gentleman named Mr. Doug McAvoy, in which my right hon. Friend wrote:
    "We have made no secret of the fact that grant-maintained schools get preferential treatment in allocating grants to capital expenditure. We look favourably at grant-maintained schools in order to encourage the growth of the sector and I am delighted to see that numbers are continuing to grow rapidly."
    The former Secretary of State wrote in a letter to the hon. Member for Blackburn (Mr. Straw) in May 1991:
    "On capital, I made clear at the time when allocations were announced for grant-maintained schools in January that my intention was to ensure that schools becoming grant-maintained were set up on a sound basis. In 1991–92 the sector as a whole has received relatively rather higher capital allocations than the LEA sector as a whole. I make no apology for that."
    We have said time and again, without apology, that grant-maintained schools will be given the capital allocations that the Secretary of State deems necessary and
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    desirable for those schools to operate on a sound basis. In doing so, we must make our assessment of the very rapid rate of growth of the grant-maintained sector in making capital available to it.
    In that context, the hon. Member for Plymouth, Devonport (Mr. Jamieson), as usual for Opposition Members, could not quite decide whether he wanted to deride the small number of schools that had become grant-maintained or whether he was fearful of the large number that were becoming grant-maintained. When I bring him up to date and tell him that nearly 1,000 schools have voted yes to become grant-maintained, I leave him to decide whether he is afraid of that as a rate of progress or whether he finds it a derisorily small number. I leave him to explain his position on that.
    A number of important points were raised during the debate. For example, the hon. Member for Dewsbury (Mrs. Taylor) referred to my Department's budget for publicity. We have an obligation under the citizens charter to provide the maximum information to parents throughout the country. We have an obligation to tell parents about the availability of the grant-maintained school option. We shall continue to discharge in full our responsibilities to parents and taxpayers for the moneys that we spend on informing them and keeping them up to date on the rapidly changing environment.
    This has been a useful debate. Some important questions have been asked. I have done my best, in the short time that has been available to me, to answer them. I welcome this and future opportunities to debate those matters and clarify them further.
    9.55 pm
    Mr. Edward O'Hara: I am grateful to you, Madam Speaker, and to the Minister for arranging the debate in such a way that a member of the Select Committee has the privilege of replying to it, as is perhaps appropriate, albeit briefly.
    In reviewing the Government's estimates for expenditure on education, I have the same problem as the hon. Member for Crosby (Sir M. Thornton), the Chairman of the Select Committee, in finding my way through the statistics. I share the concern of the hon. Member for Croydon, Central (Sir P. Beresford) that we do our best to find our way through them because it is important that we have a full picture of how the Government are investing in our nation's education system. I invite the House to see the picture that I see, which is one of incompetence, waste and a failure to invest in the nation's schools. In short, it is a failure properly to address the educational needs of the nation's children.
    The Government may defend themselves by pointing to increased expenditure in certain areas, but in many cases that is misdirected. For example, there is the obscene luxury of Sanctuary house, which is like a set for a Hollywood epic—a disaster movie in the context of the debate: "The Towering Fiasco" perhaps—
    Mr. Jamieson: "Jurassic Park".
    Mr. O'Hara: Yes. As my hon. Friend the Member for Birmingham, Yardley (Ms Morris) also said earlier, "Jurassic Park" is an appropriate title for a Government who think the way to the future is backwards.
    Department of Education accommodation costs are especially difficult to work out; they are opaque. However,

