Commons Sitting of 19 April 1994

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

    National Vocational Qualifications
    Mr. Ainger: To ask the Secretary of State for Employment what oversight his Department has of the validation policies of organisations that examine and award national vocational qualifications.
    The Parliamentary Under-Secretary of State for Employment (Miss Ann Widdecombe): The Department sets a framework for the National Council of Vocational Qualifications, which in turn oversees quality assurance arrangements for national vocational qualifications. I shall write to the hon. Member with fuller details of our procedures than can be given in a parliamentary reply.
    Mr. Ainger: The Minister will be aware that a number of large companies, including Ford Motor Co. Ltd. in the UK, have expressed their concern about a fall in standards —in their opinion—of training and vocational qualifications. She will also be aware that the National Council of Vocational Qualifications is currently conducting an investigation into the fraudulent award of national vocational qualifications and general national vocational qualifications. Bearing in mind those serious matters, will the Minister conduct an independent inquiry into those issues, especially into the bonuses paid to colleges and training agencies on a pass basis rather than a quality of training basis?
    Miss Widdecombe: The hon. Gentleman raises a serious matter. Procedures are already in place that require our training and enterprise councils to set in being audit trails which should track and monitor carefully the quality of training that is provided. The hon. Gentleman slightly understates—indeed, he considerably understates—the amount of confidence that employers show in NVQs. Of all employers, 44 per cent. are already users and 96 per cent. say that they are either experiencing benefits or expect to experience benefits as a result of NVQs. I share the hon. Gentleman's wish to get NVQs right, but I believe that we have made great strides towards that goal and I should not like an odd case to detract from that.
    Mr. Rowe: Does my hon. Friend accept that there is widespread interest in the whole system of NVQs across the world in countries such as Malaysia, Singapore and many others? Those countries feel great anxiety that if they go down the same road as Britain, which they are sorely
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    tempted to do and which would provide a great export opportunity for this country's skills, there should be a guarantee of consistency of standards.
    Miss Widdecombe: There is a general shared perception that we should ensure that standards are consistent, nationally recognised, continually updated and widely respected.
    Mr. Tony Lloyd: Doe the Minister agree that the whole credibility of NVQs is on the line when, as my hon. Friend the Member for Workington (Mr. Campbell-Savours) has revealed in early-day motions 1016 and 1017, we know that there has been systematic abuse of the system of payment? If the Minister were honest she would admit to the House that I have written asking her to look into the question of fraud in output funding and NVQs, but that she has done nothing. Does she accept that the basis of output funding and the lack of credible audit procedures allow that systematic fraud to take place?
    Miss Widdecombe: No, I do not accept that there is systematic or widespread fraud. When allegations of particular frauds are made, they are carefully investigated. I have written to the hon. Member for Workington (Mr. Campbell-Savours), who has raised some serious issues in early-day motions, and I have asked him to supply me with the evidence behind those issues so that they may be properly investigated.

    Part-time Workers
    Mr. Oppenheim: To ask the Secretary of State for Employment if he will make a statement on the proportion of workers in part-time employment.
    Miss Widdecombe: In December 1993, 28 per cent. of the work force in employment in Great Britain worked part time.
    Mr. Oppenheim: Is my hon. Friend aware that in the 1970s the number of part-time workers as a proportion of the overall total increased by 6 per cent. compared with only 5 per cent. in the 1980s? Is she also aware that since 1979 soaring manufacturing productivity has boosted average net weekly take-home pay by no less than £80 a week, compared with stagnant earnings and stagnant productivity between 1974 and 1979? Does that not graphically illustrate that it was the Labour Government who presided over the sweatshop economy and that the only Mickey Mouse jobs were those that they gave to their buddies in local government?
    Miss Widdecombe: It amply demonstrates to the House that it is the Conservative party which has presided over a rise in take-home pay for people on average earnings. What is important to those people is what is left in their pockets for them to exercise choice over. The Government have consistently stood by that, while the Labour party, which has called for expenditure on all and made promises on everything, has never delivered when in office.
    Ms Eagle: When does the Department intend to respond to the Law Lords' judgment which established that the current discrimination against part-time workers in employment law must be ended? When shall we get legislation to bring the discrimination to an end and put things right?
    Miss Widdecombe: Distinctions between part-time and full-time workers and their rights were maintained by Labour Governments, so the Law Lords' ruling applies just as much to what Labour Governments did as to what we do. We shall respond at such time as our deliberations are complete.
    Mr. Dunn: Is not part-time work one of the greatest single benefits to those women who wish to combine economic work with family responsibilities?
    Miss Widdecombe: It is indeed, and I am rather saddened that the Opposition always try to sell part-time work as some sort of second-rate option. We know from the labour force survey that it is the preferred option of those who work part time. Less than 14 per cent. of those who do so would work full time if they had the opportunity to do so. I should like to hear Opposition Members welcome that.
    Mr. McAllion: Is the Minister aware that the proportion of part-time workers is likely to grow if we have any more announcements like the one made this morning by the London International Group about manufacturing job losses in Dundee, London and south Wales, with the switch of production to Malaysia where they will not buy British goods? When will the Government recognise that the deregulated marketplace that they advocate is a one-way street to disinvestment and job losses in this country and to exploitation and slave labour in the third world?
    Miss Widdecombe: The one-way street that appears to be operating is the vastly increased inward investment to the United Kingdom as a result of the Government's policies.

    Disabled People
    Mr. Thurnham: To ask the Secretary of State for Employment what representations he has received about the employment of people with disabilities.
    The Secretary of State for Employment (Mr. David Hunt): Many, especially from my hon. Friend.
    Mr. Thurnham: Will my right hon. Friend ensure that the example set by his Department is followed by other Government Departments and by bodies throughout the public sector? Will he put his personal imprint on the code of good practice? Will he appoint an ombudsman to ensure that the civil service code is applied throughout the public sector?
    Mr. Hunt: I am grateful to my hon. Friend for his praise for the code, which I warmly and strongly endorse. I share his wish to see the code extended. I should like to see many other bodies, especially public bodies, endorsing the aims of the code and introducing codes of their own. I shall, of course, consider carefully my hon. Friend's other points.
    Mr. Wigley: Will the Secretary of State recall that it was 50 years ago when legislation was introduced providing that 3 per cent. of all employees should be disabled people? Is he aware that only 0.7 per cent. of private sector employees are disabled and that the situation is not much better in the public sector, where only 0.8 per
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    cent. of employees are disabled? What will he do to try to overcome this and ensure that disabled people have their fair share of employment within these islands?
    Mr. Hunt: First, consideration in Committee of the Civil Rights (Disabled People) Bill, which was promoted by the hon. Member for Kingswood (Mr. Berry), has just been completed and I am considering carefully the issues that were raised at that stage.
    Secondly, if we consider the placings made by the specialist advisers of the Employment Service, who put people with disabilities into work, we find that last year the total was over 40,000. I have set the special advisers a target of 55,000 placings for this financial year. I hope that the hon. Member for Caernarfon (Mr. Wigley) will accept that that is a laudable objective and I am confident that it will be met by the Employment Service.
    Mr. Prescott: Does the Secretary of State accept that the code, which the House endorses, is creating unemployment at something like four times the average level of unemployment in the country at present? Can he tell us whether Government Departments are observing the code? If they are not observing it, does he not think that he should be setting an example and asking them to observe it?
    Mr. Hunt: I wish that the hon. Gentleman would check his facts. He is talking to the Secretary of State of a Government Department which observes and meets the quota requirement.
    Mr. Elletson: Is my right hon. Friend aware of the problems faced by epileptics in employment? Will he look into the case of my constituent, Helen Barr, who was recently sacked from her job as a hospital cleaner ostensibly on the ground that she had an epileptic fit even though she declared that she was an epileptic when she took on the job? Does he agree that epilepsy is a disability just like any other, but is widely misunderstood by employers, and that epileptics face widespread discrimination and prejudice?
    Mr. Hunt: My hon. Friend has highlighted an important case and an important area. I accept that there is a need to guide employers about some disabilities in particular. My recollection is that the Employment Service produces a guide on epilepsy. If it does not, I will make sure that it does, and I shall send a copy to my hon. Friend.

    Part-time Workers
    Mrs. Helen Jackson: To ask the Secretary of State for Employment if he will make a statement on the implications of the recent House of Lords ruling on part-time workers for United Kingdom employment legislation.
    Miss Widdecombe: The Government are carefully considering the judgment to ascertain its full implications, and will make an announcement as soon as possible.
    Mrs. Jackson: Does the Minister recognise that that is the answer which she gave on 11 March and on 23 March in European Standing Committee B? Is it good enough for the Minister to continue to say that the Government are taking legal advice and that when they have heard it they will make a statement? Is it not time to tell the millions of part-time workers, who want to hear when they are to know

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    whether they are to have their rights to sickness benefit, holidays and redundancy pay recognised by the Government?
    Miss Widdecombe: I am glad that the hon. Lady recognises the consistency of my answers. Let me make it clear to the House. We shall respond and make an announcement when—and only when—all our investigations, all our proper consultation, and all our deliberations are complete. The difference between the Government and Labour Members is that we take these things responsibly while they make cheap political points out of them.
    Mr. Nicholls: Will my hon. Friend confirm my impression that if we accept the ruling in all its rigour, the effect would be to reduce employment opportunities for a great number of people who are on the margins of the job market? That will increase unemployment, not decrease it, and is exactly the sort of thing that is on offer to us from Europe if that is how the country votes in the European elections.
    Miss Widdecombe: I do not intend to speculate on the effects of the judgment until our deliberations are complete, but it has always been a priority of the Government to limit as far as possible the burdens on business. That is why we have one of the highest levels of employment in Europe, that is why we have falling unemployment, that is why we have good part-time opportunities, that is why we have inward investment, and that is why we are carrying on with the policy.
    Ms Short: Will the Minister explain how she can possibly stand there and say that the Government are not obliged to give part-time women workers equal rights with full-time workers when a House of Lords judgment which interprets European law says that the Government are obliged to do so? She is obliged to say that the Government accept the judgment and will implement it; that is the rule of law. In the debate on sex discrimination, two Tory Members said that the finding of the House of Lords should not be obeyed. The thing that the Minister and no one in her party seems to understand—[Interruption.] Does the Minister appreciate that women who want part-time work do not want second-rate work? They do not want low pay and lack of access to training; they want holiday entitlements and protection from unfair dismissal. Will the Minister accord to women the right to full-time rights for part-time workers?
    Miss Widdecombe: The hon. Lady is under a complete misapprehension. Some 69 per cent. of all those who work already qualify for full protection rights. Of the remainder, only 3 per cent. fail to qualify solely on the grounds of the hours they work.

    Employment Service, West Midlands
    Dame Jill Knight: To ask the Secretary of State for Employment how many people in the west midlands have been placed in work by the Employment Service in the past 12 months.
    Mr. David Hunt: A total of 143,600.
    Dame Jill Knight: May I express to my right hon. Friend my great pleasure at hearing that news? Is it a reasonable supposition that the considerable number of
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    extra jobs coming on stream from Jaguar, Land-Rover, Flight's Travel, Ansell's and others would not have come about had Britain been a signatory to the social chapter?
    Mr. Hunt: I agree with my hon. Friend.
    At the Social Affairs Council today, my hon. Friend the Minister of State is fighting to ensure that extra burdens are not imposed on business. One of the reasons why there has been a record level of inward investment—my hon. Friend the Member for Birmingham, Edgbaston (Dame J. Knight) rightly paid tribute to the fact that Jaguar has decided site the manufacture of the new E-type in the region, and that Land-Rover and several others have made important announcements—which is so important for jobs is,of course, that my right hon. Friend the Prime Minister refused to sign up to the social protocol.
    Mr. Grocott: What conclusion does the Secretary of State draw from the simple statistical truth—which can be confirmed by the experience of anyone who has lived in the west midlands for the past 30 years—that employment prospects, particularly for school leavers, were infinitely better under the Labour Governments of the 1960s and 1970s than they have been under the Tory Governments of the 1980s and 1990s?
    Mr. Hunt: I do not accept that. My hon. Friend the Member for Edgbaston highlighted the number of new job opportunities which will arise in the west midlands in the coming year, and it is a fact that unemployment in the west midlands has fallen by just under 30,000 in the past 12 months. Although I gave the figure 143,600 in answer to my hon. Friend the Member for Edgbaston, we are setting a target of 148,000 for the Employment Service to place in work during the next 12 months in the west midlands and I am confident that it will meet and beat that target.
    Mr. Anthony Coombs: Will my right hon. Friend confirm that one quarter of Japanese investment in this country goes to the west midlands? Is he also aware that the most recent west midlands business survey, by the university of Wolverhampton, showed that industrial confidence in the west midlands was at its best level ever? That is one reason why unemployment in my constituency has dropped by 10 per cent. in the past year alone. Does my right hon. Friend also agree that such a surge in confidence would be endangered by precisely the kind of social engineering on industry in which the Labour party seems to specialise?
    Mr. Hunt: My hon. Friend is right, and there are interesting statistics in that area. Some 70 Japanese companies have sought to base themselves in the west midlands region. That is a fine tribute to the work force in the west midlands. Those companies see this country as a centre of free enterprise, free trade and free markets. That is why we shall continue to win a record level of inward investment, which currently exceeds the levels of inward investment into all the other countries of the European Union put together.
    Mr. Alex Carlile: Does the Secretary of State agree that the level of male unemployment in the west midlands remains alarmingly high? Is he conscious that industry there is being affected by the dumping of very cheap goods —for example, garden tools from the far east—which in the past have been made successfully in, and sold from, the west midlands?
    Mr. Hunt: When one analyses present trends, one sees that although unemployment is unacceptably high in the west midlands and I constantly refer to that fact, it is on a firm downward trend throughout the country and in the west midlands. The downward trend in the country is now between 15,000 and 20,000, notwithstanding occasional monthly rises. I believe that that trend will continue, and that problems of the kind that the hon. and learned Gentleman mentioned will be more than outweighed by the constant flow of additional inward investment which will provide increasing job opportunities.

    Seamen
    Mr. Loyden: To ask the Secretary of State for Employment what were the numbers of British seamen in employment in each year since 1978.
    Mr. David Hunt: The statistics show that in 1993 there were 31,000 employees in the sea transport industry in the United Kingdom compared with 77,000 in 1978.
    With permission, Madam Speaker, I will publish in the Official Report the figures for the intervening period.
    Mr. Loyden: I am not surprised that the Secretary of State has failed to give the current figures for employment of seamen. Is it not a disgrace that a nation which built its wealth on maritime trade is sitting back and allowing its merchant fleet constantly to diminish and that our shipyards are empty? Is it not an absolute disgrace that the Government are standing aside and doing nothing about those two job-creating industries? Is it not about time the House started paying back its merchant seamen and shipbuilders by providing the sort of jobs that could be created on Merseyside, Tyneside, Clydeside and the rest?
    Mr. Hunt: First, I am giving in answer to the hon. Gentleman's question the only figures that I can give and the only figures that are available to me. Secondly, I am not, and neither are my Government, standing aside—[Interruption.] My party or my Government—neither I nor my party nor the Government in which I am proud to serve as a member are standing aside. Today, my officials are meeting, the merchant navy training board to finalise the proposal for a prototype of the new modern apprenticeships and the frameworks to be introduced in the shipping industry later this year. I believe that the new modern apprenticeship scheme will give a real opportunity to the shipping industry, which I hope that it will accept.
    Mr. Jacques Arnold: Is it not the case that the British Merchant Navy still wins on grounds of quality, if no longer on grounds of quantity, and is that not due to the high standards of training that we give to our young people for a career at sea—not least at the Denton sea school in my constituency?
    Mr. Hunt: My hon. Friend highlights the importance of training, to which I have just referred in stressing the importance of the new modern apprenticeship scheme for the shipping industry. I remind him and my right hon. and hon. Friends that the successful completion of the GATT Uruguay round and the consequent increase in world trade is very good news for the United Kingdom. It will be particularly good news for the shipping industry.
    Mr. Bennett: What good is the apprenticeship scheme if people who are already qualified cannot get jobs? What
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    help can the Secretary of State offer to one of my constituents who has just been made redundant from a cross-channel ferry so that people from Poland can be employed in his place?
    Mr. Hunt: The importance of the new modern apprenticeship scheme is that it will give school leavers aged 16 and 17 next year the opportunity to increase their skills to national vocational qualification level 3, which is equivalent to A-level, and to focus those skills on the shipping industry.
    As for the hon. Gentleman's constituent, training for work offers the opportunity to improve and increase training related to qualifications and outputs. If the hon. Gentleman will give me details of the particular constituency case to which he referred, I shall of course follow it up.
    Following is the information: Employees in the Sea Transport Industry (Standard Industrial Classification 7400): United Kingdom—1978, 77,000; 1979, 74,000; 1980, 70,000; 1981, 66,000; 1982, 58,000; 1983, 48,000; 1984, 40,000; 1985, 37,000; 1986, 34,000; 1987, 34,000; 1988, 35,000; 1989, 35,000; 1990, 33,000; 1991, 32,000; 1992, 30,000; 1993, 31,000. Information relates to June of each year and is not seasonally adjusted.

    Part-time Workers
    Mr. Heald: To ask the Secretary of State for Employment what estimates his Department has made of the proportion of those working part time who want to work full time.
    Miss Widdecombe: The labour force survey estimates for autumn 1993 show that under 14 per cent. of those working part time did so because they could not find a full-time job.
    Mr. Heald: Does my hon. Friend agree that while few part-timers want to work full time, a substantial number of full-timers—about a third—would like to work part time? Does she agree that labour market flexibility is the key not only to lower unemployment but to increased competitiveness and meeting the wishes of working people?
    Miss Widdecombe: I endorse what my hon. Friend said about the great opportunities offered by part-time work. The fact that more part-time opportunities are on offer for those who choose and prefer them, enabling more women to combine economic work with family responsibilities if they want to, can only be welcomed.
    Mr. Frank Field: Does the Minister accept that the national insurance system discriminates against employers who wish to create full-time jobs? Is she aware of the hardship that that causes to many families and the effect on public finances? As the economy slowly recovers, jobs are being taken by people who are not registered as unemployed and there is no saving in dole queue money. The wages paid to those employees are so low that they do not pay much tax. If the Government cannot wipe out discrimination for the right reasons, will they do so for other reasons? There are good, sound economic reasons for putting the public finances into equilibrium again.
    Miss Widdecombe: The best way to encourage employers to employ part-time or full-time workers—as best suits their business needs and the wishes of their

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    employees—is to reduce burdens on business. That has been, and will continue to be, the thrust of the Government's employment policy.
    Mr. Dickens: Is not it a fact that many people very much value the opportunity to work part time, whether in catering, nursing homes, rest homes, education, school dinners or whatever? Is not it also serious when a judgment forces on the House of Commons and the establishment restrictions and obligations on employers? Nothing will undermine people's right to work part time more than restrictions placed on employers.
    Miss Widdecombe: The answer to the first part of my hon. Friend's question is yes. It is right that people have those choices, which provide tremendous opportunities. The answer to the second part of his question, as I have said several times today, is that we are considering most carefully the implications of the Lords judgment arid how to implement it. The burdens on business will obviously be one of our considerations.
    Mrs. Clwyd: What about people who cannot work full time or part time because the Government deny them that opportunity? Has not the Government's pit closure programme dumped thousands of former miners on the economic scrap heap, like the miners at Tower colliery, who this afternoon were forced to accept closure because yesterday the wages of every miner at the pit were cut? British Coal and the Secretary of State have lied through their teeth.
    Madam Speaker: Order. That statement is unacceptable in this House. I ask the hon. Lady to rephrase it.
    Mrs. Clwyd: I will withdraw that statement. The Secretary of State and British Coal have told blatant untruths.
    Madam Speaker: Order. The English language is very rich. I am sure that the hon. Lady can do even better and I ask her to try.
    Mrs. Clwyd: British Coal and the Secretary of State have been peddling untruths.

    Employment Service, South-East
    Mr. Booth: To ask the Secretary of State for Employment how many people in the south-eastern region have been placed into work by the Employment Service in the past 12 months.
    Miss Widdecombe: A total of 406,900 seasonally adjusted placings to February 1994, which is an increase of 47,900 over the previous year.
    Mr. Booth: Will my hon. Friend welcome the fact that in the south-east, which includes Finchley, there has been a reduction in unemployment of 5 per cent. in the past year, born of the sensible policies of the Conservative party? Does not that contrast with the parts of the world where the most significant employment is that of the dead-beat policies that are still peddled by the Labour party?
    Miss Widdecombe: Yes, indeed. The increased number of placings, the falling unemployment and the increased number of members of the civilian work force in employment, add up to a huge endorsement of our policies. The only thing to be regretted is that whenever there is a
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    good news such as that which my hon. Friend has just brought to the attention of the House, the Opposition simply sit there looking as glum as owls.
    Mr. Gapes: Is the Minister aware that in the past year throughout the south-east of the country and in London thousands of people have lost their jobs and many people are suffering from mortgage pressure, from loss of earnings and from pressure on their lives as a result of the unemployment created by the Government?
    Miss Widdecombe: Why does not the hon. Gentleman welcome the fall in unemployment? Why does not he welcome the fall in interest rates, which reduces that mortgage pressure? Why does not he welcome the increase in numbers in employment? Why is he so concerned to peddle misery and unhappiness to his constituents? [Interruption.]
    Madam Speaker: Order. There was so much noise going on in the House that I did not hear what the hon. Member for Cynon Valley (Mrs. Clwyd) said. [Interruption.] Order. If there was less noise, I would have done so. I believe that she used a phrase which last week was unacceptable to me. If that is the case, it is still unacceptable to me now, and I ask the hon. Lady, before we proceed any further, to withdraw it. [Interruption.] Order. I will deal with this matter. I understand that the hon. Lady used—
    Several hon. Members: On a point of order, Madam Speaker.
    Madam Speaker: There is no point of order. I am on my feet. Am I to understand that the hon. Lady used the phrase, "peddling untruths"?
    Mrs. Clwyd: Yes.
    Madam Speaker: In that case, it was unacceptable to me last week and— [Interruption.] Order. It was rephrased last week. [Interruption.] Order. I am asking the hon. Lady to rephrase the comment she made. It is as simple as that.
    Mrs. Clwyd: I understand that last week the Prime Minister—I was not in my place at the time—actually used the phrase, "peddled an untruth", and I understand that the
    Prime Minister was not asked to withdraw that particular phrase.
    Madam Speaker: The Prime Minister rephrased that. [Interruption.] Order. He rephrased it and I am asking the hon. Lady to do precisely the same.
    Mrs. Clwyd: I repeat, British Coal and the Secretary of State misled the House.
    Madam Speaker: In that case I accept what the hon. Lady said, and we can now proceed.

    Youth Unemployment, East Midlands
    Mr. Barnes: To ask the Secretary of State for Employment what is the current level of youth unemployment in the east midlands; and what it was in April 1979.
    Miss Widdecombe: Among 18 to 24-year-olds, 51,271 in January 1994 and 58,627 in October 1983, which is the earliest date for which comparable information is available.
    Mr. Barnes: The labour force survey shows that nearly 20 per cent. of 16 to 24-year-olds are unemployed, and that is on the Government's fiddled figures. That figure is far greater than for any other age group, and twice as high as for some age groups. What is to be done about the scandal of youth unemployment? Our futures depend on employment. Why cannot we have high-quality education, proper training and investment for jobs instead of low-level training schemes?
    Miss Widdecombe: As the hon. Gentleman is so concerned about youth unemployment, a concern that is shared, perhaps he would like to welcome the following: that we have lower than the average EC youth unemployment; that only 138 young people in England have now been waiting for the delivery of the guarantee for more than eight weeks; that in his constituency the figure has fallen from 42 young people to one young person; and the increased training and vocational opportunities.
    Mrs. Angela Knight: Is my hon. Friend aware that youth unemployment has been falling fast throughout Derbyshire, including north-east Derbyshire, and is down by 21 per cent. in Erewash compared with last year? Does my hon. Friend agree that it is businesses that create jobs and increasing business confidence and healthy order books in companies throughout the east midlands are already translating into better prospects for people out of work and for school leavers this summer?
    Miss Widdecombe: I agree with my hon. Friend. If business confidence is the key, no one need look to the Opposition to generate it.
    Mr. Janner: Does the Minister accept that there is a greater sense of relative deprivation between the poor and the well-off in the east midlands and elsewhere which, to quote from a Home Office document, has produced a class of person for whom
    "a real job or the prospect of a real job has been absent in all the crucial years"
    of their lives, or does she disagree with the view of that leaked Home Office document?
    Miss Widdecombe: It is hard to match falling unemployment with the absence of job prospects. The hon. and learned Gentleman is out of date and his points are extremely selective. His mission in life appears to be to depress rather than cheer the most vulnerable.
    Mr. Jenkin: Will my hon. Friend take note that, in a effort to reduce youth unemployment in France, the French Government are dismantling minimum wage legislation in order to create extra jobs?
    Miss Widdecombe: If minimum wage legislation were ever to be introduced in Britain we would probably lose up to 2 million jobs. That is the Opposition's policy.

    Job Divestment
    Mr. Flynn: To ask the Secretary of State for Employment what assessment he has made of the outward divestment of jobs from the United Kingdom to (a) other countries in the European Union and (b) the rest of the world.
    Mr. David Hunt: I agree with that part of paragraph 78 of the Employment Select Committee's report published on 10 February which refers to the hon. Gentleman's question.
    Mr. Flynn: Does not the Minister feel like someone trying to fill up a bath without noticing that the plug has been pulled out? Again and again, he counts the jobs that are coming into the country, but never does he count the jobs that are being siphoned out. How will he prevent British Telecom and British Gas from scouring the sweatshops of the far east trying to peddle our British jobs to those firms that pay the worst wages in the world? I am not a Prime Minister, so I cannot accuse the Minister of peddling untruths, but is he peddling British jobs abroad?
    Mr. Hunt: The hon. Gentleman obviously has not read the Select Committee report. If he had, he would see that I have already directly answered the point that he has just made. I shall continue to praise the efforts of the United Kingdom's work force in the past 15 years in bringing to this country nearly 4,000 inward investment projects involving half a million jobs. That is a record of which we have every right to be proud.
    Mr. Duncan Smith: Will my right hon. Friend join me in regretting today's announcement by London International of the plant closure in my constituency and urge the company to think again? If its decision remains unchanged, will my right hon. Friend make every effort
    and take every measure to ensure that all those who are unfortunate enough to lose their jobs as a result will be found new jobs?
    Mr. Hunt: I will of course talk to the local training and enterprise council and Employment Service branch to make sure that everything possible is done in the direction to which my hon. Friend referred.

    Health and Safety
    Mr. Barron: To ask the Secretary of State for Employment what discussions he has had with the Health and Safety Executive regarding its prosecution policy in cases of death at work; and if he will make a statement.
    Mr. David Hunt: My Department is in regular contact with the Health and Safety Executive and I fully endorse its approach to enforcement.
    Mr. Barron: Does the Minister accept that the publication "The Perfect Crime" by the West Midlands Health and Safety Advice Centre clearly shows the absence of active policing of death at work and of prosecution of bad employers who cause death at work? Given the Law Commission's statement last week that it is considering a change in the law on prosecuting bad employers who cause death at work, will the Government stop the cuts in the Health and Safety Executive and prosecute more bad employers, who kill more people than are killed on Britain's roads?
    Mr. Hunt: I have every confidence in the Health and Safety Executive's prosecution policy. Before entering the Chamber, I checked on the matter and understand that in the past 18 months, the executive has referred 17 possible cases of manslaughter to the Crown Prosecution Service.

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    We should be proud that the rate of fatal and non-fatal accidents in this country is falling, and that we have one of the best health and safety records in the world.

  PRIME MINISTER

    Engagements
    Mr. Garnier: To ask the Prime Minister if he will list his official engagements for Tuesday 19 April.
    The Prime Minister (Mr. John Major): This morning, I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today.
    Mr. Garnier: During his many meetings with business leaders, has my right hon. Friend ever been asked by even one of them to introduce a minimum statutory wage?
    The Prime Minister: No, in my many meetings I have not yet been asked to introduce a statutory minimum wage, but a number of employers have expressed concern at the prospect. They believe that it would cost jobs andl harm competitiveness, and I agree.
    Mr. John Smith: Given the threat of fatal catastrophe that now hangs over Gorazde and the undoubted confusion that sadly attends the efforts of the international community in Bosnia, I suggest to the right hon. Gentleman that a clear statement of future policy objectives is urgently needed. I propose that they should include a redoubling of efforts to secure a ceasefire at Gorazde; the reaffirmation by this and other countries of their political, military and humanitarian commitment to the area; and a clear decision by the international community to make safe areas safe, in the knowledge that the United Nations will require to be given sufficient resources to perform that task, but also in the knowledge that those safe areas may offer the only haven to the victims of a brutal civil war.
    The Prime Minister: I have a lot of sympathy with much of what the right hon. and learned Gentleman said. There is no doubt that our objectives in Bosnia have not changed. Last week's setback in Gorazde—as my right hon. and learned Friend the Secretary of State for Defence made clear to the House yesterday, it was a setback for the United Nations—does not alter the fact that we wish to secure a complete ceasefire in Bosnia. It should not be forgotten by the House or others that we have established a ceasefire between the Croat and Bosnian forces in central Bosnia as well as in Sarajevo. However, as latest events have tragically shown, the negotiators have not yet been able to extend that ceasefire elsewhere in Bosnia. At the moment, we are onsidering both here in the United Kingdom and with our partners precisely what needs to be done next. There will of course be meetings among NATO allies tomorrow.
    Mr. John Smith: May I press the right hon. Gentleman on the question of safe areas? Will he undertake to discuss this fully with our partners? The United Nations, having resolved to create safe areas as havens for the victims of war, should resolve to make them possible by committing itself to that purpose and by using the necessary means to achieve it—Britain's contribution included, of course.
    The Prime Minister: As the right hon. and learned Gentleman knows, we are concerned, and have been for a long time, to secure, as far as it is practicable for us to do so, the safety of people in areas of Bosnia, in Gorazde or elsewhere. Before we make any blanket assurance, we have to consider whether the practical will, not just in the United Kingdom but in other countries as well, exists to release the resources to enable us to do that. We have to be careful before we make any practical assurances.
    Clearly, the objectives that the right hon. and learned Gentleman sets out are objectives that any sensible person would want realised; but we have to consider what in practice can be done and whether the resources to deliver the objectives set out are likely to be available.
    Mr. Tracey: Will my right hon. Friend join me in condemning the unacceptably high levels of local council debt, particularly among councils controlled by the Opposition parties? I refer to Liverpool and Manchester and to councils in London such as Islington, whose debt amounts to £5,500 per adult in the council's area. That adds unacceptably to the council tax. What will the Government do about it?
    The Prime Minister: My hon. Friend turns to a point that will be much in evidence during the local authority debates and during the whole local election campaign over the next few weeks. Irrespective of the equitable method of funding local authorities, there is no doubt about which local authorities, under what political control, run up substantial debts: we know that those that are in debt are Labour local authorities. We also know that those that do not adequately collect rents are Labour local authorities. I believe that many people will see the connection between the first and the second.
    Sir David Steel: Returning to the question of future policy for Bosnia, may I ask the Prime Minister to take this opportunity to make it clear that sanctions against Serbia will not be lifted and will not be open to negotiation until there is a full and secure peace settlement in Bosnia?
    The Prime Minister: We have no proposals to change the present sanctions regime, which has been in hand for some time. We have consistently said that the sanctions are in place to try to encourage people to act moderately and reasonably in the future. I have no present proposals to change them.
    Sir Ivan Lawrence: Has my right hon. Friend seen that the reported crime rate for over half the police areas in England and Wales is falling? Is not that evidence that the Government's law and order policy is working? And is not the fact that the courts have been imposing longer sentences evidence that, by taking the worst offenders out of circulation, the Home Secretary was right to say that prison works?
    The Prime Minister: My hon. and learned Friend is right. There is no doubt about the immense public concern about crime and no doubt about the desire of all parties, in the House and elsewhere, that it should decrease. It has been most encouraging recently to note that, in a number of areas, innovative policing ideas—Bumblebee in the Metropolitan area, but operations in other areas, too—seem to have had a material effect on the crime statistics.
    The most encouraging aspect of the statistics released today is the fact that the drop in crime on a quarterly basis

    737
    appears to be accelerating. These are just one year's figures, and we must view them with a degree of caution, but the trend is certainly more attractive than any for some years.
    Mr. Turner: To ask the Prime Minister if he will list his official engagements for Tuesday 19 April.
    The Prime Minister: I refer the hon. Member to the answer I gave some moments ago.
    Mr. Turner: In the excitement of last week's Question Time, the Prime Minister completely failed to answer my question. May I therefore ask it again? In the aftermath of his defeat in the local and European elections, will he continue to limp along with his battle-weary Government, or will he take the honourable path and resign?
    The Prime Minister: I look forward to answering the hon. Gentleman's questions for a long time to come.
    Mr. Cormack: Is my right hon. Friend aware that in the past few days, some 12 foreign correspondents have had their accreditation withdrawn by President Milosevic, including Sky Television's chief correspondent, Mr. van Lynden? Is not that further evidence of the evil nature of the Serbian dictatorship and does not it show that it would be a very good thing if my right hon. Friend could meet Presidents Clinton, Mitterrand and Yeltsin at the earliest opportunity?
    The Prime Minister: I know of the expulsions that concern my hon. Friend and I deplore that restriction of press freedom. We have made the Belgrade authorities aware of our views. As for the second part of my hon. Friend's question, I see no likelihood of an early meeting; but I assure him that we are in very close touch with each of the Governments and Heads of Government whom he mentioned.
    Mr. Olner: To ask the Prime Minister if he will list his official engagements for Tuesday 19 April.
    The Prime Minister: I refer the hon. Member to the answer I gave some moments ago.
    Mr. Olner: Why has not the Prime Minister properly consulted and listened to organisations such as the Royal British Legion and other veteran associations when preparing the events in commemoration of D-day?
    The Prime Minister: I think that the hon. Gentleman is mistaken. There has been a great deal of consultation and discussion; indeed, my right hon. Friend the Secretary of State for National Heritage met members of the Normandy Veterans Association and the Royal British Legion this morning, and—as the hon. Gentleman may or may not know—Field Marshal Lord Bramall is part of the committee discussing and organising events for D-day.
    Mr. Evennett: Will my right hon. Friend confirm that the national health service will continue to be available to all, irrespective of age or ability to pay? Will he condemn Opposition Members who are scaremongering, and worrying elderly people in particular? Is not the national health service for everyone in the country who needs health care?
    The Prime Minister: My hon. Friend is entirely correct, and many millions of patients who are treated each day can attest to that. It is undoubtedly the policy that the
    738
    national health service should in no way discriminate on grounds of age in allocating treatment. It is up to the clinicians concerned, in consultation with colleagues, to decide on the appropriate course of treatment for any patient, whatever that patient's age; but any patient, whatever his or her age, is entitled to the treatment that he or she needs under the national health service.
    Mr. John Evans: To ask the Prime Minister if he will list his official engagements for Tuesday 19 April.
    The Prime Minister: I refer the hon. Member to the answer I gave some moments ago.
    Mr. Evans: Will the Prime Minister join me in deploring the decision of SmithKline Beecham—which made a profit of £1.22 billion last year—to close a factory that has stood in St. Helens for more than 100 years, sack 500 workers and transfer their employment to a non-union, low-pay firm in Devon? Does the right hon. Gentleman agree with me, and with the people of St Helens, that this is the unacceptable face of multinational capitalism?
    The Prime Minister: I must tell the hon. Gentleman that I have no detailed knowledge of what has happened with SmithKline Beecham, and I am disinclined to comment on any case of which I have no such knowledge.
    Mr. Day: Does my right hon. Friend agree that the greatest threat to the things that we hold dear in this country—such as social services and the national health service—comes from the growth of highly competitive economies in the Pacific basin? Do not our party and my right hon. Friend's approach to Europe provide the only way of dealing with that competition, both for this country and for Europe in general?
    The Prime Minister: I agree with my hon. Friend. We are now operating in an increasingly competitive world. Nowadays, many parts of the world that were once readily prepared to accept British exports are manufacturing the same goods and competing with us in world markets. Unless we become as competitive as possible and keep that competitiveness, we shall lose jobs, income and influence, both economic and political.
    Mr. Barry Jones: To ask the Prime Minister if he will list his official engagements for Tuesday 19 April.
    The Prime Minister: I refer the hon. Gentleman to the reply I gave some moments ago.
    Mr. Barry Jones: Will the Prime Minister give stronger backing to Britain's manufacturing industries? Will he, for example, give help to the British steel industry in the European Union, where the German, Italian and Spanish Governments are cheating? Does he agree that Britain's steel communities have made their sacrifice in the form of tens of thousands of redundancies and many plant closures and that now is the time for the right hon. Gentleman's Government to back British steel?
    The Prime Minister: Let me say to the hon. Gentleman that we have raised a number of cases of suspected illegal subsidies with the Commission—the most recent being that of the bankrupt German company, Saarstahl. The Minister for Industry will raise that case again on Friday in the Industry Council in Luxembourg.
    On the more general point raised by the hon. Gentleman, we will continue to press for the fulfilment of

    739
    existing commitments from the Commission and from member states to end all illegal subsidies in the steel industry. As the hon. Gentleman will know, the Commission has a formal obligation to enforce the treaty of Paris and it has undertaken to pursue actively the monitoring commitments of a number of European Community countries.
    Mr. Hayes: Will my right hon. Friend congratulate SmithKline Beecham on investing £200 million in Harlow, which is good news for this country and which will be the largest project, after the channel tunnel, in Britain?
    The Prime Minister: I see rather earlier than I expected the wisdom of not responding to the question from the hon. Member for St. Helens, North (Mr. Evans) without having the details of the case in front of me. In view of what has been said by both hon. Gentlemen, I will certainly examine the matter.

BILL PRESENTED
  WATER CHARGES (AMENDMENT)
  Mr. Paul Tyler, supported by Mr. Alan Beith, Mr. Matthew Taylor, Mr. Nick Harvey, Mr. Don Foster and Mr. Simon Hughes, presented a Bill to amend the Water Act 1989 to prohibit the use by water undertakers of rateable values as a basis for charging from 31st March 1995; to provide for charging by water undertakers in accordance with council tax bands; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Friday 6 May, and to be printed. [Bill 94.]

Public Conveniences
3.31 pm
Mr. Jon Owen Jones: I beg to move,
That leave be given to bring in a Bill to remove any discrimination on grounds of gender in the provision of public conveniences and to place a statutory duty on local authorities to provide a minimum level of public conveniences; and for connected purposes.
In the Bill I propose to make it a duty of local authorities to provide public conveniences at certain minimum levels. To those who would argue that these matters should be left to the discretion of individual councils, I say that the recent record of local authorities suggests that the priority that they give to this public service is very low indeed. Public conveniences have been, and are being, closed right across the country. Due to financial constraints, local authorities are cutting back drastically on this non-statutory service.
The Public Health Act 1936 states that councils "may" provide facilities for the use of the public. There is no legal duty to provide any toilets at all. At the present rate of closure, some authorities are getting near to that nil figure. Indeed, the BBC1 programme "Here and Now", which will be shown tomorrow, carried out a survey which shows that, among the 180 councils which replied to the programme's survey, 771 conveniences have been closed in the last decade.
The number of local authorities which now charge for this important public service has risen sharply. Ten years ago only 12 charged and now 57 do—a 400 per cent. increase. The survey also reveals that, in the councils canvassed, there are still more than 1,000 more sites for men than for women. Worst hit are the towns in the north-west. Manchester closed 79 toilets in the last decade, leaving just 20—which means that it has closed three-quarters of its public toilets. Sheffield has cut the number of toilets by half, causing hardship and discomfort for up to 50,000 people in the city who suffer from incontinence.
I too recently surveyed local council provision. Among the 162 local authorities taking part in my survey, I found that provision varied enormously from a low of one facility per 6,427 men and 11,248 women to a high of one facility per 35 men and 86 women. The Bill proposes a minimum provision of one facility per 550 women and one facility per 1,100 men, with a unisex facility for the disabled per 10,000 of the population. It would also require a minimum provision of nappy-changing facilities which could be used by men and women.
People need public conveniences at "on street" sites. In general, a low fluid intake can increase the likelihood of kidney and bladder infections. Conversely, a high fluid intake helps prevent cystitis, renal tract infections, kidney stones and constipation. These are common disorders of the elderly and, clearly, there is a health argument for the better provision of toilets. Women in particular have an increased need for toilet facilities, especially when they are menstruating or pregnant.
Only last month, the Government facilitated National Continence Week to highlight the problem of incontinence which affects 3 million people. The British Foundation of Health Continence Care has estimated that 14 per cent. of women and 7 per cent. of men are affected. Many of these people can become housebound because of the absence or closure of public toilets. It is clear that women's needs are greater than men's and yet my survey showed that

743
provision is greater for men than for women. Research carried out in the United States shows that women take twice as long to urinate as men. The Bill would make provision for women at twice the level of that for men.
Groups such as the Continence Foundation and All Mod Cons examined the issue of numbers, especially when the All Mod Cons' co-ordinator worked with the British Standards Institution. They produced the figures that I have included in the Bill.
The first public toilet for women was built in London in the 1880s. It was recognised that an increasing number of women were going to work and so needed facilities near their place of work. On a public site, the toilets in Leicester square which were built in 1900 offered 27 urinals and 13 cubicles for men, with three urinettes and seven cubicles for women. The reason given for the imbalance in the provision was that women did not go out as much as men, and the belief was aired at the time that women would be too embarrassed to use a public toilet in any case. We have come a long way from the days of such ridiculous sensibilities and attitudes to women and our natural bodily functions, but it was evident to me when I surveyed local council provision that men had a better overall level of toilets and that the situation was getting worse rather than better.
The Women's Design Service researched what women objected to in current WC provision. First, they objected to the queues which were the result of the lack of facilities. Secondly, they were concerned about access, with particular reference to turnstiles. Turnstiles present particular problems at stations when people are carrying heavy luggage, but they are also a problem for the disabled or for people with pushchairs or young children—usually, of course, women rather than men. They are also dangerous, impede emergency exits and are sometimes prohibitive to entry. They are currently outlawed from council facilities under the turnstiles legislation of 1968, although I notice that Westminster has one or two. The Bill would outlaw turnstiles from all toilets provided for the public.
744
This is the Year of the Family, and anyone who has children will be aware of the difficulties in finding facilities for children and will know that one cannot hang around when one's children want to go to the toilet. I found that 52 of the authorities that took part in my survey—more than a third of them—had no nappy-changing facilities whatever. My Bill would require a unisex facility for every 10,000 head of population.
I am a relatively recent father, with a three-year-old son and an eight-month-old son. As a Member of Parliament I do not often find myself out alone with them, but it has happened occasionally. When they want to go to the toilet, they really want to go, and I know how difficult it is to find somewhere to take them.
Under the Public Health Act 1936 councils are allowed to charge for cubicles but not for urinals. Clearly that is an anachronism today, and the law is sexist. My Bill would revoke that provision.
The slogan "back to basics" has been derided in some quarters, but surely here we have a basic public service developed by Victorian civic leaders, yet all too often now ignored. I hope that my Bill will be supported on both sides of the House, and given Government support.
Question put and agreed to.
Bill ordered to be brought in by Mr. Jon Owen Jones, Mr. Nicholas Winterton, Mrs. Ann Winterton, Mr. Harry Greenway, Mr. Peter Viggers, Mr. Ian McCartney, Ms Jean Corston, Ms Mildred Gordon, Mr. Andrew Smith, Ms Marjorie Mowlam, Mr. Simon Hughes and Ms Liz Lynne.

Public Conveniences
  PUBLIC CONVENIENCES
  Mr. Jon Owen Jones accordingly presented a Bill to remove any discrimination on grounds of gender in the provision of public conveniences and to place a statutory duty on local authorities to provide a minimum level of public conveniences; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 6 May, and to be printed. [Bill 93.]

