Commons Sitting of 8 December 1994

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

  CITY OF WESTMINSTER BILL [Lords] (By Order)
  Order for consideration, as amended, read.
  To be considered on Thursday 15 December.

Oral Answers to Questions
  AGRICULTURE, FISHERIES AND FOOD

    Battery Hens
    Mr. Lewis: To ask the Minister of Agriculture, Fisheries and Food what measures he proposes to improve the welfare of battery hens.
    The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mrs. Angela Browning): Regulations implementing directive 88/166 setting out minimum standards for the welfare of laying hens kept in battery cages will come fully into force on 1 January 1995.
    Mr. Lewis: Notwithstanding that reply, does the Minister agree that a comprehensive labelling system might be better for birds than those regulations? There is a great deal of misleading information in our shops about farm fresh or country fresh eggs. Would the welfare of battery hens not be improved if the shopper knew the exact origin of the eggs that he was buying?
    Mrs. Browning: We believe that it is important that the consumer is not misled in any way. We shall continue to monitor carefully any claims made on egg packaging.
    Mr. Riddick: Is my hon. Friend aware that many poultry farmers feel that we are applying the new regulations on cage sizes for battery hens much more stringently than our European partners? Why is it that we always seem to abide by the rules while our so-called partners appear not to do so?
    Mrs. Browning: I can assure my hon. Friend that the welfare of battery hens is of paramount importance. We have pressed for much higher standards, particularly in respect of cage sizes, which will apply, for example, to cages containing fewer than three birds. Therefore, although I sympathise with my hon. Friend's claim that other countries do not keep to the rules, we do, and we want to bring their standards up to our extremely high levels.
    Mr. Morley: Does the Minister agree that it is not enough just to monitor the labelling of eggs? Is she aware that the National Opinion Poll organisation found that 34 per cent. of consumers thought that eggs labelled "farm
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    fresh" were free range when they were, in fact, battery eggs? Does she agree that it should not be left to the Royal Society for the Prevention of Cruelty to Animals to introduce schemes such as the "Freedom Food" scheme, excellent though it is? We need less monitoring and more action.
    Mrs. Browning: I was discussing this matter with the industry only this week. It, too, is aware of the problem and is anxious to show the consumer that claims made on packaging are true and to ensure that the consumer is correctly informed. I assure the hon. Gentleman that we shall continue to monitor the matter carefully.
    Mrs. Ann Winterton: Will my hon. Friend continue to try to raise standards of welfare for battery hens in Europe while bearing it in mind that we are operating within a single market? Will she ensure that the Government do not introduce unilateral new regulations which would undermine our competitiveness?
    Mrs. Browning: Yes, I can assure my hon. Friend of that, but she will be aware that the directive which I mentioned requires the Community to review its detail. We shall be asking specifically for significantly increased cage sizes and for the enrichment of cages by means of perches and scratching bars. We shall also ask for the regulations to pay particular attention to the welfare of laying hens which are not necessarily battery hens.

    York Offices
    Mr. Bayley: To ask the Minister of Agriculture, Fisheries and Food when his Ministry's new office at King's Pool, York, will open; and how many staff will be recruited from the York area to work there.
    The Minister of Agriculture, Fisheries and Food (Mr. William Waldegrave): The new offices at King's Pool opened on schedule on 10 October 1994. Around 250 local staff now work in these offices.
    Mr. Bayley: I am told by the personnel department at King's Pool that it is well pleased with the quality of the staff whom it has recruited locally. In just over a year, the Ministry will be recruiting staff for the central science laboratory at Sand Hutton just outside York. How many local staff does the Minister expect to recruit then, and will the Ministry again give priority to providing jobs for other civil servants, principally those from the Ministry of Defence, who are being made redundant in north Yorkshire?
    Mr. Waldegrave: The Ministry is, indeed, extremely pleased with the quality of people, which may surprise the hon. Gentleman. The estimate is that between 150 and 250 locally employed staff will be needed at the central science laboratory when it is completed in 1996, if it is still relevant then. As in the case of the development in the hon. Gentleman's constituency, we will see whether we can employ people, particularly from the Ministry of Defence, in the area where we have taken on a number of people—about 100, I think.
    Mr. David Nicholson: I commend the ancient northern capital to my right hon. Friend, as my wife was at university there. Will he ensure that his Department's officials, wherever they are located, work hard in conjunction with those in the Department of the Environment on studying where the next generation of