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    it appears that there has been a 75 per cent. increase between 1987–88 and 1992–93. The costs of Sanctuary house appear to be double those of its predecessor, Elizabeth house. However, it is staff costs that have risen most dramatically, by some 68 per cent. I note that current expenditure plans allow for a further increase of 67 new staff, on top of an increase of 200 between 1989–90 and 1992–93. The precise number is difficult to work out when we take account of Ofsted and the staff who have transferred to the Department of National Heritage.
    It is clear that central administration is the one area that is sacrosanct. Perhaps that is why it has taken refuge in Sanctuary house. All those extra millions are not available for allocation to schools, but there is no hint of performance indicators to justify the mushrooming of central expenditure, despite the Government's predilection for indicators in every other area of the education service.
    I expected to hear the justification—and the Minister has just given it—that the extra staff are needed for important Government reforms such as the national curriculum and the increase in grant-maintained schools. If the Secretary of State listens carefully, he will hear a hollow laugh throughout the country.
    On the national curriculum, I invite him to visit any school in the country to see for himself the accumulated outpourings of documentation and other literature, much of it piled up in cupboards or even filling whole rooms. All of it is expensively produced, much of it is redundant and much of it is unread because teachers cannot keep up with it.
    There is so much sheer waste, but no expense is spared on it. The Secretary of State had the opportunity to repent and not publish the redundant key stage 3 tests, but he went ahead and wasted a further £35 million on that. All that outpouring of literature is expensive not only in terms of money but in the damage that it does to morale, motivation and good will across the whole area of education.
    What about the increased numbers of grant-maintained schools? Perhaps there is a justification for increased central administration costs as those schools become the direct responsibility of the DFE. We cannot know, because we do not know the performance indicators, but we can do some calculations—as my hon. Friends have done. The Government estimate, probably optimistically, that by 1995–96 there will be 2·25 million pupils in grant-maintained, schools and 5·2 million under LEA administration, yet it is projected that GM schools will have more than £250 million spent on their capital programmes compared with £342·5 million for LEA schools.
    That is scandalously disproportionate. It is all about bribing schools, often against their better judgment, to follow the Government down an ideological yellow brick road, away from the imputed disadvantages of LEA administration and towards direct control from the centre, albeit by an agency. It will be remote control with no local knowledge and no local accountability—those essential elements of LEA administration. It has nothing to do with investing in the education of the majority of the nation's children.
    I describe that as misdirected expenditure. Meanwhile, the picture of massive, widespread dilapidation of the nation's schools will continue to worsen. Figures are not available, but the hon. Member for Bath (Mr. Foster) gave
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    an estimate of £4 billion. Certainly the shortfall can be counted in billions of pounds. Then again, the education of the majority of the nation's children does not figure highly in Government priorities—few of its members use state schools.
    Expenditure on the assisted places scheme is set to rise inexorably, to provide for increased take-up, revised forecasts of parental contributions and fee increases at participating schools—no belt-tightening there. The scheme has become a lifeboat for the independent sector, funded from the hard-pressed budgets of state schools. It is argued that it provides a ladder of opportunity for bright children of impecunious parents.
    It being Ten o'clock, MADAM SPEAKER interrupted the proceedings, and the Question necessary to dispose of the proceedings was deferred, pursuant to paragraph (4) of Standing Order No. 52 (Consideration of Estimates).
    MADAM SPEAKER, pursuant to paragraph (5) of Standing Order No. 52 (Consideration of Estimates), put the deferred Questions on Estimates and Supplementary Estimates, 1993–94 (Class XIII, Vote 4 and Class VII, Vote 8).

    Class XIII, Vote 4
    Resolved,
    That a further sum, not exceeding £1,505,632,000, and including a Supplementary sum of £810,000, be granted to Her Majesty out of the Consolidated Fund to defray the charges that will come in course of payment during the year ending on 31st March 1994 for expenditure by the Department of Social Security on administration, for agency payments, and for certain other services including grants to local authorities and voluntary organisations.

    Class VII, Vote 8
    Resolved,
    That a further sum, not exceeding £15,520,183,000, be granted to Her Majesty out of the Consolidated Fund to defray the charges that will come in course of payment during the year ending on 31st March 1994 for expenditure by the Department of the Environment on revenue support grant, on residual payments of rate support grants, on payment of non-domestic rates to receiving authorities in England, on a grant providing support to certain receiving authorities affected by changes in the calculations underlying revenue support grant as a result of population change, on a grant providing transitional support for certain local authorities, on a grant to compensate 75 per cent. of the expenditure incurred by them on preparation work for the council tax, on payments to specified bodies and the Commission for Local Administration in England, on payments for Valuation Office Agency rating and valuation services, on payments to meet the expenses of valuation tribunals, and on payments in respect of expenditure by the Local Government Commission.
    MADAM SPEAKER then, pursuant to paragraph ( 5 ) of Standing Order No. 52 (Consideration of Estimates), put the Questions necessary to dispose of proceedings on the remaining Estimates appointed for consideration this day (Estimates and Supplementary Estimates, 1993–94 (Class X, Votes I, 2, 3, 4, 5 and 6).