Finance Bill (Allocation of Time)
Motion made, and Question put forthwith, pursuant to Standing Order No. 80 (Business Committee),
That the Report [13th April] from the Business Committee be now considered.—[Mr. Patnick.]
Question agreed to.
Resolved, That this House doth agree with the Committee in its resolution.
Following is the Report of the Business Committee:
That—
(1) the order in which proceedings on consideration shall be taken shall be new Clauses standing in the name of Mr. Chancellor of the Exchequer, new Schedules so standing, other new Clauses, other new Schedules, and Amendments to Clause No. 1, Schedule No. 1, Clauses Nos. 2 to 5, Schedule No. 2, Clause No. 6, Schedule No. 3, Clauses Nos. 7 to 9, Schedule No. 4, Clauses Nos. 10 to 14, Schedule No. 5, Clauses Nos. 15 to 40, Schedule No. 6, Clauses Nos. 41 to 64, Schedule No. 7, Clauses Nos. 65 to 77, Schedule No. 8, Clauses Nos. 78 to 81, Schedule No. 9, Clauses Nos. 82 and 83, Schedule No. 10, Clauses Nos. 84 to 91, Schedule No. 11, Clauses Nos. 92 to 102, Schedule No. 12, Clauses Nos. 103 to 112, Schedule No. 13, Clauses Nos. 113 to 135, Schedule No. 14, Clause No. 136, Schedule No. 15, Clauses Nos. 137 to 144, Schedule No. 16, Clauses Nos. 145 to 167, Schedule No. 17, Clauses Nos. 168 to 194, Schedule No. 18, Clauses Nos. 195 to 216, Schedule No. 19, Clauses Nos. 217 to 226, Schedule No. 20, Clauses Nos. 227 to 229, Schedule No. 21, Clauses Nos. 230 to 234, Schedule No. 22, Clauses Nos. 235 to 250, Schedule No. 23, Clause No. 251, Schedule No. 24, Clauses Nos. 252 to 254, Clause No. 256, Clause No. 255 and Schedule No. 25;
(2) The allotted days which under the Order [1st February] are given to the proceedings on consideration and third reading shall be allotted in the manner shown in the Table set out below and, subject to the provisions of that Order, each part of the proceedings shall, if not previously brought to a conclusion, be brought to a conclusion at the time specified in the third colum of that Table.

Table

Allotted day

Proceedings

Time for conclusion of proceedings

First day

New Clauses standing in the name of Mr. Chancellor of the Exchequer and new Schedules so standing.

6 p.m.

Other new Clauses and other new Schedules.

11 p.m.

Second day

Remaining proceedings on consideration.

7 p.m.

Third reading

10 p.m.

Orders of the Day
  Finance Bill
    1sT ALLOTTED DAY
    Not amended (in the Committee) and as amended (in the Standing Committee), considered.
    New Clause 8

      EMPLOYEES WORKING FOR PERSONS OTHER THAN THEIR EMPLOYERS, ETC.
      '.—(1) After section 203B of the Taxes Act 1988 (which is inserted by section 125 above) there shall be inserted—
      "PAYE: employee of non-UK employer.
      203BB.—(1) This subsection applies where—

      (a) an employee during any period works for a person ("the relevant person") who is not his employer;

      (b) any payment of, or on account of, assessable income of the employee in respect of work done in that period is made by a person who is the employer or an intermediary of the employer;

      (c) PAYE regulations do not apply to the person making the payment or, if he makes the payment as an intermediary of the employer, the employer; and

      (d) income tax is not deducted or accounted for in accordance with the regulations by the person making the payment or, if he makes the payment as an intermediary of the employer, the employer.

      (2) Where subsection (1) above applies, the relevant person shall be treated, for the purposes of PAYE regulations, as making a payment of the assessable income of the employee of an amount equal to the amount determined in accordance with subsection (3) below.
      (3) The amount referred to is—

      (a) if the amount of the payment actually made is an amount to which the recipient is entitled after deduction of any income tax, the aggregate of the amount of that payment and the amount of any income tax due; and

      (b) in any other case, the amount of the payment actually made.

      (4) In this section and sections 203BC and 203BD "work", in relation to an employee, means the performance of any duties of the office or employment of the employee and any reference to his working shall be construed accordingly.
      (5) Subsections (3) and (4) of section 203B apply for the purposes of this section as they apply for the purposes of that section.
      "PAYE: employee non-resident, etc.
      203BC.—(1) This section applies in relation to an employee in a year of assessment only if—

      (a) he is not resident or, if resident, not ordinarily resident in the United Kingdom; and

      (b) he works or will work in the United Kingdom and also works or is likely to work outside the United Kingdom.

      (2) Where in relation to any year of assessment it appears to an officer of the Board that—

      (a) some of the income of an employee to whom this section applies is assessable to income tax under Case II of Schedule E, but

      (b) an as yet unascertainable proportion of the income may prove not to be assessable,

      the officer may, on an application made by the appropriate person, give a direction for determining a proportion of any payment made in that year of, or on account of, income of the employee which shall be treated for the purposes of PAYE regulations as a payment of assessable income of the employee.
      (3) In this section "the appropriate person" means—

      (a) the person designated by the employer for the purposes of this section; or

      747

      (b) if no person is so designated, the employer.

      (4) An application for a direction under subsection (2) above shall provide such information as is available and is relevant to the giving of the direction.
      (5) A direction under subsection (2) above—

      (a) shall specify the employee to whom and the year of assessment to which it relates;

      (b) shall be given by notice to the appropriate person; and

      (c) may be withdrawn by notice to the appropriate person from a date specified in the notice.

      (6) The date so specified may not be earlier than thirty days from the date on which the notice of the withdrawal is given.
      (7) Where—

      (a) a direction under subsection (2) above has effect in relation to an employee to whom this section applies, and

      (b) a payment of, or on account of, the income of the employee is made in the year of assessment to which the direction relates,

      the proportion of the payment determined in accordance with the direction shall be treated for the purposes of PAYE regulations as a payment of assessable income of the employee.
      (8) Where in any year of assessment—

      (a) no direction under subsection (2) above has effect in relation to an employee to whom this section applies, and

      (b) any payment is made of, or on account of, the income of the employee,
      the entire payment shall be treated for the purposes of PAYE regulations as a payment of assessable income of the employee.

      (9) Subsections (7) and (8) above are without prejudice to—

      (a) any assessment in respect of the income of the employee in question; and

      (b) any right to repayment of income tax overpaid and any obligation to pay income tax underpaid.

      "PAYE: mobile UK workforce.
      203BD.—(1) This subsection applies where it appears to the Board that—

      (a) a person ("the relevant person") has entered into or is likely to enter into an agreement that employees of another person ("the contractor") shall in any period work for, but not as employees of, the relevant person;

      (b) payments of, or on account of, assessable income of the employees in respect of work done in that period are likely to be made by or on behalf of the contractor; and

      (c) PAYE regulations would apply on the making of such payments but it is likely that income tax will not be deducted or accounted for in accordance with the regulations.

      (2) Where subsection (1) above applies, the Board may give a direction that, if—

      (a) any employees of the contractor work in any period for, but not as employees of, the relevant person, and

      (b) any payment is made by the relevant person in respect of work done by the employees in that period,

      income tax shall be deducted in accordance with the provisions of this section by the relevant person on making that payment.
      (3) A direction under subsection (2) above—

      (a) shall specify the relevant person and the contractor to whom it relates;

      (b) shall be given by notice to the relevant person; and

      (c) may at any time be withdrawn by notice to the relevant person.

      (4) The Board shall take such steps as are reasonably practicable to ensure that the contractor is supplied with a copy of any notice given under subsection (3) above which relates to him.
      (5) Where—

      (a) a direction under subsection (2) above has effect, and

      (b) any employees of the contractor specified in the direction work for, but not as employees of, the relevant person so specified,

      income tax shall, subject to and in accordance with PAYE regulations, be deducted by the relevant person on making any payment in respect of that work as if so much of the
      748
      payment as is attributable to work done by each employee were a payment of assessable income of that employee.".' —[Mr. Dorrell.]
      Brought up, and read the First time.
      3.42 pm
      The Financial Secretary to the Treasury (Mr. Stephen Dorrell): I beg to move, That the clause be read a Second time.
      Madam Speaker: With this it will be convenient to discuss also the following: Government new clause 9—PAYE regulations: past cases.
      Government amendments Nos. 3 to 12.
      Mr. Dorrell: The clause creates no new liabilities to tax. It contains provisions that will remove doubts that had arisen about the Inland Revenue's ability to collect tax under PAYE in certain circumstances.
      The objective of new clause 9 is to put beyond any doubt the legal basis of the operation of PAYE in those circumstances in past years, following a recent court decision in the House of Lords.
      New clause 8 has three objectives. First, it has been suggested that employers do not need to operate PAYE on the emoluments of employees or directors who come to work in the United Kingdom from overseas, if the exact proportion of their salaries and other payments that will be taxable is uncertain at the moment at which they are paid. The argument is that, when a payment of salary is made, the taxable proportion of it cannot always be ascertained precisely until later, usually after the end of the tax year, when the overall proportion of overseas and United Kingdom duties can be determined. It has been suggested that in such circumstances PAYE should not be operated on any part of the employee's salary, but that tax should be collected direct from the employee after the end of the tax year.
      Clearly that would have unacceptable cash flow consequences for the Exchequer, possibly running into hundreds of millions of pounds, as well as a potential long-term loss of tax where the individual concerned has returned to his home abroad.
      Mr. Geoffrey Hoon: Will the Financial Secretary be explaining to the House the precise circumstances which have caused the new clause to be necessary? Will he be giving an explanation of the implication of the House of Lords decision so that we may all understand why the Government must bring forward the new clause at this stage?
      Mr. Dorrell: As I told the House, the House of Lords, in the case of the Commissioners of Inland Revenue v. Herd, ruled that there was doubt about the right of the Inland Revenue to collect tax under PAYE where the proportion of an individual's remuneration taxable under United Kingdom law and the proportion taxable under foreign law was uncertain at the moment at which the payment was made. That state of affairs removed the power of the Inland Revenue to collect tax under PAYE. The House will recognise that that is not a sensible basis on which to proceed, and the purpose of new clause 8 is to remedy that situation and to put the law, in the classic phrase, back in the position in which it was always thought to have been.
      The effect of new clause 8 is therefore to provide in the new section 203BC of the Income and Corporation Taxes

      749
      Act 1988 that PAYE may continue to be applied in future to the emoluments of employees and directors who are either not resident or not ordinarily resident in the UK. New clause 8 also provides two further provisions: the new sections 203BB and 203BD, which replace an anti-avoidance provision currently provided in secondary legislation and which applies where an employee or a director is paid by someone other than the person for whom he or she works on a day-to-day basis. In such circumstances, the current PAYE regulations require the person for whom the employee works, rather than the person who pays them, to account for tax under PAYE.
      The validity of the current regulation has never been formally challenged, but when the operation of PAYE on the emoluments of employees and others coming from overseas to work in the UK was being considered, and in the light of the recent court case to which I referred, we thought that it would be sensible to put beyond doubt the power of the Revenue to collect PAYE in the respect of those individuals. That is the effect of the new sections 203BB and BD provided in the rest of new clause 8.
      New clause 9, as I have already said, confirmed the past year's validity of the regulation and the new sections which replace that regulation and ensure that the tax that has been collected through PAYE for years past was legitimately collected.
      Mr. Nicholas Brown: The Government clearly have a duty to protect the interests of the Inland Revenue and, for our part, Labour Members do not quarrel with that. As I understand the position as the Financial Secretary has stated it to the House, although the new clauses may seem complex, their purpose is to state the law as it was always understood to be.
      It is not unusual in Finance Bills for Labour Members, even on Report, to make either a pre-emptive strike on future decisions of the courts or to clarify for the courts the Government's original intention in legislating. I understand that the threat of loss of revenue could be quite substantial, so I am sure that the Government are right to act in that way.
      As the Financial Secretary has explained to the House, the principal concern seems to be with those who are either foreign nationals or who receive some substantial proportion of their total earnings from sources abroad. Therefore, there is some doubt as to the employers' liability to deduct PAYE from their earnings in Britain. It is certainly my view that there should be no such doubt and that the Government are proceeding in the right way.
      However, I wish to raise a separate concern with the Financial Secretary that has been put to me and some of my hon. and right hon. Friends by the National Farmers Union of Scotland. It is worried that the enactment that we are considering will affect its responsibility to administer payments and remunerations to gang labour employed on estates in Scotland. My understanding of the situation—frankly, I am not a specialist in the area—is that, at the moment, the gang master is responsible for the deduction of tax and national insurance, not the farmer. The NFU's fear is that responsibility is being transferred to it. It does not necessarily follow from the Financial Secretary's explanation that that is the position. I hope that he will be
      750
      able to tell the House what the position is as it pertains to gangs working on agricultural projects, especially as the law applies in Scotland.
      Mr. James Paice: As the hon. Member for Newcastle upon Tyne, East (Mr. Brown) has said, this is not a matter for Scotland alone. The role of gang masters in agriculture, and especially in large-scale horticulture, is well known, particularly in the area of the fens in East Anglia up into Lincolnshire. In my constituency, and that of my hon. Friend the Member for Cambridgeshire, North-East (Mr. Moss), many growers use gang masters as a means of harvesting and packaging their crops. Only three years ago there was a voluntary agreement between the Inland Revenue and the industry to try to overcome the problems that are caused by a few gang masters who have not been presenting the necessary payments to the Revenue.
      The great majority of gang masters are respectable individuals who run their businesses in all the ways in which we would wish them to do so. In so doing they fulfil their obligations. A few of them have been failing to do that and the voluntary agreement was targeted at them.
      It was with considerable concern that growers in my constituency, and the NFU, found the new clause on the amendment paper. They saw it as a sledgehammer to crack a nut—in other words, a large piece of extra legislation to deal with a small problem. No one is pretending that there is not a problem in a few instances, but I am concerned that the Inland Revenue should not now seek to make all farmers and growers who use gang masters responsible for
      the tax and insurance liabilities of the people who happen to work on their premises, carrying out work related to their businesses.
      It must be emphasised that farmers and growers do not employ the people who are brought to their premises by gang masters. They are not in charge of their day-to-day immediate work. They have no control over their terms and conditions. Such matters are decided by the gang master, who enters into a contract with the farmer to have a particular job of work carried out on the farm or the holding.
      My hon. Friend the Financial Secretary said that the clause does not contain any new powers. He implied that the provision would not be used extremely rigorously. I note that "may" is used in terms of the proposed powers. I should like my hon. Friend's assurance that the Revenue will not turn to every farmer and grower who uses gang masters and tell them that they must be responsible for all the PAYE paperwork for every person who works on their land.
      We are not talking about two or three people. In my constituency, there are growers who, through gang masters, may have several hundred people working on their land at any one time. To make the individual farmer or grower responsible would be a mammoth imposition, especially at this time of year, which is the beginning of the growing and harvesting season. To introduce such a burden now on farmers and growers would be something that they could well do without, particularly when they are facing immense competition from Spain in respect of several horticultural crops.
      I urge my hon. Friend the Financial Secretary to assure me and those of my hon. Friends who have considerable constituency interests in this context that he will not allow the Inland Revenue to use the powers in the clause to bear

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      upon the great majority of gang masters who carry out their obligations as we would wish. I trust that the farmers and growers who use gang masters will continue as they have in the past, with a voluntary arrangement whereby the gang master fulfils his obligations and provides the necessary returns to the Revenue.
      Mr. A. J. Beith: There is concern about the part of the new clause to which reference has been made. I have received representations from the National Farmers Union, as has my hon. Friend the Member for North Cornwall (Mr. Tyler) and my hon. and learned Friend the Member for Fife, North-East (Mr. Campbell). In practical terms, a farmer or grower would be put in a difficult position because not only might a large number of people be brought on to his farm by a gang master during a season when there are crops to be gathered, but they may be there for only one or two days in the week and then they will be on someone else's premises. The farmer or grower may start the week with 30 people working on his farm; after a couple of days, only half of them are still there and half have gone somewhere else. A few more people are brought in again when there is a bit more work to be finished.
      The flexibility of the gang system is the reason why farmers use it. It enables them to get the job done without carrying on their permanent staff a number of employees for which it would be impossible for the farm income to provide. Farmers simply cannot operate in that way. Given the competitive environment to which the hon. Member for Cambridgeshire, South-East (Mr. Paice) referred with produce from other countries, growers must find whatever ways they can to harvest their crops efficiently.
      If farmers and growers are faced with having to make pay-as-you-earn returns for all sorts of individuals who are on their farms for only two or three days in the entire year and who are not under their direction or control, whom they do not know, whose home address they do not know and whose previous employment record they do not know, it is an incredible burden to put on them.
      The Government are supposed to be engaged in deregulation and reducing the burdens on small business. The burden which the provision will present to small business is considerable. At present, it is not clear—it may become clearer later—how many farmers and growers will face this daunting problem; it will depend on how many occasions the Revenue decides to make a direction that a particular grower or farmer must fill in a return. It is not clear whether it is intended to be a general practice or whether it is a power that will be brought into play in exceptional circumstances when it is perceived that a particular gang master has not been doing his PAYE returns properly and not accounting for the people whom he is employing. There is a world of difference between those two. At present, farmers and growers simply do not know whether they will be landed with the power or whether it will be an exceptional and rarely used power. I hope that it is the latter, and that the Minister can give us that assurance.
      The gang system is open to abuse not only with regard to taxation but in other ways as well; it can work to the detriment of those who are employed in it. However, it is a necessary part of the way in which harvesting takes place. Every attempt is being made by all those concerned to find a way of resolving the specific tax difficulty satisfactorily.
      It has come as a great shock to those concerned that the
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      Government have tabled on Report a new clause on a complex matter while discussions were supposed to be still taking place. So far as I am aware, the provisions in the new clause have not been the subject of consultation with those to whom the Government were talking. I do not see the point of that. The Government rightly engage in discussions with all the organisations. But suddenly, like a rabbit out of a hat, they produce the new clause, and slap it on the amendment paper, and take it at a stage when it cannot be the subject of any further discussion or amendment later. That simply does not make sense. If the Government were that determined to press ahead, why did they not table the new clause in Committee? At least we could have had some reflection on the matter and perhaps come back on Report with any necessary modification.
      It seems that the Government are failing the precepts that they set themselves for the consideration of such tax measures. They are at risk of imposing a serious burden on a great number of small businesses in a sector of agriculture which is not doing well financially and where incomes have fallen seriously recently. I ask the Minister to rethink what the Government are doing with the new provision. They have even included it in a new clause which contains so many other provisions that are necessary —or which the Minister said were necessary. That makes it difficult to vote against the provision because in doing so we will be voting against other anti-avoidance provisions which are probably generally felt to be desirable.
      The Minister has put the farming industry in a most unfair position by asking it to accept the change without proper consultation and with all the detrimental effects that it will have on farmers and growers, who have enough problems without having to account for the PAYE returns of people who may be on their farms for only a couple of days or one week of the year.
      Mr. John Home Robertson: I am grateful to my hon. Friend the Member for Newcastle upon Tyne, East (Mr. Brown) for raising the concerns expressed by the National Farmers Union of Scotland on this issue. I stress that I hold absolutely no brief for the gang masters of this world. I am concerned about the obvious abuses which existed in the agriculture industry in the past, and which may well still exist, where casual employees are
      ruthlessly exploited by gang masters. However, the fruit and vegetable growing industry in the east of Scotland is important, and the only way in which it can function is by taking advantage of casual labour. If the Government are having difficulty collecting PAYE and national insurance contributions from that sector of the economy, they should address themselves to those who are directly responsible for employing the work force. They should not be trying to get other businesses to do that work for them.
      I understand that there is an agricultural compliance unit at the Inland Revenue which is actively seeking information about the way in which gangs operate. I would strongly support any efforts by the Treasury and the Inland Revenue to regulate that rather marginal sector of the rural economy because there is a need for proper protection for people who work in that sector. Seriously, it would not make sense to require individual farmers to become personally liable for paying the national insurance contributions and PAYE in respect of people whom they were not directly employing. It would set a silly precedent and I hope that that is not what the Minister intends to do.
      4 pm
      Mr. Dorrell: I can certainly give the House an assurance that it is not our intention to create in the new clause an obligation which does not already exist within the piece of secondary legislation to which I referred in my opening remarks. I remind the House that I said that the purpose of new sections 203BB and 203BD—we are now talking about 203BD—is to replace the provisions in the secondary legislation. The legitimacy of that legislation is at least questioned by the House of Lords ruling in the Herd case.
      The purpose of the clauses is to replace an existing piece of secondary legislation. I can certainly assure the House that the fact that the powers are now being put into primary legislation has no bearing at all on the assurances which have always been given, or those which are currently in force, by the Inland Revenue about how the powers which hitherto have been provided for by secondary legislation would be used.
      I must tell the hon. Member for East Lothian (Mr. Home Robertson) that it is not part of our purpose to provide as a normal state of affairs that a farmer should be required to provide for PAYE for labour employed by a gang master. It is clearly true that the primary responsibility for applying PAYE to members of a gang rests on the gang master, not on the farmer who employs the gang. That is a form of anti-avoidance provision which is already in the secondary legislation and the checks for the farmer are, I suggest to the House, improved by writing it into primary legislation in a number of respects.
      First, I draw the attention of the House to subsection (1)(c) of section 203BD which makes it clear that the power can be used only where
      "it is likely that income tax will not be deducted or accounted for in accordance with the regulations."
      Therefore, the board of the Inland Revenue must first satisfy itself. that there is a serious risk of avoidance activity or of a lack of enforcement activity in the circumstances.
      There are two new safeguards which are not provided in the current secondary legislation. First, the person who is using the workers' services—the farmer—will be required to deduct tax only from payments which he actually makes to the employer of the workers. Secondly, new legislation requires the board of the Inland Revenue to issue a written direction so that the parties involved are clear about their responsibilities.
      I hope that the House will accept that this is a clarification of an existing piece of secondary legislation which is under threat as a result of the Herd case. We have taken the opportunity to write in additional safeguards, and it is an important piece of anti-avoidance legislation.
      Question put and agreed to.
      Clause read a Second time, and added to the Bill.

    New Clause 9

      PAYE REGULATIONS: PAST CASES
      '.—(1) Regulation 4 of the 1993 Regulations (intermediate employers) is hereby revoked; but in relation to any time before its revocation it shall be deemed to have been validly made.
      (2) Regulation 3 of the 1973 Regulations (intermediate employers) shall, in relation to any time before its revocation, be deemed to have been validly made.
      (3) Where, at any time before the passing of this Act—
      754

      (a)a payment has been made of, or on account of, any income of an employee not resident or, if resident, not ordinarily resident in the United Kingdom,

      (b) at the time when the payment was made it appeared that some of the income would be assessable to income tax under Case II of Schedule E, but that some of the income might prove not to be assessable to income tax under that Schedule, and

      (c) the payment or any proportion of it was treated for the purposes of the 1993 Regulations or the 1973 Regulations as a payment to which the regulations applied,

      then the treatment of that payment or that proportion of the payment as being a payment to which the regulations applied shall be deemed to have been lawful.
      (4) In this section—

      (a) "employee" means a person holding an office or employment under or with any other person;

      (b) "the 1993 Regulations" means the Income Tax (Employments) Regulations 1993; and

      (c) "the 1973 Regulations" means the Income Tax (Employments) Regulations 1973.'.—[Mr. Dorrell.]

      Brought up, read the First and Second time, and added to the Bill.

    New Clause 12

      ASSIGNED MATTERS: MINOR CORRECTIONS
      '.—(1) The provisions mentioned in subsection (2) below (which enable revenue traders and taxable persons to be required to keep records) shall be amended in accordance with subsections (3) and (4) below (which correct minor errors in those provisions so far as they relate to the admissibility in evidence of the recorded information).
      (2) The provisions are—

      (a) in the Customs and Excise Management Act 1979, section 118A; and

      (b) in Schedule 7 to the Value Added Tax Act 1983, paragraph 7.

      (3) In subsection (6) and sub-paragraph (5) of those provisions—

      (a) in paragraph (c) for the words "sections 13 and 14 of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1968" there shall be substituted "sections 5 and 6 of the Civil Evidence (Scotland) Act 1988"; and

      (b) in paragraph (d), for the words "except in accordance with the said sections 13 and 14" to the end there shall be substituted "except in accordance with Schedule 3 to the Prisoners and Criminal Proceedings (Scotland) Act 1993".

      (4) Subsection (7) and sub-paragraph (6) of those provisions shall be omitted.'.—[Sir John Cope.]
      Brought up, and read the First time.
      The Paymaster General (Sir John Cope): I beg to move, That the clause be read a Second time.
      Madam Speaker: With this it will be convenient to discuss Government amendments Nos. 31 to 35.
      Sir John Cope: The new clause and the amendments refer to extremely technical provisions about the admissibility of documents, and particularly copies of documents, as evidence in civil or criminal proceedings arising under the various taxes administered by the Customs and Excise. The new clause and amendments correct errors not only in the Bill as originally drafted but in the law as it stood. They are extremely minor errors. They arise from changes in Scottish law on the admissibility of evidence. They do not change the substantive law, but they make clear what documents are admissible as evidence.
      Mr. Andrew Smith: As the right hon. Gentleman said, the new clause and amendments appear to be minor changes. However, it would be helpful to the

      755
      House if he could explain what difference it would have made if he had not tabled the amendments. Where exactly have the errors occurred, in respect of both the Bill and the position of the law as it currently stands? Does he anticipate that any claims against the Exchequer will arise out of the errors in the previous law?
      Sir John Cope: No, we do not expect any claims to arise from the errors. I am not aware of any cases which have occurred or are pending at this moment as a result of the confusion that might have arisen from the items being in the law. The Civil Evidence (Scotland) Act 1988 allowed computer evidence to be treated like evidence in other business documents in civil proceedings. The Bill as it is currently drafted, and the Acts which are referred to in the new clause and amendments, referred to the old civil provisions of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1968, which was originally about civil proceedings but applied later to criminal proceedings. Those proceedings were deleted from statute law some time ago. They are still referred to in bits of the customs law.
      Clearly, if a court was asked to refer back to obsolete provisions which have been deleted from the law, it would create a difficulty in judging whether the documents should be admissible. Therefore, it is wise to do as we suggest in the new clause and amendments to bring the law into line by inserting the consequential amendments that should have been made perhaps a year or two ago and by bringing the Bill up to date.
      The matter turned up only because of the need to make sure that the drafting of the Bill was correct. That brought to light the difference between Scottish law and English law initially in respect of the insurance premium tax that we are introducing. The amendments correct that difference as well as the earlier legislation to which I referred.
      Mr. Andrew SmithI thank the right hon. Gentleman for his explanation. It is good to know that someone is keeping a careful check on the details of these matters. One dreads to think how much other obsolete legislation there might be lurking in the nooks and crannies of the statutes. I welcome the right hon. Gentleman's explanation and I cannot see any reason to oppose the new clause.
      Question put and agreed to.
      Clause read a Second time, and added to the Bill.
      Mr. Dorrell: I beg to move amendment No. 45, a new schedule—Indexation losses: transitional relief—

      'Introductory
      1. This Schedule applies in relation to chargeable gains and allowable losses accruing to—

      (a) an individual, or

      (b) the trustees of a settlement made before 30th November 1993;

      (referred to in this Schedule as "the taxpayer").
      2.—(1) This paragraph applies for the purposes of this Schedule, and the determinations required by this paragraph to be made shall be made without regard to paragraphs 4 to 7 below.
      (2) If an allowable loss accrues on a disposal made on or after 30th November 1993 and, under the old indexation rules, a greater allowable loss would have accrued, there is an indexation loss in respect of the disposal equal to the amount by which the allowable loss which would have accrued under the old indexation rules exceeds the allowable loss accruing on the disposal.
      (3) If a disposal made on or after 30th November 1993 is one on which neither a gain nor a loss accrues and, under the old indexation rules, an allowable loss would have accrued, there is
      756
      an indexation loss in respect of the disposal equal to the amount of the allowable loss that would have accrued under the old indexation rules.
      (4) If the total amount of chargeable gains accruing to the taxpayer in any year of assessment for which this Schedule has effect exceeds the allowable losses accruing in that year, there is a relevant gain for that year equal to the amount of the excess.
      3.—(1) The cases in which the appropriation of an asset by the taxpayer is treated under section 161(1) of the 1992 Act (appropriations to and from stock) as a disposal of the asset include cases in which, if he had sold the asset for its market value, an allowable loss would have accrued to him under the old indexation rules.
      (2) Where, but for an election under subsection (3) of section 161 of the 1992 Act—

      (a) an asset appropriated by the taxpayer would have been treated as disposed of as mentioned in subsection (1) of that section, and

      (b) paragraph 2(2) or (3) above would have applied on the disposal,

      paragraphs 1 and 2 above and 6 and 7 below shall apply, as if the asset had been so treated, to determine for the purposes of subsection (3) of that section any increase to be made in the amount of any allowable loss; and the appropriation of the asset is referred to below as a "relevant appropriation".
      (3) Sections 574 to 576 of the Taxes Act (relief for individual on disposal of shares in qualifying trading company) shall apply if an individual who has subscribed for shares as mentioned in section 574(1) disposes of them in circumstances where paragraph 2(3) above applies as they apply in other cases.
      (4) Where a person makes a claim for relief under subsection(1) of section 574 in the case of a disposal in respect of which there is an indexation loss (referred to below as a "section 574 disposal")—

      (a) paragraphs 6 and 7 below shall apply to determine any increase to be made, for the purposes of that subsection, in the amount of the allowable loss, and

      (b) paragraphs 4 and 5 below shall apply to so much only of the indexation loss as is not relieved under that section.

      (5) References in this paragraph and paragraphs 6 and 7 below to an increase in any loss include, in circumstances where paragraph 2(3) above applies, a reference to the creation of the loss.

      Capital gains tax
      4.—(1) Where in the case of any taxpayer—

      (a) there is a relevant gain for the year 1993–94,

      (b) the relevant gain exceeds the exempt amount for that year, and

      (c) there are indexation losses in respect of any disposals made in that year,

      then, for the purposes of the 1992 Act, the amount by which the total amount of chargeable gains accruing to the taxpayer in that year exceeds the allowable losses accruing in the year shall be reduced by the amount mentioned in sub-paragraph (2) below, and shall be so reduced before the deduction of any allowable losses carried forward from any previous year or carried back under section 62 from any subsequent year.
      (2) The amount referred to in sub-paragraph (1) above is so much of the total of indexation losses in respect of disposals made in that year as does not exceed—

      (a) £10,000, or

      (b) the amount by which the relevant gain exceeds the exempt amount for the year,

      whichever is the smaller.
      5.—(1) Where in the case of any taxpayer—

      (a) there is a relevant gain for the year 1994–95,

      (b) the relevant gain exceeds the exempt amount for that year, and

      (c) there are indexation losses in respect of any disposals made in that year or unused indexation losses for the previous year,

      then, for the purposes of the 1992 Act, the amount by which the total amount of chargeable gains accruing to the taxpayer in the year 1994–95 exceeds the allowable losses accruing in that year shall be reduced by the amount mentioned in sub-paragraph (2) below, and shall be so reduced before the deduction of any allowable losses carried forward from any previous year or carried back under section 62 from any subsequent year.
      (2) The amount referred to in sub-paragraph (1) above is so much of the total of indexation losses in respect of disposals made in the year 1994–95, plus any unused indexation losses for the previous year, as does not exceed—
      (a) £10,000 less the aggregate of—

      (i) the amount of any reduction made under paragraph 4(1) above for the previous year, and

      (ii) any increase made under paragraph 6(2) below for the previous year, or

      (b) the amount by which the relevant gain exceeds the exempt amount for the year 1994–95,
      whichever is the smaller.
      (3) For the purposes of this paragraph, if the total amount of indexation losses in respect of disposals made by the taxpayer in the year 1993–94 exceeds the aggregate of—

      (a) the amount of any reduction made under paragraph 4(1) above for that year, and

      (b) any increase made under paragraph 6(2) below for that year,

      there are unused indexation losses for that year of an amount equal to the excess.

      Income tax
      6.—(1) This paragraph applies where, at any time in the period beginning with 30th November 1993 and ending with 5th April 1994, the taxpayer makes any relevant appropriation or any section 574 disposal; and for the purposes of this paragraph there shall be determined—

      (a) the amount of any reduction for the year 1993–94 which (disregarding relevant appropriations and section 574 disposals) would be made under paragraph 4(1) above, and

      (b) the amounts of any indexation losses in respect of relevant appropriations or section 574 disposals made in that period.

      (2) If the aggregate of the amounts referred to in sub-paragraph (1)(a) and (b) above does not exceed £10,000, the amount of any allowable loss referable to such an appropriation or disposal shall be increased by any indexation loss in respect of it.
      (3) In any other case, notwithstanding anything in paragraphs 4 and 5 above—
      (a) the aggregate of—

      (i) the amount of any reduction for the year 1993–94 to be made under paragraph 4(1) above, and

      (ii) the amount of any indexation losses in respect of relevant appropriations or section 574 disposals made in the period referred to in sub-paragraph (1) above, shall be equal to £10,000 and shall be allocated as the taxpayer may determine between that reduction and increases in allowable losses referable to such appropriations or disposals, and

      (b) no reduction shall be made under paragraph 5 above or 7 below for the year 1994–95.
      7.—(1) This paragraph applies where, at any time in the year 1994–95, the taxpayer makes any relevant appropriation or any section 574 disposal; and for the purposes of this paragraph there shall be determined—

      (a) the amount of any reduction for that year which (disregarding relevant appropriations and section 574 disposals) would be made under paragraph 5(1) above, and

      (b) the amounts of any indexation losses in respect of relevant appropriations or section 574 disposals made in that year.

      (2) If the aggregate of the amounts referred to in sub-paragraph (1)(a) and (b) above does not exceed the limit for 1994–95, that is—

      (a) £10,000, less

      (b) the aggregate of the amount of any reduction made under paragraph 4(1) above for the year 1993–94 and of any increases made under paragraph 6(2) above for that year,

      the amount of any allowable loss referable to such an appropriation or disposal shall be increased by any indexation loss in respect of it.
      (3) In any other case, notwithstanding anything in paragraph 5 above, the aggregate of the amount of any reduction for the year 1994–95 to be made under paragraph 5(1) above and of the amount of any indexation losses in respect of relevant appropriations or section 574 disposals made in that year—
      758

      (a) shall be equal to the limit for 1994–95, and

      (b) shall be allocated as the taxpayer may determine between that reduction and increases in allowable losses referable to such appropriations or disposals.

      Supplementary
      8.—(1) In this Schedule—
      "the 1992 Act" means the Taxation of Chargeable Gains Act 1992, and
      "the old indexation rules" means the 1992 Act as it would have effect if—

      (a) the amendments made by subsections (1) to (5) of section 93 of this Act, and

      (b) the repeal of section 103 (collective investment schemes, etc.) and section 111 (building societies) of the 1992 Act by subsection (7) of section 93 of this Act, had not come into force.

      (2) Other expressions not defined in this Schedule but used both in it and in the 1992 Act have the same meaning as in that Act.
      (3) References in this Schedule to the reduction of any amount include its reduction to nil.'.
      Madam Speaker: With this it will be convenient to take Government amendment No.44.
      Mr. Dorrell: Clause 93 ensures that for disposals on or after Budget day last year the capital gains tax indexation allowance cannot increase or create a capital loss. The clause was debated in depth during the Committee stage. I explained that the restriction of indexation allowances for losses was an important anti-avoidance measure. Significant abuse of indexation allowances for losses had been identified. We estimated that, unless we took action to prevent the abuse, by the end of the decade we could lose roughly £3 billion a year of revenue on capital gains through both capital gains tax and capital transfer tax.
      Several representations have been made about the way in which we are tackling this type of tax avoidance. We have heard arguments that legislation dealing with specific types of avoidance based on indexation allowances should have been introduced. We have considered that, but we have concluded that it is not a viable alternative.
      Abuse of indexation allowances for losses is so central to the structure of such allowances that any anti-avoidance legislation would have to be very complex and lengthy and would be unlikely to succeed in the long term.
      We also received some representations making a different point—that investors have been badly hit by the change. The main concern is for investors making relatively modest, chargeable gains, who were not significantly involved in tax avoidance. The vast majority of investors are generally not affected by the change to indexation on losses, since their gains were kept out of capital gains tax, either by the annual exempt amount or the operation of personal equity plans.
      To meet some of the concerns about the impact of the change, we decided to introduce a limited transitional relief for individuals and trusts, which is provided for in the new schedule. Each individual and the trustees of each trust set up before 30 November 1993 will be able to claim indexation on losses realised up to 5 April 1995, but the amount of indexation allowance that can be claimed under the transitional relief is limited to £10,000 and relief may be used only to reduce CGT liabilities in 1993–94 and 1994–95.
      The cap of £10,000 on the indexation allowance on losses for the period 30 November 1993 to 5 April 1995

      759
      will ensure that the majority of individuals and trusts will be able to claim full indexation allowance on their losses for 1993–94 and 1994–95. That will give individuals and trusts a period to rearrange their portfolios before the full restriction of indexation for losses applies from 6 April 1995. The transitional relief will cost about £45 million, spread over the three years, including 1994–95.
      Mr. Nicholas Brown: As I understand it, the Government's estimate of the cost of relief is £10 million for the first year, £25 million for the next and £10 million for the final year, giving the figure that the Finance Secretary gave the House. It is important to explain that fact because at an earlier meeting we were told that the relief would cost £25 million in a full year. Stating the figures for the three-year period shows how that figure was arrived at.
      This is a modest, relieving measure given that the debate in Committee turned out to be quite controversial. Many Conservative Members were worried about the Financial Secretary's proposals. Some Conservative Members agreed with the reforms that Lord Lawson made in the mid-1980s and took some persuading that the Government were right to return to those matters, not merely to reform Lord Lawson's arrangements but to change them entirely and withdraw in their entirety the arrangements enabling indexation on capital losses to be carried forward.
      The measure is a modest, relieving measure—a widows and orphans relieving measure—and will be worth £4,000 to a top-rate taxpayer in any one year. It is limited not merely to £10,000 but to the two-year period during which the provision can be used and, in as much as the measure applies only to individuals and trusts, it is tightly drawn. Critics of the Government's reforms would describe it as a modest concession.
      If the Financial Secretary believes that the changes that he is making are right, why is such a concession necessary? If the position, as he explained it to the Finance Bill Committee, was right in principle, why does he not stand by it? Why is he offering this albeit modest relieving measure? It seems to me, as I am sure that it will seem to others, that the Government have lost confidence in the reform that they put before the Committee and are offering this measure as a sop to the many critics of their proposals, not least those from their own side.
      Mr. Beith: The amendment is a fairly limited response to a great of deal of anxiety that was expressed in Committee.
      The Government have abandoned the Lawson reforms, in which they used to take a pride and about which they used to say a great deal. They have abandoned them because they believe that a potential tax loss of about £3 billion could result—a figure which was never satisfactorily explained in Committee, but which no Minister could ignore. My submission in Committee was that it should be possible, if that is the scale of the potential loss, to formulate more specific measures to ensure that the Lawson reforms were not abused in such a way.
      It therefore appears that Lord Lawson, when he was Chancellor of the Exchequer, set in train a tax change that could have appalling consequences for the Revenue, and that it has taken several years of Conservative government for that awful truth to come home.
      Mr. Nicholas Brown: Eight years.
      Mr. Beith: The hon. Member for Newcastle upon Tyne, East (Mr. Brown) reminds me that it has taken eight years of Conservative government for that awful truth to come home. Someone in the Treasury suddenly discovered that £3 billion could go down the tubes as a result of that serious miscalculation. The noble Lord made a number of miscalculations, not least about what the combined effect would be of his measures on mortgage interest when associated with the liberalisation of capital and mortgages and the promise of tax cuts, but that is another big Lawson miscalculation.
      4.15 pm
      I think that in the intervening eight years many people have been persuaded that it was right in principle and logical that there should be indexation relief of that type, and that people who have made losses as a result of the Government's incompetence in allowing too much inflation should not be penalised for the Government's mistakes. That seems to be a reasonable principle, and one which should guide the Government anyway. The Government should not be encouraged in their misdemeanours by the knowledge that if they produce too much inflation they gain through tax measures as a consequence, automatically, without having to come to the House of Commons to raise more tax. The Government remain in the dock for having embarked on the reforms and for abandoning them so totally on the basis of a figure that members of the Committee found slightly hard to believe.
      The measures themselves are limited in time scale. The allowance is lost if it is not used in respect of the period until 5 April 1995. It does not solve the problem of retrospection for those excluded from the relief, including companies, and one wonders whether it is right that companies should be exempt from the benefit of the change.
      The amount of the relief is also a restriction—£10,000 is a relatively small amount in relation to the losses that can be incurred, for example, in farming. In Committee, I mentioned those people who are trying to set milk quota gains against capital depreciation in land values. Large sums of money are involved which have never been seen by the farmer concerned; they are accounting transactions. On one hand, the farmer has something that he cannot even touch—milk quota—which has a value that he never asked it to have; on the other, his land, which he can see, has greatly depreciated in value as a result of the decrease in land values. We are not speaking about a pile of used notes that the farmer can spend; we are speaking about the effect on his viability, and perhaps on his ability to move from one farm to another, or to retire from farming with any provision for retirement. That viability is affected by the inability to set more than the £10,000 limit against gains.
      I have also been told that the schedule is poorly designed and looks as though it was a bit of a rushed job. For example, although individuals and settlements are included, personal representatives are not, with the result that, after a person dies and someone takes on the responsibility of executing the will, they cannot continue to sell the assets of the deceased and set them off with gains against losses. There may prove to be more drawbacks resulting from the way in which the schedule was drawn up.
      Obviously, the schedule was drawn up in a bit of a hurry as a result of the amount of criticism that was received in Committee. I am glad that the Government at least made

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      the attempt, but many people, including many small businesses and farmers, will be dealing in sums greater than those that are covered by the proposals and are likely to suffer substantial losses.
      It is hard to "read across the column", if you like, from those problems experienced by people in small business to the possibility of companies creating shell companies and off-the-shelf companies to which they can transfer millions of pounds of losses. It is of the latter material that the fears of the Chief Secretary and the Financial Secretary are made —the possibility of companies inventing other companies to which they can transfer considerable gains and with which they can make financial manoeuvres of that type; that is what the problem is about. But that is not the experience of those who may suffer from the limited nature of what the Government are now offering.
      We tabled amendments to eliminate the retrospective elements of the Government's original clause 89, now clause 93, which have not been selected, but it will be apparent from those amendments how strongly we feel about the retrospective aspect of this. I remain less than satisfied with the form of the Government's response to the concern expressed in Committee.
      Mr. John Townend: I strongly support the amendment which gives some transitional relief to individual investors and I thank the Government for that concession. However, it does not deal with the important point of principle at issue here. It is very much like an EC derogation for several years in that it dulls the pain in the short term but it hits one in the end.
      The proposal eventually to do away with the indexation of losses is wrong in principle and illogical and I question the motives that made the Government introduce it. As I understnad it, it was introduced at the request of the Inland Revenue in order to stop tax avoidance.
      When capital gains tax was set at the internationally high level of 40 per cent., it was argued that that was acceptable as the taxpayer would not pay tax on inflation. That was achieved by allowing the taxpayer to index the cost price of the asset. That was symmetric. It did not matter what happened in the future; the cost price of the asset was adjusted to cover for inflation.
      The Government are now trying to make that asymmetric in that the cost price will be adjusted only if a profit is made in the future. The cost price will not be adjusted if a loss is made. That means that an individual's portfolio of shares will no longer be protected against the ravages of inflation. We are breeching an important principle there.
      As for the reason given by the Inland Revenue—that the amendment will deal with people who are avoiding tax by complicated means—stopping indexation for everything and everybody is taking a sledgehammer to crack a nut.
      I strongly support the efforts of the Treasury and the Inland Revenue to stop artificial schemes and avoidance, but, with due respect to my colleagues on the Front Bench, on this occasion the Inland Revenue has been idle. It has been too idle to draft the necessary clauses to deal with avoidance, so everyone will suffer.
      I found the estimated cost of the Government not taking such action rather suprising. The total yield of capital gains tax is £1.2 billion a year, yet the Government are talking about a cost of up to £3 billion a year by the year 2000. I understand that that is partly because the capital gains tax figures relate only to individuals, whereas capital gains tax
      762
      applies also to companies, but I am told that indexation of losses is expected to cost £1 billion with regard to individuals.
      If those figures are not grossly exaggerated, it means that the Government consider that, during the next few years, inflation will rise dramatically, otherwise I cannot see how the estimates can be anything like accurate.
      We welcome the concession, but will the Government think seriously by the next Budget and try to bring back some equity? For example, I see no reason why they cannot continue the transitional proposals on a long-term basis and for the individual allow indexation of losses of up to £10,000 a year in perpetuity. That would protect the legitimate small investor. The Government should look at the matter again because there is an important matter of principle here.
      Mr. Dorrell: Of course the Government concede that the proposal included in my right hon. and learned Friend's Budget departs from the intellectual symmetry of the Lawson reforms of 1985. That is self-evidently true, as I made clear in Committee. We feel that it is right to depart from that intellectual symmetry because, although we can see the intellectual rigour of the approach taken by my noble Friend Lord Lawson, experience has taught us that the loss indexation provisions introduced by the 1985 legislation open substantial opportunities for tax planning and avoidance in a way that undermines the yield of capital gains tax.
      Although it is easy to see the attraction of the Lawson approach, we cannot be blind to the fact that, although capital gains tax systems applied by many other OECD countries provide indexation, there is no example anywhere in the OECD of a country that has successfully allowed indexation of losses.
      Mr. Nicholas Brown: I am grateful to the Financial Secretary for repeating that important point, which he made in Committee with telling effect. Will he explain why it took the Government eight years to discover it?
      Mr. Dorrell: The Government are still attracted to the intellectual rigour of my noble Friend's case. If it had been possible to design rules for operating a symmetrical approach to indexation without undermining the tax yield, we would of course have preferred to go down that road. Experience of the operation of the principle in practice taught us that that is not possible.
      Before the hon. Gentleman leaps to his feet and says that the new schedule is another example of the Government acting too little, too late to close a major loophole, I remind the House that the major impact of the indexation provisions on yield is building all the time.
      Our projections of the long-term effect on yield extend to the end of this decade not because—to answer my hon. Friend the Member for Bridlington (Mr. Townend)—we expect inflation to recur in the interim, but because the tax planning steps taken by some companies almost immediately, as it appears, after my noble Friend sat down after making his Budget speech in 1985 will have that much longer to mature. It is not the effect of inflation between now and 1998 that is the key, but the cumulative effect of provisions put in place and of tax planners and practitioners climbing the learning curve and exploiting new opportunities for relief. In Committee, I gave a couple of examples of new ideas that are being pursued in both the corporate and—this is important—individual sectors.