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    farmers will come from, particularly as so many present farmers are near retirement and many sons and daughters—
    Madam Speaker: Order. Perhaps the hon. Gentleman will explain to me—but later—how that refers to the area of York. It was a good try, but even in the season of good will, I cannot allow that.
    Mr. Nicholson: I am referring to the work of officials situated at York.
    Madam Speaker: The hon. Gentleman might make that clear at the beginning. We are not terribly interested where his wife was educated, provided that she was educated.
    Mr. Nicholson: I am grateful to you, Madam Speaker.
    Will my right hon. Friend's officials at York work hard on this important matter and will they pay particular attention to the problems posed for the new generation of farmers by the present price of leasing milk quota?
    Mr. Waldegrave: My officials based in York and elsewhere will, of course, take those matters seriously. I can assure my hon. Friend that the strength of the young farmers clubs in the area of York means that there is a supply of good farmers coming from that neighbourhood.

    Infant Formulae
    Mr. Faber: To ask the Minister of Agriculture, Fisheries and Food when he plans to lay before Parliament the final version of the infant formula and follow-on formula regulations.
    Mrs. Browning: We hope to lay these regulations shortly.
    Mr. Faber: Is my hon. Friend aware that the continuing delay is causing grave uncertainty for companies such as Cow and Gate in my constituency? Can she at least give them some reassurance that when the regulations are laid before Parliament, they will contain none of the ludicrous over-regulation contained in the draft regulations last year, in particular a proposed ban on the marketing and advertising of baby milk, which would deprive millions of mothers of the right to choose how to feed and bring up their children?
    Mrs. Browning: I am aware of my hon. Friend's interest in this subject, particularly as he raised it in an Adjournment debate in April. I can assure him that we have received a wide range of submissions, both for and against. That is why there has been a delay; we really do need to consider them all carefully. I hope that it will not be too long before we are able to give him a decision, but I can assure him that all the points that he has raised today are being taken into consideration.
    Mr. Flynn: Will the Minister not be persuaded by the arguments of commercial interests, many of which are profit hungry, and remember that all the studies prove that the best, the most effective and the healthiest way in which to feed infants is the natural way?
    Mrs. Browning: The hon. Gentleman will be aware that there are already some voluntary restrictions in that area. Although, of course, we would not disagree with his suggestion that breast milk is the most favourable method, we are aware that there are mothers who unfortunately
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    cannot breast feed, and I would not wish from the Dispatch Box to make them feel that they were under some pressure in that area. All views will be taken into account.

    Apples
    Mr. Lester: To ask the Minister of Agriculture, Fisheries and Food what actions he took on apple day to help the apple industry.
    5. Mr. Butler: To ask the Minister of Agriculture, Fisheries and Food what steps are being taken to encourage British shops to sell British apples, in place of foreign imports.
    The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. Michael Jack): On apple day and at the Marden fruit show, as on other occasions, I have taken part in initiatives to promote British apples in order to assist their greater sale.
    Mr. Lester: My hon. Friend will agree that British apples are among the best in the world, particularly the Bramley apple, which comes from Southwell in Nottinghamshire. Will he consider mounting a national apple pie competition, of pies made with Bramley apples, so that those who do not understand how good those apples are and how scrumptious are apple pies made with them can do so?
    Mr. Jack: My hon. Friend, who comes from Nottingham, the home of the Bramley apple, is entirely in apple pie order. At the start of the promotion of Bramley apples this year, I took part in an apple pie-making activity and will certainly commend his very excellent idea to those in English apples and pears who do such a marvellous job in promoting our excellent apples.
    Mr. Butler: Does my hon. Friend accept that, although it is welcome, the awarding of grants for the grubbing out of redundant orchards has not yet tackled the problem? Will he urge the Commission to put into effect its current proposal to reduce the intervention price of apples? Furthermore, does he agree that French Golden Delicious, which have invaded our shores, are—being French—tasteless, and are neither golden nor delicious? [HON. MEMBERS: "Super!"] Does he agree that English Coxes are the best?
    Mr. Jack: I certainly agree with the findings of my hon. Friend's discerning palate, and not with the somewhat disparaging cry of "Super!" from Opposition Members.
    My hon. Friend went to the heart of the matter when he mentioned the grubbing grant. We have had 166 applications in this country for 1,600 hectares, but it is crucial that, in the long term, taking out surplus apples has the maximum effect in Italy and France, where apples are grown not for the marketplace but for intervention purposes. In the long term, we should phase out intervention altogether: it distorts the market unnecessarily.
    Mr. Enright: In his pursuit of British apples, will the Minister also not discriminate against English rhubarb? Will he set up a rhubarb day involving rhubarb pie, and take to making that dish?
    Mr. Jack: The hon. Gentleman may not be aware that I grew up in Yorkshire, and know a good bit of Wakefield