    Class X, Vote 1
    Resolved,
    That a further sum, not exceeding £362,633,000, be granted to Her Majesty out of the Consolidated Fund to defray the charges that will come in course of payment during the year ending on 31st March 1994 for expenditure by the Department for Education on the assisted places scheme, voluntary and special schools, City Technology Colleges, grant maintained schools, music and ballet schools, direct grant schools, youth services, grants for miscellaneous international and other educational services, administrative costs of the Student Loans Company, research, information, publicity and central government grants to local authorities.

    Class X, Vote 2
    Resolved,
    That a further sum, not exceeding £3,399,269,000, be granted to Her Majesty out of the Consolidated Fund to defray the charges that will come in course of payment during the year ending on 31st March 1994 for expenditure by the Department for Education on payments to the Higher Education Funding Council (England) and the Further Education Funding Council, other payments for or in connection with higher and further education, and payment of certain licence fees to the Home Office.

    Class X, Vote 3
    Resolved,
    That a further sum, not exceeding £1,769,824,000, be granted to Her Majesty out of the Consolidated Fund to defray the charges that will come in course of payment during the year ending on 31st March 1994 for expenditure by the Department for Education on student awards and fees; provision of loans to students; reimbursement of fees for qualifying European Community students; compensation payments to redundant teachers and staff of certain institutions; and payments to the Further Education Funding Council.

    Class X, Vote 4
    Resolved,
    That a further sum, not exceeding £44,369,000, be granted to Her Majesty out of the Consolidated Fund to defray the charges that will come in course of payment during the year ending on 31st March 1994 for expenditure by the Department for Education on administration.

    Class X, Vote 5
    Resolved,
    That a further sum, not exceeding £546,513,000, be granted to Her Majesty out of the Consolidated Fund to defray the charges that will come in course of payment during the year ending on 31st March 1994 for expenditure by the Department for Education (Teachers' Pensions Agency) on superannuation allowances and gratuities, etc in respect of teachers, and the widows, widowers, children and dependants of deceased teachers.

    Class X, Vote 6
    Resolved,
    That a further sum, not exceeding £38,607,000, be granted to Her Majesty out of the Consolidated Fund to defray the charges that will come in course of payment during the year ending on 31st March 1994 for administration and programme expenditure by Her Majesty's Chief Inspector of Schools.

    FINANCE (NO. 2) BILL
    Ordered,
    That, notwithstanding the practice of the House as to the intervals between stages of Bills brought in upon Ways and Means Resolutions, more than one stage of the Finance (No. 2) Bill may be taken at any sitting of the House.—[Mr. Arbuthnot.]

    Broadcasting Act 1990
    Motion made, and Question proposed, That this House do now adjourn.—[Mr. Arbuthnot.]
    10.1 pm
    Mr. Peter Mandelson: I am grateful for this opportunity to initiate this Adjournment debate on the operation of the Broadcasting Act 1990.
    I am pleased that the bongs have sounded as usual tonight for ITN's much-admired "News at Ten", and long may they continue to do so. The early-day motion that I tabled supporting the continuation of "News at Ten" has attracted the signatures of more than 90 hon. Members. That is an understatement of the strong feelings that exist on both sides of the House.
    ITV chiefs should bear that in mind, as well as the Select Committee report, before reaching a final decision on the future of "News at Ten". They would be unwise to ignore Parliament's views, because I believe that the country wants "News at Ten" saved for the future. Parliament has a wider responsibility, however, to consider developments in ITV as a whole and to engage Ministers in examining the working of the Broadcasting Act 1990, notwithstanding the short period of its operation.
    As a former television producer, I want to speak up tonight for ITV's millions of viewers and for its employees, who are dedicated to maintaining its standards of public service broadcasting. Unquestionably, we still have one of the best broadcasting systems in the world. When ITV was introduced, some thought that the BBC's standards would be impaired. The opposite occurred. British television has been greatly enhanced by regionally based ITV.
    The reason for disturbing the ITV system with the 1990 Act was not that its programmes needed improving or that its management needed shaking up—although both might have been true in certain respects. The reason was the application of mistaken dogma to ITV at a time when it was flourishing and rightly regarded as a pillar of public service broadcasting. However, the Government and the then Prime Minister thought that ITV could be improved if the old way of doing things were discarded and if its franchises were merely sold to the highest bidders, who would then have to recoup the price that they had paid irrespective of the resulting quality of service.
    What Mrs. Thatcher wanted was to take an industry that was already in the private sector and to privatise its values and ethos even further. She was only partly restrained in doing so by her then broadcasting Minister, the right hon. and learned Member for Putney (Mr. Mellor). Making a colossally incompetent Bill into a temporarily less destructive Act will be his epitaph, or at least one of them.
    The right hon. and learned Gentleman managed to inject into the Act a bit of the old world of public service broadcasting to mitigate the new system of pure financial return. However, this legislative cocktail did not strike the right balance, and now the commercial pressures created by the Act are starting to come into sharp conflict with ITV's public service commitment. That conflict between market forces and public interest lies behind the attempt to axe "News at Ten". It is also reflected in a host of similar, albeit less prominent, scheduling decisions throughout the ITV companies.