      763
      My hon. Friend the Member for Bridlington asked why we had not made serious proposals to address abuses directly rather than undermine the principles of the Lawson reforms. As I said, we would have preferred to have made such proposals but concluded that none of the methods that we examined could be made to work. I am encouraged in my view that we have not been idle, to use my hon. Friend's word, because most of the ideas that we considered were put to us by outside bodies wanting to argue the case, and none seemed to us to pass the test of addressing the abuse while not undermining the principle of indexation. It is not just us who have been idle, but the lobbying groups that sought to argue the case to us.
      Mr. John Townend: It seems difficult to believe that the avoidance will be so successful, particularly in respect of individuals, that a tax yielding £1.3 billion would, after several years, yield only about £0.3 billion. That stretches the imagination.
      Would not most of the avoidance be covered if we exempted private investors? Most artificial tax avoidance schemes are carried out by limited companies.
      4.30 pm
      Mr. Dorrell: My hon. Friend is right that some of the best developed examples occur in the corporate sector, but I gave the Committee the example of the capital-certain bonds being developed in the City, the purpose of which would be to fall just the wrong side of the qualifying corporate bond rules so that they figured in capital gains tax. Loss indexation would be available to them, but they would in practice be capital-certain. People would therefore have the interest on the bond and the indexation available on the capital value of the bond, which value would be virtually certain.
      Of course it is true that we could have changed the detail of the qualifying corporate bond rules in order to catch a particular bond issue being marketed by a particular house; but that illustrates the sort of opportunity that exists to develop a product whose purpose would be to offer the individual investor the twin gain of a current interest return and protection against capital gains elsewhere in his portfolio. The list that I gave the Committee was not
      intended to be exhaustive—it was merely indicative of the sort of product that we know is being developed in the City to exploit the rules, not in the corporate sector but in the individual retail sector.
      My hon. Friend the Member for Bridlington asked me for an assurance that we would continue to think seriously about the future of CGT, and I am happy to give him it. As I told the Committee, the Government are engaged in a full dress review of the flow of funds through the economy and of how the tax system, among other things, impacts on the availability of finance for industry. One does not need to look far into the system to understand that capital gains tax exerts an important influence on the availability of capital to the wealth-creating sector.
      As I said in Committee, it is no part of the Government's case that CGT is a part of the tax system that cannot be further improved. I offer my hon. Friend the assurance that we shall continue to think seriously about the future of CGT as part of the tax system. In the meantime, I believe that we have little choice but to introduce the abolition of loss indexation relief, as
      764
      provided for by clause 93. I am grateful for my hon. Friend's welcome for the transitional provision that we have tabled.
      To answer the hon. Member for Newcastle upon Tyne, East, this in no sense undermines our commitment to the abolition of loss indexation relief. There was a certain inconsistency between the hon. Gentleman's argument and the arguments advanced by the right hon. Member for Berwick-upon-Tweed (Mr. Beith)—
      Mr. Nicholas Brown: We are members of different parties.
      Mr. Dorrell: Indeed, but the hon. Gentleman and the right hon. Gentleman cannot both be right. The one says that we have lost confidence in our proposals; the other says that we are sweeping away the fundamental reforms introduced by Lord Lawson. On this occasion, I side with the right hon. Member for Berwick-upon-Tweed, although not with any enthusiasm because I respect the intellectual symmetry and appeal of Lord Lawson's original proposal. But I have to conclude that we have tried it and it does not work.
      Mr. John Townend: Will my hon. Friend deal with my first point? How does he explain that a tax that yields only £1.3 billion from the personal sector—if nothing is done —will decrease by £1 billion in two or three years' time? That suggests that everyone will have a tax avoidance scheme—such projections stretch the imagination.
      Mr. Dorrell: The figures on which the £3 billion yield were based anticipated the yield from capital gains tax and from corporation tax on capital gains, by the end of the decade, as being about £4.5 billion. We anticipated that virtually all the tax from the corporate sector would by then be at risk, and roughly half the tax from the individual and trust sector would be at risk, as a result of the sort of tax planning devices that I have described. It was the application of those two principles to the underlying anticipated yield of £4.5 billion that left us with £3 billion missing and £1.5 billion still coming in.
      Amendment agreed to.

New clause 1

  PREMISES FOR THE PROVISION OF CHILD CARE
  'The following section shall be inserted after section 14 of the Capital Allowances Act 1990—
  "14A (1) Where a building or structure which is not an industrial building or structure is used by a person carrying on a trade for the provision of care for the children of workers employed in that trade, this Part shall apply to that building or structure as if it were an industrial building or structure.
  (2) The writing down allowances within section 3 which are made to a person by reason of subsection (1) above are not to exceed £10 in aggregate for a chargeable period.
  (3) In this section-'care' means any form of care or supervised activity whether or not provided on a regular basis, but excluding supervised activity provided primarily for educational purposes; 'children' means person under the age of eighteen..'''.—[Ms Harman.]
  Brought up, and read the First time.
  Ms Harriet Harman: I beg to move, That the clause be read a Second time.
  Mr. Deputy Speaker (Mr. Geoffrey Lofthouse): With this, it will be convenient to discuss also the following: New clause 6—Child care vouchers—
  '.—(1) Where an employer supplies child care vouchers to an employee in qualifying circumstances and up to the qualifying limit such vouchers shall not be treated as emoluments for the purposes of section 131 of the Taxes Act 1988 or as benefits to which section 154 of the Taxes Act 1988 applies.
  (2) For the purposes of subsection (1) above the vouchers are supplied in qualifying circumstances if

  (a) the vouchers can be used only in paying for care for a child who falls within subsection (3) below and

  (b) the registration requirement is met

  (3) A child falls within this subsection if the child

  (a) is a child for whom the employee has parental responsibility

  (b) is resident with the employee or

  (c) is a child or stepchild of the employee and is maintained at the employee's expense

  (4) The registration requirement is that

  (a) the premises on which the care is provided are registered under section 1 of the Nurseries and Child-Minders Regulation Act 1948 or section 11 of the Children and Young Persons Act (Northern Ireland) 1968 or

  (b) a person providing the care is registered under section 71 of the Children Act 1989 with respect to the premises on which it is provided

  (5) For the purposes of subsection (1) above the qualifying limit is

  (a) in the case of each child who is under the age of six years and is not in full time education, £75 a week

  (b) in the case of each other child under the age of 16 years, £30 a week.

  (6) In this section, "care" and "parental responsibility" have the same meaning as in section 155A of the Taxes Act 1988.'.
  New clause 7—Child care and the self-employed—
  '.—(1) Notwithstanding section 74 of the Taxes Act 1988, in computing the amount of the profits or gains of an individual to be charged under Case I or Case II of Schedule D a deduction may be made for the cost up to the qualifying limit of care for a child who falls within subsection (2) below if the registration requirement is met
  (2) A child falls within this subsection if the child

  (a) is a child for whom the individual has parental responsibility

  (b) is resident with the individual or

  (c) is a child or stepchild of the individual and is maintained at the individual's expense

  (3) The registration requirement is that

  (a) the premises on which the care is provided are registered under section 1 of the Nurseries and Child-Minders Regulation Act 1948 or section 11 of the Children and Young Persons Act (Northern Ireland) 1968 or

  (b) a person providing the care is registered under section 71 of the Children Act 1989 with respect to the premises on which it is provided

  (4) For the purposes of subsection (1) above the qualifying limit is

  (a) in the case of each child who is under the age of six years and is not in full time education, £75 a week

  (b) in the case of each other child under the age of 16 years, £30 a week.

  (6) In this section, "care" and "parental responsibility" have the same meaning as in section 155A of the Taxes Act 1988.'.
  Ms Harman: New clause 1 raises a genuine anomaly in the tax treatment of employers who provide nurseries for their employees. It highlights the difference between the tax treatment of employers in factories and warehouses who provide such nurseries, and that of employers in shops and offices who do the same. It also highlights the difference between employers in shops and offices who provide their employees with sports facilities and those who provide nurseries: the latter do not receive the same tax concessions as the former. The new clause also deals with the important question of child care, giving us an opportunity to examine the current position and to demand action from the Government.
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  Nothing less than a social and economic revolution has taken place in this country over the past couple of decades. The patterns of both family life and work have changed. A typical employee used to be a man working full time, expecting to work full time from the moment when he left school to the moment when he retired at 65, and assuming that, throughout that time, he would be supported by a non-working wife caring for their children at home.
  Now, however, there is no set pattern of family life, and families come in all shapes and sizes. Two specific trends are discernible: more families are headed by lone mothers, and there are fewer extended families. Granny is less likely to be on the scene.
  The revolution has extended to the workplace. Women now constitute half the work force. It cannot be said often enough that public policy must catch up with the revolution in the labour market and the world of work, and its effect on the economy. Women's work is essential to the economy, as women now work in all regions of the country and in all industries; however, it is also essential to the family budget. Women are working not just for themselves, but for their families and the economy as a whole.
  There has also been a revolution in women's educational qualifications. Women now have educational qualifications equal to those of men when they leave school, college or university—not necessarily in the same subjects, but investment in the education of girls and women now equals investment in that of boys and men.
  A new army of women has joined men at work—and most of those women are mothers. The Government, however, have failed even to ask themselves, let alone answer, the question that every working mother must ask herself: who will look after the children? As far as we can see, there is no public policy on child care—no public policy to match the revolution that has taken place at home and at work.
  The Government have simply turned a blind eye to the needs of the children of working mothers; parents have been left to fend for themselves, and for most working parents the care of both pre-school and school-age children is a headache.
  I make it absolutely clear that, although we are talking tonight about children aged under five years, we are talking also about school-age children. It is not as though, once children start school at the age of five, the problems are solved for working parents. We should think about all those in-service training days when working women are tearing out their hair, and think of the school holidays, and of half term. School is not child care, and it does not solve the problems of working parents.
  I hope that, when people worry, as they are right to do, about children being stuck in front of videos, they also ask themselves what the connection is between the debate about children spending too much time watching videos and the debate we are having today about the lack of facilities for school-age and pre-school children.
  With women now entering the labour market and making up half the total work force, the result has been a huge increase in the demand for child care. The southern European countries—the Mediterranean countries—by and large still have a well-developed extended family network. Therefore, child care needs can be met to quite a large extent by aunts, great aunts or grandmothers. That is no longer the case in most communities in this country.

  767
  The northern European countries meet the demand for child care by providing day nurseries, nursery schools and classes, and through out-of-school provision. Many of those countries also have a more stable extended family network than we have.
  In the south of Europe, there are extended families as well as many well-developed child care systems, and in the north there is good child care provision as well as extended families. But what do we have in this country to support the children of working parents when we do not have the extended families or child care?
  The demand for child care is increasingly being met, not by an increase in the number of nurseries—which would be the first choice of many parents—but by an increase in the number of child minders. I have obtained some figures through answers to parliamentary questions. Between 1982 and 1992, the number of places in local authority day nurseries fell. What an indictment that is. There has been an unprecedented increase in the number of women going to work, yet there has been a fall of 4,500 in the number of places in local authority day nurseries.
  The really big increase in child care provision has been in the number of child minders. More than a quarter of a million children are now cared for by child minders—an increase of more than 150,000 in the last 10 years. The lack of child care provision and the increase in the number of women in the work force have resulted in an increase in demand for child minders which has been met by an increase in the number of child minders.
  For many—especially those with very young children —that is the preferred form of child care; but for more it is not. The number of children cared for by child minders has grown by more than 150,000 in the last 10 years. But for most of those parents, child minders are simply the only available option or the cheapest option; they are not necessarily the first choice of the parents or of experts examining the child care situation.
  In the past, the child of a working mother was more likely to be cared for in a nursery. During the war, when the men went off to fight and the women worked in industries such as the armaments industry, the response was to ensure that nurseries were available for the children of working mothers. But there has not been a similar response to the current influx of women entering the work force. A network of nurseries has not been established today as was
  established during the war, when an equal number of women worked.
  4.45 pm
  As women have entered the work force, child care has been privatised and fragmented, with the need met by private nurseries. There has been an increase in the number of private nurseries, although there are still very few places available in private nurseries. Only 91,000 children have places in private nurseries, compared with the quarter of a million children who are cared for by child minders.
  Often, the reason why children are cared for by child minders rather than in a private nursery—the two alternative forms of private child care—is the cost of private nurseries. The Government's own figures show that it can cost up to £150 per week for a private nursery place.
  In our view, it is wholly unsatisfactory that a major public policy shift has taken place with no parliamentary debate or public discussion. I should like to hear the Minister's reaction to these issues. Does he think that it is satisfactory that parents have no choice of child care, and
  768
  that many can only afford a child minder? Does he think that a nursery place should be a viable choice? Does he think that a public policy issue is involved here, or is it simply a matter of parents who work fending for themselves?
  I look forward to the Minister's response to these questions. I hope that he will not say that it is a matter for his colleagues in the Department of Health, the Department for Education or the Department of the Environment. I can tell the Minister that each one is saying that it is a matter for the other. As the Minister is in the Chamber, perhaps we can hear from him the Government's response to this important economic issue.
  Every Minister I have asked for information about the child care strategy has given a different answer. There have been different answers because there is ambivalence about the issue of what child care provision there should be for the children of working mothers. There is a similar ambivalence about nursery provision.
  We have seen the Government going hither and thither in their approach to nursery education. On 14 November, last year The Sunday Times said that the Secretary of State for Education was ruling out universal nursery education and dismissing it as too expensive. He said:
  "We haven't got any money. We are in a difficult public expenditure round."
  Ms Angela Eagle: Would my hon. Friend agree that that kind of argument is very short-sighted, as keeping mothers who wish to work on benefit does not save the taxpayers money? It means that mothers are stuck on benefit and are not making a contribution to the tax revenue, which they would be making if they could afford to work because they had access to affordable child care.
  Ms Harman: My hon. Friend is absolutely right, and I hope to return to that issue.
  Without a nursery place, many parents—particularly single parents—are dependent upon benefits and cannot go out to work. That is quite apart from the fact that research shows that nursery education benefits children, and therefore should be seen as a long-term investment in children's futures.
  Although in November the Secretary of State for Education ruled out nursery education for children as too expensive, and said that it was not possible because the Government had a "difficult public expenditure round", a month later, on 23 December, the Prime Minister changed the tune. He said that it was the Government's intention to move to universal nursery education. He added—we have been making the point for years—that the United Kingdom compares poorly with the rest of Europe in terms of child care, with only half our three to four-year-olds in nursery education, compared with 99 per cent. provision in France and 96 per cent. provision in Belgium.
  On the one hand, we can see the ambivalence of different Secretaries of State, Ministers of State and Government Departments about nursery education and women at work, but the Chief Secretary to the Treasury gave the game away when he said that the provision of public services sapped parental responsibility. He was saying that any public provision somehow confiscates the responsibility of parents, but he failed to recognise that, with the help of proper public provision of child care services, many parents who want to go out to work but who

  769
  are at the moment stuck on benefit and living on income support could be financially responsible for themselves and their children if child care provision was available.
  The Chief Secretary was in effect saying, "They're your children; you had them, so you look after them. They are absolutely nothing to do with us." We believe that, of course, children are primarily the responsibility of their parents—no one would have it any other way—but the community as a whole has an interest in the well-being of our children and their preparation for adult life.
  We all have an interest in children growing up to be adults who are, in the Prime Minister's words, "at ease" with themselves and able to take on adult responsibilities. The Government's attitude—"They're your children; they are nothing to do with us, so why are you even asking us about child care?"—is short-sighted.
  When the Government have reluctantly taken action on child care, it has always been characterised by two features: it has been short-term—"here today, gone tomorrow" initiatives—and fragmented. We need not pump priming but a long-term strategy. When the Government have been pressed and felt it necessary to issue a press statement on child care, they have set up a pump-priming initiative.
  I do not know whether hon. Members remember the under-fives initiative set up in the 1980s, which was to last for two years. What happened to it? In the 1990s, grants via training and enterprise councils seem to be the fashionable way of affording the Government the opportunity to issue a press release, but there is no long-term strategy to deliver a national child care programme. What is lacking is not pump priming but a long-term strategy.
  Child care should be regarded as part of the economic infrastructure, as important in getting women to work as the roads and railways on which they travel to work. Like other infrastructure projects, child care needs a long-term, strategic approach. Such an approach would match not only the demands of the economy but those of parents. Although the patterns of women's employment may be fragmented and changing, the needs and demands of their children are not. Their children need continuity and certainty.
  If a mother gets a training place for six months, it is not good enough to offer her child care for six months at the local TEC. The child will just be settling in when it will be time for the mother to take him out of the nursery because she is looking for a job. She will have to make temporary arrangements for the child while looking for work and, if she gets a job, she will have to make other arrangements for the child to be cared for while she is at work. If she is on one of the increasing number of short-term contracts, what will happen to her child care when the contract comes to an end?
  There is no set pattern for women's employment. The fact that women now form half of the work force does not mean that they are working according to the pattern to which men used to work. A woman might work full-time or part-time; she might be out of the labour market for a while and then retrain and return to part-time work and then to full-time work. The point is that, although a mother's pattern of employment might be changing and
  770
  fragmented, her child needs continuity and certainty, and child care cannot be fragmented to mirror the fragmentation of the new labour market.
  Does the Minister believe that child care is part of the economic infrastructure and not a matter for individual parents, or does he believe that it is a private matter that can be left to parents alone?
  Mr. David Willetts: The hon. Lady says that she does not want a fragmentation of the labour market, with women moving from one job to another leading to their child care also being fragmented. Why, therefore, is she advocating a change that specifically ties tax relief to the place of employment?
  Ms Harman: The hon. Gentleman has not read the new clause carefully enough. It would also provide more favourable tax treatment for employers who undertake joint ventures with local authorities. We have greatly welcomed that growing trend, which Labour councils have pioneered.
  For example, when giving planning permission for a new Sainsbury store to be built, the council and the company embark on a joint venture to build a nursery there. When that happens, we believe that the employer should get the same tax relief on the nursery buildings that it would have received had they been a warehouse or factory.
  We are making two points. First, there is not enough child care. We need more, and we want to encourage it wherever we can. Secondly, we have to ensure that it is of high quality and embodies certainty and continuity.
  Does the Minister believe that child care is an economic issue about which his team is concerned, or does he believe that it is solely a private matter that can be left to parents?
  Mr. Dorrell: I am happy to respond to the hon. Lady. Of course it is true that child care is an economic issue, and I should like the hon. Lady to expand a little on that point. She said that we need a national child care strategy, and her hon. Friends support that proposition. Is she committing her party to a such a strategy? If so, would she be responsible for it, or would the shadow Department for Education? If she were to be responsible for a national child care strategy, what would be its shape?
  Ms Harman: We have made it clear that we believe that working parents with young children should have a choice of child care. We also believe that the Government have a role to play—they must take the lead. I shall deal with the Minister's point a little later.
  We certainly do not think that child care provision is entirely a matter for public finance, although it is a crucial aspect of public policy. It is not only the Government who will foot the bill, although they must play their part. The Government must take a lead in galvanising the willingness of parents to chip in and pay some of the cost and to galvanise the willingness of employers to invest.
  There is a readiness to act, but the Government must take a lead to ensure that we have a national child care strategy. The Minister should examine what Labour councils have been able to do, and I shall deal in a moment with what the Government are saying about council provision.
  Mr. Dorrell: The hon. Lady has conceded that child care provision is not purely a matter of public finance. I therefore do not understand why she is dismissive of

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  developments in the infrastructure of child care in the private sector, such as private registered day nurseries. Why is she so dismissive if she accepts that child care does not have to be wholly publicly funded?
  Ms Harman: I am not dismissive of the increase in child care over the past 10 years, but I am making two points. First, the increase in child care has in no way matched the increase in the number of young children whose mothers are at work, what we call the "child care gap". Secondly, parents do not have a real choice of child care, often having to go for the cheapest option. That is why I believe that there should be a public policy on child care, and a national child care strategy. It is not good enough for the Minister to conclude that there appear to be more child minders, so everything must be fine. "Look," he says, "there appear to be more private day nurseries, so there we are, it is all happening."
  The important fact is that we do not have a proper strategy that ensures choice and high-quality affordable child care.
  Mr. Dorrell indicated dissent.
  5 pm
  Ms Harman: The Minister appears to think that the Government do have a strategy. He clearly does not understand that, all over the country, working mothers, who are doing a good job, contributing to the economy and to their family budgets, are tearing their hair out because of the lack of child care provision, and because of the expense and the variable quality of the care that is available.
  As the Prime Minister hesitatingly acknowledged last December, in other European countries Governments have recognised the importance of child care and nursery provision. But Britain is at the bottom of the European nursery league table. Why should Britain's children be Europe's poor relations? I should like the Minister to respond on that point.
  The Minister said that he believed that there was a strategy, and that the Government recognised that child care is part of the economic infrastructure. I am delighted to know that he thinks that there is a strategy. Perhaps he would discuss it with some of his colleagues in other Departments.
  I have addressed several parliamentary questions to all the Departments, and when we put all the answers together, it becomes clear that there is no coherent strategy. There is inadequate information about how much money is spent on child care and nurseries, and about the number of places. I asked all Departments to make statements both about child care for their own staff and about the contributions they make to other child care and nursery services.
  The Department for Education, which is responsible for nursery education, said nothing about its strategy. The Department of the Environment, which provides resources to local authorities for under-fives provision and out-of-school care, said nothing whatever about child care strategy. The Department of Employment, which provides resources for out-of-school care, could not say anything about a child care strategy, either. The Department of Health, which has overall responsibility for child care, said nothing about the importance of child care for working parents.
  Four of the Departments that provide child care for their own staff—the Departments of Health, of the
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  Environment, and of Employment, and the Treasury—said nothing about the strategy behind that provision. Clearly it is tacked on, with no coherence.
  There is also a lack of information about what spending there is, and what it contributes to. The Department for Education does not know how much local education authorities spend in total on the under-fives. That is extraordinary. The Department of Health does not know how much local authorities spend on child care for the under-fives. The Department of the Environment knows how much is given to local authorities but not how much is spent, and the Department of Health does not know how much is spent on nursery provision in the national health service.
  There is also a lack of information about child care places. The Department of Health could not provide overall figures for child care provision, because the figures for day care and for nursery schools and nursery classes are collected on a different basis. The Department of the Environment did not know how many child care places were provided by local authorities.
  The Department for Education provided figures for under-fives in nursery and primary schools, but of course those include the rising-fives, who are already in full-time schooling. The Department does not provide figures for under-fives in nursery schools and classes. The Department of Health does not know how many child care places there are for NHS employees.
  Mr. Nigel Spearing: Is my hon. Friend aware that this morning I received a written answer from the Department for Education about the statistics for provision for the under-fives? That answer, which is recorded at column 379 of yesterday's Hansard, admits that, on the due date, there could be double counting of children who may attend both playgroups and nursery classes during the same year. So the statistics that the Secretary of State for Education constantly bandies around are open to question.
  Ms Harman: Yes, I noted my hon. Friend's question, and the information he received in reply to it makes an important contribution to the debate. It proves that there is no determination to find out what is going on, what is working and what is not working, so as to build on best practice and take things forward. The Government seem to be collecting whatever figures they can to show themselves in the best possible light, without any concern about what is really happening on the ground, and whether that represents a proper national child care strategy.
  The situation is a shambles. Working mothers and their children are being let down, and the child care deficit is growing all the time. Since 1984, there has been an increase of more than 600,000 in the number of children under five whose mothers go out to work. Yet during those 10 years, there has been an increase of less than 300,000 in places with nurseries, child minders and playgroups; and, as hon. Members will know, much of the provision counted in with the 300,000 extra places is not provision for working parents.
  Playgroups provide an invaluable service, but most people recognise that many cannot be counted as child care for working parents. The same goes for nursery education. Nursery education is vital, and we want all parents who feel that their child can benefit from it to have a chance of a place in a nursery school or nursery class for that child.

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  However, such places often cannot constitute child care for working parents. The official increase of 300,000 over-estimates the increase in provision for working parents.
  Many more mothers, especially lone mothers, would come off benefit and go out to work if child care were available. But the increase in child care nowhere near matches the increase in the number of mothers already going out to work, let alone the number who want to work but are prevented from doing so by the lack of child care.
  The Government's own figures show that 90 per cent. of lone parents currently out of work, who are claiming benefit and bringing up their children on income support, want to go out to work, but lack of child care is a major obstacle for them. If we examine the map of participation of lone parents in the work force and the map of child care provision, we see that, in the countries that have developed child care, there is much more participation of lone parents in the work force.
  Instead of Ministers moaning about single parents claiming benefits, let them listen to the demands of single parents. Single parents want to go out to work and to be able to provide for themselves and their families, but the lack of a Government national child care strategy prevents them from doing so and keeps them in forced dependency, bringing up their children on the breadline.
  It is not only the Labour party and other such organisations that recognise the child care gap, and the importance, both present and future, of child care. Howard Davies, the director general of the Confederation of British Industry, speaking at an employers' conference called Working for Child Care, described the position accurately:
  "Clearly, the demand for affordable, good quality childcare is greater today even than it was at the beginning of the 1980s. It is a demand which is not being met by the current supply of child care provision."
  Sometimes, the Government say that there has been a great increase in council provision of nursery education, so everything must be fine. However, we should recognise that, in so far as we ever hear Ministers boasting about nursery schools and classes, they are talking about Labour councils, which provide nursery places not because of the Government but in spite of them. The Government continually claim the credit for the child care and nursery provision that exists, but it is Labour councils that should receive that credit. Conservative councils have followed the Government's lead and lagged far behind.
  According to Government figures, of the 40 best local education authorities in providing places in nursery schools and classes, 34 are Labour, just two are Conservative, one is Liberal and three have no overall control. The message is absolutely clear: on the ground, local Labour councils are working with employers to provide more nursery places, they are providing more nursery education schools and classes, and they are trying to help. Without the Government taking a lead, it is difficult, and is bound to remain patchy.
  Against the background of a growing child care gap, the very least that the Government could do is seriously examine the anomalous treatment of employers who provide workplace nurseries or enter into joint ventures with councils to provide workplace nurseries.
  The system works as follows: the Capital Allowances Act 1990 makes a distinction between capital expenditure
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  on plant and equipment and capital expenditure on buildings. All companies are allowed to claim capital allowances on plant and equipment, no matter what sort of employer they are—shop, office, warehouse or factory.
  That means, among other things, that any expenditure they incur for fixed equipment associated with nurseries is allowable against tax. On the other hand, expenditure on buildings is covered by a different set of rules. The industrial buildings allowance is restricted, as the name suggests, to factories and warehouses. Other types of premises, principally offices and shops—where women are largely employed—receive no allowance at all against corporation tax.
  That distinction also applies to premises built to provide workplace nurseries. Therefore, workplace nurseries attached to industrial buildings qualify for the buildings allowances, but those attached to other types of building do not. Capital expenditure falling under the Capital Allowances Act is deemed to include investment not only in wholly owned ventures but in joint projects. The tax rules that I have described therefore also apply to instances when companies enter into agreements to provide workplace nurseries, either with other companies or with local authorities.
  It is clearly anomalous that employers whose businesses are based in offices or shops and who wish to provide workplace nurseries should receive less favourable treatment than industrial employers when providing nurseries for their employees. Obviously, there is a more general argument about the need to discourage excessive office building, but it cannot reasonably be applied to a situation in which either an office building already exists or where the decision to build has already been made and the question is whether a workplace nursery should be included.
  The tax rules already provide one exception—for company sports and recreational clubs which qualify for the industrial buildings allowance even when they are attached to an office or a shop, irrespective of the nature of the employer's business. Women who work in offices and shops will think that it is wrong that, if their employer provided them with a workplace nursery, they could not claim tax relief against the buildings, whereas, if they worked in a warehouse or a factory, they could.
  Certainly, women who work in offices and shops and who realise that the buildings qualify for tax relief if their employer provides sports facilities, but not if their employers provide nursery facilities, will think that it is wrong. It only leaves us all wondering why sports facilities qualify for tax relief and workplace nurseries do not. I hope that it is not because there is more interest among men in sports and more interest among women in child care.
  Our new clause simply extends the industrial buildings allowance to all companies which invest in workplace nurseries, either on their own or jointly with councils. That will provide an incentive to employers to construct their own workplace nurseries, to go in with other companies to provide joint nurseries, or to enter into partnership with local authorities to extend provision for child care.
  The new clause has attracted the support of the employers' organisation Employers for Childcare, which has said that the different treatment in tax relief of sports facilities and workplace nurseries and of shops and offices as opposed to industries and factory premises was
  "another example of the inconsistency which exists in the field of childcare provision … It is a further demonstration of the need

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  for the Government to undertake a full review of the situation in Britain today. Employers for Childcare believe that this is an essential first step in developing a coherent national strategy to offer accessible, available, affordable, quality childcare services for all."
  I should like to hear the Minister tell us how the Government justify those anomalies. How can they allow tax relief for sports clubs, but not for nurseries? How can they justify relief for nurseries attached to factories and warehouses, but not for nurseries attached to offices and shops?
  5.15 pm
  The new clause is merely a probing clause, but it probes an important point. The Government have a history of tax treatment in child care. For many years, we argued that taxation should not be in the hands of the employee for the employer's contribution to workplace nurseries. When that issue arose in the House of Commons in 1989, the then Chief Secretary to the Treasury, the right hon. Member for Kingston upon Thames (Mr. Lamont), said, putting the straightforward, free-market view:
  "if married women want to work and if employers want to employ them, the market will work and employers will pay the necessary wage to encourage married women to return to work."—[Official Report, 11 July 1989; Vol. 156, c. 892.]
  However, a year or so later, the Prime Minister, who was then Chancellor, slightly changed his mind when he said:
  "I have decided to exempt the value of workplace nurseries and playgroups from taxation as a benefit in kind."—[Official Report, 20 March 1990; Vol. 169, c. 1023.]
  He said that it was a small, but important, supply-side measure.
  Although we shall vote on the new clause, unfortunately we do not necessarily expect the Government immediately to see the light, but we are hopeful that as the arguments are put the penny will drop and the Government will recognise it as an important public policy issue.
  Women's entry into the labour market and the new family patterns needs to be recognised in public policy. The demands of the economy and of working mothers are the same. We need a national child care strategy that aims to see that parents have a choice of provision—child minders and nurseries for pre-school age children and provision for school-age children.
  Not all the investment in child care needs to come from the Government. Employers and parents may play their part, as will local councils. Unless the Government take a lead, it simply will not happen.
  Mr. Willetts: The hon. Member for Peckham (Ms Harman) speaks rather more confidently and certainly at greater length on child care than she does on taxation. Her speech concerned a subject with which she appeared to have rather more familiarity than the subjects that she addressed in her performances in Standing Committee.
  The principle of greater choice and diversity in child care is one that, of course, we on the Conservative Benches completely support. I should like to draw the attention of the House to some of the practical problems in the approach set out by the hon. Lady.
  I thought that the Labour party had some concern about the distribution of income and wealth. One of the great difficulties in trying to provide extra tax relief for working women is that, by and large, it would benefit two-earner couples. We cannot speak with enormous confidence about
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  patterns of income in the country, but one thing of which we may be sure is that, by and large, two-earner couples are not at the lower end of the income scale.
  Ms Eagle: Does the hon. Gentleman recognise that new clause 1 deals with capital allowances and that my hon. Friend the Member for Peckham (Ms Harman) was talking about the provision of child care, not tax relief for child care?
  Mr. Willetts: The speech of the hon. Member for Peckham covered most aspects of child care. The new clause specifically concerns capital allowances, but the hon. Lady ranged widely in her comments and I do not see why Conservative Members should not range as widely.
  Assistance that is focused especially on working women is likely to be of particular benefit to two-earner families, who, generally, are not at the bottom of the income scale. Poverty among families is concentrated in one-earner or zero-earner couples. They are unlikely to be the families that will benefit from the measures that have been set out by the hon. Member for Peckham.
  That outcome seems not to interest the Labour party, which is supposed to be especially concerned—we are used to its ritual denunciations—about widening gaps in the income scale. Its lack of interest is rather odd.
  The argument of the hon. Member for Peckham seems to rest on the assumption that the only women who have an interest in child care are those who want to go out to work. It is equally important that women who are working but not in paid work—those who are at home with their children in one-earner families—should be entitled to benefit. That argument is even stronger, of course, for zero-earner families. The new clause is remarkably narrowly focused on families that are likely to be at the upper end of the earning scale.
  It is strange that a significant measure which was announced by my right hon. and learned Friend the Chancellor of the Exchequer in his Budget statement has not been referred to by the hon. Lady. That, of course, is the extension of family credit to provide a new disregard to help single parents especially, but other low-income working families as well, with their child care costs.
  Ms Hilary Armstrong: Does the hon. Gentleman acknowledge what was acknowledged eventually in parliamentary responses from Ministers, which is that the poorest people on family credit will not benefit from the Government's proposals? That is because they already receive the full amount of family credit. People will be able to receive the benefit that he is talking about only if they are currently receiving an extremely small amount of family credit and can therefore reach the maximum by claiming the extra benefit. There will be nothing like the quality of benefit that the Chancellor hinted at when he presented his Budget. As the facts have emerged, it is clear that very few people will benefit, and only those who are at the bottom of family credit.
  Mr. Willetts: I am surprised by that intervention. There will be a disregard for costs incurred in buying child care.
  Mr. Dorrell: My hon. Friend is right to be surprised by the argument advanced by the hon. Member for Durham, North-West (Ms Armstrong) because she is wrong. The fact is that 150,000 families will gain as a result of the

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  change announced by my right hon. and learned Friend the Chancellor on Budget day. I cannot believe that even the hon. Lady regards that as an insignificant number.
  Ms Armstrong: The gain will be fragmented.
  Mr. Dorrell: The hon. Lady might describe it as fragmented, but it will be targeted—that is the word that I would use—at those who need assistance.
  Mr. Willetts: I am grateful to my hon. Friend for his intervention.
  There will be a disregard for the costs of child care, which will help many of the families in receipt of family credit. It is particularly well targeted because it will help low-income working families. One of the ironies of family credit is that the beneficiaries generally fall into two categories, which may be at the opposite ends of the spectrum of family life styles. One of the main groups of beneficiaries is single parents who have low incomes but are in work. They will benefit, as my right hon. and learned Friend the Chancellor made clear in his Budget statement.
  The other significant group of recipients of family credit is one-earner working families where the mother is not in work but is likely to be at home looking after the children. They similarly will benefit from the assistance. It seems to be well targeted in terms of income and tolerant of the diversity of families.
  Ms Harman: Will the hon. Gentleman recognise that, even if the Government's target is met and about 50,000 women who are now on income support go out to work and claim family credit, there will be many more low-paid women who as a result of the tax changes set out in the past two Budgets will find themselves out of work and on income support? That will happen because tax increases, by virtue of the freezing of personal allowances and the freezing and cutting of other allowances—and especially increased national insurance contributions—make it more expensive for people to go out to work. That will hit low-paid women, many of whom will find that it is no longer worth their while to go out to work. They will find instead that they are better off on benefits. The hon. Gentleman is talking about those women who will go off benefits and enter the labour market, but will he recognise that probably double their number will go out of work because of tax increases and will return to benefits?
  Mr. Willetts: The hon. Lady is assuming that many women go out to work only if their income is entirely exempt from taxation and national insurance contributions. Surely that is not a reasonable basis on which to plan any sensible approach to taxation. She is saying that as soon as they find themselves brought within the income tax net they will find that they no longer have an incentive to go to work.
  One of the difficulties of financing public expenditure with taxation is that tax increases bring more people into the tax net. I accept that that is a consequence of the measures that were announced in the Budget. The alternative—not taking measures to reduce the public sector borrowing requirement—would have been far worse.
  I move on to another approach to the proposals set out in new clause 1 and in the new clauses that have been tabled by Liberal Democrat Members. The hon. Member
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  for Peckham said that a large amount of child care is informal: much of it is provided by relatives and friends. The statistics are dramatic. They show that 65 per cent. of mothers in full-time work use as their main provider of child care the husband, the grandparents or other relations. It seems that 87 per cent. of mothers in part-time work choose above all members of the family to provide child care.
  We all know about the painful and difficult negotiations that are involved. We suddenly become remarkably keen on our in-laws. We find ourselves negotiating complicated arrangements to try to get child care help provided. It is not fair to regard it as evidence that everyone would rather have formal, institutionalised child care provided by the employer or in another structured setting, and that we have informal arrangements because of the failure of individuals to obtain the institutional arrangements that they would prefer.
  On the contrary, informal arrangements are often the pattern of child care which people prefer and with which they are comfortable. There is some interesting evidence from America. As part of their programme to help single parents, especially, into work, and as a result of the greater diversity of approach that is now permitted by federal legislation on programmes for single parents, some states have set up large funds that are aimed at helping single parents to purchase child care when they return to work. They have found that the funds are not being drawn on to the extent that they expected. That is because, lo and behold, single parents in America prefer to negotiate informal arrangements with their neighbours or with relatives wherever possible rather than rely on institutional provision.
  The trouble with the new clauses is that they all favour institutionalised and formal rather than non-institutionalised and informal patterns of child care. I do not believe that that approach matches the preference of most parents in this country.
  Ms Eagle: The hon. Gentleman seems to be saying that those who are lower down the income scale prefer their mothers or grandmothers to look after their children in an informal way. Presumably those who are high up the income scale and use a very institutional form of child care that is known as the public school are allowed to get away with that approach. Indeed, it is seen as a good thing. How can the hon. Gentleman account for the difference in his analysis of the social classes?
  Mr. Willetts: I do not regard that intervention as a serious contribution to the debate; I hoped for something more serious from the hon. Lady.
  I shall turn to another aspect of the debate. The measures proposed by the Opposition parties are entirely concerned with the demand for child care rather than the obstacles to supplying it. They are entirely concerned with trying to lower the cost for employers of providing child care or, in the case of the Liberal Democrats, to assist people to buy child care.
  There is another more important aspect—the regulatory burdens under which the providers of child care find themselves. I shall quote from the experience of one lady who was trying to open a new nursery. This is an account of what she had to go through when she was opening the nursery:
  "When I was setting up my nursery school it took 6 months for the Social Worker to come and see me. She made it quite clear

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  that the state should provide. She encouraged the two local play-groups in neighbouring villages to object to planning permission on the grounds that I would take children from them. She said only mothers with cars would be able to come as my village is small and isolated. She insisted that I must have water play and sand inside. I do think they are both important but it is not easy in a house and I have a sand pit outside and I told her that most of my children had … plenty of water play with mothers who played with them. She wanted more dressing up clothes and to stipulate what toys I should have."
  5.30 pm
  Of course, we would love to have ideal child care. We could all sit around in committees—people sat around in committees during preparation of the Children Act 1989 and the regulations that followed—trying to design ideal child care. However, the problem with designing regulations which are intended to set out a picture of the ideal is that it makes it more difficult for new providers to enter the market.
  I hope that, as part of the Government's deregulation initiative, the way in which some overprotective local authorities interpret the regulations made under the Children Act, making it more difficult for new entrants to supply child care, will be examined. I also hope that local authorities—often they are left-wing Labour-controlled local authorities—which seem to be averse to granting planning permission to anyone who applies for a change of use to set up a nursery or child-care facility will be more tolerant. Instead of perpetually debating finance arrangements in the form of tax breaks or subsidies, we should also examine the obstacles that have been erected by successive Governments and local authorities which stand in the way of increasing the supply of child care.
  Finally, I shall consider a few other aspects of help for child care that are focused particularly on the employer and the workplace. The book written by the hon. Member for Peckham, "20th Century Man: 21st Century woman: How both sexes can bridge the century gap"—
  Ms Harman: You are in the 18th century.
  Mr. Willetts: I am sorry that the hon. Lady thinks that I am in the 18th century; that is harsh, especially as I was about to say that the book is interesting. I was not proposing to descend to the same level as the hon. Lady.
  The hon. Lady's analysis is interesting. She makes some valid points about the changes in the role of the sexes. No man can look at the figures that show that 75 per cent. of all divorces are initiated by women and the figures that show the amount of help that men give around the house without feeling a certain amount of guilt. The hon. Lady's analysis is interesting. In her book, she briefly discusses the question of employer-based and employer-financed child care. It is a carefully even-handed discussion. She describes some of the advantages of such child care. I quote:
  "The advantage to the employer is that it creates an incentive for staff to stay. Parents will not want to move their child from the nursery unless absolutely necessary."
  Although that is cited as an advantage, it seems to be an argument that cuts both ways. There are many parents who are worried about putting themselves in a position of greater dependence on their employer, as the hon. Lady appeared to recognise in her speech.
  The hon. Lady goes on to discuss the disadvantages of such child care. I quote:
  "Travelling to and from work in the rush hour with a young child is often difficult particularly in big cities. And children may prefer to be involved in local activities rather than far from home.
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  For the parents, the workplace nursery can seriously impair job mobility; some feel that it is more difficult to concentrate on their jobs knowing that their child is close at hand."
  As the hon. Lady has set out those disadvantages so clearly in her book, it is odd that her only practical proposal to encourage child care is one which adds further tax relief to a pattern of child care that already does especially well under the tax system as a result of the concession in the 1990 Budget which ensures that the provision of workplace nurseries is not a benefit in kind for which the employee has any liability to tax. These patterns of provision already do well under the tax system. If workplace nurseries have not sprung up in a large number all around the country, that may tell us something about the preferences and views of parents. However, it should not be taken as evidence that the tax regime needs to be even more favourable.
  Some of the rhetoric that we heard earlier about strategies and national programmes for child care did not seem to take as much account as it should have done of how parents lead their lives and their child care preferences for their children.
  Mrs. Diana Maddock: Decent child care should be a priority for all of us. It is something that we should be thinking about this year—the Year of the Family.
  In this country, we have an extremely poor record with regard to child care, as has already been pointed out in the debate. Indeed, we have one of the worst records in Europe with only Portugal ranking below the United Kingdom in the provision of child care for the crucial pre-school years.
  Obviously, the Liberal Democrats would like to see a wide variety of provision for children, especially those under five. We are concerned that the provision of child care must be increased. In response to the hon. Member for Havant (Mr. Willetts), let me say that we are discussing a Finance Bill, not an Education Bill.
  Today, I shall talk about the new clauses that we have proposed, which extend the principle embodied in the Government's provisions for workplace nurseries. Our new clauses would widen the provision for employers to help with child care. There are some disadvantages to workplace nurseries. They are not always able to meet the needs of mothers at work, especially if they live a long way from their workplace. Regrettably, only a small fraction of child care is provided by workplace nurseries. Indeed, I regret that many workplace nurseries in London have closed down recently.
  Child care vouchers are a method of administering a tax incentive and provide parents with maximum choice and flexibility. I know that during debates on previous Finance Bills there has been much discussion about the costs of the scheme. If our new clauses are passed today, many women will be able to return to work and the tax that they pay will have an effect on the total cost of the scheme. Indeed, increases in tax payments from parents who are able to return to work, together with contributions from employers and reductions associated with home-bound parents, can be shown to cover much of the increased child care costs that we are proposing. I hope that in the Year of the Family the Government will give a more sympathetic response than they have previously done.
  In this country, we waste the talents and training of many women because there is no commitment to child care. Child care is one of the biggest problems for women when they wish to return to work after they have had