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    rhubarb when I see it. Last year, my hon. Friend the Member for Crawley (Mr. Soames) received a delegation of rhubarb growers, and he has done his best to promote that excellent vegetable—and, indeed, not to talk rhubarb.
    Mr. Graham: The Minister will remember one of the finest slogans ever used—"An apple a day keeps the doctor away". I have been eating apples in order to lose four stone, and I can recommend them as part of a healthy diet. We should do everything possible to help the British apple, because—as the hon. Member for Milton Keynes, North-East (Mr. Butler) said—they are some of the finest apples produced in the world.
    Mr. Jack: I am delighted that the English apple industry has contributed to the hon. Gentleman's robust and healthy looks. He is absolutely right: the potential for more fruit consumption, which is mentioned in a recently published report by the Committee on Medical Aspects of Food Policy, shows just what can be done. Fruit consumption in this country is too low, but with the hon. Gentleman as an advertisement I am sure that more will be eaten.

    Common Agricultural Policy
    Lady Olga Maitland: To ask the Minister of Agriculture, Fisheries and Food what plans he has for the further reform of the common agricultural policy.
    8. Mr. Robathan: To ask the Minister of Agriculture, Fisheries and Food what plans he has to reform the common agricultural policy.
    12. Mr. Lidington: To ask the Minister of Agriculture, Fisheries and Food if he will make a statement about his policy group on the reform of the CAP.
    Mr. Waldegrave: I meet my European colleagues regularly to discuss all aspects of the common agricultural policy, including current proposals for the reform of those sectors not covered by the 1992 reform agreement, such as wine. However, in the long term, we will need a more fundamental reform. On 6 December, I announced the names of a group of independent experts who will help the Department and me to develop our thinking.
    Lady Olga Maitland: I thank my right hon. Friend for his reply. Is he aware that the Leader of the Opposition has said that he will never allow this country to become isolated in Europe? Does he agree that there are times when we must stand apart, be independent and fight for Britain's interests?
    Mr. Waldegrave: My hon. Friend gives a wise example. Although some voices in the European Community are beginning to support us in regard to fundamental reform of the CAP, for a long time we were alone in arguing for it. In that instance, Britain was right to be alone. The argument that we should never be isolated is very foolish, and would often lead to decisions that were not in Britain's best interests.
    Mr. Robathan: My right hon. Friend used to be Secretary of State for Health, and I know that he disapproves of the European Community's subsidising tobacco. I understand that the Department of Health spends £20 million on encouraging people not to smoke.
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    What plans will my right hon. Friend present to stop the Community from spending £500 million or more on tobacco growing?
    Mr. Waldegrave: My hon. Friend is right about both my personal views and the Government's policy. I think it is wrong for us, and some other countries in Europe, to campaign against smoking if the CAP then adopts a regime that subsidises the growing of tobacco. I hope that, over time, we shall win over more allies to the idea that we do not need such a regime.
    Mr. Lidington: Has my right hon. Friend assessed the likely impact on the CAP of the accession to the European Union of the Visegrad countries of central Europe? Is there any sign that the European Commission and other European countries are taking seriously the gravity of the challenge that that move will impose on the CAP?
    Mr. Waldegrave: My hon. Friend has put his finger on what will be the cause of further fundamental change in the CAP, of which I am glad. I do not see how the CAP can take on board countries of central and eastern Europe—which, before the war and before the communists ruined their agricultural systems, were extremely powerful agricultural producers—without further fundamental reform. Some parts of the European Commission seem to be beginning to recognise that. Directorate-General II has recently issued a good report, known as the Munk report, that advances many of the same arguments as the Government. In his speech at the Royal Institute of International Affairs conference last Friday, however, Commissioner Steichen did not seem to recognise the scale of the challenge that faces the agricultural part of the Commission.
    Mr. Stevenson: Does the Minister agree that the sugar sector would be a crucial part of any CAP reform and that any reform of that sector would heavily depend on our commitments under the general agreement on tariffs and trade, which requires the European Community to reduce its sugar exports by about 36 per cent? Does he further agree that the two basic ways of achieving that are to reduce the quota or to reduce price? If those are the two basic elements, will he ensure that any quota reduction takes place in European Union countries whose quotas are in excess of their production requirements and that imports from African, Caribbean and Pacific countries are protected, because they need that protection to develop?
    Mr. Waldegrave: The hon. Gentleman is absolutely right. By far the best way of reforming the regime would be to bring down the price while protecting imports from ACP countries. The Commission's proposals are not nearly radical enough. Within what the Commission proposes, I shall do my best to ensure that British quotas are not discriminated against—after all, we consume up to the limit of our quota. I do not find anything with which to disagree in what the hon. Gentleman said.
    Mr. Tyler: Will the Minister confirm that nothing in the current CAP milk regime prevents him from taking action on the spiralling cost of the milk quota, including milk both for lease and for sale? Is that not a home-grown problem rather than a CAP problem? Will the right hon. Gentleman also confirm that nothing in the CAP regime prevents him from using his powers to confiscate unused