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    Hon. Members have drawn attention, for example, to worrying developments in Granada Television and other ITV companies, whose cuts in programme-making capacity, it is feared, will affect the companies' ability to fulfil the conditions of their licences. Undoubtedly there is mounting pressure on a range of programmes—not just news but all factual programming, documentaries, education, regional arts, minority entertainment and many others, which are popular but which may not maximise audience share and advertising revenue, and therefore help ITV to compete with its rivals.
    As yet, ITV is far from collapsing. This year, £515 million is being spent on the programme schedules. In most parts of the country, viewers are still seeing the programmes that they are used to on ITV. Nevertheless, there is a growing recognition of a threat to ITV, and a real danger of a downward spiral of programme quality, brought on by the commercial burdens on ITV.
    When the highest-bid ITV auction was carried out in 1991, the present Prime Minister passed immediate judgment on it. He said:
    "I don't think it has been an optimum success."
    When asked whether the system should be abandoned, he added:
    "We will have to wait and see."
    I doubt whether his confidence has grown since then.
    After an inauspicious start, three developments have taken place to frustrate the intention of the Broadcasting Act to protect public service broadcasting on ITV. First, the ridiculous auction has resulted in franchises costing between £2,000 and £43 million apiece, producing an income for the Treasury, and a huge fixed cost for the companies, of £231.6 million per annum. Advertising revenue is available to cover these purchase costs, although it also has to cover programme making.
    Secondly, the recession has been deeper and longer than anyone expected, and that has drained ITV of anticipated income. Thirdly, and most important for the long term, the competition to ITV from satellite, cable and Channel 4 has grown faster than many predicted. The satellite and cable systems now reach more than 3 million homes and have sources of income, such as subscription television, that are denied to ITV. Those systems, along with Channel 4, are eroding ITV's market share, thereby threatening to reduce its advertising revenue year on year.
    Further rapid technology changes will greatly accelerate the spread of this competition. In 1989, when the Act was being considered, digital technology seemed to be at least a decade away, yet BSkyB is planning to use digital technology in Britain in two years' time. That will bring films almost on demand. Pay-as-you-view television will be here in profusion. In 1989, high-definition television on a commercial basis was seen as the technology of the 21st century. It could now be the technology of the mid-1990s.
    This is the crux of the issue. As ITV loses revenue due to technology-driven and unregulated competition and rivalry from Channel 4, the ITV companies will be forced to cut costs. Because of their high fixed costs, chiefly the franchise bids, the axe will fall on programme budgets. That will weaken the programme schedule, depressing audience ratings and revenue still further, creating the danger of a descending spiral of programme quality.
    What should Ministers be doing to respond to that threat? First, the Government must recognise that the problem exists. The Secretary of State for National
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    Heritage—I am glad that he has joined us for the debate —told me last month that his job is merely to listen to the debate. That is not encouraging. It is necessary for him to think again and carry out a thorough review of the Broadcasting Act, which should take place in tandem with a review of the BBC's charter and the subsequent legislation.
    The review needs to embrace a number of aspects of the operation of the Act. First, it needs to examine the possibility of reducing the cash burdens on ITV created by the franchise auction. At the moment, that is planned for 1999. Consideration should be given to bringing that forward by two or three years. Next, the review should look at the balance of regulation between ITV and the satellite and cable systems in order to put competition on a fairer basis. BSkyB has almost no public service obligations placed on it, whereas ITV has a requirement, for example, to carry 51 per cent. British or European originated production.
    The review also needs to look carefully at Channel 4. Paradoxically, Channel 4's success has been a worry for ITV ever since the Broadcasting Act separated it from the ITV system. Channel 4 has taken full advantage of its licence conditions, which are looser in some respects than ITV's, and its flexible remit to provide a service that is able to compete advantageously with channel three. The problems posed by that for ITV need to be examined by Ministers. I am not inviting the Government to consider privatising Channel 4 because of its success or to eye the money it makes to ease the Treasury's current problems. Perhaps the Minister will reassure us on those matters.
    Last but not least, there is the issue of ITV's business structure. At the beginning of next year, under the Boradcasting Act, it will be permissible for large ITV companies to merge with smaller ones, but not with each other. Foreign companies of any size will be able to take over British companies, large and small. We are all rightly concerned at the impact that mergers can have on the regional identity of our television stations. Most Members of Parliament, including myself, are instinctively hostile to them. When Yorkshire Television tried to swallow up Tyne Tees during their merger last year, I campaigned to ensure that the interests of the viewers in my constituency and throughout the north-east were not sacrificed precisely because of that concern for regional identity and production.
    As a result of the way in which the industry is structured and the way in which the Broadcasting Act operates, financial reality is driving the major ITV companies towards consideration of mergers. In the face of overseas competition, which operates without restraint on merger and acquisition, the pressure to reduce costs and overheads through coming together is now becoming inexorable. I regret that, but at present it is a commercial fact. The risk is that, in the absence of a level playing field, we may end up with the bizarre situation in which foreign-based companies have a significant advantage over home-based ones. At the very least, it now merits serious scrutiny by the Government.
    Any changes must, however, preserve the regional licences, production and local identity of ITV. Yorkshire Television's crude attempt to absorb Tyne Tees shows the fragility of local identity and control and the immense dangers of giving excessive latitude to ITV companies. However, the prompt intervention of the Independent Television Commission in the north-east—we have seen