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  children. Women have often been trained with public money—one thinks particularly of nurses. Women have knowledge and skills which have been gained in previous jobs over a number of years but which are often lost to offices, schools and businesses because women cannot get the child care that they need in order to return to work.
  Money spent on our proposals would reap returns for the public purse through tax, and also for our businesses because they would not lose the skills and knowledge that people have built up. Businesses give many benefits in kind to their employees which are not linked to the quality of work of their employees. Many of them have no general advantage in bringing people back into work. So why are the Government so opposed to an extension of their own scheme?
  In addition, our proposals would enable small businesses in particular to keep the skills of employees who wish to return to work after having children. The current statutes discriminate against small offices and workplaces. We need a more flexible response to help with child care. In recent weeks we have heard a lot from the Government about the importance of nursery education, and I welcome the fact that the Government now believe in nursery education. As I said in the House last week, when I was a councillor in Southampton some years ago I was classed as subversive and left-wing because I thought that we ought to have nursery places at work.
  Ms Eagle: Does the hon. Lady agree that Conservative concern about child care rarely translates into policy? When the former Prime Minister, now Baroness Thatcher, was at the Department of Education she was on record as saying that she would create what would be effectively a nationwide child care facility and nursery education facility. Yet 15 years of Conservative rule have brought us no nearer that desirable goal.
  Mrs. Maddock: I wholeheartedly agree. It is extremely disappointing that we had a woman Prime Minister who we believed was committed to nursery education and yet many years later we are no further forward.
  Mr. Simon Burns: Does the hon. Lady accept that after Baroness Thatcher made that commitment there were five years of a Labour Government, two years of which included the Lib-Lab pact, and nothing seemed to happen then on a national policy?
  Mrs. Maddock: Is the hon. Gentleman saying that it is right to have gone on doing the same thing, if that was the case, for so many years?
  5.45 pm
  We have heard a lot of talk, but not an extra penny has ever been committed to those words. Today, in the Year of the Family, the Government have a chance to put some finance to those words and I hope that they will do so.
  Mr. Matthew Carrington: I start my few remarks on the subject of child care not by declaring a formal interest, but by declaring a past interest. My wife works and we have a child. Since my wife returned to work, which she did shortly after giving birth, child care has been a continual problem. It is a problem for all families, whatever their level of income, where one or both parents work or where a lone parent works.
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  Child care is a continual difficulty, but it is not confined to pre-school time. It is a problem which goes on after school starts to a point well beyond that at which the child would no longer consider himself a child because in this day and age, unfortunately, it is not possible to leave even young adults alone for long periods without some degree of supervision and care. That care does not need to be of the professional level which is needed when the child is younger, but it should certainly ensure security, company and protection.
  I feel strongly about child care, and all families need it. It is not only a problem for families where both parents work, or where a lone parent works. It is also a problem for those for whom work is not the cause of the need for child care. It is important at various times for children to be looked after by other people—if only for the continuing sanity of the parents. Parents must have what is known in the social services and care in community world as respite care. I suppose that it is not politically correct to say that parents need respite care from their children, but if most parents were honest they would admit that they do—if only to allow them to go out occasionally and to re-establish their relationship with each other.
  Child care is very important. I suspect that there is unanimity across the House on that. It is even more important for the country because of the need to enable parents to get back to work and to contribute to the economy. There are obvious benefits in getting parents who are on low incomes off of benefit. It is also important when the parents have had a high level of training and have high skill levels. Those skills need to be used for the benefit of the community and the economy.
  The importance of child care is not in dispute in the House. We all accept that we must ensure a diversity of available child care, which will become more important as our society develops. The need for child care is perhaps more important now than it was when I was young some 30 years ago, and it is getting more important as time goes by. If and when my daughter produces her family in the fullness of time, child care may be even more important for her.
  Mr. Spearing: The whole House will agree with the hon. Gentleman that there should be diversity in child care, particularly for the under-fives, and last week the Secretary of State for Education agreed with me that there is a complementarity between playgroups and nursery education. In view of that, does the hon. Gentleman deplore—as I do—the fact that the Government have objected even to a debate in Standing Committee on the Nursery Education (Assessment of Need) Bill, which would reinsert elements of the Education Act 1944 taken out by the Government the hon. Gentleman supports?
  Mr. Carrington: The hon. Gentleman will excuse me if I do not go into the details of education because, as he may know, I am involved in the Department for Education and I would not wish to prejudice that. There is a clear commitment on the part of the Government towards nursery education and its provision. The Government have always sought ways of delivering that commitment in ways that parents want.
  Mr. Willetts: While we are on the subject, is my hon. Friend aware of the following interesting historical fact? It was the great reforming Liberal Government of 1906 who raised the school entry age; children had previously started

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  school at the age of three, but a Liberal measure raised the age of school entry to five on the argument that schooling for three and four year-olds was of poor quality. Should one therefore welcome the apparent shift in Liberal policy this century?
  Mr. Carrington: I should be more than happy to bandy anecdotes with my hon. Friend about the Liberal Government of 1906, who in many ways were the architects of our misfortunes in the 20th century. However, with all respect to my hon. Friend, it seems to me that 1906 is a long time ago.
  The debate should concentrate on how child care can best be provided and the best way of encouraging the right form of child care. It is apparent that no form of child care is appropriate in every case. That is something which the House has to consider. Some parents work normal working hours from 9am to 5pm in jobs which are fairly well regulated. They can conform to standard patterns of child care in a nursery which opens at a certain time in the morning and they can collect the child at a specific time in the afternoon.
  Unfortunately, more and more patterns of work these days do not conform with the requirements of institutionalised child care. Parents, particularly working mothers, frequently find themselves working in the evenings. Parents who undertake work such as shop work may well find themselves working early in the morning or late in the evening, so one of the characteristics that has to be provided is a high degree of flexibility in the types of child care available to parents to choose from.
  The needs of children, particularly young children, vary enormously from one child to another, and they vary much more in pre-school children than in children over the age of five. The emotional development of children below the age of five is much more varied—much more rapid in some children and much slower in others—than the development of children as they become more mature. The needs of older children are much more uniform. Again, that means that parents have to judge what type of care is needed for their child. Some children are happy to be left in institutions while others will need much more love and attention from someone who is less a teacher but more cuddly.
  Mr. Burns: Does my hon. Friend agree that there is an important distinction between nursery education and creches or child care? Does he agree that all too often there is a confusion and that "nursery education" is used as an all-embracing term for the provision of child-minding facilities for working mothers when nursery education itself is a different proposition altogether?
  Mr. Carrington: It is indeed a different proposition. My hon. Friend is right that education in that sense is by no means appropriate for all children, particularly at a very young age, when they need qualified and progressive emotional development which is not necessarily provided in an institutional education framework. Children frequently need more a framework of guided supervision or perhaps even child minding. There are many types of arrangement within which such care can be provided. I do not propose to describe all the variants, but I will give one example other than institutionalised child care.
  Parents often get together as a group and provide someone to look after their children in a group in a way that suits them. Ideally, and in many cases, the person
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  employed in that way is professionally qualified to look after children. That is very much to be encouraged. Child care by people who have nursery nursing qualifications is to be highly recommended and encouraged, and it is frequently provided outside the institutional framework.
  What worries me about the new clauses is that a bias is being introduced in the tax system in favour of institutionalised child care—[Interruption.] If the hon. Member for Durham, North-West (Ms Armstrong) wishes to intervene, she is welcome to do so. I would rather she did that than that she should shout.
  Ms Hilary Armstrong: I was suggesting that the hon. Gentleman might think about changing his language. Not all collective care is institutionalised. In the English language the word "institutionalised" has a negative aspect. I assure the hon. Gentleman that much nursery education and nursery provision is far from negatively institutionalised, but is good collective child care and nursery education.
  Mr. Carrington: I am sorry that the hon. Lady finds the word "institution" derogatory—
  Ms Armstrong: The word "institutionalised".
  Mr. Carrington: Or "institutionalised". As a Conservative, I strongly believe in the institutions of Britain and the institutionalisation of elements of this country. It is sad that the hon. Lady feels that the word has negative connotations. I believe that we have many fine institutions, and I suspect that many child care institutions are very fine. I would rather encourage institutions, but if the hon. Lady would prefer me not to use that word, in the interests of harmony across the Chamber I will use another word.
  Mr. Irvine Patnick: My hon. Friend is too nice to the Opposition.
  Mr. Carrington: My hon. Friend is right. I am sometimes too indulgent to the Opposition.
  Child care organised by people other than the parents has a place and is appropriate, but I doubt whether it should be encouraged over and above child care organised by parents for the benefit of their children. What worries me about the new clauses is that the taxation system would be structured in such as way as to favour one type of child care over another. That seems inherently undesirable.
  My hon. Friend the Member for Havant (Mr. Willetts) read out from the book of the hon. Member for Peckham (Ms Harman) the criticisms of workplace nurseries. Those criticisms are right. Particularly in London, workplace nurseries are often inappropriate, if only because most workers commute some distance to work. Travelling with a small child on the underground or on buses in London in the rush hour is extremely difficult and certainly not to be encouraged. I therefore had reservations when my hon. Friends introduced in the Finance Bill of 1990 provisions on workplace nurseries in preference to support for other types of child care, and I should be reluctant to see that move encouraged still further by new clause 1.
  I was intrigued and somewhat attracted, however, by the possibility of vouchers in new clause 6. Vouchers have been rumbling around in political theory for a great many years and have considerable attractions, but they have always been found to be difficult to implement in practice because of the administrative complexity of such a system.

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  My anxiety about new clause 6 is the one which I am afraid also applies to capital allowances for providing nursery care. The measure proposed in new clause 6 is indiscriminate. If we are to support people who cannot otherwise make provision for their children, the money will inevitably come from scarce resources. The money would be better given to people who need it more.
  To take my own case as an example, my wife and I both work and we are capable of making financial provision for child care, so it would be wrong for either or both of us to receive vouchers to pay for child care. I suspect, however, that new clause 6 would provide for both parents to receive vouchers. If any money is to come out of the tax system for child care, it should go to those people who cannot afford to provide for child care themselves.
  Equally, money for child care should not be concentrated on the employer. That is the problem with new clause 1. If money from the tax system is to be given to anyone to provide child care, it should go to parents who need assistance to get themselves back into work or to provide proper care for their children other than straight child minding, which is frequently of a questionable nature.
  Taxation support for child care must be targeted on the people who need it—parents who cannot provide for such care out of their own resources, but who can be encouraged back to work with a little help from the state. That is why the provisions made in the Budget last November were the right way forward, rather than any attempt to extend tax reliefs which, by definition, probably give help to those who need it least. We must get the relief to those people who do not pay tax.
  Ms Eagle: The hon. Gentleman makes the same slip as his hon. Friend the Member for Havant (Mr. Willetts). New clause 1 deals with capital reliefs, not income tax reliefs, for the use of workplace nurseries.
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  Mr. Carrington: The hon. Lady is mistaken. I do not make that mistake. Capital reliefs come off the corporation tax paid by companies providing nursery places, so the relief is targeted on the company rather than the employee. But inevitably all employees may benefit: from the managing director, who may be highly paid, down to the less highly paid—they will all be paid, as they are all employees.
  Ms Dawn Primarolo: Can the hon. Gentleman therefore explain why, when employers give their employees health benefits through a private health scheme, it is deductible from corporation tax? The Government have not closed that loophole, but the hon. Gentleman advances the case against child care being treated according to the same principle.
  Mr. Carrington: The argument is straightforward: if a company gives private medical insurance to an employee, it is not taxed but the employee is taxed.
  Ms Primarolo: That is not true.
  Mr. Carrington: I will give way to the hon. Lady again.
  Ms Primarolo: I am sorry, but I must correct the hon. Gentleman. Companies which give private health insurance to their employees as a fringe benefit are able to offset the cost against corporation tax. It is true that the employee has a tax liability as a result, but the company benefits. The hon. Gentleman is arguing against that happening with child care.
  Mr. Carrington: The hon. Lady is repeating what I told her. Of course the company can offset the cost against corporation tax, but that merely avoids double taxation because the employee pays tax on the benefit—probably at a higher rate than the company would have done. We are talking here about a benefit that would be given to employees without their being taxed on it. Companies would get a deduction, but that is not my objection.
  Mr. Dorrell: My hon. Friend might like to know that there is no difference between the treatment, for corporation tax purposes, of expenses currently incurred by a company when providing health benefits to employees and those incurred when providing child care facilities for them. They are precisely analogous cases and are dealt with in the same way under the corporation tax regime.
  Ms Primarolo: The Minister should tell his hon. Friend, not me. He is arguing the wrong case.
  Mr. Dorrell: I am telling the hon. Lady.
  Mr. Carrington: The difference comes down to the treatment of the employee, which is what I was saying. Employees are taxed on premiums paid for private health insurance whereas under new clause 1 they would not be taxed on child care costs. That seems wrong as it would benefit people who do not need that help—the more highly paid rather than those on lower wages.
  We need to place the money that we are giving to encourage child care in the hands of those parents who need it, so that they can be encouraged to provide the type of child care from which their children will benefit most, meet their circumstances and needs in terms of the amount and hours required, and encourage people back into the economy. We must not target it on people who would return to work of their own accord because they can afford to do so, but on those who need a little incentive to return to work. That is proper use of the taxation system.
  I am always deeply suspicious of grand strategic plans of any sort, so I am not sure whether we should have one for child care. Parents are the best people to decide what care is right for their children. If we are to have distortions within the taxation system, they should best be used to encourage people back to work who would earn very low wages or who are on benefit. We should probably use the benefit system to get those people back to work, as we did in the Budget.
  Ms Armstrong: I was interested to hear the contributions from the hon. Members for Havant (Mr. Willetts) and for Fulham (Mr. Carrington) but I was most disappointed with that of the former. We were given to understand that he was the intellectual force behind Conservative policies on the family and children, which shows what a desperate state that policy is in.
  Today's debate comes hot on the heels of our debate on family policy last week and it is impossible to separate the two. We are debating child care within the context of the Finance Bill because we are anxious to make the

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  Government think seriously, at every possible step, about the way in which policies are undermining our economic future and the future for families.
  Because today's debate is on the Finance Bill, it highlights the fact that a child care strategy is central to the economic future of the country. Everyone talks about a more flexible work force—one that is able to respond to the needs of the next century. Opposition Members would say that that is important, but that we will create enormous problems if we develop such a work force at the expense of children.
  Children live in a much more dangerous and complex world than the world in which we lived when we were growing up. We were simply not aware of many of the challenges, fears and threats that they have to face. We cannot even imagine the complexities of relationships and negotiations that they will have to steer themselves through. That is why their experience—whatever their family and wherever they are based—is a critical aspect of both social and economic policy.
  Whatever the Government may wish, women go out to work. Three years ago many Conservative Members would have told us that that was wrong and that they did not want it to happen.
  Mr. Dorrell indicated dissent.
  Ms Armstrong: The Minister shakes his head but I think that I have sat through every debate on child care since I came to the House in 1987—I accept that that is not a long time—and I could name the Conservative Members who are uncomfortable with, and resisted, women going out to work. They are not all here today, but I suspect that they would still resist it.
  Whatever the Government or any hon. Member want, women are working. Many do so because it is an absolute necessity and what their family requires. In my constituency, many work because there is no work for men—no work that they would he accepted for or that they are taking up. Because women are largely responsible for child care, it is critical that we know what we are going to do about it.
  Some hon. Members have got themselves into a dreadful mess over the difference between nursery education and child care and all the rest. It is clear. Of course children have individual needs, but all children have intellectual, social and emotional needs that must be met in whatever setting they are—whether they are with a child minder, in a day nursery or in full-time care. I hope that in his reply the Minister will not insult the House with the statistics that are usually peddled from the Conservative Benches about the number of children who receive care. We all know that none of us should take those statistics seriously.
  It is true that 90 per cent. of the under-fives may be with a person other than their parent at some stage in the week, but that does not mean that they are in care that lasts for any period. Children who are in a playgroup for one session of an hour are included in the statistics. That is not the child care and nursery education that we are so serious about, and that is not being serious about the needs of those children or the needs of parents.
  Many parents want their children to be with child minders when they are very young. The important thing is that those child minders are supported and that they have the opportunity to speak to other child minders. They
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  should have the opportunity, perhaps, to go to a local nursery, where the children can be with other children for an hour or so while the child minders think their way through the ways in which they can improve themselves as child minders and the ways in which they can give a better service. That is happening, but only in small areas of the country. In many rural areas, opportunities for women and for child care are minimal, as the recent report of the Development Commission clearly showed.
  When I was working, before the general election, on the shape of a potential child care strategy, I was taken by the number of employers' organisations that were springing up and coming to me saying, "For goodness' sake, let us work in partnership. We want to do things, but our expertise is not child care and we do not want to set up, or become involved with, ventures that will not provide the highest quality care for children. We do not want to get the blame if something goes wrong."
  Ms Eagle: Does my hon. Friend agree that, as a result of the recession, often some of the good teams to provide child care that have been set up by companies to help women advance in their structures are cut if the firm gets into financial difficulty, so that the services that those firms provide are unstable and likely to disappear if the firm experiences difficulties?
  Ms Armstrong: My hon. Friend tries to take me too far ahead.
  Those employers were mainly saying that, rather than setting up their own facilities, they wanted to enter into partnership with the public sector in their locality so that they could offer choice and opportunity to parents. There are some very good schemes of that nature.
  I bring to the attention of the Minister again the scheme in north Tyneside, which has been established in full co-operation with local employers and with the Government. The Government have used the north Tyneside scheme for, I think, eight workplace nurseries in their own facilities. That scheme has enabled employers to consider the parents' needs. They have spoken to their employees and found out the different types of child care that they would like.
  The north Tyneside scheme has supported the whole range of child care—all-day child care, nursery education, child minders and child minders in the parent's home, who are called nannies in the south of England. It provides, first and foremost, quality care wherever the child is placed and, secondly, the real opportunity of choice. That has not placed additional cost on the public purse because it has linked the public commitment and the public child care strategy for that borough to the needs of employers and their employees in a way that has increased opportunity throughout.
  I say to the hon. Member for Havant that, far from simply providing for those women who are in highly placed jobs, the north Tyneside scheme has so improved the opportunities for, and the experience of, child care in the day nursery that now working parents and middle-class parents bring their children to it as well, and that has uplifted the experience of those parents who thought that their children were there only because they qualified because they were deprived. Bringing all of that together with a strategy, knowing what is wanted for the whole borough and offering the opportunity for all parents to be involved in discussing what they wanted and the quality

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  that they expected, has uplifted the experience, not simply of the parents, but of the children and those people who work with them.
  6.15 pm
  The new clause does not tackle all the child care issues that we want to tackle, but it gives us the opportunity to say to the Government once again that this issue, which is critical for our future, ought not to be bandied about across the Benches. Unless we are prepared to invest in the best quality care for our children, they will not grow up with the confidence and commitment to be the active and participating citizens that we know that they will need to be in the next century. Unless we are prepared to invest in child care partnerships with employers, they will be unable to train and support the type of work force that they need, and that the country needs, to develop and improve. That is an economic issue, but it will also affect the patterns of community and of our society.
  I hope that the Government, far from treating that issue as something that they can throw back at us, saying, "This is silly. If you do not like the exact nature of the clause, suggest something else", will recognise that unless we develop a child care strategy that centres on the economy, the future will be bleak for us all.
  Ms Jean Corston: The debate is timely because it is reported that, by the end of 1994, women will outnumber men in the labour market. That especially challenges women with young children.
  In the mid-1980s, 24 per cent. of women with children aged under five were working. By 1991, that figure was 45 per cent. As my hon. Friends have said, those mothers work through necessity as well as choice, because the Government's policy of low wages and deregulation means that women need to work to pay the mortgage, to support the family and to provide extras that they consider important for their children. That explosion in women's employment, especially when the children are under the age of five, has led to a child care gap that, in the past 10 years, has grown to number about 400,000 children.
  The Pre-School Playgroups Association set up a telephone help line in October 1993, which was soon inundated with telephone calls from parents, especially lone parents, who were desperate to find child care.
  Mr. Nigel Forman: I am listening to what the hon. Lady says. Does she know what proportion of the 45 per cent. of women with children aged under five to whom she referred who are in work are in very much part-time work rather than full-time work, according to the conventional definition? Obviously, if they were in part-time work, as I suspect that many of them are, that is more compatible with children going to pre-school playgroups and so on.
  Ms Corston: Whether they are in full-time or part-time work is irrelevant if there are 400,000 children with unmet need. I shall talk about the various kinds of child care, but that is what I am concerned about, as all hon. Members should be. We all agree that women should be allowed to go out to work for whatever reason.
  In February 1994, the Government published their first report to the United Nations committee on the rights of the child. It is revealing as much for what it does not say as for
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  what it does say. The Government claimed that the number of day nurseries and child minders had increased "quite significantly".
  In 1992, England had 91,600 places in day nurseries, 108,000 registered child minders with more than 252,000 places and 409,000 playgroup places for three and four-year-olds. There are nearly 2 million children aged two to four and the growth in the number of working mothers with children of that age has outstripped the growth in places, as I have said.
  There were 24,000 children in local authority day nurseries and 330,000 places in local authority schools and classes, but they have been unable to expand to fill the gap because of the Government's squeeze on local authority resources. Yet the Government, in their report to the United Nations, had the cheek to say that they
  "would like to see a widening of nursery and other pre-school education as resources become available."
  They went on to say:
  "The longer-term ambition is universal availability for those who want it."
  That is a welcome commitment by the Government to universality, but I hope that the same commitment can be made today, because it demands a rational plan and a timetable.
  Article 18 of the United Nations convention on the rights of the child specifies the objective:
  "States Parties shall take all appropriate measures to ensure that children of working parents have the right to benefit from child-care services and facilities for which they are eligible."
  As my hon. Friend the Member for Peckham (Ms Harman) has pointed out in her recent book, the United Kingdom brings up the rear of the member states of the European Union. It shares with Portugal the lowest provision for the under-fives. In France, Italy, Belgium and Denmark between 85 and 100 per cent. of three and four-year-olds are in publicly funded nursery schools and classes. What is at stake is investment in children.
  Families with children have suffered a great deal from the Government's policies of cuts in public expenditure, deregulation, privatisation and failure to promote employment. Let me spell out a small part of that sorry story. On 28 February 1994, in response to a parliamentary question, I was told that the percentage of households with less than half the average national household income was 10 per cent. in 1979 but as high as 27 per cent. in 1990–91. That deterioration is unparalleled in the rest of Europe. If the richest and poorest are compared, the scale of the growing divide in the 1980s in the United Kingdom is without precedent in the history of the collection of statistics.
  Figures from the "Social Trends" survey show that since 1979 the disposable incomes of the poorest 10th have decreased by 3 per cent. while those of the richest 10th have increased by 155 per cent. Families with children are particularly at risk. On 22 February the Prime Minister told me that the incomes of people
  "at all ranges of income has increased".—[Official Report, 22 February 1994; Vol. 238, c. 146.]
  According to Government statistics, that is untrue for the poorest 10th, whether their incomes are measured before or after housing costs, and that also applies to some of the next poorest 10th of the population.
  In answer to parliamentary questions tabled by me in 1993 I was given figures showing that there were altogether 5.7 million people in families with children who had a smaller disposable income in 1990–91 than similar

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  families in 1979. That information was confirmed to me as recently as 13 April 1994. After undertaking various forms of standardisation, the Treasury produced figures which, after taking account of inflation, show that for families with children, the poorest 10th and the next poorest 10th had a lower real disposable income than such families had in 1979. The poorest 10th had lost £438 per household per year, a 10 per cent. cut, compared with 1979. The next poorest 10th had lost £281, a 5 per cent. cut. Those two sets of families include more than 3 million children. How can those parents provide decent child care in what we are told is a child care market?
  A huge number of reports by organisations in Britain and overseas help to explain those statistical results. They include reports from UNICEF, the Child Poverty Action Group, Barnardo's, the National Children's Home, the Rowntree Trust and the Family Policies Study Centre. For example, a 1993 report by UNICEF entitled "Child Neglect in Rich Nations" describes why some of the wealthiest nations on earth "have short-changed children." The United Kingdom and the United States were found to have the highest child poverty rates among eight industrialised countries including Germany, France, Australia, Canada, the Netherlands and Sweden.
  There were such wide differences that a European model of child welfare was contrasted with what UNICEF described as a "neglect-filled" Anglo-American model. Thus France was quoted as having
  "The most comprehensive child-care system in Western Europe"
  and
  "recent governments have all recognised that proper pre-school care and education are an investment in the nation's future citizens."
  That statement from UNICEF is one with which all hon. Members should agree and to which any Government should commit themselves.
  UNICEF went on to point out that in the United Kingdom the Children Act 1989 set high standards, but said:
  "and yet at present the Government seems unwilling to provide the resources necessary to meet those standards."
  According to the same report, the
  "swelling tide of child neglect has potentially disastrous consequences."
  It said that there were problems of raising a generation of uneducated and unskilled adults and went on to say:
  "Unless countries such as the US and the UK invest in their children on a new and a massive scale, a burgeoning human capital deficit will trigger an economic tailspin".
  Women are criticised by the Government for being on income support and some of us suspect that the number of women on income support has been more of a trigger to the creation of the Child Support Agency than the so-called responsibility of fathers. Despite that, the Government have made no effort to will the means to enable women to go to work by providing affordable child care.
  In the debate on sex discrimination initiated by the Opposition in the House last month, the hon. Member for Sutton and Cheam (Lady Olga Maitland) gave us the benefit of her wisdom and told us that she had managed to go to work because she had had a nanny. I remember an article in The Guardian some years ago which reproduced an interview with the then Mrs. Margaret Thatcher, a newly elected Member of Parliament, now Baroness Thatcher, who said that she had managed to keep working after she had had her twins because she had had her nanny.
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  That is very nice for them, but in my constituency on Friday I made two visits. The first was to a playgroup in Brislington which has a huge waiting list and where a dedicated group of parents and playgroup leaders provide a wonderful service for children. They are doing their best to keep the charges to parents as low as possible because they realise that most parents cannot afford to pay the real economic cost and they are reduced to fund-raising in their spare time to keep the playgroup going, recognising how important it is to raise money in order to provide proper equipment for the children. They do not think that providing for messy play indoors, which some Conservative Members seem to think is a waste of time, is anything other than a good thing for children.
  I then went to a nursery school in the St Phillip's area of my constituency where I met parents who were concerned that the wonderful services provided by Avon county council through the high scope nursery education system are under threat because, once again, the Government have targeted Avon county council and even bigger cuts in the local authority's budget have to be considered. That means that many parents whose children were receiving full-time nursery education are having to contemplate part-time education. That is against the background of the Conservative leader of Avon county council speaking about the possibility of closing the St. Phillip Marsh nursery school. She was astonished by the hostility that engendered among parents, and it was interesting how quickly she backed off.
  People in my constituency and throughout the country depend on such services day after day. They have a right to expect decent child care. Responsible parents want to ensure that their children have play and care facilities that stimulate them. I have seen that with my own baby grandson—my daughter-in-law has been seeking child care for him. There must be a strategy. Conservative Members know that and we know that, so when will the Government know?
  6.30 pm
  Mrs. Anne Campbell: I congratulate my hon. Friends on the Front Bench on initiating this debate, which concerns probably the single most important issue for mothers of young children in my constituency.
  I have received interesting correspondence about the lack of suitable child care facilities and of accessibility to them. One woman has written to me a number of times. Her latest letter is long, but I want to read it because it illustrates many of the problems confronting single parents in particular, who find life extremely difficult—not least under a Conservative Government.
  My constituent wrote:
  "I thought I'd write you the next chapter in 'The life of a single parent longing to return to work'.
  I've been offered a job! The perfect job for a parent—16 hours a week, when it suits me, some at home, some in the office, some out and about. Only problem is, I lose more benefit than I gain in wages, especially after paying for child care. I rang the free social security telephone line and spoke to a very helpful gentleman, whose advice was not to work any longer than two hours a week (the time it would take to earn the £15 I'm allowed to earn before benefit reduction).
  This situation made me mad enough, but today I have received notice of income tax payable for the coming year—£490 down compared with last year, so I'll pay another £10 tax, plus VAT on fuel, which will cost me £10 a month also.

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  Existing on income support is getting harder and harder—both my daughters need new clothes (my eldest goes to school wearing trousers that stop nearly 3 inches above her shoes) but I have difficulty even buying secondhand for them.
  And now, going back to work seems even harder too. So today I made a resolution to find a job overseas. Somewhere"—
  this sentence is significant—
  "where my honours degree in molecular biology is valued, and where child care is considered a social necessity and not a private luxury.
  My father, an ex-staunch Tory, has been telling me since I graduated to go abroad but I resisted through fear of the unknown, and the belief that a British education would be the right thing for my children.
  The latter is now highly questionable, and my fear of the unknown has diminished in respect of my disgust of the known—this government does not value its educated citizens nor provide for its future—its children. Very soon, education will have returned to Victorian days—only for the rich.
  Anyway, that is it. I can't afford to take the job that was offered, I can't afford a full-time job that pays enough, and I can't manage on the pittance that the government says is my right. I don't want to be rich, I just want to buy my children clothes, shoes, chocolate biscuits. For myself, I'd like to be able to buy my own copy of New Scientist each week, instead of walking to the library! Stupid, little things."
  That letter says a great deal about the lives of the many women in this country who find it extremely difficult to survive on income support, and who find life even harder when they try to get jobs.
  We heard a disgraceful attack on single parents last year, particularly in the build-up to the Tory party conference. We should support single parents by providing subsidised child care and doing what we can to increase its accessibility.
  When the Secretary of State for Wales visited St. Mellon housing estate in Cardiff, he was told that half the families there were single parent families. His reaction was not to ask what could be done to help them out of poverty but to attack the unmarried single-parent culture and to suggest that benefits might be withheld until absentee fathers are tracked down. One Treasury Minister claimed that teenage girls could be lured into a life of poverty and state dependency by over-generous benefits.
  That is not borne out by the evidence. One single parent interviewed on Radio 4 said:
  "There's no question that some of the poorest people in the country are single mothers, so any reduction in benefits would hit an already desperate group—it's an appalling idea. There is no snap solution. People have less faith in marriage and we now have a whole culture who don't believe that marriage necessarily leads to happiness. You can't legislate on people's mental attitudes and morality by threatening them financially."
  That was not someone from a left-wing Labour authority speaking, but Harriet Crawley, a single mother who stood as a Tory candidate in the last general election.
  A report from the Joseph Rowntree Trust stated:
  "Hundreds of thousands of lone parents are trapped on a 'poverty plateau', where it makes little difference whether they earn £70 or £170 a week. By the time child care and travel costs are taken into account, any incentive to work may have disappeared."
  Contrast that with the French approach to single mothers. The Caisses Nationale des Allocations Familiales in Paris organises the French family benefits system and commissions research on family policy. One of its researchers, also speaking on Radio 4, said:
  "In France, because the value system is different, a majority of women want to be both mothers and work, and the state, unlike the UK, will offer them the necessary support."
  That is borne out by the two countries' employment figures
  794
  for single mothers. In France, the figure is 85 per cent., but in the UK—as my hon. Friend the Member for Bristol, East (Ms Corston) said—it is less than 50 per cent. France, like Belgium and Denmark, is among the European countries that make the most generous provision for child care. That country considers it much more important to provide creches and kindergartens. As soon as children are two years old, they can attend pre-school all day long, with a hot lunch. Some 173,000 places are available in subsidised creches, and there are numerous approved mothers' helpers.
  Lone mothers have priority on the day care and pre-school lists, which partly explains why such a high proportion of French lone mothers are in work, and more frequently have a full-time job than their UK counterparts. As a result, they are far less likely to rely on social assistance. French benefits to lone parent families are more generous than in the UK, especially where there is a child under the age of three, or there are three or more children, and the lone parent has a low income.
  Family benefits in France are structured to favour larger numbers of children, and there are various training programmes that are relevant to lone mothers. Low-income lone mothers are also eligible for housing allowances. The great difference is that, in France, single mothers are not seen as a drain on taxpayers' money, as their benefits are paid from employers' contributions and because many of them are able to find full-time jobs with the help of the much better child care that is available.
  In my local community recently, a survey was carried out by the training and enterprise council in south Cambridgeshire. It was done as a result of a Government pump-priming initiative, as my hon. Friend the Member for Peckham (Ms Harman) described it, in an attempt to get more child care schemes under way. The great problem with these schemes is that, although they have been valuable in showing up the deficiencies in child care, many of them will flounder later on because of a lack of money. Far too many people find child care too expensive when they have to pay the full cost out of what they earn.
  The Cambridgeshire TEC carried out the survey last October. More than 1,000 questionnaires were distributed to the parents of children aged between five and 16. What emerged showed up the differences between my constituency and that of the Prime Minister.
  The survey found that 23 per cent. of children in Cambridge had one parent working full time and the other part time; the corresponding figure for Huntingdon was 44 per cent. There was also a difference in the proportions of parents who both worked full time: 30 per cent. in Cambridge and only 19 per cent. in Huntingdon. There was a great difference in the numbers of single parents: 20 per cent. in Cambridge and 13 per cent. in Huntingdon. Those two places are only 20 miles apart, so the differences are rather surprising.
  The survey also looked into how most children are looked after. It found that, in Huntingdon, 91 per cent. of child care took place in the family, whereas only 83 per cent. did in Cambridge. In other words, these families have no external help with their child care at all, so grandparents, brothers and sisters, and parents are caring for the children.
  When asked, parents said that they were well satisfied with this arrangement. When they were asked, however, whether they would use an out-of-school care scheme, 70 per cent. of them said that they would in Cambridge, and

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  82 per cent. in Huntingdon said that they would. That goes to show the unmet need. A great many people who work part time during the school term need full-time care during the holidays.
  I have had the pleasure of visiting a number of organisations and firms around my constituency in the past two years. I was, for instance, extremely impressed by the child care provision at the Babraham Institute, a Government research laboratory formerly under the Agricultural and Food Research Council and now under the Biotechnology and Biological Sciences Research Council. It is a research council institute, and it provides a nursery and an out-of-school care scheme for up to 10 children. It is always well used, and is considered of enormous benefit to the parents who work at the institute. I congratulate the director, Richard Dyer, on being innovative and forward-looking enough to start the nursery.
  The institute's facility contrasts starkly with a bank in central Cambridge—it might not be fair to mention its name. I asked the bank about its child care policy and was told that there was a working party looking into child care and nursery provision in the organisation.
  I asked the bank why it did not have a nursery attached to its central Cambridge branch, only to be told that it had considered the idea but decided against it, on the extraordinary ground that, if it did run such a nursery, it would not be able to stop fathers using it as well as mothers. Looking a little taken aback, I asked why that mattered. I was told that, if fathers were allowed to use the facility, their wives would then be free to work for the bank's competitors. I am still reeling from this information. It shows that we have to do a great deal to change this sort of sexist attitude to parents, families and children.
  6.45 pm
  Owing to the pressure from many single parents, married parents and parents in stable relationships, I decided that I would try to set up a child care project in Cambridge to help people gain access to child care facilities and to give them information about benefits and training. We held an interesting meeting, which I was pleased to note was supported by the Benefits Agency, the Child Support Agency, the county council, the Daycare Trust—it was extremely helpful—the Cambridge job centre, the city council, the Employment Service and the local training and enterprise council.
  I explained that I wanted to help a group of single parents back into full or part-time work, with the aim of showing that investing in child care could in the long term prove cheaper than leaving single parents on benefits, without care for their children. This is a social as well as an economic issue. The Daycare Trust said that it believed that the major problem was the lack of adequately subsidised child care. There is a lack of places even in non-subsidised child care.
  It also emerged from the meeting that we need a major information drive to reassure parents about coming off income support and on to family credit. Living on income support, at least people know that they are secure, but once they come off it and go into short-term or short-contract jobs, with the attendant insecurity of going on to family credit—they may not be sure that the Benefits Agency will get its sums right—they may worry a great deal about what
  796
  will happen when a job comes to an end. We need to do much more to reassure parents that the process is feasible, and to offer them a little more security.
  Although the Government introduced measures in the last Budget to try to deal with the cost of child care, in Cambridge the cost of full-time child care averages £60 to £70 a week. Many people pay much more than that, and presumably some pay less. The manager of the Benefits Agency in Cambridge said that he would like a business plan to be put together showing the long-term benefits of child care—a reduction in staff losses, lower net costs to the Exchequer, support for training places and so on.
  The Government are not doing any of this. They are not examining the cost of not providing child care; they are looking only at the cost of providing it. That attitude is wrong.
  Mr. Malcolm Chisholm: Although child care is a massive issue for thousands of our constituents, that is often not reflected in either our procedures or media coverage. The reason is obvious: the institutions involved are still dominated by men, whereas in the present state of society child care is still predominantly a women's issue—although the responsibility should be shared equally between the sexes.
  There are several reasons why child care is a massive issue. First, there is the objective reality of increasing female participation in the labour market. The male and female participation rates are now converging: indeed, in parts of the country—such as Lothian region, where I come from—women are in the majority in the labour force. That, however, masks the existence of a good many problems; it does not mean that adequate child care facilities are available to all those women.
  My hon. Friend the Member for Cambridge (Mrs. Campbell) mentioned the problem of cost, but there are other problems. For instance, many women returning to the labour market after having children may take up jobs that they do not really want to do: they would prefer to be doing other jobs that it is not possible for them to do. They may also have to work fewer hours than they would like.
  Notwithstanding the high rate of female participation in the labour market, only 18 per cent. of lone mothers with children under five are working in this country: that is the lowest rate in Europe. Moreover, the figure for all mothers with children under five is the second lowest.
  This is, among other things, an equal opportunities issue, and the Equal Opportunities Commission has said as much. We cannot have a proper equal opportunities policy that does not take child care into account. That is the second reason why this is a massive issue; the third is that it also has economic implications, as many hon. Members have already pointed out. It can be viewed in many ways, but a fundamental point is that the skills of many women are being lost to the economy. That is why many employers are very interested in child care.
  Only today, in the Lobby, I spoke to a representative of Employers for Childcare, who told me that, for that very reason, many employers are keen for the Government to adopt a co-ordinated strategy for child care, in which a number of them wish to be involved. Many studies have shown that the economy would benefit from a massive expansion of child care facilities; I hope to say more about that later.

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  The fourth reason why this is a massive issue relates to poverty. My hon. Friend the Member for Bristol, East (Ms Corston) covered that very thoroughly.
  My own involvement in child care resulted from my membership of the Greater Pilton Childcare Action Group, which operates in my constituency. A fundamental reason for its formation was the area's participation in the European Poverty 3 programme, and the fact that, at an early stage, child care was identified as a key issue in the attack on poverty. Incidentally, I should like to know why the Government are showing no interest in European Poverty 4 programme; people in my area certainly hope that the project will continue.
  The ability of women to go out to work is a basic element of the attack on family poverty. That is why so many women in my constituency are keen to have the child care facilities that they need.
  The fifth reason why this is a massive issue is the appalling state of child care in this country, in comparison with provision in other European countries. Many statistics show that to be true. For instance, 2 per cent. of care for children under three is publicly funded in this country; in Denmark, the figure is 48 per cent. In this country, the figure for children between three and five is 37 per cent.; it is 85 per cent. in Italy and 95 per cent. in France and Belgium.
  I should add that there are considerable variations within our 37 per cent. figure. As other hon. Members have pointed out, the percentage is often far higher in areas with Labour-controlled authorities than in Conservative areas. For instance, the figure for nursery education for three and four-year-olds in Lothian region is running at 68 per cent. That is a major factor—and, of course, there are many other arguments for nursery education, in terms of the benefits for children.
  There are many reasons, then, why child care is a major issue, and why the House should treat it as such. We want the Government to adopt a co-ordinated strategy; at present, their policy is very unco-ordinated. The fundamental principle is choice: people should be able to choose the type of child care they want.
  The new clauses are concerned specifically with workplace nurseries. Although some Conservative Members have tried to misrepresent us and suggest that that is all we are interested in, they are entirely wrong; it is only one aspect of the general issue of child care. According to a study carried out by the British Social Attitudes survey, however, 20 per cent. of women with children under five would like workplace nurseries to be available. That is one strand of the policy that we need to formulate.
  The new clause deals with the fact that the industrial building allowance is available only to workplace nurseries in industrial buildings and certain types of hotel. It seeks to end that anomaly, and to extend the allowance to all work places. The present position is particularly anomalous in the context of section 14 of the Capital Allowances Act 1990, under which sports pavilions and buildings in all workplaces can receive the allowance while nurseries can receive it only in specific buildings. I shall be interested to hear how the Financial Secretary seeks to justify that anomaly, if he does.
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  New clause 1 covers not only nurseries but child care for those of school age. The existing allowances apply only to children under five, but it should be recognised that children often need care after going to school as well as before. Conservative Members have drawn attention to the child care allowance in the Budget. That Government initiative—along with the after-school care initiative—is all right as far as it goes, and Opposition Members welcome both in principle; but there are many problems with the way in which they have worked in practice. We should like those schemes to be improved and extended.
  An interesting feature of the child care allowance provided in the Budget is the fact that, only a few months earlier, the Prime Minister dismissed it out of hand. I know that, because I asked him a question about it, and when—as usual—he did not answer, I wrote him a letter. I kept his reply: I keep all his letters. In fact, when I wrote to him about nursery education, pointing out that he was saying something quite different from what his Secretary of State was saying, he did not reply—but the reason for that was obvious.
  I found the Prime Minister's letter very interesting. As well as saying that disregards for parents in receipt of family credit were a ridiculous idea, he came up with the staggering assertion:
  "research has shown that the majority of low income working lone parents do not pay for childcare."
  I do not think that research is needed to discover that. The simple truth is that low-income lone parents cannot afford to pay for child care, but that is not adequately addressed by the child care disregard in the Budget.
  We have heard about the costs of child care. The maximum allowance available is £28; according to an answer that I was given, 90 per cent. of families on family credit cannot receive even £28—and it should be remembered that that is for the whole family. That does not deal with the problem of affordability, which lies at the heart of the debate about child care.
  The after-school care initiative is also good in principle, but particular problems are involved, certainly in Scotland. I have tried to find out how much each local enterprise company in Scotland is spending. This week, I received another letter—this time, from a Scottish Office Minister. It said, basically, that I had no right to know the answer: it was for Scottish Enterprise
  "to determine whether and to what extent they will provide details of the financial allocations they make to the LECs and it would be inappropriate for Ministers to intervene."
  Many enterprise companies in Scotland—including those in Lothian—spent nothing on that initiative last year, but the Scottish Office does not want to admit that publicly. Things seem to be slightly better this year; we shall wait and see.
  The problem with the initiative is that, although it helps with start-up costs, many parents will be unable to afford the cost of after-school care. As I have said, affordability is at the heart of the matter. It was also at the heart of the European child care recommendation, which constitutes a very good guideline, although it was watered down slightly before being adopted just before the general election.
  The Government have accepted the European child care recommendation, and at the heart of that recommendation is the idea that public funds should contribute to the provision of affordable child care. In reality, at the moment most people do not have access to affordable child care.

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  The Government have to introduce many measures to increase the supply of affordable child care. We have again been misrepresented by Conservative Members as just talking about demand subsidies. Some demand subsidies are necessary, but in fact it is the Tory argument that only demand subsidies will do, because it assumes that the market will provide. We believe that there has to be intervention in the market in order to increase the supply of child care. That is the thrust of our demand for a national child care strategy to look at the supply of child care.
  7 pm
  We have said that the Government should look at many schemes that are operated already by local authorities—as it happens, most of them Labour-controlled authorities—which have done something to deal with the problem. We have asked the Government to evaluate the schemes and to come up with a co-ordinated strategy instead of the current totally chaotic child care "policy"—if I can call it that—whereby some Government Departments do not know what other Departments are doing.
  Partnership arrangements have been mentioned. I am told that these work in north Tyneside, for example. I know from personal experience that they also work in Fife in Scotland, where employers buy places in schemes run in partnership with local authorities. That is one way forward, because many employers recognise that it is in their own interests to make child care places available for their workers. That is part of the economic argument for child care to which I referred earlier.
  Beyond that, I think that we need to put more money into the provision of child care. At the heart of the argument are the studies to which I referred earlier in general terms. The studies by the National Children's Bureau, the National Institute of Economic and Social Research and the Institute for Public Policy Research have shown that, in the long run, the provision of child care will benefit the economy.
  I think that the Government recognised this fact in a very small way with their child care disregard in the Budget. That is the way forward, but we should act in conjunction with other policies. For example, the parental leave directive from the European Community, which has not been accepted by the Government, would help in the early stages of children's lives. More generally, the Government should recognise that society is changing and that increasingly men and women will have the same role in the family and in the workplace. The Government have to accept the subsequent changing patterns of work.
  A policy from another country that appeals to me is the right of parents in Sweden to work a six-hour day for the first eight years of their children's lives. I think that the Government should look in that direction as well.
  Child care is on the agenda now because society has changed. In last week's debate on the family, it appeared that many Conservative Members wanted to go back to the 1950s. They said that everything went wrong in the 1960s—the implication being that we should go back to the 1950s. I accept that argument to the extent that in the 1950s more people were in work, but the proviso is that it was only full male employment.
  Nobody on this side wants to go back to the 1950s. We have to go forward into the 21st century, and prepare for a society in which the roles of men and women in the family and in the workplace will be identical. That is the issue that should be addressed.
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  I do not see how the Government can have any justification for arguing against this new clause. It is only one strand in the child care policy which we on this side are proposing. It is time that the Government came up with a policy, instead of introducing the occasional inadequate measure.
  Ms Eagle: I support new clause 1. As we have all heard in the debate so far, it would allow the provision of workplace nurseries to attract more extensive capital relief, and would encourage joint ventures—which are already beginning to occur in some areas—between local authorities and firms to buy places in workplace nurseries.
  As we consider the Budget, we are in the middle of a social and economic revolution which is changing the face of advanced western societies more rapidly than we ever thought possible. As legislators, we have to look at what is going on around us to see how we can change institutions and structures and how best we can legislate to take account of the changes that are occurring.
  In the past 50 years, there has been a revolution in the patterns of family life and employment. The changes, particularly in the labour market and in the structure of jobs—who is working, for how long, for how much and where—have occurred more rapidly in the past 15 years with the deregulation of labour markets. One of the most obvious social revolutions is the massive increase in the number of women who are working or who want to work.
  Between now and the end of the century, nine out of 10 new jobs created will be taken by women. Women will probably outnumber men as a proportion of the work force sooner rather than later—certainly by the end of the century. No Government who hope to create a society at ease with itself can possibly contemplate such massive change without seeking to alter societal structures and so accommodate and facilitate a planned, civilised change rather than the chaotic one which will occur if it is left to the market. So far, the Government have failed to respond adequately to the very great challenges that are being laid before them.
  Historically, it has always been recognised that child care has to be provided if women are to be able to work effectively. We need only look at what happened during the world wars when women were required to work to sustain the war effort. Suddenly it became possible for women to do heavy engineering work—work that they had never been considered fit to do in the past—and it was quickly realised that women had to go on to the land to produce food. It was quickly recognised that women could perform every role asked of them to sustain the country in some of its darkest hours this century.
  The Whitehall civil servants and Government Ministers who planned the economies during both world wars realised very quickly—particularly during the second world war—that in order to mobilise the capacity of 51 per cent. of the population they had to provide child care. Lo and behold, it was provided. But afterwards it was decided that women should be treated like the Turkish guest workers in Germany: once they had served their useful purpose in dire times they were meant to be bundled back into the home where they belonged and left there. So child care was withdrawn, as were jobs and wages that women had begun to take for granted, and women's employment was curtailed.
  As I said earlier, at the moment there is a massive increase in participation in part-time work by women. It

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  appears that women are more able to be flexible in their employment and want to combine their duties of looking after children and providing a home with work. The social attitudes towards trying to balance a career and look after children are changing, and changing quite rapidly. But the institutions in our society are not changing to enable women to do that.
  It is remarkable that so many women have managed, by hook or by crook, to circumvent institutions which do not encourage them to be where they are. I speak from some personal experience, as I believe that many of the women in this place have circumvented structures which were not designed to permit them to be where they are now. I believe that all women empathise with other women who are attempting to do two impossible things when the Government are offering no significant help.
  The new clause attempts to help women in one very narrow respect, but it is a travesty for Conservative Members to criticise us for not dealing with some of the other important aspects of child care at a national level and with the strategic provision of child care. We are debating the Finance Bill and the new clause is quite appropriate because it gives us the opportunity to consider some of the economic implications of what is happening with regard to child care provision.
  There has been a social and economic revolution and we are in a period of transition. The Government must facilitate a change to do away with some of the contradictions and madnesses with which untrammelled free market forces have left us. Some of those changes have already been alluded to. Millions of women—single parents—are unable to work because the jobs that we have created to date are often low paid and part time. On the money that they earn in the deregulated labour market, women cannot afford to pay for child care, so they are trapped on benefit. That is frustrating for the vast majority of those women who want to go out to work, to be independent and to be able to raise the next generation. All children, whether raised in poverty or otherwise, will be the new generation and, if we do not tackle the problems now, we shall eventually have to deal with the consequences of their being deprived in childhood.
  The vast majority of female single parents want to work, to be able to provide more for their children and to have the independence and pride of going out to work. They do not want to be stuck on benefit, but it is practically impossible for them to work because of the lack of child care provision combined with their low earning potential. In the meantime, our benefit bills are soaring while many jobs remain undone, and not only in the caring professions. Children are living in poverty and women are frustrated because they cannot go out to work. One does not need to be a genius to realise that the provision of child care would allow those women to go out to work and come off benefit, thereby making a saving to the Exchequer; it would mean that they would pay taxes, thereby increasing the tax yield; it would create additional jobs because people would be needed to provide the child care that allows those women the freedom to go out to work in the first place; and it would increase spending power, which would also help the recovery.
  The provision of adequate child care would also benefit children. All the experts say that it is no good for children
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  to be brought up in poverty by frustrated and demoralised parents who cannot go out to work but are stuck on benefit. Those children often cannot mix with their peers because of the restrictions that living in poverty places on families. Children develop much better and more quickly if they can mix with their peers—they grow up more confident and better adapted to the world. Therefore, child care helps mothers and children, the Exchequer and our economy—so why on earth are we not providing it? I should be interested to hear what the Minister has to say.
  Mr. Forman: The hon. Lady and a number of her colleagues have made a powerful case for investment in child care. I have listened carefully to what they have said and especially to the impressive speech by the hon. Member for Edinburgh, Leith (Mr. Chisholm) who spoke without notes, other than those from the Prime Minister which he kept in his pocket. Since Labour Members have broadened the debate and are not focusing solely on the new clause, they should be considering what, in a modern society, should be the appropriate balance of the financial contributions made towards the desirable objective of child care by the individual involved, by employers and by the generality of taxpayers. If I were to hear more from them about the appropriate balance to be struck in the Bill, I might be more persuaded.
  7.15 pm
  Ms Eagle: I thank the hon. Gentleman for his comments. I do not believe that the Government have yet accepted the case for a structured, strategic provision of child care—had they done so, it would have been in place. So far, private provision has been left to develop without intervention from the Government, which is what we would expect given the iron grip of neo-classical ideologies.
  Mr. Dorrell: If the hon. Lady does not believe that the Government accept the case for targeted assistance to low-income families for child care so that people can get back to work, will she speculate on why my right hon. and learned Friend the Chancellor announced in the Budget that we were to spend £30 million net of Government money on the child care disregard in family credit? Why does she think that we have done that if it is not because we accept the need to help people back to work? When she has answered that question, perhaps she would like to answer that of my hon. Friend the Member for Carshalton and Wallington (Mr. Forman) and say what she thinks a national child care strategy would look like. Who would pay for it and what would be the result?
  Ms Eagle: I should be the first to concede that a Government who did something about child care provision had finally recognised its importance, but this Government have not given it adequate priority. They have been in power for 15 years and we now have a £50 billion deficit and £20 billion of North sea oil money has been wasted on tax cuts for the very rich. It is therefore a bit rich for the Government to boast about spending £30 million. They have proved their interest in the issue—let us face the fact that their activity in this sphere does not amount to much, although I recognise that £30 million has been earmarked. My hon. Friends have commented on the inadequacy of that sum and I shall not repeat the arguments, but, when people look back at the Government's record, they will realise that child care has not been a very high priority. It

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  is only recently that the Prime Minister has mentioned it as something that is desirable, but the Government have not proved its desirability by committing money to it in anything like the sums needed to make a difference.
  Child care should be regarded as part of the economic infrastructure and as an investment in the future. The Government do not yet understand how significant that is. The hon. Member for Havant (Mr. Willetts) came up with the interesting theory that informal child care is the most desirable. That means that the woman around the corner, granny if she is still alive, or anyone who happens to be around, should look after the children.
  This country will not be able to compete seriously with the rapidly changing and advancing economies that will emerge in the new world, with their flexible employment patterns, high-tech industries and high levels of education, if we expect 51 per cent. of the population to rely on the woman next door to look after their children. The Government have to be systematic, but I do not believe that they have yet grasped the seriousness or the strategic implications of child care provision. After 15 years in power, it is about time that they did.
  Another suggestion from Conservative Members was that we should deregulate the market in child care. They said that there were too many regulations facing anyone who wanted to set up child care provision, but people who go out to work must be confident that their children are in safe hands. There must be an appropriate level of regulation to ensure the quality of care. I cannot think of anything more important to ensure than that.
  Leaving it all to the woman next door, or lowering the quality of care to such an extent that nobody knows whether it is good or not, is playing fast and loose with the future of our children and of our economy. After all those years, that is not worthy to be called a Government policy, yet it is all that we have heard from the Conservative party.
  Conservatives are quick enough to deregulate the labour market and to help to accelerate changes such as the increase in part-time work. They are quick to celebrate a decline in earning power and the arrival of low wages, and then they wonder why so many people cannot afford to go out to work. They lament the consequences of their own policies, as if they had descended upon them from above. Yet often their economic policies and the ideology that they have pursued have caused some of the problems.
  It is time that we took a strategic look at what we can do to deal with the issue nationally. We should not leave it all to patchy and fragmented practice in different parts of the country, some of which is good and some of which is bad. At present, because of the local authority provision, one is three times more likely to have access to child care if one lives in a Labour area than if one lives in a Conservative area. In Labour-controlled areas 40 per cent of all three and four-year-olds are in child care or nursery education, but in Tory areas the proportion is only 13 per cent. It is not fair that those who have the misfortune to grow up in Tory areas should not have access to something so vital.
  No serious Government should consider how we can face the future and pay our way in the new economy, without realising that we must invest in child care here and now, or we shall pay for the consequences in the future.
  Mr. Forman: I was reluctant to speak, but I feel bound to do so because of the nature of the Opposition speeches that I have heard on this important subject. Nobody on
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  either side of the House would disagree with the general propositions that Opposition Members have advanced about the importance of child care, especially for very young children. All the studies show that the influences on young children are critical in determining how they grow up and lead their later lives.
  As my hon. Friend the Financial Secretary to the Treasury said, we do not dispute the simple proposition that it is important to get mothers back to work after having a child, if they wish to work, because that is good for families and psychologically good for mothers, and it helps with the material circumstances of the families concerned. That is all to the good. And, as we all know, one of the smaller measures in the Budget was directed towards that end. So far, so good.
  The real question was contained in my intervention in the speech of the hon. Member for Wallasey (Ms Eagle)—an intervention that I had been tempted to make during earlier speeches, too. Taxpayers, and other people listening to the debate, will want the Labour and Liberal parties to tell them how the necessary cost of the desirable measures that they advocate would be apportioned, and how that will fit into the overall strategy on which Opposition Members say that they are so keen—although I have not heard a great deal of substance to it so far.
  In view of the contrast between what happens here and what happens on the continent of Europe, the Opposition must answer the question: what is the appropriate balance for meeting those costs in modern society? First, to what extent should we put the costs for those desirable extra measures on to individuals? What contribution should the families themselves make? Secondly, what contribution should employers make, in their own interests as much as for any other reason, so that they can recruit and retain the well-qualified women employees whom they need? Thirdly, what proportion should be borne by the generality of taxpayers?
  We sometimes talk glibly of Government money—but there ain't such a thing as Government money, only taxpayers' money. There is an opportunity cost, and all those other things. I can think of other forms of desirable family financial support which could be made a charge on the taxpayer—for example, financial help for those looking after elderly people. Many women in families these days have to pick up the burden, both financial and human, of caring for an elderly relative. That will happen more and more in the future because of the changing demographic profile.
  Mr. George Stevenson: Given our appalling child care record in comparison with that of any European country that the hon. Gentleman cares to mention, does he accept the proposition that, whatever balance the Government have constructed over the past 15 years, it is self-evident that it is not working? Secondly, does he accept that the new clause represents but a small step in the direction of attempting to shift that balance more in favour of fostering child care, which, in view of our appalling record, is obviously not happening now?
  Mr. Forman: If the hon. Gentleman's argument were correct, it would be surprising that our rate of female participation in the labour force has climbed so rapidly to such a high level in recent years, so that we are now second only to Denmark in the European Union.

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  In an ideal world where there was plenty of money available for such things, whether from individuals, companies or the generality of taxpayers, it might indeed be desirable to increase the financial contributions from all those groups. But before the debate finishes I want to hear some authoritative guidance from the Opposition. I do not know whether we shall hear another speech from the Opposition Front Bench; I apologise for not having heard the opening speeches, but I could not be in the Chamber at that time. I should like to hear an authoritative statement on how the Opposition would go about implementing the strategy about which they talk so airily. That is the key question with which we must concern ourselves during the Report stage of the Finance Bill.
  Mr. Spearing: This debate should not be necessary. Indeed, if there were a properly co-ordinated and integrated Government policy on child care the debate would be unnecessary, and so would the new clause, and the speech by the hon. Member for Carshalton and Wallington (Mr. Forman). The hon. Gentleman may have a point about the mechanics of putting the effects of the amendment into practice, but he and the Financial Secretary have to answer for the lack of integrity in the Government's present approach to child care.
  I use the word "integrity" advisedly. We often use it in a pejorative sense when we say, "That person has no integrity." But I am using the word in a collective sense to describe the Government, because their policy is not integrated. It is not a whole; therefore it has no integrity in itself, and I shall prove that. In an earlier intervention the Financial Secretary claimed that the Government had a strategy. He nods, but I hope to prove to him, to the House and to the public that they have not.
  The hon. Member for Fulham (Mr. Carrington) castigated the 1906 Administration of Lloyd George—or rather of Campbell-Bannerman, and subsequently of Asquith and then, during the war, of Lloyd George. The hon. Gentleman said that the root of most of our troubles in the rest of the century could be laid at the door of that Government, and what it started. That remark illustrates the differences between Conservative Members.
  Some Conservatives believe that we must have a collective form of public service whereby, together as a whole, we fund the professionals who provide care, whether that be in health or in education—
  Mr. Carrington rose—
  Mr. Spearing: I shall give way in a minute, when I have finished what I am saying.
  Surely, by definition, care is not a marketable commodity. We have been talking about child care today, and the hon. Member for Fulham is really saying that the tradition of public service that the 1906 Administration started, and that my hon. Friends have attempted to continue since 1945, is all wrong. But I maintain that it is essential to meet the challenges of the next generation, as my hon. Friend the Member for Durham, North-West (Ms Armstrong) properly and eloquently explained.
  Mr. Carrington: I do not to wish to go into long disputations about the pros and cons of the record of the Campbell-Bannerman and Asquith Governments, although I point out that Lloyd George was not a Liberal Prime
  806
  Minister, but a coalition Prime Minister. The two principal achievements of that Government were the highest number of days lost in strikes at any time in the country until 1978, which occurred in about 1911, I believe, and the start of the first world war. Those two factors meant that most of our problems came from that Government.
  Mr. Spearing: We may make a judgment about the causes of that terrible conflict, but if the hon. Gentleman considers the public institutions in what was the borough of Fulham or looks round any city or town at the public institutions and public buildings which were erected between 1906 and 1913, he will see that there is a great deal of good. The problem with Conservative Members is that some of them believe in public service, even if it is over a narrow range, and the rest of them do not. I rather suspect that the hon. Gentleman is one of those who does not.
  7.30 pm
  The Prime Minister believes in public service. He has written a great deal in the newspapers about child care. It is he who said in an interview in The Daily Telegraph that we were to have an expansion of nursery education. Articles in the Daily Express further trailed the Prime Minister' dedication to that, even though the Secretary of State for Education appeared to have a different sort of view as to how it should be discharged. My hon. Friend the Member for Bristol, East (Ms Corston) pointed out that, in their official report to the United Nations, the Government said:
  "It would like to see a widening of nursery and other pre-school education as resources become available … The longer-term ambition is universal availability for those who want it."
  We may ask "universal availability" of what? It is clear that, as the Government have said, such availability relates to the widening of nursery and other pre-school education. Nursery education, playgroups and some form of minding all have a part to play. We must ask ourselves what are the best arrangements to create a balance and who should supply each of those commodities, as the hon. Member for Fulham calls them. I prefer to call it care.
  That is the area in which the Government have not got the integrity of which I spoke. When I use the word "integrity", I do not mean it in a personal capacity. However, it is perfectly clear that, corporately, integrity does not exist and I shall show why.
  The Education Act 1944 laid a duty on every education authority to have regard to the need for nursery education for children under the age of five. Every local education authority had a duty to assess that need. They did not have to provide it, they could argue one way or the other and they did not have to provide for the full need. Indeed, in 1979, Oxfordshire council decided that it was going to disband nursery education. As a result, legislation passed through the House in 1980 which removed that requirement of the 1944 Act. However, it was passed in a way which did not make it clear to the House that that obligation and duty to provide care—at least the duty to see how much care was necessary or desirable—was being removed.
  It is interesting that that principle of providing nursery education was endorsed by R. A. Butler in his speeches on the 1944 Act. He said that the concept of nursery education was to support home life and was not an attempt to

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  supplant it. That is why, earlier this Session, I introduced the Nursery Education (Assessment of Need) Bill to put that duty back on the statute book.
  Mr. Deputy Speaker (Mr. Michael Morris): Order. I remember the hon. Gentleman's Bill, but the three new clauses are not about nursery education, but specifically concern capital allowances, child care vouchers and the self-employed. I hope that the hon. Gentleman will at least address one of those three dimensions.
  Mr. Spearing: Certainly, Mr. Deputy Speaker. However, you will recall that, in the course of the debate, the Government claimed—this relates to the need for the amendment of my hon. Friend the Member for Peckham (Ms Harman)—that their policy was integrated and met the needs of the hour.
  I shall rapidly conclude my speech and address my remarks to the Minister, who claimed that that integrated policy was present. All that I shall say is that that Bill was talked out by the hon. Member for Sutton and Cheam (Lady Olga Maitland). It was blocked by Ministers subsequently and on Friday 15 April I moved, as was my privilege under the Standing Orders, that the Bill be sent to a Second Reading Committee for consideration of its merits. But the Treasury did not want the Bill, not because it could not be passed on the nod—at 2.30 pm on a Friday, which everybody understands—but because it objected to the principle of debating it in Committee. If Treasury Ministers are objecting to debating the principle which was enshrined in an Act in 1944 by a Government with a huge Conservative majority who were elected in 1935 and will not apply it to the needs of today, they have no integrity. That is why my hon. Friend finds it necessary to move her amendment.
  Mr. Alan Simpson: One of the reasons why I am grateful for this debate is that it moves us beyond the platitudes that presume that there is a shared and common interest existing on both sides of the Chamber about meeting the rights and needs of the child to pre-school nursery care and education. It seems that if we are to have a serious debate on those issues, we must at some stage address three of the key elements that must underpin any such commitment. Those elements are: what form the care and provision should take, where it should be located, and how it should be paid for.
  May I simply outline the starting point? I am grateful to a number of my hon. Friends who have pointed out that, in the European league of comparisons, our starting point for three to five-year-olds is as follows. While in France and Belgium 95 per cent. of children have access to nursery education, in Italy and Denmark the figure is 85 per cent., and in Germany, Greece and Spain up to 70 per cent. of children receive nursery education, in the United Kingdom only 35 per cent. of children have such access. We are second to bottom of the European league. [Interruption.]
  Mr. Deputy Speaker: Order. I am sorry to interrupt the hon. Gentleman. I should be most grateful if the hon. Member for Cambridge (Mrs. Campbell) would recognise that her hon. Friend is addressing the Chair.
  Mr. Simpson: Our best is less than half the best of the rest of Europe. Therefore, we ought to place our debate in a somewhat humble context. We perform no better if we stretch the age range and consider the provision for the under-threes. In Denmark, 48 per cent. of its children have
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  access to nursery education and nursery care. The figure for France and Belgium is 20 per cent., but for the United Kingdom the figure is 2 per cent.
  Against that relatively humble background, the House must ask what the starting point should be for a coherent and strategic policy that delivers to children their rights of access to pre-school nursery care. I take as my starting point the report of the Education, Science and Arts Committee in 1988. It reported:
  "We recommend those LEAs which have not already done so should review their existing plans to ensure that under fives provision is not adversely affected by the rise in pupil numbers."
  The report went on to say:
  "It is unlikely therefore that any significant expansion could take place in provision for the under fives without provision of additional resources by central government."
  Sadly, the Committee had to recognise that the Government had stated that it was their aim
  "broadly to maintain the present level of expenditure on under fives in real terms."
  When the Committee questioned the Government further, they said that the
  "maintenance of the current participation rate seemed incompatible with level funding given the increasing number of under fives."
  The Committee asked the Government to clarify whether that would guarantee increased funding in absolute terms. The Government's response was that they would not at present
  "envisage providing resources on the scale necessary to expand provision"
  in the way that the Committee was recommending. The Committee concluded that the gap between public policy and public provision was a stark one that had to be addressed in unambiguous terms and commitments. It stated:
  "in the long run, we are brought, by the evidence on the value of nursery education, by the picture of the child situation in the eighties, and by the evidence of parental demand to our second major conclusion, that the way forward is the provision of a place in a nursery classroom for all children whose parents wish it."
  Those conclusions, which were set out in 1988, have not been honoured. We have made no significant progress towards meeting those observations or commitments.
  If we are to identify any pathways of hope, they are to be found not in Government policy but in the policies pursued by local authorities; virtually in defiance of the successive and swingeing cuts that central Government have imposed on local authority spending.
  I am grateful to my hon. Friend the Member for Wallasey (Ms Eagle) for saying that the local authorities' record of provision for the under-fives is exemplary when compared with central Government provision. In the main, the record is exemplary for Labour authorities rather than for those that are controlled by the Conservative party. As my hon. Friend said, a child is three times more likely to have access to a nursery place if it lives in a Labour authority than in a Conservative area. Of the best 40 providers of nursery places, 34 are Labour authorities. Of the worst 25 providers, not one is Labour controlled.
  I am even prouder to say that in Nottinghamshire the record of the Labour education authority since it came into power in 1981 has been outstanding. Nottinghamshire is now the leading shire county in the provision of child care. Every year since 1981 the authority has increased the number of places for children under five in local authority nurseries. The numbers increased from 4,700 places in

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  1981 to 6,900 last year. It meant, last year, that there were 13,500 children throughout the county in full-time or part-time nursery places.
  The authority has been struggling to hit a target that it set itself. It wishes 50 per cent. of the under-fives to have access to nursery places. It has reached 49.68 per cent. and sadly failed to reach its target. There has been a shortfall each year simply because the numbers of under five-year-olds outstrips the number of places that the authority is able to provide, in defiance, as I have said, of Government policy.
  Within that commitment I am even prouder to recognise that 65 per cent. of children in Nottingham city have access to nursery places. I am grateful to the hon. Member for Havant (Mr. Willetts) for saying earlier that it is not sufficient to talk about the generality of provision. We must ascertain whether provision is being made available, first, to those who are in greatest need.
  I invite the hon. Member for Havant to examine the record of Nottinghamshire's education authority. It is against the criterion that the hon. Gentleman outlined that it has decided where to make provision for nursery places. Unless that quality criterion is built into any general policy, there is a risk that those who are most able to demand will be first in the queue and those who may have the greatest claim on a needs basis will be at the end of the queue. The hon. Member for Havant made this an important point that we should all bear in mind in any strategy that we claim to put before the House that reflects favourably on the extension of the rights of children under five in terms of access to nursery care.
  7.45pm
  Every child in Nottinghamshire with a place in nursery education must, though, understand that the vote of thanks that he, she and his parents need to make should be addressed to the Labour local authority that has obtained, maintained and sustained those places.
  Several Conservative Members have talked about parental choice. I spent a number of years before entering the House as an inner-city community worker. For much of that time the level of child care provision was well below the needs of the local communities with which I was working. In many instances some of the best initiatives were taken by groups of parents who gathered together and said that, despite the rigours of central Government finance, which were restricting the expansion of nursery provision, they would do their own thing. In effect, they said, "It is better that we make common provision to offer some stimulation for our children than to make no provision at all." I can only praise the parents who made that sort of commitment.
  At the same time, I would not want anyone to be under the illusion that the approach that I have outlined constituted a free and positive choice that was being offered against the widest of all possibilities. Even the widest of the possibilities that stretched across these parents' horizons denied them the choice of a nursery place for their children. It was the denial of that choice that forced them into making other provision.
  There may be some people who, given the widest range of choices, would still wish to say, "I would like to have a hands-on involvement, along with other people in my community, for the pre-school care and education of my
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  children." That is fine. There may be others who say, "I would rather that my children were with members of my family." Again, that is fine, but I want people to be able to exercise such choices in the knowledge that they also have rights of access to free and comprehensive child care provision of the highest quality that the country can provide.
  If people make personal choices to invest their own time and effort in education within extended family networks, that is fine. Unfortunately, we are a long way from having that range of options as a positive choice.
  I am grateful again to the hon. Member for Havant for trying in an intervention to question whether the House should be concerned about the general provision of child care as opposed to questioning or examining the prospects of children in households where there is low income, one income or no income. It is an extremely important question which needs an answer if we are to address the rights of all children in our society.
  Mr. Deputy Speaker: Order. The hon. Gentleman may have been asked a question in an intervention, but I ask him to relate his remarks to the three new clauses; he must weave his speech around them.
  Mr. Simpson: I shall do that specifically.
  In addressing the new clauses, we must look at the nature of the recent changes in the employment market so that we can ask ourselves some fairly serious and searching questions about whether employer-based provision will work and whether it is desirable.
  I draw the attention of hon. Members to a recent survey conducted by the Low Pay Network, which was referred to in an article in The Observer on Sunday. Some fairly stark evidence was provided in that article which must raise the most serious question about women in part-time work being able to buy places for their children in either employer-based nurseries or private or community-based schemes. The study related to part-time jobs which had been generated in the Stirling area, and examined 91 part-time retailing jobs and the incomes of those who took up the jobs. Virtually all of the jobs were taken up by women.
  The consequences for those women, and for the House, must be understood and considered. One consequence is that the earnings of those women were equivalent to 28 full-time jobs. The tax contributions they paid fell by a staggering 96.5 per cent. They fell from some £42,000 in tax and national insurance contributions to a total of £1,470. What we have is an increase in the activity rates in the work force of people who will not be able to pay for access to private nursery care or full-cost nursery provision by an employer. They will certainly not have the money to pay for child minding on any responsible and reputable basis.
  The question is: how do those working mothers then gain access to decent nursery care for their children which meets the highest standards which their children have a right to expect? That question is important not only for the employer but for the Government. As the Government widen the base between the tax take that they get from the shuffling of the employment market, and as they retreat from their commitment to direct nursery provision, a massive and serious shortfall is being loaded on to society

  811
  which it will have to pick up in the future. Any party that has a serious commitment to a comprehensive policy on access to child care must address that issue.
  It must be understood that those who are caught in the employment revolution, which the Government frequently laud in the House, are faced with a choice whereby they are pauperised in employment or stigmatised out of employment. Access to child care through the employer then takes on a different notion. The most sinister and disturbing context in which it could be construed is that the most cynical employers—if they were drawn into provision because they could make tax gains from it—would use it in precisely the way in which my hon. Friend the Member for Cambridge (Mrs. Campbell) pointed out, in terms not of extending access to children but of restricting the rights of parents. Employers would not allow access to the caring father in case the mother sought employment elsewhere, especially with a competitor. That would make access to nursery care not a child's right or a parent's right but an employer's right.
  There is something deeply disturbing about seeing a solution to the rights of child care provision for children mainly in the hands of employers. Given the Government's ideological commitment to free market forces, the logic of the argument is that we will see child care inexorably tied to permanently low pay, to the maintenance of poor conditions and to the continuation of discriminatory practices in the workplace.
  Mr. Willetts: I congratulate the hon. Gentleman on what seems to be a significant attack on the new clause proposed by the hon. Member for Peckham (Ms Harman). It is absolutely devastating.
  Mr. Simpson: I am trying to address the rights of children in the whole and—
  Mr. Deputy Speaker: Order. That has become plain, but I appeal to the hon. Gentleman to recognise that this is a specific debate on three new clauses. He has not mentioned one of the new clauses for one moment of his speech.
  Mr. Simpson: I think that that is a trifle unfair, having just been congratulated by the hon. Member for Havant (Mr. Willetts) on addressing precisely that key issue.
  I am aware that employer-based nursery provision is an important but second-best option in a comprehensive strategic policy that delivers child care opportunities to all of our children. I do not discount employer-based child care as an option. However, in order to place it properly in a strategic policy, we should not deceive ourselves that what may be an answer in part is in fact an answer in the whole. We need to place its provision in that context.
  If we are considering moving along that path, we must be willing to open up a debate about partnership which moves beyond the terms by which the Government have structured this debate. I am not averse to a partnership between the public and private sectors. However, the benchmark of that partnership must be judged not by whether we can come to an agreement between ourselves but whether we can devise provision by the public and private sectors that meets the desires and demands of parents and their children.
  All provision must eventually be measured and judged against the rights of children. That does not get in the way of a diverse and pluralistic approach to such provision, but
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  it sets down clear, common standards against which the provision must be judged. It is not a question whether the provision should be tax deductible; it is a question whether it is based on shared obligations which the public and private sectors take on board with regard to meeting the needs of children.
  In constructing whatever debates we have, we must be clear that the issue is not about a parent's desire for a job but about a child's right to a nursery place. We must understand that we have a common interest in making access to child care a universal right for all under-fives in this country. We have that common interest for two simple reasons. First, a study which was done in the United States a couple of years ago asked the question: what can we best do to deflect young people from crime? The answer that resulted from extensive research throughout the United States was that public and private initiatives needed to invest in provision for under-fives. If society wants the best "bang for its buck" in terms of anti-crime initiatives, it should invest in the under-fives. It is in the interests of industry and employers as much as it is in the state's interest.
  We also need to know that employers, as much as anyone, have an interest in producing a generation of children who are highly literate and numerate, and who are capable of finding a place in a high-wage economy. If we do not invest in that for the century ahead, then the gap between those who are retired non-earners and who are dependent upon tomorrow's earners and pension contributors will be increasingly unbridgeable.
  8 pm
  We need, as my hon. Friend the Member for Edinburgh, Leith (Mr. Chisholm) mentioned, a strategic and co-ordinated national policy about child care provision. That must take on board the issues of staff training and take-up rights. It must extend from the question of funding buildings to books and also toys. It must recognise that if we do not develop a comprehensive and strategic approach which delivers access to child care and nursery care for all under-fives who wish it—as of right—we will be doing little other than stealing from our own future.
  Mr. Dorrell: I begin by congratulating the hon. Member for Nottingham, South (Mr. Simpson). Those who have sat through the debate have heard many calls for a national child care strategy, but he is only the hon. Member who has not merely spoken in favour of the idea but has sketched out some idea of what a national child care strategy would look like.
  The only problem is that there appears to be a difference of nuance between the hon. Gentleman and the Opposition Front Bench. The hon. Gentleman made it clear that he is not in favour of employer-provided child care. I look forward to welcoming him in the Lobby if the hon. Member for Peckham (Ms Harman) chooses to force a Division, because the purpose of the hon. Lady's amendment is to provide a tax concession for employer-provided child care.
  Mr. Simpson rose—
  Mr. Dorrell: There is another difference in nuance between the hon. Gentleman and the Opposition Front Bench. He might like to reply for both of them at once, as I shall give way in a moment.

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  The hon. Member for Peckham responded to more than one intervention this afternoon by avoiding answering the question of what a national child care strategy would look like. A large number of speeches have called for a national child care strategy, but all of the hon. Gentleman's colleagues neatly avoided setting out what that meant. The hon. Gentleman was clear that what he means by a national child care strategy is free access to child care and nursery education for all under-fives at the choice of the parent. That is his view, and it is perfectly clear, but I fear that he has yet to persuade the Opposition Front Bench that that is either affordable or desirable.
  Mr. Simpson: I hope that the Minister will recognise, given the difficulties that I had in making my way through the interventions from the Chair, that the terms of the debate are specifically limited. There is not a great deal of scope for setting out a national strategy and there have been other occasions when those on the Opposition Front Bench were more than forthright about what the framework of that should be.
  May I simply clarify a point that I made about employer-based provision? I am not opposed to it and I said clearly that it is an important strand of a second string to the provision of child care rights. It must be judged against what is in the best interests of the child, rather than the employer, and it must deliver universal access to all those children who are under five who wish access to such provision.
  Madam Deputy Speaker (Dame Janet Fookes): Order. That was a long intervention after a fairly long speech.
  Mr. Dorrell: The hon. Gentleman said that it was difficult, in this debate, to have the opportunity to sketch out a full strategy for child care. I congratulate him on finding a way to do so that his hon. Friends were not sufficiently ingenious to find.
  The hon. Member for Peckham was quite right to say that the debate about child care takes place against the background of a major change in the labour market over the past couple of decades. There has been a large increase in the number of women at work and that has led to a substantial increase in the number of two-earner households. For a number of other social reasons, there has also been a substantial growth in the number of single-parent families.
  Those are all important factors, which demand an increase in the level of provision of child care. That is not in dispute. The problem is that Opposition Members appear to be dismissive of the fact that that demand for increased child care has been met. There is clear evidence in the figures of a substantial increase in the number of places in nurseries and in child minding. That is responding to precisely the kind of social phenomena that the hon. Lady identifies.
  It became clear in the debate that the attitudes of the Opposition were accurately summed up by the hon. Lady's article in this morning's edition of The Independent. She wrote:
  "The number of children in private day nurseries … is 90,000 and increasing."
  That is a fourfold increase on the figure of 10 years ago. She goes on:
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  "But the demand for child care for working mothers has been met above all by a huge increase in child-minding. More than 250,000 children are being cared for by child-minders".
  That is a rise, as the hon. Lady accurately says, of 155,000 or 150 per cent. in the past 10 years.
  The attitudes of the hon. Lady become clear when she goes on to say:
  "For many parents, child-minding is their preferred option."
  One could say that there is clear evidence that they are taking up opportunities which are there. She continues:
  "But for many more, it is not. It is unsatisfactory that the increase in women at work is being underpinned by a major expansion in a type of child care which is not the first choice of parents or experts."
  The last word is the giveaway. The truth is that the Opposition are more interested in the views of experts on collective provision than they are in the views of parents about how their children should best be cared for.
  Before I pursue the argument any further, I should declare an interest. I am the father of an 18-year-old son—[Interruption.] An 18-month-old son. My wife works and I must declare to the House that, despite the opinion of experts, my son Philip was taken on Monday of this week from a nursery and given to a child minder because that met the needs of my family more directly. I am sorry if that contradicted the opinion of the hon. Lady about what we should have done as parents. However, the choice of parents should determine our child care policy.
  Mr. Spearing: The Minister has claimed that the Government are responding to the various needs, whether in child minding, nursery education or playgroups. Why do the Government persist in rejecting what the House accepted in 1944—that local authorities should assess the need, even if they are not to supply it?
  Mr. Dorrell: The hon. Gentleman knows that the Act to which he refers related to nursery education, not child care.
  The hon. Member for Peckham called for a national strategy for child care. My hon. Friend the Member for Carshalton and Wallington (Mr. Forman) was absolutely right to point out that—with the honourable exception of the hon. Member for Nottingham, South—no Opposition Member sketched out in any degree what he meant. The new clause does not constitute a strategy. It provides an industrial buildings allowance for child care facilities in commercial buildings. It is based on the proposition that that is available for sports facilities in commercial buildings. That is not correct.
  There is a specific industrial buildings allowance provision for sports pavilions, but sports facilities in commercial buildings would be treated in precisely the same way as child care provision in commercial buildings. That is, their access to capital allowances would be determined by the status of the building and, if it is a commercial building, no capital allowance would be available. So on her own logic, the hon. Lady's argument falls.
  As my hon. Friend the Member for Havant (Mr. Willetts) said, the hon. Member for Peckham's argument was in direct contradiction to the concerns that she expressed about employer-provided nurseries in the book that she wrote on all those subjects, and from which my hon. Friend quoted. The hon. Lady and her hon. Friends called for a strategy and, with one honourable exception, made no attempt to set one out.
  The Liberal Democrats on the other hand offered us something that at least cost a substantial amount of money,

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  even if it did not constitute a strategy. The hon. Member for Christchurch (Mrs. Maddock) argued that we should introduce tax relief for child care vouchers. That in itself is a relatively low-cost proposal, but I have to ask the hon. Lady and anyone else who may be attracted to child care vouchers as the way forward what we would do when employers and employees agreed that, as child care vouchers were tax deductible, it was in the interests of both to provide vouchers, if necessary at the cost of a reduction in pay, in order that employers could meet directly the child care that was previously met by employees out of their own pocket. It would clearly be in the tax interests of both employers and employees to do that.
  Such an arrangement would substantially increase the cost of the hon. Lady's proposal. She would then have to explain why it applied to employees but not to the self-employed. When she had done that, she would have to explain why child care was tax deductible when all those convolutions were gone through, but not when employees paid for it out of their own pocket. Once that concession was made—the lobby groups make it clear that that is their objective—the cost to the Exchequer would be £300 million a year. Not a single extra child care place would be provided as a consequence. I do not regard the hon. Member for Christchurch's proposal as a strategy or a sensible use of £300 million when it would not lead to the provision of a single extra child care place.
  Ms Diane Abbott: What about single parents?
  Mr. Dorrell: I am coming to precisely that point in response to the hon. Lady. I am always happy to go where she leads.
  The proposition that the Government put to the House is that the wrong way to go about child care is to introduce blanket subsidies of the kind that were accurately described by my hon. Friends the Members for Havant and for Fulham (Mr. Carrington) as ill-targeted assistance going to the wrong people. The Government believe that we should recognise that there is a real problem for those on low incomes, particularly single-parent families, and that it is in the interests of such families, wider social policy and wider economic policy objectives to help those people out of the single-parent employment trap. That is why in the Budget last year my right and hon. learned Friend the Chancellor introduced the child care disregard in family credit. That is why, in addition, we are assisting the development of 50,000 places for children of school age through the out-of-school child care initiative.
  The Government's approach to the problem is to target assistance where there is a real problem, where there are real anti-work incentives and real difficulties for people in finding their way off benefit and into work. By using money in that way we shall be able to achieve a substantial social advance rather than a blanket subsidy which is ill targeted and delivers the lion's share of the benefit to people who do not need it and are comfortably off with their present arrangements. On that basis, I commend the Government's approach—
  Mr. Chisholm: Will the Minister give way?
  Mr. Dorrell: No. I think that the House wishes to come to a decision on the matter. I commend the Government's approach and recommend to the House that all three of the new clauses should be rejected.
  Question put, That the clause be read a Second time:—
  The House divided: Ayes 259, Noes 291.

  Division No. 213]

  [8.13 pm

  AYES

  Abbott, Ms Diane

  Evans, John (St Helens N)

  Adams, Mrs Irene

  Ewing, Mrs Margaret

  Ainger, Nick

  Field, Frank (Birkenhead)

  Ainsworth, Robert (Cov'try NE)

  Fisher, Mark

  Allen, Graham

  Flynn, Paul

  Alton, David

  Foster, Rt Hon Derek

  Anderson, Donald (Swansea E)

  Foster, Don (Bath)

  Anderson, Ms Janet (Ros'dale)

  Foulkes, George

  Armstrong, Hilary

  Fraser, John

  Ashton, Joe

  Fyfe, Maria

  Austin-Walker, John

  Galloway, George

  Banks, Tony (Newham NW)

  Garrett, John

  Barnes, Harry

  George, Bruce

  Barron, Kevin

  Gerrard, Neil

  Battle, John

  Gilbert, Rt Hon Dr John

  Bayley, Hugh

  Godman, Dr Norman A.

  Beckett, Rt Hon Margaret

  Godsiff, Roger

  Beith, Rt Hon A. J.

  Golding, Mrs Llin

  Bell, Stuart

  Gordon, Mildred

  Benn, Rt Hon Tony

  Graham, Thomas

  Bennett, Andrew F.

  Griffiths, Nigel (Edinburgh S)

  Benton, Joe

  Griffiths, Win (Bridgend)

  Bermingham, Gerald

  Grocott, Bruce

  Berry, Roger

  Gunnell, John

  Blair, Tony

  Hain, Peter

  Blunkett, David

  Hall, Mike

  Boateng, Paul

  Hardy, Peter

  Boyes, Roland

  Harman, Ms Harriet

  Bradley, Keith

  Harvey, Nick

  Bray, Dr Jeremy

  Hattersley, Rt Hon Roy

  Brown, Gordon (Dunfermline E)

  Henderson, Doug

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

  Heppell, John

  Burden, Richard

  Hill, Keith (Streatham)

  Byers, Stephen

  Hinchliffe, David

  Caborn, Richard

  Hoey, Kate

  Callaghan, Jim

  Hogg, Norman (Cumbernauld)

  Campbell, Mrs Anne (C'bridge)

  Home Robertson, John

  Campbell, Menzies (Fife NE)

  Hood, Jimmy

  Campbell, Ronnie (Blyth V)

  Hoon, Geoffrey

  Campbell-Savours, D. N.

  Howarth, George (Knowsley N)

  Carlile, Alexander (Montgomry)

  Howells, Dr. Kim (Pontypridd)

  Chisholm, Malcolm

  Hoyle, Doug

  Clapham, Michael

  Hughes, Kevin (Doncaster N)

  Clarke, Eric (Midlothian)

  Hughes, Robert (Aberdeen N)

  Clarke, Tom (Monklands W)

  Hughes, Roy (Newport E)

  Clelland, David

  Hughes, Simon (Southwark)

  Clwyd, Mrs Ann

  Hutton, John

  Coffey, Ann

  Illsley, Eric

  Cohen, Harry

  Ingram, Adam

  Connarty, Michael

  Jackson, Glenda (H'stead)

  Cook, Frank (Stockton N)

  Jackson, Helen (Shef'ld, H)

  Cook, Robin (Livingston)

  Jamieson, David

  Corbett, Robin

  Janner, Greville

  Corston, Ms Jean

  Johnston, Sir Russell

  Cousins, Jim

  Jones, Barry (Alyn and D'side)

  Cox, Tom

  Jones, Ieuan Wyn (Ynys Môn)

  Cunliffe, Lawrence

  Jones, Jon Owen (Cardiff C)

  Cunningham, Jim (Covy SE)

  Jones, Lynne (B'ham S O)

  Cunningham, Rt Hon Dr John

  Jones, Martyn (Clwyd, SW)

  Dafis, Cynog

  Kaufman, Rt Hon Gerald

  Dalyell, Tam

  Keen, Alan

  Darling, Alistair

  Kennedy, Charles (Ross,C&S)

  Davidson, Ian

  Kennedy, Jane (Lpool Brdgn)

  Davies, Bryan (Oldham C'tral)

  Khabra, Piara S.

  Davies, Rt Hon Denzil (Llanelli)

  Kilfoyle, Peter

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

  Kinnock, Rt Hon Neil (Islwyn)

  Denham, John

  Kirkwood, Archy

  Dewar, Donald

  Lestor, Joan (Eccles)

  Dixon, Don

  Lewis, Terry

  Donohoe, Brian H.

  Litherland, Robert

  Dunnachie, Jimmy

  Livingstone, Ken

  Eagle, Ms Angela

  Lloyd, Tony (Stretford)

  Eastham, Ken

  Llwyd, Elfyn

  Etherington, Bill

  Loyden, Eddie

  817

  Lynne, Ms Liz

  Redmond, Martin

  McAllion, John

  Reid, Dr John

  McAvoy, Thomas

  Robertson, George (Hamilton)

  McCartney, Ian

  Robinson, Geoffrey (Co'try NW)

  Macdonald, Calum

  Roche, Mrs. Barbara

  McFall, John

  Rogers, Allan

  McKelvey, William

  Rooker, Jeff

  Mackinlay, Andrew

  Ross, Ernie (Dundee W)

  McLeish, Henry

  Rowlands, Ted

  McMaster, Gordon

  Ruddock, Joan

  McNamara, Kevin

  Sedgemore, Brian

  Madden, Max

  Sheerman, Barry

  Maddock, Mrs Diana

  Sheldon, Rt Hon Robert

  Mahon, Alice

  Short, Clare

  Mandelson, Peter

  Simpson, Alan

  Marek, Dr John

  Skinner, Dennis

  Marshall, Jim (Leicester, S)

  Smith, Andrew (Oxford E)

  Martin, Michael J. (Springburn)

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

  Martlew, Eric

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

  Maxton, John

  Smith, Llew (Blaenau Gwent)

  Meacher, Michael

  Snape, Peter

  Michael, Alun

  Soley, Clive

  Michie, Bill (Sheffield Heeley)

  Spearing, Nigel

  Michie, Mrs Ray (Argyll Bute)

  Speller, John

  Milburn, Alan

  Squire, Rachel (Dunfermline W)

  Miller, Andrew

  Steel, Rt Hon Sir David

  Mitchell, Austin (Gt Grimsby)

  Steinberg, Gerry

  Moonie, Dr Lewis

  Stevenson, George

  Morgan, Rhodri

  Stott, Roger

  Morley, Elliot

  Strang, Dr. Gavin

  Morris, Estelle (B'ham Yardley)

  Straw, Jack

  Morris, Rt Hon J. (Aberavon)

  Taylor, Mrs Ann (Dewsbury)

  Mowlam, Marjorie

  Taylor, Matthew (Truro)

  Mudie, George

  Thompson, Jack (Wansbeck)

  Mullin, Chris

  Turner, Dennis

  Murphy, Paul

  Tyler, Paul

  O'Brien, Michael (N W'kshire)

  Vaz, Keith

  O'Brien, William (Normanton)

  Walker, Rt Hon Sir Harold

  O'Hara, Edward

  Wallace, James

  Olner, William

  Walley, Joan

  O'Neill, Martin

  Wardell, Gareth (Gower)

  Orme, Rt Hon Stanley

  Watson, Mike

  Parry, Robert

  Welsh, Andrew

  Patchett, Terry

  Wicks, Malcolm

  Pendry, Tom

  Wigley, Dafydd

  Pickthall, Colin

  Williams, Rt Hon Alan (Sw'n W)

  Pike, Peter L.