    569
    the ITC acting again over ITN's "News at Ten"—proved how firm regulation can protect the interests of regional viewers. In this as in other matters, a strong role for the ITC to protect the public and regional interest needs to be upheld. Such interest, the maintenance of programme standards and the whole ethos of public broadcasting must underlie any review of the Broadcasting Act 1990.
    The crisis in ITV is not yet on us, but it is not far off. The Act, born in prejudice, must now fit new realities as well as maintain the traditional standards of British broadcasting. I hope that the Minister will state how the Government intend to proceed. I am sure that he shares my concern and my commitment to the strengthening of public licence broadcasting on ITV. That would certainly reflect the reputation and record of the Department of National Heritage to date. I hope that he will respond vigorously and imaginatively.
    10.16 pm
    The Parliamentary Under-Secretary of State for National Heritage (Mr. lain Sproat): I congratulate the hon. Member for Hartlepool (Mr. Mandelson) on his good fortune in securing the debate. I also congratulate him on the thoughtful way in which he presented his comments. As he will discover, I do not agree with all that he said, but it is nevertheless excellent that such sharp and well informed comments should be directed at the Broadcasting Act 1990 and, indeed, at all Acts, from time to time. I am sure that nothing but good can flow from it.
    As the hon. Gentleman rightly said, the subject is extremely topical. It is also a very large subject, as the Broadcasting Act 1990 is one of the longest passed by the previous Parliament. It has 10 parts, 204 sections and 22 schedules. The hon. Gentleman has, fairly enough, concentrated on a few issues and I begin by setting them in context.
    The Act was a significant move towards deregulating what had hitherto been a highly regulated industry. There were good reasons for it: it was in line with the Government's general policy of trying to remove unnecessary shackles in the operation of commercial enterprises. Moreover, conditions were changing. In the past, it had been thought necessary to regulate broadcasting fairly closely, but, with the possibility of many more services, a new framework had to be created to take account of those changes.
    By the late 1980s, it was clear that more services could become available through satellite and cable television and through the BBC releasing some radio frequencies so that more independent radio stations could be opened. The old framework, the cosy duopoly of the BBC and the Independent Broadcasting Authority, could not cope with the likely multiplicity of services; nor could it accommodate the move towards a global market for broadcasting services. Services may now be transmitted to one country by an organisation based in another country, using a satellite owned in a third country for reception in a fourth country, or, indeed, on another continent.
    The aims of the Broadcasting Acts were to create diversity, choice and competition in the provision of broadcast services. It set out to create a new pattern for broadcasting, opening the way for many more services. It
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    created two new regulatory bodies, the Independent Television Commission and the Radio Authority, to licence broadcasting services.
    The Act has enabled a huge range of services to be licensed. At one end of the scale there are the terrestrial television services available throughout the United Kingdom, the new national independent radio services and the satellite services. At the other end of the scale are the local delivery services to bring television and radio services to 1,000 or more homes through a cable or microwave system, and the Radio Authority's restricted licences, which allow local events to be covered by a temporary radio service in a limited area.
    The Act also establishes different levels of regulation for different types of service. For programmes it sets out standards of taste, of decency, of accuracy and of due impartiality for all services licensed by the ITC and the Radio Authority. Most services are regulated more lightly than would have been possible in the past.
    Only Channel 4, and S4C in Wales, are required to broadcast programmes as public services of information, education and entertainment. Channel 4 has to ensure that it broadcasts programmes likely to appeal to tastes and interests not catered for on ITV and has to encourage innovation and experiment in the form and content of programmes. S4C has to ensure that a substantial proportion of its programmes are in Welsh.
    Channel 3—ITV—is no longer required to provide programmes as public services, although the Act places some public service obligations on Channel 3 licensees. Those include providing programmes calculated to appeal to a wide variety of tastes and interests, regional programmes, religious programmes, programmes intended for children, and news and current affairs.
    I shall now make some specific points, the first of which concerns the competitive cash bidding for ITV licences. Not all licences under the Act are awarded by competitive bidding. Licences awarded in that way are those that are potentially the most valuable—the licences for Channel 3, Channel 5 and the new national independent radio services. As the licences constitute permission to use a public asset—the frequencies—for commercial purposes, it seems right that the Treasury and the taxpayers should receive their share. That was the purpose of the bids.
    For ITV there was a quality threshold, too, and some applicants fell at that hurdle. Not all the successful applicants had been the highest bidders. Whatever the criticisms, the process was open and the criteria for applications were known. That seems preferable to the awards behind closed doors that were a feature of the earlier arrangements. The same processes will not happen again. ITV licensees will be able to renew their licences after six years, but the ITC can withdraw licences if promises are not kept.
    With regard to the ownership of ITV companies, there is a balance to be struck between conflicting objectives. There are economies of scale to be achieved if fewer but larger organisations provide a service, but there are also benefits in competition. Those benefits are obtained by allowing a number of organisations to compete in providing a service and by preventing concentrations in the ownership of the media in any area.
    During the passage of the Broadcasting Act, the Government were persuaded to provide for a period of stability when the new ITV licences came into force. That was the background to the so-called moratorium, which is

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    due to expire at the end of the year. It does not prevent all takeovers, but it means that any takeovers or mergers have to be approved by the ITC.
    The Broadcasting (Restrictions on the Holding of Licences) Order 1991, made under the Act, prevented Channel 3 licensees from acquiring two licences in contiguous areas as part of the initial award of licences. It did not prevent subsequent mergers. However, the order designates nine areas with the largest advertising revenues, and the licensee for one large area cannot hold the licence in another large area. That licensee can, however, own a licence in a smaller area, a 20 per cent. interest in another large licensee, and a 5 per cent. interest in the holders of other regional licences.
    Concern has been expressed, both by the hon. Member for Hartlepool tonight and by other hon. Members on other occasions, about takeovers from organisations based in other EC countries. Any organisation taking over an ITV company will be hound by its licence conditions, including those requiring local programmes and local programme production.
    There is a debate between the licensees as to whether it would be desirable for those ownership restrictions to be relaxed further or whether the moratorium should be extended. My right hon. Friend the Secretary of State—here with us tonight—met representatives of all the ITV licensees on 14 June so that they could put their views to him face to face. It was a very helpful meeting, and my right hon. Friend is now reflecting on what was said to him on that occasion. I am not able this evening to say what the outcome of those reflections will be.
    The hon. Member for Hartlepool, mindful of the interests of his constituents, has been concerned—and he properly expressed that concern this evening—about the merger of Tyne Tees and Yorkshire Television. This merger was allowed by the ITC under the provisions of the Act. I understand that, earlier this year, the commission held a series of meetings with representatives of Yorkshire and Tyne Tees and is now satisfied with the new arrangements for the structure of the companies, with two organisations operating under a hold company.
    The hon. Gentleman was concerned about the regional programming in the Tyne Tees area and the continuation of programme production there. The commission clearly shares his anxieties. As he knows, the main provisions on regional programming and production are set out in the licences that the commission has issued. It is for the commission to monitor compliance with those licences and there is every indication that it intends to take those duties extremely seriously.
    Under the terms of the Act, the commission will in future include in its annual report to Parliament an assessment of the extent to which the holders of ITV licences have failed to comply with the conditions included in their licences. The first of those reports should be available to the House next summer. I understand the hon. Gentleman's concern about job losses in the Tyne Tees area—that concern is entirely right and proper—but in the longer term inefficient concerns will not survive. The restructuring of broadcasting is creating new opportunities, as well as job losses. There has been an increase in independent production companies and facilities companies.
    Let me now deal with the question with which the hon. Gentleman began his speech—ITN and "News at Ten". ITN has been nominated by the ITC as the news provider
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    for Channel 3 under the terms of the Act. Both sides of the House were agreed that it was important that Channel 3 schedules should include high-quality programmes of national and international news, which could compete effectively with the news services provided by the BBC.