  Williams, Alan W (Carmarthen)

  Pope, Greg

  Wilson, Brian

  Powell, Ray (Ogmore)

  Winnick, David

  Prentice, Ms Bridget (Lew'm E)

  Wise, Audrey

  Prentice, Gordon (Pendle)

  Worthington, Tony

  Prescott, John

  Wright, Dr Tony

  Primarolo, Dawn

  Young, David (Bolton SE)

  Purchase, Ken

  Quin, Ms Joyce

  Tellers for the Ayes:

  Radice, Giles

  Mr. John Cummings and

  Randall, Stuart

  Mr. Alan Meale.

  Raynsford, Nick

  NOSE

  Ainsworth, Peter (East Surrey)

  Bellingham, Henry

  Aitken, Jonathan

  Bendell, Vivian

  Alexander, Richard

  Beresford, Sir Paul

  Alison, Rt Hon Michael (Selby)

  Biffen, Rt Hon John

  Allason, Rupert (Torbay)

  Blackburn, Dr John G.

  Amess, David

  Body, Sir Richard

  Arnold, Jacques (Gravesham)

  Bonsor, Sir Nicholas

  Arnold, Sir Thomas (Hazel Grv)

  Booth, Hartley

  Ashby, David

  Boswell, Tim

  Aspinwall, Jack

  Bottomley, Peter (Eltham)

  Atkins, Robert

  Bottomley, Rt Hon Virginia

  Atkinson, David (Bour'mouth E)

  Bowden, Andrew

  Atkinson, Peter (Hexham)

  Bowis, John

  Baker, Rt Hon K. (Mole Valley)

  Boyson, Rt Hon Sir Rhodes

  Baker, Nicholas (Dorset North)

  Brandreth, Gyles

  Baldry, Tony

  Brazier, Julian

  Banks, Matthew (Southport)

  Bright, Graham

  Banks, Robert (Harrogate)

  Brooke, Rt Hon Peter

  Bates, Michael

  Brown, M. (Brigg & Cl'thorpes)

  Batiste, Spencer

  Browning, Mrs. Angela

  818

  Bruce, Ian (S Dorset)

  Hawkins, Nick

  Budgen, Nicholas

  Hawksley, Warren

  Burns, Simon

  Hayes, Jerry

  Butler, Peter

  Hendry, Charles

  Carlisle, John (Luton North)

  Hicks, Robert

  Carlisle, Kenneth (Lincoln)

  Higgins, Rt Hon Sir Terence L.

  Carrington, Matthew

  Hill, James (Southampton Test)

  Carttiss, Michael

  Hogg, Rt Hon Douglas (G'tham)

  Cash, William

  Horam, John

  Chapman, Sydney

  Hordern, Rt Hon Sir Peter

  Churchill, Mr

  Howard, Rt Hon Michael

  Clappison, James

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

  Clark, Dr Michael (Rochford)

  Howell, Sir Ralph (N Norfolk)

  Coe, Sebastian

  Hunt, Rt Hon David (Wirral W)

  Colvin, Michael

  Hunt, Sir John (Ravensbourne)

  Congdon, David

  Hunter, Andrew

  Conway, Derek

  Hurd, Rt Hon Douglas

  Coombs, Anthony (Wyre For'st)

  Jack, Michael

  Coombs, Simon (Swindon)

  Jackson, Robert (Wantage)

  Cope, Rt Hon Sir John

  Jenkin, Bernard

  Cormack, Patrick

  Jessel, Toby

  Couchman, James

  Johnson Smith, Sir Geoffrey

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

  Jones, Gwilym (Cardiff N)

  Curry, David (Skipton & Ripon)

  Jones, Robert B. (W Hertfdshr)

  Davies, Quentin (Stamford)

  Kellett-Bowman, Dame Elaine

  Davis, David (Boothferry)

  Key, Robert

  Day, Stephen

  Kilfedder, Sir James

  Deva, Nirj Joseph

  King, Rt Hon Tom

  Devlin, Tim

  Kirkhope, Timothy

  Dickens, Geoffrey

  Knapman, Roger

  Dicks, Terry

  Knight, Mrs Angela (Erewash)

  Dorrell, Stephen

  Knight, Greg (Derby N)

  Douglas-Hamilton, Lord James

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

  Dover, Den

  Kynoch, George (Kincardine)

  Duncan, Alan

  Lait, Mrs Jacqui

  Duncan-Smith, Iain

  Lang, Rt Hon Ian

  Dunn, Bob

  Lawrence, Sir Ivan

  Durant, Sir Anthony

  Legg, Barry

  Elletson, Harold

  Leigh, Edward

  Emery, Rt Hon Sir Peter

  Lennox-Boyd, Mark

  Evans, David (Welwyn Hatfield)

  Lester, Jim (Broxtowe)

  Evans, Jonathan (Brecon)

  Lidington, David

  Evans, Nigel (Ribble Valley)

  Lightbown, David

  Evans, Roger (Monmouth)

  Lilley, Rt Hon Peter

  Evennett, David

  Lord, Michael

  Faber, David

  Luff, Peter

  Fabricant, Michael

  Lyell, Rt Hon Sir Nicholas

  Fairbairn, Sir Nicholas

  MacKay, Andrew

  Fenner, Dame Peggy

  Maclean, David

  Field, Barry (Isle of Wight)

  McLoughlin, Patrick

  Fishburn, Dudley

  McNair-Wilson, Sir Patrick

  Forman, Nigel

  Madel, Sir David

  Forth, Eric

  Maitland, Lady Olga

  Fowler, Rt Hon Sir Norman

  Malone, Gerald

  Fox, Dr Liam (Woodspring)

  Mans, Keith

  Fox, Sir Marcus (Shipley)

  Marland, Paul

  Freeman, Rt Hon Roger

  Marlow, Tony

  French, Douglas

  Marshall, John (Hendon S)

  Fry, Sir Peter

  Marshall, Sir Michael (Arundel)

  Gale, Roger

  Martin, David (Portsmouth S)

  Gallie, Phil

  Mates, Michael

  Gardiner, Sir George

  Mawhinney, Rt Hon Dr Brian

  Garel-Jones, Rt Hon Tristan

  Merchant, Piers

  Garnier, Edward

  Mills, Iain

  Gill, Christopher

  Mitchell, Andrew (Gedling)

  Gillan, Cheryl

  Mitchell, Sir David (Hants NW)

  Goodson-Wickes, Dr Charles

  Moate, Sir Roger

  Gorst, John

  Monro, Sir Hector

  Grant, Sir A. (Cambs SW)

  Moss, Malcolm

  Greenway, Harry (Ealing N)

  Needham, Richard

  Greenway, John (Ryedale)

  Nelson, Anthony

  Griffiths, Peter (Portsmouth, N)

  Neubert, Sir Michael

  Hague, William

  Newton, Rt Hon Tony

  Hamilton, Rt Hon Sir Archie

  Nicholls, Patrick

  Hamilton, Neil (Tatton)

  Nicholson, David (Taunton)

  Hampson, Dr Keith

  Nicholson, Emma (Devon West)

  Hanley, Jeremy

  Norris, Steve

  Hannam, Sir John

  Onslow, Rt Hon Sir Cranley

  Hargreaves, Andrew

  Oppenheim, Phillip

  Haselhurst, Alan

  Ottaway, Richard

  819

  Page, Richard

  Sweeney, Walter

  Paice, James

  Sykes, John

  Patnick, Irvine

  Tapsell, Sir Peter

  Patten, Rt Hon John

  Taylor, Ian (Esher)

  Pawsey, James

  Taylor, John M. (Solihull)

  Peacock, Mrs Elizabeth

  Taylor, Sir Teddy (Southend, E)

  Pickles, Eric

  Temple-Morris, Peter

  Porter, Barry (Wirral S)

  Thomason, Roy

  Porter, David (Waveney)

  Thompson, Sir Donald (C'er V)

  Portillo, Rt Hon Michael

  Thompson, Patrick (Norwich N)

  Rathbone, Tim

  Thornton, Sir Malcolm

  Redwood, Rt Hon John

  Thurnham, Peter

  Renton, Rt Hon Tim

  Townend, John (Bridlington)

  Richards, Rod

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

  Rifkind, Rt Hon. Malcolm

  Tracey, Richard

  Robathan, Andrew

  Tredinnick, David

  Roberts, Rt Hon Sir Wyn

  Trend, Michael

  Robertson, Raymond (Ab'd'n S)

  Trotter, Neville

  Robinson, Mark (Somerton)

  Twinn, Dr Ian

  Roe, Mrs Marion (Broxbourne)

  Vaughan, Sir Gerard

  Ross, William (E Londonderry)

  Viggers, Peter

  Rowe, Andrew (Mid Kent)

  Waldegrave, Rt Hon William

  Rumbold, Rt Hon Dame Angela

  Walden, George

  Ryder, Rt Hon Richard

  Walker, Bill (N Tayside)

  Sackville, Tom

  Waller, Gary

  Sainsbury, Rt Hon Tim

  Ward, John

  Scott, Rt Hon Nicholas

  Wardle, Charles (Bexhill)

  Shaw, David (Dover)

  Waterson, Nigel

  Shaw, Sir Giles (Pudsey)

  Watts, John

  Shephard, Rt Hon Gillian

  Wells, Bowen

  Shersby, Michael

  Wheeler, Rt Hon Sir John

  Sims, Roger

  Whitney, Ray

  Skeet, Sir Trevor

  Whittingdale, John

  Smith, Sir Dudley (Warwick)

  Widdecombe, Ann

  Soames, Nicholas

  Wiggin, Sir Jerry

  Speed, Sir Keith

  Willetts, David

  Spencer, Sir Derek

  Wilshire, David

  Spicer, Sir James (W Dorset)

  Winterton, Mrs Ann (Congleton)

  Spicer, Michael (S Worcs)

  Winterton, Nicholas (Macc'f'ld)

  Spink, Dr Robert

  Wolfson, Mark

  Spring, Richard

  Wood, Timothy

  Sproat, Iain

  Yeo, Tim

  Squire, Robin (Hornchurch)

  Young, Rt Hon Sir George

  Steen, Anthony

  Stephen, Michael

  Tellers for the Noes:

  Stern, Michael

  Mr. Robert G. Hughes and

  Stewart, Allan

  Mr. James Arbuthnot.

  Streeter, Gary

  Question accordingly negatived.

New Clause 6

  CHILD CARE VOUCHERS
  `.—(1) Where an employer supplies child care vouchers to an employee in qualifying circumstances and up to the qualifying limit such vouchers shall not be treated as emoluments for the purposes of section 131 of the Taxes Act 1988 or as benefits to which section 154 of the Taxes Act 1988 applies.
  (2) For the purposes of subsection (1) above the vouchers are supplied in qualifying circumstances if

  (a) the vouchers can be used only in paying for care for a child who falls within subsection (3) below and

  (b) the registration requirement is met

  (3) A child falls within this subsection if the child

  (a) is a child for whom the employee has parental responsibility

  (b) is resident with the employee or

  (c) is a child or stepchild of the employee and is maintained at the employee's expense

  (4) The registration requirement is that

  (a) the premises on which the care is provided are registered under section 1 of the Nurseries and Child-Minders Regulation Act 1948 or section 11 of the Children and Young Persons Act (Northern Ireland) 1968 or

  (b) a person providing the care is registered under section 71 of the Children Act 1989 with respect to the premises on which it is provided

  (5) For the purposes of subsection (1) above the qualifying limit is

  (a) in the case of each child who is under the age of six years and is not in full time education, £75 a week

  (b) in the case of each other child under the age of 16 years, £30 a week.

  (6) In this section, "care" and "parental responsibility" have the same meaning as in section 155A of the Taxes Act 1988.'.—[Mr. Beith.]
  Brought up, and read the First time.
  Motion made, and Question put, That the clause be read a Second time:—
  The House divided: Ayes 22, Noes 293.

  Division No. 214]

  [8.29 pm

  AYES

  Alton, David

  Lynne, Ms Liz

  Beith, Rt Hon A. J.

  Maddock, Mrs Diana

  Campbell, Menzies (Fife NE)

  Michie, Mrs Ray (Argyll Bute)

  Carlile, Alexander (Montgomry)

  Steel, Rt Hon Sir David

  Connarty, Michael

  Taylor, Matthew (Truro)

  Dafis, Cynog

  Tyler, Paul

  Ewing, Mrs Margaret

  Wallace, James

  Foster, Don (Bath)

  Welsh, Andrew

  Harvey, Nick

  Wigley, Dafydd

  Johnston, Sir Russell

  Jones, Ieuan Wyn (Ynys Môn)

  Tellers for the Ayes:

  Kennedy, Charles (Ross,C&S)

  Mr. Archy Kirkwood and

  Llwyd, Elfyn

  Mr. Simon Hughes.

  NOES

  Ainsworth, Peter (East Surrey)

  Cash, William

  Aitken, Jonathan

  Chapman, Sydney

  Alexander, Richard

  Churchill, Mr

  Alison, Rt Hon Michael (Selby)

  Clappison, James

  Allason, Rupert (Torbay)

  Clark, Dr Michael (Rochford)

  Amess, David

  Clifton-Brown, Geoffrey

  Arbuthnot, James

  Coe, Sebastian

  Arnold, Jacques (Gravesham)

  Colvin, Michael

  Arnold, Sir Thomas (Hazel Grv)

  Congdon, David

  Ashby, David

  Conway, Derek

  Aspinwall, Jack

  Coombs, Anthony (Wyre For'st)

  Atkins, Robert

  Coombs, Simon (Swindon)

  Atkinson, David (Bour'mouth E)

  Cope, Rt Hon Sir John

  Atkinson, Peter (Hexham)

  Cormack, Patrick

  Baker, Rt Hon K. (Mole Valley)

  Couchman, James

  Baker, Nicholas (Dorset North)

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

  Baldry, Tony

  Curry, David (Skipton & Ripon)

  Banks, Matthew (Southport)

  Davies, Quentin (Stamford)

  Banks, Robert (Harrogate)

  Davis, David (Boothferry)

  Bates, Michael

  Day, Stephen

  Batiste, Spencer

  Deva, Nirj Joseph

  Bellingham, Henry

  Devlin, Tim

  Bendall, Vivian

  Dickens, Geoffrey

  Beresford, Sir Paul

  Dicks, Terry

  Biffen, Rt Hon John

  Dorrell, Stephen

  Blackburn, Dr John G.

  Douglas-Hamilton, Lord James

  Body, Sir Richard

  Dover, Den

  Bonsor, Sir Nicholas

  Duncan, Alan

  Booth, Hartley

  Duncan-Smith, Iain

  Boswell, Tim

  Dunn, Bob

  Bottomley, Peter (Eltham)

  Durant, Sir Anthony

  Bottomley, Rt Hon Virginia

  Dykes, Hugh

  Bowden, Andrew

  Elletson, Harold

  Bowis, John

  Emery, Rt Hon Sir Peter

  Boyson, Rt Hon Sir Rhodes

  Evans, David (Welwyn Hatfield)

  Brandreth, Gyles

  Evans, Jonathan (Brecon)

  Brazier, Julian

  Evans, Nigel (Ribble Valley)

  Bright, Graham

  Evans, Roger (Monmouth)

  Brooke, Rt Hon Peter

  Evennett, David

  Browning, Mrs. Angela

  Faber, David

  Bruce, Ian (S Dorset)

  Fabricant, Michael

  Budgen, Nicholas

  Fairbairn, Sir Nicholas

  Burns, Simon

  Fenner, Dame Peggy

  Butler, Peter

  Field, Barry (Isle of Wight)

  Carlisle, John (Luton North)

  Fishburn, Dudley

  Carlisle, Kenneth (Lincoln)

  Forman, Nigel

  Carrington, Matthew

  Forth, Eric

  Carttiss, Michael

  Fowler, Rt Hon Sir Norman

  821

  Fox, Dr Liam (Woodspring)

  Malone, Gerald

  Fox, Sir Marcus (Shipley)

  Mans, Keith

  Freeman, Rt Hon Roger

  Marland, Paul

  French, Douglas

  Marlow, Tony

  Fry, Sir Peter

  Marshall, John (Hendon S)

  Gale, Roger

  Marshall, Sir Michael (Arundel)

  Gallie, Phil

  Martin, David (Portsmouth S)

  Gardiner, Sir George

  Mates, Michael

  Garel-Jones, Rt Hon Tristan

  Mawhinney, Rt Hon Dr Brian

  Garnier, Edward

  Merchant, Piers

  Gill, Christopher

  Mills, Iain

  Gillan, Cheryl

  Mitchell, Andrew (Gedling)

  Goodson-Wickes, Dr Charles

  Mitchell, Sir David (Hants NW)

  Gorst, John

  Moate, Sir Roger

  Grant, Sir A. (Cambs SW)

  Monro, Sir Hector

  Greenway, Harry (Ealing N)

  Moss, Malcolm

  Greenway, John (Ryedale)

  Needham, Richard

  Griffiths, Peter (Portsmouth, N)

  Nelson, Anthony

  Hague, William

  Neubert, Sir Michael

  Hamilton, Rt Hon Sir Archie

  Newton, Rt Hon Tony

  Hamilton, Neil (Tatton)

  Nicholls, Patrick

  Hampson, Dr Keith

  Nicholson, David (Taunton)

  Hanley, Jeremy

  Nicholson, Emma (Devon West)

  Hannam, Sir John

  Norris, Steve

  Hargreaves, Andrew

  Onslow, Rt Hon Sir Cranley

  Haselhurst, Alan

  Oppenheim, Phillip

  Hawkins, Nick

  Ottaway, Richard

  Hawksley, Warren

  Page, Richard

  Hayes, Jerry

  Paice, James

  Heald, Oliver

  Patten, Rt Hon John

  Hendry, Charles

  Pawsey, James

  Hicks, Robert

  Peacock, Mrs Elizabeth

  Higgins, Rt Hon Sir Terence L.

  Pickles, Eric

  Hill, James (Southampton Test)

  Porter, Barry (Wirral S)

  Hogg, Rt Hon Douglas (G'tham)

  Porter, David (Waveney)

  Horam, John

  Portillo, Rt Hon Michael

  Hordern, Rt Hon Sir Peter

  Rathbone, Tim

  Howard, Rt Hon Michael

  Redwood, Rt Hon John

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

  Renton, Rt Hon Tim

  Howell, Sir Ralph (N Norfolk)

  Richards, Rod

  Hughes Robert G. (Harrow W)

  Rifkind, Rt Hon. Malcolm

  Hunt, Rt Hon David (Wirral W)

  Robathan, Andrew

  Hunt, Sir John (Ravensbourne)

  Roberts, Rt Hon Sir Wyn

  Hunter, Andrew

  Robertson, Raymond (Ab'd'n S)

  Hurd, Rt Hon Douglas

  Robinson, Mark (Somerton)

  Jack, Michael

  Roe, Mrs Marion (Broxbourne)

  Jackson, Robert (Wantage)

  Ross, William (E Londonderry)

  Jenkin, Bernard

  Rowe, Andrew (Mid Kent)

  Jessel, Toby

  Rumbold, Rt Hon Dame Angela

  Johnson Smith, Sir Geoffrey

  Ryder, Rt Hon Richard

  Jones, Gwilym (Cardiff N)

  Sackville, Tom

  Jones, Robert B. (W Hertfdshr)

  Sainsbury, Rt Hon Tim

  Kellett-Bowman, Dame Elaine

  Scott, Rt Hon Nicholas

  Key, Robert

  Shaw, David (Dover)

  Kilfedder, Sir James

  Shaw, Sir Giles (Pudsey)

  King, Rt Hon Tom

  Shephard, Rt Hon Gillian

  Kirkhope, Timothy

  Shersby, Michael

  Knapman, Roger

  Sims, Roger

  Knight, Mrs Angela (Erewash)

  Skeet, Sir Trevor

  Knight, Greg (Derby N)

  Smith, Sir Dudley (Warwick)

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

  Soames, Nicholas

  Kynoch, George (Kincardine)

  Speed, Sir Keith

  Lait, Mrs Jacqui

  Spencer, Sir Derek

  Lang, Rt Hon Ian

  Spicer, Sir James (W Dorset)

  Lawrence, Sir Ivan

  Spicer, Michael (S Worcs)

  Legg, Barry

  Spink, Dr Robert

  Leigh, Edward

  Spring, Richard

  Lennox-Boyd, Mark

  Sproat, Iain

  Lester, Jim (Broxtowe)

  Squire, Robin (Hornchurch)

  Lidington, David

  Steen, Anthony

  Lightbown, David

  Stephen, Michael

  Lord, Michael

  Stern, Michael

  Luff, Peter

  Stewart, Allan

  Lyell, Rt Hon Sir Nicholas

  Streeter, Gary

  MacKay, Andrew

  Sweeney, Walter

  Maclean, David

  Sykes, John

  McLoughlin, Patrick

  Tapsell, Sir Peter

  McNair-Wilson, Sir Patrick

  Taylor, Ian (Esher)

  Madel, Sir David

  Taylor, John M. (Solihull)

  Maitland, Lady Olga

  Taylor, Sir Teddy (Southend, E)

  822

  Temple-Morris, Peter

  Waterson, Nigel

  Thomason, Roy

  Watts, John

  Thompson, Sir Donald (C'er V)

  Wells, Bowen

  Thompson, Patrick (Norwich N)

  Wheeler, Rt Hon Sir John

  Thornton, Sir Malcolm

  Whitney, Ray

  Thurnham, Peter

  Whittingdale, John

  Townend, John (Bridlington)

  Widdecombe, Ann

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

  Wiggin, Sir Jerry

  Tracey, Richard

  Willetts, David

  Tredinnick, David

  Wilshire, David

  Trend, Michael

  Winterton, Mrs Ann (Congleton)

  Trotter, Neville

  Winterton, Nicholas (Macc'f'ld)

  Twinn, Dr Ian

  Wolfson, Mark

  Vaughan, Sir Gerard

  Wood, Timothy

  Viggers, Peter

  Yeo, Tim

  Waldegrave, Rt Hon William

  Young, Rt Hon Sir George

  Walden, George

  Walker, Bill (N Tayside)

  Tellers for the Noes:

  Waller, Gary

  Mr. Irvine Patnick and

  Ward, John

  Mr. Michael Brown.

  Wardle, Charles (Bexhill)

  Question accordingly negatived.

New Clause 13

  JOINT VENTURES FOR INFRASTRUCTURE INVESTMENT BETWEEN PUBLIC AND PRIVATE SECTORS
  The following subsection shall be inserted after section 6(1) of the Income and Corporation Taxes Act 1988—
  "(1A) Where—

  (a) a company has been formed for the purpose of the construction, design and operation of roads, rail or other transportation projects, the provision of training or child care, or such other purposes as the Treasury may by regulation deem appropriate, and

  (b) not less than 10 per cent. of the issued share capital of that company is owned by the Government or other public sector body at the end of an accounting period, and

  (c) not less than 30 per cent. of the issued share capital of that company is owned by private

  bodies at the end of the same accounting period. then the liability of that company to corporate tax under this section for each accounting period shall be reduced by £100.".'.—[Mr. Darling.]
  Brought up, and read the First time.
  Mr. Alistair Darling: I beg to move, That the clause be read a Second time.
  Madam Deputy Speaker: With this it will be convenient to take new clause 18—Joint Ventures for Infrastructure Investment between Public and Private Sectors (No.2)—
  'The following section shall be inserted after section 6(1) of the Income and Corporation Taxes Act 1988—
  "Where—

  (a) a company has been formed for the purpose of the design, construction and operation of roads, rail or other transportation projects, the provision of training or child care, or such other purposes as the Treasury may by regulation deem appropriate, and

  (b) at the end of the period of concesssion the assets and activities of the company are to pass to the public sector,

  then the liability of that company to corporation tax under this section for each accounting period shall be reduced by £100.".'.
  Mr. Darling: The new clauses are technical in nature but they allow us to debate an important matter that is crucial to the future of the United Kingdom and the world economy. Both concern the need for more initiatives involving public and private sector capital.

  823
  The need to invest in Britain's infrastructure is obvious to most people, if not to the Government. At the last election, the Labour party was anxious to ensure that the public sector had private sector money available to it. My hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott), the shadow employment spokesman, spent much of the general election campaign emphasising the fact that we believed that it was necessary for British Rail to attract private sector money. At that time, he was roundly criticised by the Government, who suggested that such a solution to the problem was not acceptable and should be rejected. Yet immediately following the general election the Government adopted exactly the same policy, showing that yet again they followed Labour party policy in this area of industrial development.
  The bankrupt nature of the Government's approach during the past 15 years is best illustrated by what has happened with the channel tunnel link between London and the Kent coast. This summer, trains will travel through France at 185 mph. They will then travel through the tunnel at 85 mph. Then, and for the next 10 years, they will limp through Kent—a 75-mile bottleneck—at just 47 mph. The decision to build the channel tunnel was taken in 1986 and work began in December 1987. Yet Britain will probably not have a fast link between London and the Kent coast until 2004. Until we have that fast link there will not be the through link to many parts of England and to Scotland, all of which should benefit from the opening of the channel tunnel. I believe that that has happened because of the Government dogma which prevailed throughout the 1980s, and which we still see today, which says that only private sector money is appropriate for large infrastructure projects of this kind.
  We know that parts of the London underground system are more than 120 years old. Anyone who travels on any part of the London underground system—which, as a general rule, Ministers do not—will know that it is in desperate need of overhaul. Even when the Government recognise that action is necessary, there is delay. The Northern line is an example of that, to which I shall return shortly.
  The Heathrow express line, now a public-private sector partnership initiative, was planned 10 years ago. We have one of the world's major airports, if not the world's major airport; yet there is no efficient public transport link between it and London city centre. The Piccadilly line, which currently links the two, is an appalling service. I can bear personal testament to that, and it is no way to link a modern airport with a city centre. Yet after years of delay and argument the Heathrow express line will not be ready until 1997—and even when it is completed it will dump passengers at Paddington station with no direct link anywhere else.
  The crossrail project, which will link east and west London, has still to complete its parliamentary passage and we do not know when, if ever, the line will be completed.
  Leaving aside the argument whether the London docklands development was a good scheme, we had the absurd situation where it was completed but there was no infrastructure to enable people to get in or out of it. Until recently, the London river bus—another casualty of the recession—was by far the best way to docklands and other parts of London because the road and rail links were not efficient.
  We also know that one in six sewerage pipes in Britain is more than 100 years old.
  824
  Alongside all those projects which desperately need investment we have between 3 million and 4 million people who are unemployed and condemned to a second class existence. They are people who want to work. There is work to be done and there are people ready to do it. What we need to find—and what the Government should find—is a solution which brings the work that is needed to those who want to work. The kind of initiative highlighted by new clauses 13 and 18 would provide one possible solution. I emphasise that it is one solution because there are other possibilities.
  Clearly, projects totally financed by the public purse and those totally financed by the private purse are ways of tackling these problems, but I wish to concentrate on the solution that would be enabled by the new clauses—matching the need to invest with the available private sector finance if such finance is available. That is one reason why we published a consultative document entitled "Financing Infrastructure Investment" in February this year. We subsequently held a conference which was heavily over-subscribed and attended by industrialists and financiers, confirming our belief that the private sector wants to contribute and that the biggest single barrier to progress is Government dogma, on the one hand, and simple paralysis on the part of the Government on the other.
  8.45 pm
  I do not believe that there should be any ideological difficulty over the funding of such projects. For far too long, political ideology has been dominated, certainly on the Government side, by the issue of public financing. Throughout the 1980s, the Government held that the only spending worth undertaking was that undertaken by the private sector. If the private sector could not or would not do it, it was not worth doing. That is as daft as saying that the only way to finance public works is through the public sector.
  Partnerships between the public and private sectors are essential. They are used in many different parts of the world. Local authorities throughout Britain have been pioneering such developments. The Government should now embrace the concept in order to tackle the woeful lack of investment in public infrastructure. The negative, polarised attitude has to change. We need to bring about the structural changes which are needed if partnerships are to develop. Public money should be used in a way which maximises the benefit to the community, which includes public infrastructure. If public funds are applied and they in turn attract public funding, aggregate spending is increased, bringing both direct and indirect benefits.
  Our concept of public-private partnership is ambitious and expensive—[Interruption.] That was a mere slip of the tongue. Those who have been observing the debate so far will have noticed that our amendments are far from expensive, as the Financial Secretary has already seen. Our partnerships are ambitious and expansive. We see the scope for new partnerships not just in the provision of rail and infrastructure, but in inner-city and regional developments, training, housing and child care, as we discussed at some length in the previous debate.
  As a first step, the Government should draw up a list of their priority projects. That is what seems to me to separate the Labour and Conservative parties. The Conservative party has never yet drawn up a list of those projects that it considers to be major priorities. It is for the Government to

  825
  determine their infrastructure priorities and then to invite the private sector to participate—not the other way round. That simply has not happened. No doubt the Financial Secretary will tell us why.
  That is also the view of the private sector. It is not just the Labour party which is saying that the public sector should do this. The Royal Bank of Scotland has said:
  "The public sector takes an active role in identifying and promoting priority projects."
  John Laing—no particular friend of the Labour party—has said that it is essential for the Government to ensure that projects are drawn up so that
  "the private sector pursues projects at the top of the Government's shopping list."
  That has not happened so far and it should happen as a matter of urgency. Instead, in the past 15 years we have had a Government ideology which has maintained that only the private sector knows best. That view has been rejected by the private sector itself. Yet every Conservative Member in the House today has been a bag carrier of that failed Tory dogma in the past.
  Last September, the Chancellor decided that a new initiative was required. Having announced that because he was born in the midlands he had an eye to industrial strategy, he produced a list of 78 projects that he claimed demonstrated the Government's commitment to public-private sector projects. They ranged from the channel tunnel link at one extreme to the car park behind Eastbourne hospital at the other. When he addressed the Confederation of British Industry last November, he said in his typical style:
  "You could say it is about privatising the process of capital investment in our key public services."
  As usual, he missed the point. The Government must determine priorities.
  With other projects, the risks are too great to be borne by the private sector alone. Where such projects are to be encouraged, it must be the Government's responsibility to take a lead and to share the risk appropriately. Many projects, such as the west coast railway, have a strategic importance but are not necessarily seen by the private sector as an attractive commercial proposition, or at least not in their entirety. In that instance, no private firm would contemplate the line's wholesale upgrading; but in partnership with the public sector, certain parts of the project might be attractive to a private firm and it might be willing to help fund them.
  Mr. Beith: I agree with the hon. Gentleman, but surely his earlier slip of the tongue was right. Some projects are expensive, but they are justified and cost-effective. The crunch is whether the Government are prepared either to put up the money or to underwrite the risk of some of the projects that he described. We shall not get away with £100 concessions to companies, as the hon. Gentleman's amendment proposes. It will require some commitment of public money to achieve the hon. Gentleman's objectives.
  Mr. Darling: The right hon. Gentleman makes a fair point. Of course the sums at stake are substantial, particularly in respect of the channel tunnel link and the upgrading of the west coast main line. Ultimately, the public will fund those projects with the public purse through taxation, to service the loan. If they are funded jointly by the private and public sectors, the money will come partly from taxation and partly from fees, pricing or some other means of paying for them.
  826
  Earlier, before I was diverted by the Financial Secretary, I made the point that if public money is applied in that way and brings in private money, the aggregate investment is increased. I wholeheartedly accept the right hon. Gentleman's proposition that if the British economy is ever to get out of the rut that it is in, infrastructure investment in key projects will be needed. The Singapore Government, for example, are building both a physical highway and a telecommunications superhighway through the spine of that country. That is one example of a country prepared to embark on a major investment led by the public sector but subject to a substantial private sector commitment. That will bring economic spin-off developments which will provide employment for people who will then contribute taxes and national insurance or whatever is the appropriate system in that country.
  I fully accept that such developments do not short-circuit the fact that if the public sector is involved it creates a public sector borrowing requirement commitment. We are debating ways of introducing private and public sector money to allow investment in infrastructure projects which have been neglected for many years.
  Precisely that argument led me to emphasise the need for a channel tunnel link. It is not a narrow matter of a link between London and the Kent coast. The entire railway infrastructure to allow British companies to export to the rest of the European Union depends on a link between all parts of Britain, the tunnel and mainland Europe. That will not be possible in the absence of a fast link between London and the Kent coast, which is unlikely to exist for another 10 years
  The west coast main line was one of the most modern railways when the Government came to power in 1979, but it is now desperately in need of investment and its managers warn that it is at risk of catastrophic failure. All that the Government have done is to put obstacles in the way. Instead of the private sector or the Government dealing with one operator—British Rail—the network is run by more than 20 operators, all with their own goals and priorities. We know the difficulties that that has caused. Strathclyde passenger transport executive, which operates a major commuter network in the west of Scotland which is vital to communications there, is finding it difficult to maintain its commitment with ScotRail, which operates the Scottish rail network, because of uncertainty about the effects of privatisation. It is tragic when an integrated transport system is put at peril because of Government dogma.
  Earlier I mentioned the Northern line of the London underground—a classic case of the inflexibility of Government rules. Their policy has repeatedly delayed the investment that anyone who uses that line knows is desperately needed. The manufacturers of the new trains are happy to enter into an agreement to lease and to maintain them, which is important, because problems will inevitably arise with new rolling stock and they will have to be overcome. The Government want the manufacturers to go one step further and share the revenue risk. The people who build the trains freely admit that they do not have operational expertise. They cannot control the revenue, as they have no control over fare structure or marketing.
  I do not argue that leasing and maintenance is the solution that we would go for in every case—there may be occasions when revenue risk is entirely appropriate—but the Government must devise some mechanism which

  827
  offers the flexibility required. If the Government want a project badly enough, they should accept a greater degree of risk—perhaps ultimately by undertaking the entire project themselves, but perhaps something less than that. If the Government do not give a project particularly high priority, they would be right to ask the private sector to take a far greater share of the risk. At present, we have an extremely inflexible system, the result of which is that hundreds of thousands of Northern line users will be inconvenienced for a long time to come. That does not seem to make any sense. Does the Minister wish to intervene?
  Mr. Dorrell: I am grateful to the hon. Lady—[Laughter.] I beg the hon. Gentleman's pardon. He alleged that there is a blockage because the Government require the operators to take a risk on revenues, but that is not the position. The Government published in the Official Journal the terms of a competition to determine which supplier would make the best offer in terms of replacing Northern line rolling stock. Is the hon. Gentleman arguing that that step is otiose?
  Mr. Darling: Earlier the Financial Secretary was confused about the age of his son. Now he appears confused about my sex. I wonder if he is also confused about Government policy on the public and private sectors.
  I have no objection to competitions or to tendering. The Government have said that they want the operators of the trains to accept a revenue risk, but I entirely see the operators' point of view: they do not know about the business of running trains. If they have an interest in only one particular line and not in others, it is difficult to see how they can reasonably be expected to take such a risk unless they are given some say in the fare structure and in marketing, so as to protect the risk that they are running.
  Clearly, the Government must be flexible about any strategy for attracting public-private sector initiatives. If a bridge is to be built across a river, the Government may adopt a view different from the one that they would take if it was just a case of providing rolling stock for one section of one line. The Government must be open about these matters and must be prepared to show flexibility.
  I would never argue that the Government should not press the private sector to make as much of a contribution to the risks as it possibly can. I know that those behind the Jubilee line extension wanted the Government to take the lion's share of the risks. I accept that the Government were right in that case to stick to their guns and ensure that the private sector took its fair share of the risk. No one should be dogmatic about these issues; it is just a case of what is right for the circumstances.
  Mr. Dorrell: I entirely agree with the hon. Gentleman about the need for flexibility—it is an important point. He was arguing earlier that an unnecessary delay was being built into the Northern line acquisition by the Government's stance. The delay, if it be delay, is caused by the Government's insistence that potential suppliers enter into a competition. I want to establish whether the hon. Gentleman accepts that competition should be the next stage. If he does, he cannot argue that there is a delay.
  9 pm
  Mr. Darling: There is a delay by definition-because the Government have decided to hold a competition. I am glad to see that that is common ground. This is not just my
  828
  complaint: many Members representing London constituencies, together with the Evening Standard and numerous members of the public, all know about the misery of using the Northern line every day—and they consider that the Government have caused the delay.
  To say that the Government must be prepared to show flexibility is not to say that the private sector should not be pressed as hard as possible when it is right that it should assume a far greater risk. In certain other projects, such as the Northern line, it is important that the Government strike a realistic balance.
  Mr. Brian Wilson: Does my hon. Friend agree that, whatever the Minister says, there has been an inordinate delay in getting to the point of holding the competition? The reason for that has been the Treasury's obsession with the idea that risk must take the form of operating risk—as well as maintenance risk, to which the operators are prepared to agree. Does my hon. Friend further agree that if the Minister is saying categorically that the Treasury is no longer insisting on operating risk as an element of the contract, that will be good news for everyone?
  Mr. Darling: I do not believe that the Minister was saying that—indeed, he seems to be shaking his head. I think that we can take it that the Government are indeed insisting that operating risk should be part of the package.
  Mr. Dorrell: It is one of the issues that will determine the result of the competition.
  Mr. Darling: My hon. Friend the Member for Cunninghame, North (Mr. Wilson) makes his own point, and now the Minister appears to accept it. There has been an inordinate delay, but this is only one of many projects in which there has been delay, caused partly by the fact that the Government are not clear in their collective mind about what their approach should be.
  There seems to be some confusion about where the Government stand. I appreciate that they have travelled a long philosophical road. Five years ago, under the previous regime, such talk would not have been allowed. At that time, the idea of a public-private sector partnership was not to be tolerated: the private sector knew best—that was all there was to it. We have had this list of 78 projects, of which 43 are mere proposals and, as such, cannot be relied on as part of a comprehensive Government strategy.
  We should recall that these projects were announced by the Chancellor on a wet night in Glasgow last September. Perhaps they have the same status as the Chancellor says the Tory promises of tax reductions had when it came to the last Budget—it is just that one list was delivered on a wet night in Glasgow and the other in Dudley. They cannot be relied on. Two of the projects are, in any event, for car parks—highly desirable, no doubt, but scarcely the stuff of economic regeneration. They cannot be said to be priorities, but perhaps we shall hear more about them this evening.
  The Government will say that it is unfair of me to blame them for everything that has gone wrong, and that the private sector has also made mistakes in the past. Others would argue that this business ought to be left to the private sector and that the public sector has no role to play. I recognise that there have been failures on the part of the private sector to invest in areas which fall within its own domain.

  829
  These matters are perhaps outwith the scope of this debate, but the Government can take a lead. They set the tone and the economic framework. For example, they determine the takeover policy which has led to companies being forced to pay out heavy dividends to fight off takeovers—dividends which could have been deployed for investment. The Government should have a view on corporate governance, which can have a heavy influence on the culture of investment.
  Institutional investors also have a lot to answer for. Those who saw last night's BBC "Panorama" programme must have despaired on hearing reports that banks, pension funds and other institutions are again investing heavily in property, despite two spectacular collapses in the past 20 years. It is not just a private matter: money invested in property is, by definition, not available for other investment, and property collapses which leave banks badly burnt are paid for by the public through increasing bank charges. It is high time the whole culture of investment in this country and the behaviour of some people in the City was questioned—not just by members of the public, but by the Government. Perhaps the Financial Secretary, who has hinted in a series of speeches that he is concerned about such matters, will say something about them today.
  We need projects which can be implemented quickly, as well as projects which can enhance long-term efficiency and competitiveness. Projects should provide an acceptable rate of return, taking account of employment effects as well as straight cash terms. The Government have encouraged a culture in which high dividend payouts have taken priority over research and capital investment, which has seriously damaged our competitiveness. For that reason, it is for the Government now to show a lead in promoting public-private sector initiatives that will begin to redress some of the balance. We understand that only now, after 15 years, are the Government examining companies' behaviour with regard to dividends; only now has the Financial Secretary started to take an interest in the matter from the Government's point of view.
  What about privatisation? No doubt we shall be hearing something about that. On average, about 20 per cent. of after-tax profits are paid out in dividends, but nearly 45 per cent. of the after-tax profits of the privatised utilities—water, electricity and gas—have been paid out in dividends. That is more than twice the figure for other companies. Yet we are asked to believe that privatisation leads to the best investment decisions. We know that that is not the case. We cannot leave such important matters, particularly matters of infrastructure, to private sector judgment alone. There are areas in which the private sector can operate best, but in many others there is a public interest—a public interest that has been neglected over the past 15 years. So far, we have seen no evidence that the Government are prepared to tackle seriously and reverse the problems that have occurred in the 15 years during which they have been in power.
  There are other problems to be addressed. There is, for instance, the question of risk. As I have said, a flexible approach is needed. Risk does not come only in cash terms; there is the question of the Government's acceptance of planning and legislative risks, for instance. There is also the question of the public sector borrowing requirement, as
  830
  I pointed out in response to an intervention from the right hon. Member for Berwick-upon-Tweed (Mr. Beith). The PSBR will not go away, but I believe that we need more transparency. The Government should separate their accounts to show their trading activities and investment borrowing as opposed to the borrowing that they undertake to maintain their core activities. We should bear in mind Sir Leo Pliatzky's observation that the PSBR is merely what the Treasury says it is. A far wider debate is needed about the definition of the PSBR. We accept that it will not go away, but people should be able to see what the Government are borrowing for.
  The cost of borrowing itself must also be considered. The rate of return demanded by the Government has been unreasonably high in some cases—higher even than that in the private sector. That has stopped much rail investment, for example. Then there is the question of the status of public bodies such as the Post Office which find it very difficult to operate in the market because the Government will not let them do so—although many believe that the Post Office could compete very adequately if it were freed of the plundering by the Treasury each and every year.
  It is significant that many local authorities—particularly Labour authorities, I am glad to say—have been at the forefront of imaginative development in metro schemes and various public sector developments. That should be encouraged. The whole issue of the public-private sector initiative must be part of an overall strategy for manufacturing investment and economic development. Yet we hear nothing from the Government. Such developments
  are happening all over the world—in the far east, in Europe and in the United States—yet in this country we have seen very little. We see merely continuing decay and decline.
  The Government say that there is no alternative to their policies—just as they said that there was no alternative in the last 15 years which saw Britain's gradual decline in economic performance. I accept that there are problems, but these problems are there to be tackled and not used as an excuse for doing nothing. The Government need to broker agreements where agreements need to be reached. There is a willing private sector, there are people who want work and there is work that needs to be done. Britain should not be condemned to a second-class economic existence because of the triumph of Government dogma over common sense.
  Mr. Beith: During the period of grim recession that we have just experienced the Government, along with the private sector, could have productively engaged in promoting infrastructure investment. In doing so, they would have allowed contracts to be placed at a time when the private sector was in a particularly weak position and when excellent prices could have been obtained. That would have created employment, thereby increasing the return from tax revenue and decreasing expenditure on social security benefits. At the end of the day, there would have been assets that we need desperately an improved transport system and improvements in housing and other aspects of public investment.
  The fact that this has not occurred will count very heavily against us. If there is an economic recovery, there will come a point when it will be difficult for the Government to promote more investment and activity in this area because the private sector may be quite active elsewhere and engaging in such investment could generate more inflation.

  831
  But the gaps will still be there. The deficiencies in the transport system will remain. They will produce bottlenecks which will create further problems, such as inflation, in particular, because of scarce capacity. People will have difficulty getting to work—a problem which is particularly evident in London where the transport system is not equal to the task of getting people to work. Business faces huge losses because of that inefficiency.
  There will be problems not just in London, but in other parts of the country as well. The Government have missed a great opportunity and, in so doing, have made it a great deal more difficult for us to succeed and to be competitive in the future.
  The opportunity has been missed partly for the reasons of dogma which have been mentioned already in the course of the debate. But let us get one thing clear: there is no free lunch; the kind of investment that we are talking about will cost the public sector some money. Partnership with the private sector can reduce the total amount of public sector commitment as well as bring other advantages. Private sector project management and private sector operation of activities can, in many cases, bring benefits and qualities which are sometimes absent from the public sector.
  But the public purse will have to provide certain elements, or the projects would have gone ahead long ago. As a speculative investment, the private sector would have built railways and done other work for which there was a prospect of a reasonable return—particularly if economic conditions had been better managed than they have been in the past few years. But we are talking about areas where the risk is too great, where the return is too uncertain, or where, by the very nature of the scheme, there is not the means of securing the return which the private sector requires.
  So we need a contribution by the public sector in the form of money up front or in the bearing of risk. Either way, the Treasury believes that it should appear on the public sector borrowing requirement. I was pleased to hear the hon. Member for Edinburgh (Mr. Darling) accept that as a fact of life; it is no use pretending otherwise The logical conclusion is to say, "Right, we may well be justified in adding to the public sector borrowing requirement in that way because by doing so we improve public investment, we improve our competitiveness for the future and we ensure that, in some respect, we can lower future public borrowing because we have an efficient and competitive economy".
  It is extraordinary that, as a result of our not having a public sector balance sheet, we have this curious ideological argument. Just like any company, we should make a regular assessment of our community assets. The lack of a public sector balance sheet puts all the emphasis on revenue accounting. A public sector balance sheet would show where our assets were declining and where we were not renewing them and would set in context the debate about the PSBR.
  9.15 pm
  As I said, we must recognise that there has to be a contribution from the public sector to get some of these projects under way. The hon. Member for Edinburgh, Central said that the new clause was technical, and indeed it is—to any eligible company, it would mean only £100 relief from corporation tax. The Labour party's care not to make any public spending pledges could scarcely be clearer. I take it that the new clause was a device to secure a debate, but there is an important point underlying it.
  832
  Labour and Government Front Benchers are trying to escape the reality. The Government are trying to pretend that a great many public and private sector co-operative ventures are about to appear. The fact that they have not done so year after year, despite successive changes of policy by Chancellors, supposedly to make it easier, makes it clear that the Government are not facing reality. As for the Labour party, it refuses to admit that such projects cost money and that we shall have to fork out some public money to get them under way. I should expect the Labour party to argue that not only do they cost money but that it is money well spent and a reasonable expenditure. I agree with all that the hon. Member for Edinburgh, Central said about the desirability of the projects in question and their long-term cost-effectiveness.
  The Government should come clean and admit that their efforts thus far to achieve public-private sector partnership have been woefully unsuccessful. If that were not so, there would not, in almost every Budget and in almost every autumn statement, have been another Government commitment to make new changes to move the culture so that the projects were easier to mount. Every year, we have questioned Ministers and civil servants in Committee about what they were going to do next and what other changes they were going to make, but we get nowhere because the Government will not face the fact that there has to be a significant contribution in the form of funds up front or guarantees to enable some of the projects to go ahead. For their part, the Opposition need to recognise that the projects involve justified commitment of public resources because they will make our economy much more efficient in the future.
  There is so much agreement on the general desirability of some of these projects and such wide acceptance of the principle of partnership between the public and private sectors that it is extraordinary that we should still have to argue about it and that we should be making so little progress. I therefore call on the Government to make it clear that the projects that we are debating are necessary and important and will justify a commitment of public resources.
  Public sector borrowing is not all bad. Public sector borrowing that is designed to create assets for the future can be fully justified if we can show a return on it in the future. In their understandable attempt to cope with the borrowing that has resulted from recession and from what I would describe as the mismanagement of recent years, the Government should not throw out the baby with the bath water. They must not convince their supporters, let alone the public in general, that it is always wrong for the public sector to borrow. It is not wrong if we are creating assets that will make our economy more efficient in the future.
  There is a long list of such projects and there is considerable private sector interest in getting involved in them, but we cannot escape the need for a degree of public sector commitment if they are to go ahead. So far, the Government's attempts to promote public and private sector co-operation have not been equal to the task. The Ryrie rules, which originally covered this matter, have been relaxed at least three times in my recollection without any noticeable effect on projects coming to fruition. Successive Chancellors have said what they were going to do, but still too little has been done. Let us proceed—these projects are needed and they will make our economy more successful in the future.
  Mr. Nicholas Winterton: I rise to speak because I have been fascinated by the contributions to the debate so far. I have immense sympathy with the views expressed by the Opposition Front-Bench spokesman and by the right hon. Member for Berwick-upon-Tweed (Mr. Beith)—except for his reference to what he called the Government's "mismanagement" over the past 15 years. I suspect that in a quiet moment, and perhaps only privately to me and not on the Floor of the House, the right hon. Gentleman would confess that what has happened over the past 15 years would probably have happened whatever Government had been in power. [HON. MEMBERS: "No."]
  I say to the right hon. Gentleman and to the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) that they have only to look back at what has happened in the past 50 years, since the war. Because of the damp hand of the Treasury, which is the real problem, Governments have not made the investment either in public infrastructure or in private industry which the country required. As the right hon. Member for Ashton-under-Lyne knows only too well, such investment has been made in the countries that are our major competitors—in Japan, Germany and even France.
  We should look just across the channel at the huge infrastructure that has been put into the channel tunnel project. We should consider the huge investment that the French, including their Government, have made on the other side of the tunnel at Calais and Sangatte, and in the rail infrastructure right the way through to Paris and elsewhere. I believe that this country should follow that example.
  It is a pity that debates of this nature are not held more frequently, and on occasions other than debates on amendments or new clauses when the Finance Bill is on Report. If the House debated more seriously and legislated less frequently we should get a better answer at the end of the day. I am sure that the right hon. Members for Berwick-upon-Tweed and for Ashton-under-Lyne share my view that if all-party committees of the House considered proposed legislation—not least on joint ventures between the public and private sectors for infrastructure investment—the legislation that ultimately came before the House would have considerable cross-party support, and we should be able to counter the damp hand of the Treasury, which seems to bring to a halt in one way or another investment in both the public and the private sectors.
  There is no doubt that the Government will never be able to find purely from public resources the means to fund, finance and resource the infrastructure projects. As the hon. Member for Edinburgh, Central (Mr. Darling), who led for the Opposition, and the right hon. Member for Berwick-upon-Tweed both said, we need those infrastructure projects because they are an investment for the future which will provide medium and long-term returns for the country.
  We shall never be in a position to compete, especially in manufacturing, unless we have the infrastructure in the United Kingdom that will provide the best way for British industry to connect with the continent. Is it not crazy that the tunnel is about to open, yet British Rail does not have the infrastructure to enable the north-west—and, indeed, the north-east, but I am especially concerned with the north-west, because it is my region—to link up with the tunnel? That would enable us to channel immense investment and immense amounts of goods and manufacturing production towards the continent.
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  I hope that the Minister who responds to the debate will say that proposals such as those of the official Opposition and the Liberal Democrat party will not fall on deaf ears. I hope that he will realise that there are Conservative Members who are sick and tired of the Government's finding excuses not to advance resources for vital infrastructure projects. If they do not provide the actual resources for those projects, they should provide guarantees which would make it attractive and possible for the private sector to come forward with its expertise and its funds to make those projects possible.
  The Government are currently toying with the idea of privatising the Post Office. What they do not say very often is that the Post Office in Britain is the most profitable, effective and efficient post office in the world. All that the Post Office needs is to be released from the restrictions under which it is operating at the present time. We will have to let the Post Office loose from those restrictions, or the Dutch or the Germans, for instance, will come into the country and cream off the corporate business of our Post Office to the detriment of the Post Office, to the detriment of employment in the country and to the detriment of the country as a whole. With the relaxation of restrictions on our Post Office, I believe that it will be able not only to continue to provide a universal service to all parts of the country, but will be able to make technological advances in Britain and look abroad for additional business. It requires action from Government and action from the Treasury.
  The Government are concerned about public expenditure, but, as the hon. Member for Edinburgh, Central said, we must separate the types of public expenditure. For instance, we must separate the core activities of government, to use the phrase of the hon. Member for Edinburgh, Central, from that expenditure which would be an investment in the future, which could include investment in some of the public infrastructure projects to which the hon. Member for Edinburgh, Central and the right hon. Member for Berwick-upon-Tweed referred. It is stupid for the Government to pile up huge, additional expenditure for themselves by way of social security and other benefits when, by some modest investment, we could get people back to work, thereby reducing unemployment and reducing the pressure on the social security benefit budget.
  I say that to my hon. Friend the Financial Secretary because I know that he has a very successful business background. I am sad because he has so far failed to manage to persuade the Treasury mandarins to do things that he would practise as a private business man. It is to my mind crazy that the present Government, who are supposed to represent business and private enterprise, so clearly fail to do just that through their policies. How would it be wrong for the Government to create the right environment in which those major projects could go ahead, either by providing a guarantee or by providing some climate in which it would be worth the private sector taking the risk and making the investment?
  My hon. Friend knows, as do Labour Members, that in the House I have sought to speak for manufacturing industry for all the 23 years that I have represented my constituency. Just over a year ago, we formed the all-party manufacturing and construction industries alliance, which has had a little influence, not only in the House, but, dare I say it, on organisations outside the House such as the CBI. Sadly, from time to time, the CBI does not positively

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  enough encourage the Government to take the right decision in the area of joint ventures by the public and private sector. That is the way in which to proceed.
  I share some of the views that I think will be expressed by Opposition Members. I do not think that privatisation in itself is the solution to all the problems of the country. We are able to have highly efficient public organisations. I think that I was one of only two Conservatives who voted against water privatisation. I do not regret that decision and I believe that I have been proved right. What is the point of exchanging a public monopoly for a private monopoly, especially when it trebles the salaries of top executives and screws industry and the private house owner when everyone is going through a deep recession, because it is able to do so from its position of monopoly?
  9.30 pm
  I am not in favour of privatising the Post Office, but I am in favour of putting in, as we have, the best management and releasing it from the Treasury shackles within which it now operates. I hope that my hon. Friend the Financial Secretary will confess that the Post Office is making a substantial contribution to the Government's budget each and every year. Indeed, that contribution will increase this year over last year. Yet the Post Office is unable to compete in the free market.
  I accept that there are not many Conservative Members in their places. I am ashamed that so many of my right hon. and hon. Friends are not present because this is a critical debate about our country's future.
  The involvement of the private sector with the public sector in major construction projects could do much for the advantage of industry and for employment. It could do a great deal also to reduce the huge social security and benefit budget, which has caused many of the problems that the Government are now facing. If only—dare I say this where the Government and the Treasury are concerned—it were realised that we should take a gamble. The Government and the Treasury should, with the expert advice that is available to them, be able to identify many infrastructure projects upon which public money should be spent, and spent now. With the provision of guarantees we could make even more private money available to fund infrastructure projects.
  I ask my hon. Friend the Financial Secretary why the north Birmingham relief motorway has not already been constructed. It is vital. The hon. Member for Liverpool, Broadgreen (Mrs. Kennedy) knows the M6 well as she uses it to travel down from her constituency to London. I know it, too, because I use it when I travel down to London from Macclesfield. It is crazy that the relief road, which could have been partially funded by the private sector, has not been constructed and put into operation, thereby reducing the tremendous road and other problems that are faced on the M6.
  Ridiculous excuses have been trotted out by the Department of Transport and Treasury Ministers. I am sick and tired of them. We want action from the Government. I say to my hon. Friend the Financial Secretary, and through him to some of the highly paid and well-pensioned mandarins who sit in the Treasury, that it is about time they got out of London and started to use some of our infrastructure so that they come to realise how inadequate it is.
  It would not cause a run on the pound if we were to invest in solid, sensible and well-assessed infrastructure
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  projects involving both the public and private sectors. The Government would get cross-party support. Indeed, there would be support in the City. The trouble is that the City pays itself too much money and does not realise what is happening at the grass roots.
  As the hon. Member for Edinburgh, South said from the Opposition Front Bench, too much money is being invested again in property. Why is it that people are investing in property? The answer is that in the past it has provided a much better return than investment in other sectors. But it has not created any real jobs in the long term. As a result, manufacturing industry has not been able to provide a return by way of dividends to its shareholders and has suffered a reduction in its investment.
  We must invest in jobs. What is the most competent area of our economic activity in which we shall get that process going? The answer is the construction industry. What does the construction industry do? It carries out vital infrastructure projects. If we were to give the construction industry a fillip, it would undertake more work, provide more jobs in the United Kingdom and provide itself with a good base for undertaking the fantastic projects that are available to construction companies throughout the world. We have a fine history of carrying out some of the most successful infrastructure and civil engineering projects overseas.
  Sadly, I shall be voting with the Government—[Interruption.] To be fair, the failings of new clause 13 have already been pointed out admirably by the right hon. Member for Berwick-upon-Tweed. I am sure that the hon. Member for Edinburgh, Central realises that the new clause was tabled to achieve a debate on Report of the Finance Bill. It has enabled me—I thank the hon. Gentleman for this—to say to my party in the House and publicly what I often say privately: let us get on with it, Minister. There is a hell of a lot to be gained. You can take a lead here. You have a business background, unlike many of your colleagues in the Treasury.
  Madam Deputy Speaker: Order. The hon. Gentleman has forgotten that he should be addressing the Chair.
  Mr. Winterton: Madam Deputy Speaker, I could never forget that. We have seldom had a more colourful Deputy Speaker. You are always in my eye, especially today because of the bright colours that you are wearing. [Interruption.] Madam Speaker, will I have to repeat the compliments that I have passed to Madam Deputy Speaker, who is just vacating the Chair?
  My final comments are directed at my hon. Friend the Financial Secretary. I ask him whether the Treasury can give much more serious consideration to the sort of concept that is highlighted in new clause 13. I pray that he will understand the sincerity with which I have spoken. I come from a business background. There are many Tory Members who would like to see a better understanding by the Treasury of the important role that such infrastructure projects can play. They understand that the Government cannot do it on their own and it is vital to involve the private sector. That is what is behind the new clauses. I hope that my hon. Friend will do more than simply respond to them; I hope that he will give a commitment that the Government will take them seriously.
  Mr. Hoon: We have heard three different speeches in the debate representing three different political parties. It is fair to say that, apart from slight differences in detail, there

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  has been no difference in substance between any of the speeches. Perhaps it will be left to the Financial Secretary to inject a note of controversy in our debate on the new clauses.
  That is typical of the problems that the country faces when the majority of public opinion is united in calling for new public investment but, sadly, is unable to persuade Ministers of the necessity for it. Indeed, the new clauses were designed to open up debate as to how we can best promote partnership in the provision of investment finance from the public and private sectors working together, as the new clauses emphasise, to improve the infrastructure in our society.
  There is little doubt—the hon. Member for Macclesfield (Mr. Winterton) put the point forcefully, and perhaps even more radically than some Labour Members would do on occasions—about the chronic need for new capital investment in our infrastructure if we are to compete effectively with other advanced economies in Europe and, indeed, throughout the world.
  Sadly, one comment that is made by people returning from visits abroad is how disappointed they are in the state of our public buildings—they seem to be run down and tired, and in need of new investment and new developments. People are also disappointed in how poor many of our public services have become in comparison with our immediate continental neighbours, and how low is the quality of our public environment. The vast majority of the population recognise that we need urgently new investment to restore our public facilities. However, to bring that about we need a Government who are prepared to take the lead. The present Government—although apparently committed in principle to the idea of attracting new private investment to public projects—appear incapable of getting involved, again for ideological reasons.
  Management consultants Ernst and Young put it in this way in a pamphlet called "Project Finance in the 1990s":
  "One of the chief deterrents to the private sector is Government's 'hands off' policy with regard to privately financed projects".
  The pamphlet continued:
  "Government should act as the primary promoter of projects rather than as the arbitrator between different consortium bids."
  The limited role which the Government have set for themselves goes a long way to explaining why their own private finance initiative has enjoyed such modest success—if success is the right word to use in that context. Some 96 projects were apparently identified, only 12 of which are under construction. Eleven have been completed, but each of those was started long before the initiative was announced. A further 43 apparently are no more than paper proposals which have not reached any stage of activity.
  Mr. Dorrell: The hon. Gentleman has argued that the Government should set out clearly the projects which are available to be developed on a joint basis. I agree, and he has quoted from the list which was published by the Chancellor in September. Some of those projects have been completed, some are under construction and some are precisely what he is asking for—projects which the Government want delivered and where we are looking for private sector partners.
  The hon. Gentleman cannot have it both ways. Either the list is suspect because some of the things on it have not
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  been done yet, or he wants a list of projects for which the private sector can bid. I agree with the latter proposition: some of the projects have been included in the list about which he is talking.
  Mr. Hoon: I intended my points to be taken together, and not chopped quite so logically as the Financial Secretary sought to do.
  Many more than 96 projects around the country could be identified by a Government who were prepared to lead the way. That is precisely the criticism which was made by Ernst and Young, and that firm is hardly likely to be advancing propositions such as those made by the hon. Member for Macclesfield or by the Opposition.
  It is said that many more projects would be possible than the 96 that have so far been identified. I hope that the Financial Secretary will address his remarks to that and explain why more has not been done by the Government. We must identify projects because, without them, we will not be able to compete effectively.
  I want to consider one area—my hon. Friends will want to look at other areas—in which I believe that we must bring together public and private finance to take advantage of the technological advances which are available to us. We have talked a lot lately in this country and in the United States about information super-highways. My hon. Friend the Member for Edinburgh, Central (Mr. Darling) touched on that.
  We know about the possibility of the technology which is available to establish networks which would allow information to be exchanged around this country, Europe and the rest of the world. Eventually, those networks will be based on systems of comprehensive fibre-optic cabling, not only throughout this country but in a way which will enable us to transfer information instantly around the world.
  It is recognised that fibre-optic cabling will be used to improve our information exchange systems, and projects for our main trunk routes are to be cabled fibre-optically. As for taking the benefits of that technology along every street, we are engaged in cabling our streets with some of the oldest technology available in the field.
  We are not even contemplating the way in which the technology will reach every home. If we are to take full advantage of the interactivity which will be available from the new technology for work and education, we must look at ways in which the full benefits of the technology which is well established can reach every house, every workplace and every public institution. Consider the benefits that that would bring to our society. Every place of work, every home, every public institution and every educational facility could have access to such sophisticated computer links. Working from home would become an entirely practical proposition, not only for the self-employed in particular types of job but for many employees who currently travel to and from work every day at roughly the same time in the morning and in the evening. Eventually it would be possible to extend the use of such facilities to the generality of employees. That would ease congestion on our roads, reduce the stress on public transport and eliminate the cost to businesses of providing expensive office accommodation in prime sites in big cities.

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  9.45 pm
  Similar arguments can be applied to educational provision. People could enjoy educational courses at home at a time of their choosing, but with access to teaching on line that would allow them to ask questions. At present remote teaching does not always provide for that. Many people have concentrated on the benefits to entertainment of such a system. It could provide every home with access to the latest films, television and music. Indeed, the provision of that entertainment is seen by many as the key to providing the capital investment that will be required for the network.
  For the moment, the along-the-street cabling that we are considering as a society is based on comparatively limited and rather old-fashioned technology. We need a financial structure that will allow us to take advantage of the latest in technology. In a sense, that problem is typical of the difficulties faced by Government in keeping pace with technological changes and harnessing those changes for the benefit of their citizens. Given the parlous state of Government finances, indeed the state that any new Government will inherit, no Government is likely to commit itself to the massive public expenditure involved in fibre-optic cabling every home, public building and workplace.
  Moreover, despite the attractions of supplying paid-for entertainment and services down such fibre-optic cables, no private company will be in a position to take the enormous long-term risk involved in providing the large-scale fibre-optic linking, even if it was allowed to provide and charge for the comprehensive range of services.
  The constraints placed on British Telecom are a good illustration of the difficulties under which private companies have to operate. Privatised by a Conservative Government who trumpeted the virtues of free market forces, the company is nevertheless prevented by law from competing with cable companies in the provision of entertainment down the line, even though the same cable companies provide telephone services in direct competition with British Telecom.
  Moreover, in developing and using the technology, companies such as British Telecom are forced to do so subject to the constraints imposed on them by our existing relatively limited telephone network based, as I have said, on relatively old technology. Surely it ought to be possible to imagine a project agreed jointly between the public and private sectors in which the Government would lead the way in the provision of fibre-optic cabling subject to a significant private sector involvement in the provision of services paid for perhaps by long-term leases on the use of the basic equipment. The price of those leases would assume a significant return on the capital injected by the Government.
  Mr. Dorrell: The hon. Gentleman makes an important point. He argues that the cabling that is currently being done by the private sector is an obsolete technology and that it would be a better business decision for those companies to invest in a different technology that allowed all the benefits that he describes. He will recognise that that is essentially a business decision. Why does the hon. Gentleman think that I—my hon. Friend the Member for Macclesfield (Mr. Winterton) kindly referred to my expertise in business from the textile industry, perhaps not the obvious background to make a judgment—or indeed
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  anyone else in Whitehall, am better placed to make the type of judgment that he describes than the companies currently putting their shareholders' shirts on investing in the technology that the hon. Gentleman describes as obsolete?
  Mr. Hoon: With the greatest respect, the Financial Secretary has demonstrated the Government's limited horizons on such projects. He has shown that he is considering the matter in the terms in which the Government established the system.
  The Government are saying that small-scale cable companies will have a monopoly to provide such facilities, free from competition from British Telecom—free market forces only go so far where Government philosophy is concerned. Small companies cannot compete to provide the investment that will be necessary to bring fibre-optic cabling to our doors. That is what I was saying when the Financial Secretary interrupted me.
  The Government are big enough to lead the way, and with private finance it could be done. Small-scale private operators are constrained to use older technology to provide cable systems and essentially that is what we have. Market forces mean that small companies can cable a relatively limited area using limited technology. That is the result when the Government opt out of their responsibility for leading the way.
  That is not the reaction in other countries, where Governments recognise that they have a responsibility to establish those projects and create the conditions in which the private sector can participate. If the Financial Secretary considers the problem in that detail, he may reach some different conclusions.
  I see no reason why the Government cannot take the lead. Providing leadership for a project and finding ways in which the private sector might become involved would be a perfectly proper role for the Government to play. I can imagine equally ingenious ways in which the private sector could pay for access to such computer networks.
  The Government's scheme for computerising the Inland Revenue seems to have dragged on for an inordinate time. I understand the difficulties involved. The system will leave many people who are claiming state benefits still subject to the existing haphazard and rather abitrary system which, sadly, tends to dehumanise those involved on both sides of the exchange.
  One only has to compare the scene in a typical social services department office, where a queue of claimants are trying to establish their rights and dealing with hard-pressed and often overworked officers, with that in a typical high street retail store where someone is paying with a charge card. The store has the technology to show that the card has been used on a certain number of occasions, subject to a credit limit. The card can facilitate shopping in all manner of ways.
  It can also facilitate borrowing, with no social stigma involved. When people claim social security, they are subject to significant social stigma, notwithstanding the fact that they are exercising their legal right to funds to which they are clearly entitled. People who borrow money can do so in a socially acceptable way, but people who are exercising their rights to benefits are treated as second-class citizens.
  Computerisation of the benefits process could make a significant difference, especially if private sector companies were involved in designing software packages.

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  Such packages could, for example, show the best package available and how claimants could maximise their entitlement.
  The Government need to use only a little imagination to envisage the possible revolution in the use of technology. I have given only one illustration of the way in which they could promote contact between the public sector and private finance. They might then recognise that such an exchange would have benefits for society.
  I hope that the new clauses will force the Government to think more clearly about the ways in which private sector finance can be involved in large-scale capital projects which require their leadership. I hope that we can thus encourage the Government to think more carefully about the link between their initiatives and private sector finance and to take a lead in that respect.
  Mr. Peter Snape: I have listened with interest to the debate. My hon. Friend the Member for Ashfield (Mr. Hoon) will forgive me if I do not follow him down the road that he has taken.
  The hon. Member for Macclesfield (Mr. Winterton) referred to his 23-year career in this place. He will probably be aware that I spent some time, in a minor capacity, doing my best, 23 years ago, to prevent him getting here. Indeed, one of the narrowest escapes of my political life was not being selected as his opponent in the subsequent general election. He has mellowed considerably in the 23 years that he has been here. [Interruption.] Those Conservative Members who scoff should have seen him in those days.
  Few of us would argue with the very relevant arguments that the hon. Member for Macclesfield made, especially about what he called the "damp hand" of the Treasury—what many of us would term the "dead hand" of the Treasury—which always seems to fall across any infrastructure project. Of course the circumstances—the economic situation—are never right for the expenditure of public moneys on major infrastructure projects.
  Had the Ryrie rules been in Germany, the rubble of world war two would still disfigure most German cities. The German Government are a little more intelligent in their approach to public transport and infrastructure projects generally, and much more intelligent than successive Governments have been in the United Kingdom. I shall refer specifically to a project dear to my own heart in the west midlands, a light rail project—the midland metro.
  My hon. Friend the Member for Edinburgh, Central (Mr. Darling) referred to some of the work that was done before the last election by the Labour party transport team in considering ways in which private sector capital could be attracted to some infrastructure projects. That initiative, led by my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott), was widely rubbished by some Conservative Members—not by the hon. Member for Macclesfield, I am glad to say, but especially by one of the many Transport Secretaries who occupied, for a fleeting few moments, it seemed, that post in the previous Conservative Government.
  It is perhaps a poignant commentary on present-day politics that one of those Transport Secretaries, now Lord Parkinson, finds himself leading a consortium that is anxious to bid and to involve private sector money in work
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  of the type that has been mentioned in the debate. He will have one great advantage that some of his colleagues might not possess—he will be able to refute all the arguments that he used to make against such projects when he was Secretary of State for Transport.
  It appears that the lessons have not been learnt by the present Administration, and especially by the Treasury. One would have thought that the midland metro was the type of project that would appeal 100 per cent. to the Conservative party. The private sector is accepting a great deal of the risk. I will make comparisons later between the risk that has been accepted by the private sector in the midland metro and in other light rail schemes—in Manchester and Sheffield, for example.
  When one considers projects such as the channel tunnel rail link, the west coast main line, the Heathrow express and the Northern line of the London underground, one is scarcely filled with optimism about the likely detail of the response of the Financial Secretary to the Treasury.
  It seems to many of us that the Government's only idea about private sector involvement is to cloud and confuse the issue with a series of supposed competitions between supposedly interested companies at such length that interest in the matter dies away and the decision-making processes are postponed year after year. Line 1 of the midland metro, which runs through your constituency, Madam Speaker, as it does through mine, has had the toughest appraisal ever given to any transport project by the Department of Transport. It is the No. 1 transport priority for the west midlands, supported by all seven metropolitan councils, two of which, at least for another couple of weeks, are in the hands of the Conservative party.
  I think that all Members of Parliament from the west midlands, Labour and Conservative, have supported that project, as have the chambers of commerce and industry, business groups such as Birmingham City 2000, and many others. Yet the net cost to the public purse of line 1 is just over £100 million. Government approval is needed right now to spend that, and Government grants of around £50 million are needed towards the total cost.
  I listened with interest to my hon. Friend the Member for Edinburgh, Central. We in the Labour party are being a little timid at the moment about how we propose any public sector involvement in projects such as this. We shall never satisfy the Conservative party about our fiscal abilities, and it is pretty pointless trying to do so. But if we have a public debate about how much public money goes into projects such as the midland metro, our arguments will stand the test when set against the lack of progress in such projects by the Conservative party.
  Despite the fact that the awful negative campaigning in which the present-day Conservative party indulges the whole time will enable it to go round accusing us of all sorts of fiscal sins, it is well worth while that a project such as the midland metro, and some of the others that I have already mentioned in which public and private sector finance is involved, should go ahead.
  I referred to the other light rail projects for which the Government have given the go-ahead—the Manchester metrolink and the Sheffield supertram. Neither has been subject to the same fiscal appraisal as the midland metro. None of the private sector people involved in those projects has given the sort of guarantees that the John Laing/Ansaldo joint venture companies have given to the financial initiatives involved in the midland metro. Yet they have been given the go-ahead.

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  The Manchester metrolink has been up and running for some years, and the Sheffield supertram started a few weeks ago. We all know that the Treasury has the weird view that somehow public sector projects are less worthy than, for example, road building.
  Mr. Dorrell indicated dissent.
  Mr. Snape: The Financial Secretary shakes his head, but he should listen to the speeches of some of his colleagues in the Department of Transport. They talk of massive rates of return on road building projects, but they refer to the midland metro as an expensive project.
  The Prime Minister came to the west midlands a couple of weeks ago. Between infuriating the city of Birmingham with some of his more inflammatory comments, he talked about the specific project. Unfortunately, he gave us no great hope that we would get the go-ahead before the next financial year. But what more can the city of Birmingham, the west midlands, the constituency authorities and Members of Parliament do collectively to convince the Treasury of the worthwhile nature of the project?
  If we cannot get the Prime Minister to give the go-ahead two or three weeks before local elections when the Conservative party chairman has promised to win the city of Birmingham—that is another promise that looks as though it is being junked the nearer we get to the day of the election—what can we do to convince the Financial Secretary of the necessity for the project in order to prevent the west midlands conurbation from seizing up altogether?
  The Financial Secretary might consult his fellow Ministers in the Department of Transport, and they might say that there already exists some public transport along the Wolverhampton/West Bromwich/Birmingham corridor. It is true that there is an existing heavy rail line along part of that corridor, but since the closure of the former Great Western Railway line in 1972, constituencies such as ours, Madam Speaker, have been poorly served by public transport. The congestion along that corridor grew worse throughout the 1980s and 1990s. The alternative to the A41 Holyhead road are the M5 and M6 motorways. No hon. Member who uses that alternative—particularly those of my hon. Friends who advocate the swift completion of the Birmingham northern relief road—is under any illusion about the congestion it produces.
  10 pm
  I am at a loss to know how best we can convince the Financial Secretary of the worth of that project, particularly after the rigorous selection process to which it was subject. I hope that the Minister will say that the Government not only pledge their continued support and commitment to the project but will give it the go-ahead sooner rather than later. Unless that is done, all the talk from the Treasury Benches about commitment to public and private sector projects is so much hot air. That project is a priority for the west midlands.
  We heard a great deal tonight about the Financial Secretary's business expertise, although we discovered subsequently that it was gained in the textile industry rather than in the people-moving industry. The hon. Gentleman is none the worse for that. It makes a pleasant and refreshing change for a Treasury Minister to have any sort of business experience. If the Financial Secretary is to live up to the blandishments heaped on him by the hon. Member for Macclesfield, he will put us out of our misery and give the go-ahead for the midland metro.
  Mrs. Jane Kennedy: The new clauses do not pretend to offer a panacea for the overall problems of investment, but suggest changes to the Income and Corporation Taxes Act 1988, to allow joint funding of projects of the sort mentioned tonight to be placed on the agenda. They are not at present, because the fiscal regime does not encourage it.
  The hon. Member for Macclesfield (Mr. Winterton) mentioned our shared sorrow at regularly having to use the M6 motorway. Another consequence for me of entering Parliament to represent a Liverpool constituency is that I must closely study changes in employment patterns in my own constituency and the constituencies of my hon. Friends, as well as throughout the world.
  A recent study of Pacific rim countries revealed that they are investing heavily in labour-intensive manufacturing industries to compete with this country in attracting capital investment and custom. We no longer have to compete in the world market for capital—that is freely available.
  We can beat other countries on the skills of our work forces. When we on these Benches talk about the need to invest in skills, we are not trotting out tired old phrases but advocating real investment, to give Britain a competitive edge in the world.
  We can also beat our competitors in the developing world through our infrastructure. Tonight's debate has concentrated on large-scale projects of the kind that Pacific rim countries are taking seriously. They are investing a great deal of public and private money in developing their road and rail systems, to enable them to compete with us even at that level.
  Unless we recognise that our competitors are achieving the same levels of skill and investment that we achieved in the past but are failing to achieve now, we shall fall behind. It will not matter that we are a member of the European Union. That issue needs to be taken seriously by the Government and, so far, they have not done so. My hon. Friends and the hon. Member for Macclesfield have made that point forcefully.
  I want to talk briefly about one small area in which the public and private sectors could invest together. I also want to challenge some of the arguments advanced by the Financial Secretary during the previous debate.
  Last week, I had the honour of opening the Rocking Horse day nursery in my constituency. It provides 40 places, largely for the children of the employees of Alder Hey children's hospital. It represents a public sector investment by an NHS trust. A beautiful building, it has been built right next door to Ronald McDonald house, so named because McDonald's food chain invested £1 million in a charitable project to provide accommodation for families visiting their children while they are in hospital.
  Why did not the public and private sectors together consider investing in the nursery itself? Could not McDonald's or Burger King have been persuaded on to the site to invest alongside the health authority so that 80, not 40, places could have been provided?
  The Financial Secretary has said that there is no problem with child care, because the need for it is being met by child minders. I know from personal experience that child minders offer an invaluable service. Not only do they provide a flexible service for working mums and dads; they also offer an easy way for women to return to the labour market, so they serve two purposes. But I challenge

  845
  the Minister's assumption—that just, because child minders represent the growth area in child care provision, they are what most people would choose. That is not necessarily true.
  The Financial Secretary said that he himself had chosen to use a child minder instead of a nursery. I made the opposite choice: having used a child minder, I opted for a private day nursery. But many people in my constituency do not have that choice. They have to use child minders because there are no nursery places.
  There should be a fiscal regime that encourages the public and private sectors to consider ways in which money can be invested in this sort of project. Perhaps one sector could provide the capital and the other pay for the running costs of a nursery. Perhaps one or other could pay for certain staff—there are a range of ways in which, given the will, joint funding arrangements can be made.
  We are losing because the private sector is discouraged from considering these options by our current tax regime.
  Mrs. Teresa Gorman: Does the hon. Lady agree that, if we could persuade the Treasury to allow the cost of child care provision to be offset against earnings—tax relief on the cost of child care, in other words—that would be enormously helpful to women? It would also encourage the growth of new jobs—a whole new type of occupation for people who are out of work at the moment.
  Mrs. Kennedy: We certainly need to consider every conceivable suggestion that might encourage child care provision to meet the growing needs of working mums and dads. The hon. Lady's option is one that should be considered—and would be, if we were developing the strategy whose details the Financial Secretary requested earlier.
  Mr. Beith: May I remind the hon. Lady that that option was considered a little earlier this evening, when the House voted on new clause 6? As far as I can recall, neither she nor the hon. Member for Billericay (Mrs. Gorman) spoke about or voted for the new clause, which would have achieved precisely what they have asked for.
  Mrs. Kennedy: I did not vote for the new clause because I do not agree with the idea of tax vouchers—but they should certainly be debated. It was the right hon. Gentleman's right to table the new clause, and mine not to vote for it: and I did not.
  Ms Abbott: Is not nursery provision an excellent candidate for private/public sector partnership? It is easy enough for the Financial Secretary to say that child minders are meeting the need, and there are many excellent child minders about; but in inner-city areas such as my own—Hackney—and, for instance, Liverpool, child minders are struggling to look after children in inadequate living conditions and with insufficient training and support. Tomorrow morning, many a woman will take her child to a child minder with a heavy heart: she would be much happier if she had the option of taking her child to a high-quality nursery.
  Mrs. Kennedy: My hon. Friend is absolutely right. Although the child minders whom I have used throughout my working life have, after months and years of acquaintance, become close personal friends whose help I
  846
  have always appreciated, I am aware that some of my friends have not had the same experience. Child minders are not the answer to most people's problems, as the Financial Secretary suggested.
  10.15 pm
  Finally, let me say a word about the cost of nursery education. The Rocking Horse day nursery, which provides a marvellous service for the staff of Alder Hey hospital, charges £15 per whole day. In small projects like that, public/private sector partnerships would allow the public sector to provide more subsidies to help with child care costs.
  I hope that the Financial Secretary will consider all the issues that I have mentioned. I feel that he replied too quickly to points made earlier, and I trust that he will deal with the serious matter raised by the new clause.
  Mr. Keith Hill: All the speeches that we have heard—not least the impassioned contribution of the hon. Member for Macclesfield (Mr. Winterton)—have suggested that joint private and public sector projects could provide a useful way of supplementing infrastructure development, and that there is growing interest in the subject, as well as growing consensus between the parties.
  As some Opposition Members have already pointed out, the concept has long been expounded by my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott), whose proposals for leaseback arrangements for certain railway projects on the French model were included in Labour's manifesto at the time of the last general election.
  It goes without saying that my hon. Friend's eminently sensible proposals were consistently rejected, derided, condemned and shrugged off by a succession of transport and finance Ministers. They must now find themselves rather shamefacedly having to eat their words, following the Chancellor's welcome and important commitment to the private finance initiative in his Budget statement of 30 November 1993, in which he announced a number of new projects under the initiative, confirmed the establishment of a new working group chaired by Sir Alastair Morton and concluded that the Government had
  "injected a new momentum into the private finance initiative."—[Official Report, 30 November 1993; Vol. 233, c. 933.]
  I am bound to say, however—given that the Conservative Benches have been singularly barren throughout most of our proceedings—that that momentum has not exactly set the Conservative party in Parliament alight.
  Hard on the heels of the Budget statement, Labour published its own report on the issue, entitled "Financing Infrastructure Investment" and subtitled "Promoting a Partnership Between Public and Private Finance". That detailed consultation document set out a number of areas in which public and private initiatives could be undertaken through the creation of public interest companies, new relationships between Government and public trading bodies, the possibility of regional development banks' mobilising private finance into small and medium-sized firms and—critically—a review of the current distinction between operating and finance leases, a subject to which I wish to return.
  The report makes clear Labour's commitment to private and public initiatives across a range of policy areas and beyond transport infrastructure alone. It says that Labour's concept of public-private partnership is "ambitious and expansive"—as my hon. Friend the Member for Edinburgh, Central (Mr. Darling) precisely enunciated.

  847
  We on this side of the House know, and the country knows, where Labour stands on this issue, which is the subject of new clause 13. Notwithstanding the Chancellor's fine words in his Budget statement, are we entirely sure where the Government stand on this issue? Has it finally been resolved in the Chancellor's favour inside the Treasury?
  In his Budget statement, the Chancellor said that making a success of the private finance initiative would require "a complete change of culture within Government". Certainly the Treasury's grudging response to the recent London Underground Northern line offer by ABB Transport seems to suggest that this cultural change still has a long way to go.
  It is rather tempting to believe that the Treasury was wrong-footed on this issue precisely because it was a private rather than a Government initiative. But despite the very clear benefits of the deal—a totally new fleet of trains on London's misery line for the first time since world war two; a 20-year operating lease financed by the private sector; the total value of the scheme amounting to in excess of £700 million, which could certainly not be funded in present circumstances by London Underground; and most of the new fleet in place by 1997—the Treasury dragged its feet for three or four months before it announced that it consented to the commencement of the tender process.
  One is also tempted to think that its consent was influenced more by the political pressures generated by the highly effective campaign of the Evening Standard, as well as the imminence of the London local elections, than necessarily by a change of heart—a new conviction—on the part of the Treasury.
  Nevertheless, the contract has now gone out to tender. I think that most of us who were involved in the campaign accept that making the announcement through the Official Journal was inevitable, and probably the correct procedure. But if the deal goes ahead, whichever company wins it, it will doubtless reflect the main features of the ABB offer.
  So far, so good. Members of Parliament on both sides of the House, and all Londoners, were delighted with the progress achieved in the Secretary of State's announcement of 29 March. Notwithstanding the Secretary of State's announcement, some nagging doubts are emerging about the fine print in the Government's response.
  These nagging doubts raise the question: was this merely a tactical concession on the part of the Treasury to avoid a short-term political embarrassment, or, at the heart of the Treasury, does there remain a fundamental resistance to this kind of scheme which jeopardises the whole approach to public and private finance initiatives—the subject of the present debate?
  The Treasury has laid down two tests which such initiatives must pass: the value for money test and the risk transfer test. The essential element of the value for money test is whether it is apparently cheaper to fund within public sector borrowing requirement rules or through a private finance initiative.
  Under the test, if it is apparently cheaper in total value for money terms to purchase through the public sector route, the private finance proposal is deemed to have failed. I emphasise that, under the test, a proposal is deemed to have failed, irrespective of whether Government moneys can ever have been made available for the project. That is clearly ludicrous.
  848
  Following the 1993 Budget, London Underground deferred indefinitely its Northern line modernisation scheme, and further cuts in public support may be in the offing. If it is left to public sector financing, there is no prospect in the foreseeable future of the investment like that offered by ABB, and possibly other sources, being made available to London Underground.
  There is no acceptable alternative to the scheme. The refurbishment project, which we understand has been touted in the Treasury as an alternative, has few benefits and perpetuates many of the disadvantages already experienced by Londoners travelling on the misery line. A failure to acquire new Northern line trains through the private finance initiative would be an absolute loss to the London travelling public. I hope that the Financial Secretary will offer a firm assurance that there is no question of this absurd and irrelevant yardstick being applied in the final assessment of the bids under the tendering process.
  The second test applied by the Treasury to the private finance proposals that we are debating is the risk transfer test. The essential measure is whether most liability for asset ownership over the life of a project transfers to the private sector. The questions are how much risk, and what kind of risk? This is perhaps where we find the source of the main anxieties about the Treasury's approach.
  The Secretary of State for Transport's announcement of 29 March, the contractual details of which have now appeared in the Official Journal, set out two aspects of risk-taking by potential bidders. First, the private sector would be required to finance the cost of trains and to provide a complete maintenance and support system. Secondly, any deal would
  "have to transfer a substantial degree of risk to the private sector in order to meet the Government's criteria under the private finance initiative".
  The first requirement seems entirely reasonable in any such joint private-public venture. It seems reasonable that a manufacturer in this case—or any manufacturer, for that matter—should undertake responsibility for meeting the risk of performance of the rolling stock that he is producing as well as for possible cost overruns and delays. Indeed, such an undertaking, together with a maintenance deal, was already on offer from ABB Transport.
  What seems by contrast quite unreasonable is the fact that the manufacturing company should assume responsibility for the many variables on which revenue returns are dependent and which lie entirely outside its control. For the Government, that means the level of public subsidy for transport services, and for London Underground management, it means factors such as staff costs, fare levels and even marketing.
  However, that apportionment of risk now seems to lie at the nub of the argument and may be the obstacle that the Treasury is laying in the path of this new and exciting private financing initiative. The fact is that it is a matter of subjective decision-making. No fixed scale of risk transfer is laid down on projects of more than £10 million.
  London Underground has estimated the percentage risk transferred with the ABB Transport project at 70 per cent., and it is satisfied that the project is merit worthy with a 6:1 benefit-to-cost ratio. Is it really the case, as some commentators suspect, that the Treasury wants to transfer the totality of risk to the private sector? Surely—this point

  849
  has been made by many other hon. Members—the heart of the public-private sector joint project concept lies in the sharing of risk.
  It is eminently acceptable that the public sector should bear a part of the risk because the gains from a decent public transport system, or decent public services in general, cannot be captured in higher fares and higher charges—higher charges if one wishes to impose them. Decent transport and decent public services are a public good and private and public deals should reflect that fact. If it is not recognised, such deals will not happen because there is nothing in it for the private sector. That may, of course, be precisely what the Treasury is looking for.
  We are entirely clear that we are talking about risk sharing and sweeping away the cobwebs of obsolete thinking. However, we need answers from the Financial Secretary. Is the requirement for revenue risk in the Northern line project an absolute stipulation or, as the Secretary of State for Transport implied in evidence to the Select Committee on Transport, a general requirement that would be of interest, but would not be a make-or-break criterion for going ahead with the project? We need to know the status of that requirement. Much depends on the Financial Secretary's response.
  10.30 pm
  If the Government do not sort out the issue, if they intend entirely to privatise risk in such projects, that will sink the chances of the entire private finance initiative. That would be bad news for the Government, but—it is rather more important—it would be bad news for London Underground passengers and passengers elsewhere in the country, who would have to wait another two or three years until the next general election, after which a start will made on the modernisation of Britain's transport infrastructure, with a Labour Government genuinely committed to a partnership between public and private finance.
  Mr. Dorrell: Anyone listening to the debate, if he had no reason to know better, could be forgiven for thinking that during the past 15 years the country had been run by a Government motivated solely by the aim of keeping the private sector out of the delivery of public services. From the speeches that we have heard it would have been reasonable to draw the conclusion that the idea that the private sector has a role to play in the delivery of public services was a new idea launched by the Opposition.
  That is the exact opposite of the truth. For 15 years the Government have been involving the private sector in the delivery of services that in 1979 were regarded as the exclusive preserve of the state. British Telecom, water, electricity and gas are parts of the infrastructure now vested in the private sector, free from the public sector constraints that Opposition Members profess to find objectionable.
  If the Labour party is serious about wanting to involve the private sector in the delivery of public services, surely to goodness that is a Damascene conversion on a truly biblical scale. It involves eating the words that have been spoken from the Opposition Benches for the past 15 years.
  Mr. Wilson: Will the Minister give way?
  Mr. Dorrell: No, I will not.
  850
  The use of the private sector in the delivery of public services goes to the core of what the Government have sought to do for 15 years. That is why over that period, in addition to the privatisation programme, we have used the private sector to deliver the Dartford crossing and to build the second Severn bridge, and to engage in the largest civil engineering project of our age—the channel tunnel. It is absurd for the Opposition to talk about their interest in the private sector as the deliverer of public services.
  In the 1992 autumn statement—
  Mr. Wilson rose—
  Mr. Darrell: No, I shall not give way.
  In the 1992 autumn statement, my right hon. Friend the Member for Kingston upon Thames (Mr. Lamont) made it clear that he wanted the private finance initiative to be used to extend further the role of the private sector in the delivery of public services. The Opposition's argument this evening has been that the results of that initiative have been sparse. That is hard to square with the facts.
  Since the 1992 autumn statement, private sector operators have been able to compete for the building of two new prisons. We have made it clear that we are extending to the private sector the opportunity to replace the Scottish air traffic control system. There has been a substantial investment in a myriad small projects in the national health service, involving private capital and management. The private sector has invested in student accommodation, as part of the expansion of our university system.
  It has been involved in the future planning of the road system, through the development of road charging and the opportunity for shadow tolling, which was foreshadowed in a statement made by the Secretary of State for Transport only last week.
  The principle of the Government's position is absolutely clear. The private sector has made it clear that it wants to be involved, and believes that it can contribute to the better delivery of public services. We, on behalf of the public sector, want to see its expertise and its resources recruited to the better delivery of public services. Changes on that subject are not required on this side of the House. It is on the Opposition Benches where the truly difficult questions remain to be faced. The hon. Gentleman—
  Mr. Wilson: On a point of order, Mr. Deputy Speaker. Will you confirm that it is within the rules of a debate for a competent and confident Minister to give way during that debate, rather than simply to read from a prepared—
  Mr. Deputy Speaker (Mr. Michael Morris): Order. The hon. Gentleman has been in the House long enough not to need that sort of ruling.
  Mr. Dorrell: The best that the Labour party has been able to do to substantiate its proposition that private finance is an issue that it may call its own has been to quote the speeches of the hon. Member for Kingston upon Hull, East (Mr. Prescott) on leasing to British Rail before the last election. Frankly, the hon. Member for Kingston upon Hull, East is condemned from his own mouth. He described his own idea as one concerned with accountancy not socialism. That is precisely the problem for the Labour party on the subject.
  The problem has been grasped by the hon. Member for Hackney, North and Stoke Newington (Ms Abbott). She wrote to The Independent soon after the document about which the hon. Member for Edinburgh, Central (Mr.