    In the past, ITN was wholly owned by all the ITV companies. The Broadcasting Act requires that ownership should be more varied. No one can have more than a 20 per cent. interest in the nominated news provider, and the holders of regional ITV licences taken together should have less than a 50 per cent. interest. Obviously, time has to be allowed for changes in the ownership of ITN, and those requirements do not come into effect until the end of 1994.
    Earlier this year, ITN was taken over by a new consortium, which included a number of ITV licence holders and also Reuters. One of the major partners in the consortium was Carlton Communications and the chairman of Carlton Communications is Michael Green, who is also the chairman of Carlton Television, holding the weekday Channel 3 licence and now the chairman of ITN.
    I understand that, when the bid was made, it was considered by the Office of Fair Trading. My right hon. Friend the President of the Board of Trade subsequently concluded that there was need for a reference to the Monopolies and Mergers Commission. There are, of course, many other providers of broadcast news services, including the BBC, Sky News and CNN for those who receive cable services, as well as the independent radio services.
    I do not intend to comment at any length on the view that Mr. Green should stand down as chairman of ITN just because he is a declared supporter of and donor to the Conservative party. The Act requires news programmes to be presented with due accuracy and impartiality. It also requires due impartiality on matters of political or industrial controversy or relating to current public policy. We can expect the commission to monitor compliance with those requirements.
    During the past two weeks, considerable concern has been expressed in the House and elsewhere about the timing of the main evening news bulletin on ITV. My right hon. Friend the Prime Minister wrote to the chairman of the Independent Television Commission expressing his concern about the proposed changes in the timing and stressing the importance of ITV providing a high-quality news service, and providing effective competition with the BBC in peak hours. The Leader of the Opposition also wrote.
    The National Heritage Select Committee, which by chance was examining witnesses from the ITV companies last week, produced, with commendable speed, a report with its views on the proposals for changing the scheduling of the main news bulletin. In the face of that barrage, it is hardly surprising that the ITV companies are planning to discuss the issue at their annual meeting with the ITC on 14 July.
    The main responsibility for monitoring the implementation of the provisions of the Broadcasting Act which governs ITV rests with the Independent Television Commission. Those provisions came into effect only at the beginning of this year.
    The Act establishes a new relationship between the commission and, the ITV companies. Until this year, the commission was the broadcaster, providing a public

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    service of information, education and entertainment, with programmes supplied by the ITV companies under contract. Now the ITC is a regulator and the ITV companies operate under licences which it has issued.
    It is understandable that it will take some time for that relationship to settle down. In the past few months, there has been some jockeying for position and some flexing of muscles on both sides, but the commission seems determined to be an effective watchdog.
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    We shall keep the working of the Act under review, but it is far too early to consider major amendments. Amending the Act will not alter the changes in the global market—
    The motion having been made after Ten o'clock and the debate having continued for half an hour, MADAM SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
    Adjourned at twenty-nine minutes to Eleven o'clock.