  851
  Darling) waxed so lyrical, drawing attention to the difficulties of the document published by Labour Front-Bench spokesmen. It is interesting to quote to the House the writings of the hon. Lady. She argued that:
  "private sector involvement in public sector investment has all kinds of problems that neither Gordon Brown nor The Independent seem to appreciate. It is a more expensive way of raising money and the private sector invariably wants to take all of the profit and none of the risk."
  She went on:
  "the involvement of private sector personnel and practices in the public sector seems to bring with it a risk of sleaze and corruption."
  In the hon. Lady's eyes, the private sector is identified directly, apparently, with sleaze and corruption.
  The key point came in the next sentence of the hon. Lady's writings. She said:
  "Above all there is a danger that the private sector will by degrees affect the priorities and the policies of a Labour Government in relation to public expenditure."
  She is, of course, exactly right. That is what involving the private sector means. It means bringing in not only capital, but management and accepting that people other than the Government have a perspective on improving the delivery of public services.
  For 15 years, the Government have been opening the public sector to private sector skills and disciplines. During the whole of that time, Labour has resisted the process and identified public service with public provision. At last, we have seen the first signs that the dinosaur may be blinking. Labour has finally noticed that, while Government reforms have been giving customers better quality service and taxpayers better value for money, Labour policy has been stranded in a cul-de-sac. Fifteen years after the Government stamped on its tail, apparently the message has finally reached the dinosaur's brain. For that, there is much mercy, but little celebration.
  Mr. Darling: The Financial Secretary's reply must surprise many people who thought that he was the coming man of the moment for the Conservative party. Instead of dealing with the arguments advanced, not only by Labour Members but by two of his hon. Friends, he has engaged in a rant which, frankly, does not do the subject any justice at all. We are entitled to ask where the Government stand on the question of public-private sector partnerships. The Financial Secretary seemed to be attacking its very principle, yet the Government say that they are in favour of developing further partnerships.
  All that we have seen from the Government is a list—cobbled together, I suspect, 24 hours before the Chancellor gave a speech in Glasgow in September—of projects. Many of those will never see the light of day, but are simply glints in the planners' eyes. Others have been completed.
  However, there was no evidence that the Government have any idea of a clear strategy on how to approach the problem. It is a piecemeal approach. The Government say that they are building two new prisons, and that they are building a Scottish air traffic control centre. I remember when the Chancellor announced that Scottish scheme, because it took many people in the air traffic control industry in Scotland completely by surprise. They had never heard of the project before. Yet the Government were saying that it was one of the centrepieces of the then autumn statement.
  We have known for a long time that the Government have no strategy for economic investment. It is now
  852
  abundantly clear, however, from what the Financial Secretary has said that they do not even have a strategy for promoting public-private partnerships.
  The Financial Secretary complains about what my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) said before the last general election. He still condemns what my hon. Friend said. Yet the Government, having condemned what Labour candidates said during the election, went on to adopt the very same policy only a few months later.
  It is not surprising that people do not have confidence in what the Government say. It is clear from what the Financial Secretary says that the Government do not know what they are doing from one moment to the next. They say that they are in favour of public-private sector partnerships, and the next day they say that they are not.
  The Financial Secretary made no attempt to deal with the arguments advanced by the hon. Member for Macclesfield (Mr. Winterton), who made an excellent speech; I would not disagree with one word of it. I might suggest to him, however, that he should be complaining about the dead hand of Treasury Ministers, not that of the Treasury. It is Ministers who decide, and it is Ministers who should be held to account for the bankruptcy of policy in this area.
  Many of my hon. Friends have said that it must make sense to invest in the infrastructure that the United Kingdom desperately needs if it is to compete with the rest of the world. My hon. Friend the Member for Ashfield (Mr. Hoon) referred to the Government's appalling policy and lack of foresight in respect of telecommunications super highways. My hon. Friend the Member for West Bromwich, East (Mr. Snape) talked about desperately needed infrastructure, including a specific metro scheme. In the area which I represent in part, Lothian regional council's metro scheme has been sidelined by Government policy.
  As for timidity, I make no apology for the Opposition not being timid about the Government's policy. We believe that public-private initiatives are one way in which our country can begin to regenerate and rebuild its infrastructure, which has been neglected for the past 15 years.
  If we are serious about maintaining and sustaining a high level of employment, surely rebuilding our infrastructure will enable people to go back to work to undertake that task. That must be a project that is well worth supporting. Yet what do we get from the Government? The answer is absolutely nothing. They heap scorn on anyone who comes up with any new ideas. They are hidebound by the dogma that has caused so much decline and misery for the past 15 years.
  The Financial Secretary has made several speeches and written several articles. He has let it be known among the press that he is a new thinker, and that he is prepared to consider proposals that hitherto the right-wing members of his party were not prepared to contemplate. He has even hinted that there is something to be said for a consensus between the parties on economic matters where that makes sense. We have heard nothing about that tonight.
  The Financial Secretary is supposed to be examining British industry's policies and problems on and with dividend payouts. We have heard nothing about that. He says that we should rely on the Government's privatisation proposals. He did not respond to our complaint that the dividend payments of the privatised utilities are double that

  853
  of most other companies. That is money that should be available—we were told that it would be available—for rebuilding the privatised utilities' infrastructures. The Financial Secretary said nothing about that.
  It is not surprising that, when the Labour party published "Financing Infrastructure Investment" earlier in the year, it was welcomed both inside and outside the House. It is not surprising also that, when the party held a conference to discuss the matter, it was heavily over-subscribed.
  People said to us repeatedly, "Is it not surprising that the Government have no idea how to conduct an economic policy?" The Government live from day to day and minute to minute. They have nothing to say to those who believe that Britain must compete with the rest of Europe and, indeed, the whole world. To do that we must rebuild our infrastructure, which has been neglected because of the free market dogma that has dogged the political system for the past 15 years.
  If the Financial Secretary is supposed to be the man of the future, it is not surprising that more and more people are coming to the conclusion that the Conservative party is the party of the past, and that it will be thrown out of office at the next election.
  Question put, That the clause be read a Second time:—
  The House divided: Ayes 260, Noes 297.

  Division No. 215]

  [10.44 pm

  AYES

  Abbott, Ms Diane

  Clarke, Tom (Monklands W)

  Adams, Mrs Irene

  Clelland, David

  Ainger, Nick

  Clwyd, Mrs Ann

  Ainsworth, Robert (Cov'try NE)

  Coffey, Ann

  Allen, Graham

  Cohen, Harry

  Anderson, Donald (Swansea E)

  Connarty, Michael

  Anderson, Ms Janet (Ros'dale)

  Cook, Frank (Stockton N)

  Ashton, Joe

  Cook, Robin (Livingston)

  Austin-Walker, John

  Corbett, Robin

  Banks, Tony (Newham NW)

  Corbyn, Jeremy

  Barnes, Harry

  Corston, Ms Jean

  Barron, Kevin

  Cousins, Jim

  Battle, John

  Cox, Tom

  Bayley, Hugh

  Cummings, John

  Beckett, Rt Hon Margaret

  Cunliffe, Lawrence

  Beith, Rt Hon A. J.

  Cunningham, Jim (Covy SE)

  Bell, Stuart

  Cunningham, Rt Hon Dr John

  Benn, Rt Hon Tony

  Dafis, Cynog

  Bennett, Andrew F.

  Dalyell, Tam

  Benton, Joe

  Darling, Alistair

  Bermingham, Gerald

  Davidson, Ian

  Berry, Roger

  Davies, Bryan (Oldham C'tral)

  Blair, Tony

  Davies, Ron (Caerphilly)

  Blunkett, David

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

  Boateng, Paul

  Denham, John

  Boyes, Roland

  Dewar, Donald

  Bradley, Keith

  Dixon, Don

  Bray, Dr Jeremy

  Dobson, Frank

  Brown, Gordon (Dunfermline E)

  Donohoe, Brian H.

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

  Dowd, Jim

  Burden, Richard

  Dunnachie, Jimmy

  Byers, Stephen

  Dunwoody, Mrs Gwyneth

  Caborn, Richard

  Eagle, Ms Angela

  Callaghan, Jim

  Eastham, Ken

  Campbell, Mrs Anne (C'bridge)

  Enright, Derek

  Campbell, Menzies (Fife NE)

  Etherington, Bill

  Campbell-Savours, D. N.

  Evans, John (St Helens N)

  Cann, Jamie

  Ewing, Mrs Margaret

  Carlile, Alexander (Montgomry)

  Faulds, Andrew

  Chisholm, Malcolm

  Field, Frank (Birkenhead)

  Clapham, Michael

  Fisher, Mark

  Clarke, Eric (Midlothian)

  Flynn, Paul

  854

  Foster, Rt Hon Derek

  Marek, Dr John

  Foster, Don (Bath)

  Marshall, Jim (Leicester, S)

  Foulkes, George

  Martin, Michael J. (Springburn)

  Fraser, John

  Martlew, Eric

  Fyfe, Maria

  Maxton, John

  Galloway, George

  Meacher, Michael

  Garrett, John

  Meale, Alan

  George, Bruce

  Michael, Alun

  Gerrard, Neil

  Michie, Bill (Sheffield Heeley)

  Gilbert, Rt Hon Dr John

  Michie, Mrs Ray (Argyll Bute)

  Godman, Dr Norman A.

  Milburn, Alan

  Golding, Mrs Llin

  Miller, Andrew

  Gordon, Mildred

  Mitchell, Austin (Gt Grimsby)

  Graham, Thomas

  Moonie, Dr Lewis

  Griffiths, Nigel (Edinburgh S)

  Morgan, Rhodri

  Griffiths, Win (Bridgend)

  Morley, Elliot

  Grocott, Bruce

  Morris, Estelle (B'ham Yardley)

  Gunnell, John

  Morris, Rt Hon J. (Aberavon)

  Hain, Peter

  Mowlam, Marjorie

  Hall, Mike

  Mudie, George

  Hardy, Peter

  Mullin, Chris

  Harman, Ms Harriet

  Murphy, Paul

  Harvey, Nick

  O'Brien, Michael (N W'kshire)

  Hattersley, Rt Hon Roy

  O'Brien, William (Normanton)

  Henderson, Doug

  O'Hara, Edward

  Heppell, John

  Olner, William

  Hill, Keith (Streatham)

  O'Neill, Martin

  Hinchliffe, David

  Orme, Rt Hon Stanley

  Hoey, Kate

  Parry, Robert

  Hogg, Norman (Cumbernauld)

  Patchett, Terry

  Home Robertson, John

  Pendry, Tom

  Hood, Jimmy

  Pickthall, Colin

  Hoon, Geoffrey

  Pike, Peter L.

  Howarth, George (Knowsley N)

  Pope, Greg

  Howells, Dr. Kim (Pontypridd)

  Powell, Ray (Ogmore)

  Hoyle, Doug

  Prentice, Ms Bridget (Lew'm E)

  Hughes, Kevin (Doncaster N)

  Prentice, Gordon (Pendle)

  Hughes, Robert (Aberdeen N)

  Prescott, John

  Hughes, Roy (Newport E)

  Primarolo, Dawn

  Hutton, John

  Purchase, Ken

  Illsley, Eric

  Quin, Ms Joyce

  Ingram, Adam

  Radice, Giles

  Jackson, Glenda (H'stead)

  Randall, Stuart

  Jackson, Helen (Shef'ld, H)

  Raynsford, Nick

  Jamieson, David

  Redmond, Martin

  Janner, Greville

  Reid, Dr John

  Johnston, Sir Russell

  Rendel, David

  Jones, Barry (Alyn and D'side)

  Robertson, George (Hamilton)

  Jones, Ieuan Wyn (Ynys Môn)

  Robinson, Geoffrey (Co'try NW)

  Jones, Lynne (B'ham S O)

  Roche, Mrs. Barbara

  Jones, Martyn (Clwyd, SW)

  Rogers, Allan

  Kaufman, Rt Hon Gerald

  Rooker, Jeff

  Keen, Alan

  Ross, Ernie (Dundee W)

  Kennedy, Charles (Ross,C&S)

  Rowlands, Ted

  Kennedy, Jane (Lpool Brdgn)

  Ruddock, Joan

  Khabra, Piara S.

  Sedgemore, Brian

  Kinnock, Rt Hon Neil (Islwyn)

  Sheerman, Barry

  Kirkwood, Archy

  Sheldon, Rt Hon Robert

  Lestor, Joan (Eccles)

  Short, Clare

  Lewis, Terry

  Simpson, Alan

  Litherland, Robert

  Skinner, Dennis

  Livingstone, Ken

  Smith, Andrew (Oxford E)

  Lloyd, Tony (Stretford)

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

  Llwyd, Elfyn

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

  Loyden, Eddie

  Smith, Llew (Blaenau Gwent)

  Lynne, Ms Liz

  Snape, Peter

  McAllion, John

  Soley, Clive

  McAvoy, Thomas

  Spearing, Nigel

  McCartney, Ian

  Spellar, John

  Macdonald, Calum

  Squire, Rachel (Dunfermline W)

  McFall, John

  Steinberg, Gerry

  McKelvey, William

  Stevenson, George

  Mackinlay, Andrew

  Stott, Roger

  McLeish, Henry

  Strang, Dr. Gavin

  McMaster, Gordon

  Taylor, Mrs Ann (Dewsbury)

  McNamara, Kevin

  Taylor, Matthew (Truro)

  Madden, Max

  Thompson, Jack (Wansbeck)

  Maddock, Mrs Diana

  Turner, Dennis

  Mahon, Alice

  Tyler, Paul

  Mandelson, Peter

  Vaz, Keith

  855

  Walker, Rt Hon Sir Harold

  Wilson, Brian

  Wallace, James

  Winnick, David

  Walley, Joan

  Wise, Audrey

  Wardell, Gareth (Gower)

  Worthington, Tony

  Watson, Mike

  Wright, Dr Tony

  Welsh, Andrew

  Young, David (Bolton SE)

  Wicks, Malcolm

  Wigley, Dafydd

  Tellers for the Ayes:

  Williams, Rt Hon Alan (Sw'n W)

  Mr. Peter Kilfoyle and

  Williams, Alan W (Carmarthen)

  Mr. Jon Owen Jones.

  NOES

  Ainsworth, Peter (East Surrey)

  Dicks, Terry

  Aitken, Jonathan

  Dorrell, Stephen

  Alexander, Richard

  Douglas-Hamilton, Lord James

  Alison, Rt Hon Michael (Selby)

  Dover, Den

  Allason, Rupert (Torbay)

  Duncan, Alan

  Amess, David

  Duncan-Smith, Iain

  Arbuthnot, James

  Dunn, Bob

  Arnold, Jacques (Gravesham)

  Durant, Sir Anthony

  Arnold, Sir Thomas (Hazel Grv)

  Dykes, Hugh

  Ashby, David

  Elletson, Harold

  Atkins, Robert

  Emery, Rt Hon Sir Peter

  Atkinson, David (Bour'mouth E)

  Evans, David (Welwyn Hatfield)

  Atkinson, Peter (Hexham)

  Evans, Jonathan (Brecon)

  Baker, Nicholas (Dorset North)

  Evans, Nigel (Ribble Valley)

  Baldry, Tony

  Evans, Roger (Monmouth)

  Banks, Matthew (Southport)

  Evennett, David

  Banks, Robert (Harrogate)

  Faber, David

  Bates, Michael

  Fabricant, Michael

  Batiste, Spencer

  Fairbairn, Sir Nicholas

  Bellingham, Henry

  Fenner, Dame Peggy

  Bendall, Vivian

  Field, Barry (Isle of Wight)

  Beresford, Sir Paul

  Fishburn, Dudley

  Biffen, Rt Hon John

  Forman, Nigel

  Blackburn, Dr John G.

  Forsyth, Michael (Stirling)

  Body, Sir Richard

  Forth, Eric

  Bonsor, Sir Nicholas

  Fowler, Rt Hon Sir Norman

  Booth, Hartley

  Fox, Dr Liam (Woodspring)

  Boswell, Tim

  Fox, Sir Marcus (Shipley)

  Bottomley, Peter (Eltham)

  Freeman, Rt Hon Roger

  Bottomley, Rt Hon Virginia

  French, Douglas

  Bowden, Andrew

  Fry, Sir Peter

  Bowis, John

  Gale, Roger

  Boyson, Rt Hon Sir Rhodes

  Gallie, Phil

  Brandreth, Gyles

  Gardiner, Sir George

  Brazier, Julian

  Garel-Jones, Rt Hon Tristan

  Bright, Graham

  Garnier, Edward

  Brooke, Rt Hon Peter

  Gill, Christopher

  Brown, M. (Brigg & Cl'thorpes)

  Gillan, Cheryl

  Browning, Mrs. Angela

  Goodlad, Rt Hon Alastair

  Bruce, Ian (S Dorset)

  Goodson-Wickes, Dr Charles

  Budgen, Nicholas

  Gorman, Mrs Teresa

  Burns, Simon

  Gorst, John

  Burt, Alistair

  Grant, Sir A. (Cambs SW)

  Butler, Peter

  Greenway, Harry (Ealing N)

  Carlisle, John (Luton North)

  Greenway, John (Ryedale)

  Carlisle, Kenneth (Lincoln)

  Griffiths, Peter (Portsmouth, N)

  Carrington, Matthew

  Grylls, Sir Michael

  Carttiss, Michael

  Gummer, Rt Hon John Selwyn

  Cash, William

  Hague, William

  Clappison, James

  Hamilton, Rt Hon Sir Archie

  Clark, Dr Michael (Rochford)

  Hamilton, Neil (Tatton)

  Clifton-Brown, Geoffrey

  Hampson, Dr Keith

  Coe, Sebastian

  Hanley, Jeremy

  Colvin, Michael

  Hannam, Sir John

  Congdon, David

  Hargreaves, Andrew

  Conway, Derek

  Haselhurst, Alan

  Coombs, Anthony (Wyre For'st)

  Hawkins, Nick

  Coombs, Simon (Swindon)

  Hawksley, Warren

  Cope, Rt Hon Sir John

  Hayes, Jerry

  Couchman, James

  Heald, Oliver

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

  Heathcoat-Amory, David

  Curry, David (Skipton & Ripon)

  Hendry, Charles

  Davies, Quentin (Stamford)

  Hicks, Robert

  Davis, David (Boothferry)

  Higgins, Rt Hon Sir Terence L.

  Day, Stephen

  Hill, James (Southampton Test)

  Deva, Nirj Joseph

  Hogg, Rt Hon Douglas (G'tham)

  Devlin, Tim

  Horam, John

  Dickens, Geoffrey

  Hordern, Rt Hon Sir Peter

  856

  Howard, Rt Hon Michael

  Rathbone, Tim

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

  Redwood, Rt Hon John

  Howell, Sir Ralph (N Norfolk)

  Richards, Rod

  Hughes Robert G. (Harrow W)

  Rifkind, Rt Hon. Malcolm

  Hunt, Rt Hon David (Wirral W)

  Robathan, Andrew

  Hunt, Sir John (Ravensbourne)

  Roberts, Rt Hon Sir Wyn

  Hunter, Andrew

  Robertson, Raymond (Ab'd'n S)

  Hurd, Rt Hon Douglas

  Robinson, Mark (Somerton)

  Jack, Michael

  Roe, Mrs Marion (Broxbourne)

  Jackson, Robert (Wantage)

  Ross, William (E Londonderry)

  Jenkin, Bernard

  Rowe, Andrew (Mid Kent)

  Jessel, Toby

  Rumbold, Rt Hon Dame Angela

  Johnson Smith, Sir Geoffrey

  Ryder, Rt Hon Richard

  Jones, Gwilym (Cardiff N)

  Sackville, Tom

  Jones, Robert B. (W Hertfdshr)

  Sainsbury, Rt Hon Tim

  Key, Robert

  Scott, Rt Hon Nicholas

  Kilfedder, Sir James

  Shaw, David (Dover)

  King, Rt Hon Tom

  Shaw, Sir Giles (Pudsey)

  Kirkhope, Timothy

  Shephard, Rt Hon Gillian

  Knapman, Roger

  Shersby, Michael

  Knight, Mrs Angela (Erewash)

  Sims, Roger

  Knight, Greg (Derby N)

  Skeet, Sir Trevor

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

  Smith, Sir Dudley (Warwick)

  Kynoch, George (Kincardine)

  Smyth, Rev Martin (Belfast S)

  Lait, Mrs Jacqui

  Soames, Nicholas

  Lang, Rt Hon Ian

  Speed, Sir Keith

  Lawrence, Sir Ivan

  Spencer, Sir Derek

  Legg, Barry

  Spicer, Sir James (W Dorset)

  Leigh, Edward

  Spicer, Michael (S Worcs)

  Lennox-Boyd, Mark

  Spink, Dr Robert

  Lester, Jim (Broxtowe)

  Spring, Richard

  Lidington, David

  Sproat, Iain

  Lord, Michael

  Squire, Robin (Hornchurch)

  Luff, Peter

  Steen, Anthony

  Lyell, Rt Hon Sir Nicholas

  Stephen, Michael

  MacGregor, Rt Hon John

  Stern, Michael

  MacKay, Andrew

  Stewart, Allan

  Maclean, David

  Streeter, Gary

  McLoughlin, Patrick

  Sweeney, Walter

  McNair-Wilson, Sir Patrick

  Sykes, John

  Madel, Sir David

  Tapsell, Sir Peter

  Maitland, Lady Olga

  Taylor, Ian (Esher)

  Malone, Gerald

  Taylor, John M. (Solihull)

  Mans, Keith

  Taylor, Sir Teddy (Southend, E)

  Marland, Paul

  Temple-Morris, Peter

  Marlow, Tony

  Thomason, Roy

  Marshall, John (Hendon S)

  Thompson, Sir Donald (C'er V)

  Marshall, Sir Michael (Arundel)

  Thompson, Patrick (Norwich N)

  Martin, David (Portsmouth S)

  Thornton, Sir Malcolm

  Mates, Michael

  Thurnham, Peter

  Mawhinney, Rt Hon Dr Brian

  Townend, John (Bridlington)

  Mellor, Rt Hon David

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

  Merchant, Piers

  Tracey, Richard

  Mills, Iain

  Tredinnick, David

  Mitchell, Andrew (Gedling)

  Trend, Michael

  Mitchell, Sir David (Hants NW)

  Trotter, Neville

  Moate, Sir Roger

  Twinn, Dr Ian

  Monro, Sir Hector

  Vaughan, Sir Gerard

  Moss, Malcolm

  Viggers, Peter

  Needham, Richard

  Waldegrave, Rt Hon William

  Nelson, Anthony

  Walden, George

  Neubert, Sir Michael

  Walker, Bill (N Tayside)

  Newton, Rt Hon Tony

  Waller, Gary

  Nicholls, Patrick

  Ward, John

  Nicholson, David (Taunton)

  Wardle, Charles (Bexhill)

  Nicholson, Emma (Devon West)

  Waterson, Nigel

  Norris, Steve

  Watts, John

  Onslow, Rt Hon Sir Cranley

  Wells, Bowen

  Oppenheim, Phillip

  Wheeler, Rt Hon Sir John

  Ottaway, Richard

  Whitney, Ray

  Page, Richard

  Whittingdale, John

  Paice, James

  Widdecombe, Ann

  Patnick, Irvine

  Wiggin, Sir Jerry

  Pawsey, James

  Wilkinson, John

  Peacock, Mrs Elizabeth

  Willetts, David

  Pickles, Eric

  Wilshire, David

  Porter, Barry (Wirral S)

  Winterton, Mrs Ann (Congleton)

  Porter, David (Waveney)

  Winterton, Nicholas (Macc'f'ld)

  Portillo, Rt Hon Michael

  Wolfson, Mark

  857

  Wood, Timothy

  Tellers for the Noes:

  Yeo, Tim

  Mr. David Lightbown and

  Young, Rt Hon Sir George

  Mr. Sydney Chapman.

  Question accordingly negatived.
  It being after Eleven o' clock, further consideration of the Bill stood adjourned, pursuant to Order [1 February] and Resolution [this day].
  Bill, not amended (in the Committee) and as amended (in the Standing Committee), to be further considered tomorrow.

EMPLOYMENT
Ordered,
That Mr. Andrew Robathan be discharged from the Employment Committee and Mr. David Nicholson be added to the Committee.—[Mr. Andrew MacKay, on behalf of the Committee of Selection.]

AGRICULTURE
Ordered,
That Mr. Martyn Jones be discharged from the Agriculture Committee and Mr. D. N. Campbell-Savours be added to the Committee.—[Mr. Andrew MacKay, on behalf of the Committee of Selection.]

Rail Sleeper Service (West Country)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Andrew Mitchell.]
11.1 pm
Mr. Anthony Steen: Just over 11 years ago, on 9 March 1983 at 10.16 pm, when I was the Member for Liverpool, Wavertree, I introduced an Adjournment debate on the British Rail sleeper service to the north-west. I initiated the debate because a little mole on the night train had told me that British Rail was going to cut and run and savage that sleeper service, leaving the public high and dry. British Rail wheeled out the hoary old chestnuts that the route did not justify the investment, that each new night sleeper cost £250,000, that the service was not producing a 7.5 per cent. return on its capital and so forth.
I was strongly supported by the hon. Member for Warrington, North (Mr. Hoyle) and, sadly, by the late Mr. Bob Cryer, who was then the Member for Keighley, by the former Member for Manchester, Openshaw, Mr. Charles Morris, and the hon. Member for Denton and Reddish (Mr. Bennett)—then the hon. Member for Stockport, North. The former hon. Member for Manchester, Withington, Mr. Fred Silvester, made a good contribution and the former Secretary of State for Employment, Mr. Albert Booth, who represented Barrow-in-Furness, added his weight. My friend and colleague the Under Secretary of State for Transport, now Sir Reginald Eyre, responded in his normal avuncular, cogent and helpful way.
As a result, after heavy lobbying and the strongest of representations, the sleeper service to the north-west was saved and everyone breathed a sigh of relief. British Rail did not dare to run the gauntlet again until after the Boundary Commission got rid of my Liverpool seat. Within months of my adoption for the Devon seat of South Hams, British Rail whisked the night sleeper off. I saw the right hon. Member for Manchester, Wythenshawe (Mr. Morris) earlier and he said that the region was the poorer for losing the night train. Obviously, the battle between what some people have described as David and Goliath did not percolate down to the south-west, or British Rail might have had second thoughts before taking on someone who, if I may say so, is a seasoned warrior.
The Government are committed to the west country. The Prime Minister said that the Cabinet was now thinking west country, and he has been as good as his word, delivering the nuclear refit to Devonport, guaranteeing jobs well into the next century. The President of the Board of Trade was as good as his word in ensuring that large swathes of the south-west are now eligible for European money through assisted area status and 5b status. It is good to see on the Front Bench, among other distinguished Ministers, the Minister with responsibility for deregulation, the Under-Secretary of State for Corporate Affairs. It is nice to see that he is keeping an eye on such subjects.
Much of my constituency is now covered with layers of grant opportunity, as has never happened before in our history. More Cabinet Ministers have descended on the west country than have done for generations. I am told that some Ministers are now thinking of applying for season tickets to save the taxpayers money. The fact that the west country is an important area, which, unlike Scotland and Wales, does not have its own Government Department, has

859
meant that it has to receive top priority in Government thinking and there are plans for its future development throughout the region.
The Devon structure plan forecasts an increase of 66,000 houses by the turn of the century. We must have a better transport system to cope. The Department of Transport is reviewing whether the Exeter to Plymouth A38 should be upgraded to motorway standard. Brymon Airways continues to run, through British Airways, a service from Heathrow to Devon and Cornwall throughout the day. It is not a cheap service to fly west and it is not surprising that the airplanes are not as full as British Airways would like.
That goes also for the Cornish Riviera sleeper train. It used to stop at Reading, Swindon, Bristol, Taunton, Exeter, Newton Abbot and Plymouth and continue to Cornwall. Now it stops only at Reading, Exeter and Plymouth and, not surprisingly, there are fewer people as there are fewer stops. None the less, the sleeper train provides an essential communication link with the west country's principal towns and cities.
If the sleeper ceased to exist, the first weekday train from Paddington would not reach Penzance until 1.30 pm—a whole morning has gone—and one would not reach Plymouth much before 11.30 am, if the train arrived on time. By the time that one got into Plymouth proper, it would be midday. Those would be the first available times that one would arrive at those towns' railway stations.
If you were an investor or an industrialist, Mr. Deputy Speaker, would you choose to put your inward investment in a town that you could not reach until midday on public transport? If you were coming from Japan or Europe, there are many other parts of Britain that you would favour, nearer the channel tunnel, with excellent infrastructure and good public transportation systems. You would not invest in Plymouth or Cornwall if you could not get there. If the public transport is bad, new industry and new employment prospects will not come there. It is too much bother to go somewhere when one has to drive the whole time.
One of the reasons why the inner cities have not revived as fast as we would like, in the way that the Government would like, is not only violence on the streets and high rates, but the absence of proper infrastructure that allows big articulated lorries in and out, or good railway connections that help industrialists to travel between places. One cannot get into many of the inner cities and one cannot get out of them.
The rail and airplane network has to be top class, or people take the roads, because it is more convenient, even though the roads are heavily congested. With the £3 billion reduction in the road-building programme this year, it is essential that we use other channels of communication and do not overburden even more the roads that we have built.
British Rail's west of England service has greatly improved in the past 10 years. It is odd, though, that in spite of the multi-million pound new signalling equipment, that has not resulted in faster or more frequent trains. However, the fact that the night train continues to plough its way across the country both ways, every evening, six days a week, arriving virtually on time in every case, so that the business man can arrive fresh for a day's work and tourists arrive with buckets and spades at the ready, makes it an essential part of the rail infrastructure.
The Great Western management, to whom I shall pay tribute later, seem a little less enthusiastic about the continuation of the Cornish Riviera night sleeper, as it is
860
known, perhaps because they do not see it as an essential part of the west country fabric. Financially, apparently, it is precariously balanced, but that is not too surprising because the charges are high, the continental breakfast is quite dreadful, the facility is not well enough marketed and the train does not stop at enough stations.
I pay tribute to my right hon. Friend the Minister and my right hon. Friend the Member for Taunton (Mr. Nicholson), whose interest in the railway is well known, for coming up to Paddington and touring the sleeper. I have never seen so many people in a single first-class cabin. There were two television companies, each with their floodlights, and my right hon. Friend the Minister shaking the hand of a poor man in pyjamas. It was quite an amazing sight.
My right hon. Friend the Minister was left in no doubt when he heard all those who were travelling on the night sleeper—I think that it is fair to say that no one put British Rail up to it; they were all diehard travellers on the night sleeper—say how tremendously important it was to their industry and business. I am only sorry that my hon. Friend the Member for Plymouth, Drake (Dame Janet Fookes) is unable to speak because of her elevated position. Like me, she used to use the night sleeper. In particular, she and I were regular travellers on the Saturday night sleeper, but that has been withdrawn.
The Devon and Cornish Riviera night service has become a symbol of the Government's commitment to the west country. If it is withdrawn, it would appear that the Government are not prepared to stand up for an essential service, especially as the franchise bid is but a year away. Just at the point when the west country is witnessing the beginning of the economic upturn with business and commerce showing real signs of revival, an essential public transport service is about to come off the rails. Will the Minister, therefore, give me the opportunity of being the first hon. Member to save two sleeper services, the Liverpool one and now the west country one?
Before I close, I pay a special tribute to Brian Scott, the managing director of InterCity, Great Western Railways. He has managed to build around him a first-class team at the management level and has inspired loyalty and commitment from those working the service on the stations and in the trains. The restaurant cars are run to a high standard but I wish that there were not so many ticket collectors constantly disturbing one's journey, not to mention the incessant announcements telling one not to open the doors, to close the doors, not to leave any personal luggage, where to find the buffet, what the buffet is selling—hot and cold snacks; I know it by heart. A little peace and quiet would be much appreciated.
What we have in the House tonight is the strength of the west country Conservative Members, who are committed to a first-class franchise service but who do not want to damage the west country's prospects by an early and unnecessary withdrawal of a crucial rail facility. I have been trying for three and a half months to get this slot in the parliamentary timetable and I am most grateful to whoever arranged for me to speak tonight. I hope that my right hon. Friend the Minister, knowing that I have waited three and a half months, will not let us down. Whatever he says, I thank him for his extended courtesy for spending a couple of hours at Paddington station last night seeing for himself what we on the Conservative Benches believe is of great importance to the west.
Mr. Paul Tyler: Will the hon. Gentleman give way?
Mr. Steen: No, but I shall give way after the debate has finished!
I thank all my hon. Friends for helping me during the past three months in ensuring that the sleeper service continues and that we have a helpful and productive debate. Finally, Mr. Deputy Speaker, I should say that, as my hon. Friend the Minister has sorted out with us, my hon. Friends have my consent to speak for as long as they like.
11.13 pm
Mr. Robert Hicks: I support my hon. Friend the Member for South Hams (Mr. Steen) in what he said about the need to continue the Paddington—to—Penzance sleeper service, although I am not sure that I would necessarily support his remarks about other areas during the course of his 12-minute speech, particularly in relation to Liverpool.
Of those present in the Chamber, my hon. Friend the Member for Exeter (Sir J. Hannam) and I are probably the longest standing users of the service. When we were first elected in 1970, there were two night sleeper services between Paddington and Penzance. One reason why British Rail withdrew one of them was lack of support. It is incumbent upon all of us in the west country to play our part in making sure that the service continues. I make the point to my right hon. Friend the Minister that we are approaching a crucial period.
Mr. Tyler: An election.
Mr. Hicks: I do not need flippant remarks from Liberal Members.
It is important that we ensure that the service continues into 1995 so that it forms part of any franchise offer made to Great Western or anyone else who may be interested post-1995. If the service were to be discontinued this year, it could not be included in the franchise package. That makes it absolutely crucial that my right hon. Friend the Minister leans on British Rail management, or uses whatever influence he has at his disposal, to ensure that the service stays in the British Rail timetable post-October and remains in the package for the franchise or whatever future arrangements are made next year.
If we lose the service this year, there would be no guarantee that it would re-run at some future date. I look to my right hon. Friend for an assurance that he has done what he can with British Rail and Great Western management to ensure that the service will not be discontinued from October.
11.16 pm
Mr. David Nicholson: I congratulate my hon. Friend the Member for South Hams (Mr. Steen) on securing this Adjournment debate, which has attracted widespread support from Conservative Members representing west country constituencies.
I accompanied my hon. Friend and my right hon. Friend the Minister to Paddington station last night to see the sleeper and to talk to people using it. I shall not add to my hon. Friend's unparalleled description of the scene at the station at midnight, except to say that we spoke to a number of passengers who use the sleeper service regularly—at least once a month. They much appreciated the
862
assistance being given, and we appreciate the contribution that they—as business men, industrialists or investors—make to the west country. It would much diminish economic recovery in Devon and Cornwall in particular if the sleeper service were withdrawn.
There is a slight snag, of which my right hon. Friend the Minister is aware. Three years ago, the sleeper service ceased to stop at Taunton. We saw a train at Paddington station that was about to depart, at 11.30 pm, for Bristol—so that area is served by a late-night train. Exeter, Plymouth and Cornwall are served by the late-night sleeper service. Taunton and the hinterland of Somerset, north and east Devon could much benefit from a service that departed about midnight and stopped at Taunton at 2 o'clock in the morning. A sleeper would not be required, because few passengers would want to use one for such a journey. They would require only the seating accommodation that we saw on the train last night.
Such a service would enable my constituents and those of neighbouring constituencies who are in London for evening meetings, dinner, theatre or whatever to return home the same night. The lack of such a service has caused considerable concern and aggravation in my constituency over the past three years. I make the point to my right hon. Friend the Minister but also to British Rail and the successor companies that such a service would make good common and commercial sense. It is a financial equation and—
Mr. Tyler: Will the hon. Gentleman give way on that point?
Mr. Nicholson: I cannot give way because the Minister will want to speak. Perhaps the hon. Gentleman will catch the Chair's eye later.
It makes good commercial sense to entice more passengers on to the late-night service—people who want to return to Somerset or thereabouts. With the opening of the channel tunnel, over the next few years more people will want to use the railways. As they come to see the environmental problems and the huge costs of road transport, more of them will want to travel by rail. I hope that the Government and those responsible for operating the rail service will take the opportunity not only to make the service stop at Taunton but to ensure that it survives.
11.20 pm
Mr. Sebastian Coe: Members who represent Cornwall all recognise that Cornwall's ability to sustain full-time meaningful employment is inextricably linked to the ability of its business people to go out and conquer fresh markets, and to chase markets hitherto closed to them simply because they could not get in and out of the county within one full working day and get back to shepherding their businesses the following day.
We recognise that the future of the sleeper service is closely linked to all this. As my hon. Friend the Member for South Hams (Mr. Steen) pointed out, we must impress on the Minister the need for any future structure running the railways to market the service properly. The future of any public service depends—this is almost a truism—on the number of people who use it, and that is particularly true of a sleeper service. The service must be marketed as a stand-alone service that can compete with all the other burgeoning services in the county.

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This is an important facility—
Mr. Matthew Taylor rose—
Mr. Coe: —and I hope that the Minister will make a positive response to our requests.
11.21 pm
Sir John Hannam: I congratulate my hon. Friend the Member for South Hams (Mr. Steen) on his initiative, not only in securing the debate but in arranging for the Minister's visit to Paddington station to see the extent of the support for the continuation of this important service to the west country.
I represent the constituency with the first stop in the west country. Business men and women in Exeter, Dorset and east Devon would tell the Minister that they rely very much on this service. They like to leave their cars at Exeter, come up to do their business in London, then journey back late at night, arrive in the morning, pick up their cars and get home for a couple of hours before starting a normal day's work.
The same applies further west in Cornwall, where, unless people have a sleeper service, they cannot pursue a normal day's business when they get back to Truro and points west.
British Rail needs reminding again and again that great opportunities are unfolding with the new system that we are setting up, and that its success will depend on attracting more customers and new business; and the only way to do that is to open up the system and provide ever more facilities—unlike what has been done with freight services which have in the past been shut down. Not only should this important service be maintained but stations like Taunton should be reopened so as to offer access to a wider clientele.
My hon. Friend the Member for South Hams reminds me of one of those wonderful steam engines of the past: when the going gets tough and the track starts going uphill, he makes a lot more noise and exerts even more determination. That is how he secured victory in Liverpool. I am sure that in this endeavour he will have the support of my right hon. Friend and of us all as our businesses and industries enter a period of expansion.
Our aim is to move regional offices from Bristol down towards the south-west. The civil servants and others working in those offices will need a night service to get home after, say, late-night debates in the House.
I hope that my right hon. Friend will listen very carefully to the views represented tonight, and will ensure that the service continues, so that when the franchise is offered it will be included as an important part of the service to the west country.
11.24 pm
The Minister for Public Transport (Mr. Roger Freeman): I congratulate my hon. Friend the Member for South Hams (Mr. Steen) on initiating a debate on this important subject. I also congratulate my other hon. Friends who have participated, particularly my hon. Friend the Member for Falmouth and Camborne (Mr. Coe)—who came to see me yesterday with my hon. Friend the Member for South Hams—and my hon. Friends the Members for Taunton (Mr. Nicholson) and for Exeter (Sir J. Hannam),
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who also came, as did my hon. Friends the Members for Cornwall, South-East (Mr. Hicks) and for Plymouth, Drake (Dame Janet Fookes).
Representations have also been made over recent weeks by, in particular, my hon. Friend the Member for St Ives (Mr. Harris), and by my right hon. Friend the Member for Honiton (Sir P. Emery) and my hon. Friends the Members for Tiverton (Mrs. Browning), for Torridge and Devon, West (Miss Nicholson), for Plymouth, Sutton (Mr. Streeter), for Woodspring (Dr. Fox) and for Westbury (Mr. Faber). It is a formidable list.
As my hon. Friend the Member for South Hams implied, we had a very interesting discussion yesterday afternoon to discuss the continuation of the Paddington-to-Penzance sleeper after the end of the current timetable. We covered the issue in some detail, and I felt that the meeting had enabled me to understand much more fully the concerns of my hon. Friends representing the south-west. That contrasts sharply with the behaviour of members of the Liberal Democrat party, who have neither sought a meeting with me nor tried to secure an Adjournment debate; nor have they raised the issue in the same direct way as my hon. Friends.
Mr. Tyler: Will the Minister give way?
Mr. Freeman: No. Indeed, what they have been doing—
Mr. Tyler: On a point of order, Mr. Deputy Speaker. Is it in order for the Minister specifically to attack hon. Members and then refuse them the opportunity to intervene?
Mr. Deputy Speaker (Mr. Michael Morris): It is entirely in order, as far as the Chair is concerned. The Chair has no role to play, and no comment to make.
Mr. Freeman: I pay tribute to Brian Scott and the management of British Rail, who have succeeded in improving services on the Great Western railway. That includes the sleeper, which has received significant and welcome patronage in recent months.
Let me give my hon. Friends the firmest possible indication of Ministers' views on the continuation of the Paddington-to-Penzance sleeper, known as the night riviera. Ministers believe that the service should be part of the franchising process in 1995. We want to see what ideas the private sector can bring to the future operation of services—for example, in terms of improved marketing of the night riviera service.
Mr. Brian Wilson: Will the Minister give way?
Mr. Freeman: No.
Until franchising takes place, the future of the service is a matter for British Rail; but I do not wish to see any precipitous change. I assure my hon. Friend that Ministers wish the service to continue throughout this year and up to and including the franchising process. The service is in the current timetable, which runs up to October. I therefore expect it to be included in the October timetable, which is the winter timetable, so that it will be open to the Franchising Director to consider it in the context of franchising the Great Western main line services. I hope that that reassures my hon. Friends who have interests in that important part of the country.

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The Government accept that important rail services such as the Great Western main line and sleeper services are perceived as being very important to the economy of the west country—important not only to the business community, but to those who travel to the area for leisure purposes. It must be recognised, however, that the economic viability of the night riviera service is a crucial factor in the determination of its future. I understand that currently the service is marginal. However, I also hear that Great Western hopes that passenger ridership will increase as the economy comes out of recession, and there is already evidence of an increase in patronage.
I believe that the debate tonight—I again congratulate my hon. Friend the Member for South Hams on his contribution—will serve to raise the profile of this important service. But a railway, as with any other business, has to be responsive to passenger demands. It is therefore vital that, in order to ensure the long term future of the night riviera service, there be increased usage of the sleeper. It really is a case of use it, or lose it. People cannot come to British Rail, Great Western and the Franchising Director and ask for a service to be retained if they are unwilling to make use of it.
I thank my hon. Friend the Member for Falmouth and Camborne for helpfully and clearly spelling out that point. I also confirm that we expect to see channel tunnel night services running on the Great Western main line. I hope that the night stock, which is currently under construction, will be running on that line from Christmas 1995. That will bring a very welcome boost to the economy of the west country because it will bring tourists directly from the
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continent of Europe and through the channel tunnel, all the way along the Great Western main line, and certainly as far as Plymouth. We do not rule out a continuation and extension of that service in the future.
It is very important for the economy of the south-west that we continue to develop rail services. I can tell the hon. Member for Cunninghame, North (Mr. Wilson), who has had ample opportunity to criticise our reforms in other debates, that the reforms which will follow in the wake of the Railways Act 1993 will improve rail services in this country. He will find that the private sector will introduce into the railways not only fresh capital but innovation—new ideas.
I agree with my hon. Friend the Member for South Hams that one of the great advantages of franchising is that the marketing of the service is improved. I make no criticism of Brian Scott and his management team or of British Rail—they have done an excellent job within the constraints of a public sector service.
The hon. Member for Cunninghame, North and the hon. Member for North Cornwall (Mr. Tyler) have no imaginative or positive ideas to offer to improve rail services. The Government have a monopoly on good ideas to improve rail services. We will bring additional capital to the railway industry, we will let the private sector market the services better, and we will see more patronage not only on the day services and night services but on the sleeper services.
The motion having been made after Ten o'clock and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
Adjourned at twenty-nine minutes to Twelve midnight.