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    quota from non-producers who hoard it for speculative purposes? Is he aware that many dairy farmers are on the brink of bankruptcy because of the problem?
    Mr. Waldegrave: It follows, just as night follows day, that, if the milk price goes up, the quota value goes up—that is what a market is all about. The hon. Gentleman is not right to say that this is a home-grown problem, because part of the problem derives from the fact that the national quota is lower than national consumption. If we could achieve the transferability of milk quota across national boundaries in the European Community, as many people have argued we should, a great deal of good would be done to relieve the pressure on people who are having to pay more for quota than they would like.
    Mr. Dafis: Does the Department have any information on the degree of equability in the distribution of farm support, both among different-sized farms and among different regions in the United Kingdom? Does the Minister accept that any CAP reform must aim for greater equability in that regard and for the retention of at least the present level of employment in agricultural farming? Will he consider carefully the recommendations in the recent Friends of the Earth report entitled "Working Future" in relation to that matter?
    Mr. Waldegrave: We have to be careful about this argument because what we call small farms in the UK are large farms in terms of farm holdings in Europe. If we begin to accept the language of bias towards what Europe calls small farms, we shall ruin British farmers, large and small. Although it sounds an attractive slogan, I do not think that it is helpful in terms of British agricultural structure. Nothing will better maintain the welfare of people in the farming sector than the removal of as many quantitative controls as possible, which have grown in the short term, in a more fundamental, long-term reform of the CAP to bring it closer to the market and to allow people who have good products to sell them freely.
    Mr. Colvin: Will my right hon. Friend use all his influence to try to ensure that CAP 3 takes all the rural economy into account and not just agriculture?
    Mr. Waldegrave: With my right hon. Friend the Secretary of State for the Environment, I have launched the process that will lead, next year, to the production of a White Paper that will cover the rural economy more generally. I therefore sympathise with what my hon. Friend has said, because when we consider the health of rural areas, we should look not only at agriculture but at a number of other sources of income and constraints on prosperity.

    Bovine Immunodeficiency Virus
    Mr. Cox: To ask the Minister of Agriculture, Fisheries and Food if steps are being taken by the Ministry to restrict BIV-infected livestock from entering the United Kingdom.
    Mrs. Browning: The Government have considered that very carefully, commissioning research and consulting not only independent scientific experts in this country, but the leading researchers in north America and Europe. There is no scientific evidence relating to BIV that would justify
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    placing restrictions on livestock to be imported into the United Kingdom, and we are not aware that such restrictions have been imposed by any other country.
    Mr. Cox: Although I note that reply, is the Minister aware that that view is not held by many in the farming community? There is clear evidence that cattle from central Europe, which are imported here via western Europe, are infected with BIV. In view of the high quality of British cattle stocks, will the Minister assure the House that the quality and health of animals imported to Britain will be subject to rigid control?
    Mrs. Browning: I can indeed assure the hon. Gentleman of that. He will be aware that harmonised EC regulations governing the importation of cattle and animals are now in force. They require that an imported animal must have a certificate of health, signed by a veterinarian from the exporter country, and put the onus on the importers to ensure that they are satisfied that that animal is healthy and has the necessary certification.
    Mr. Martyn Jones: Does not Milk Marque take a different view by refusing to purchase milk from the BIV-affected farm in Cheshire? If it turns out that that strain of BIV is particularly virulent, is it not irresponsible of the Government not to take any precautions now, before the results of the investigation are known? They should make the disease notifiable, compensate the farmer and undertake an in-depth study of the disease. The potential danger posed to the dairy industry by that disease is disastrous.
    Mrs. Browning: I am sorry that the hon. Gentleman takes that line, because it overstates the importance of the virus. We would not normally discuss the farm in Cheshire in detail, but given that the owners have made public the information relating to their animals, it is important to make the case clear. The decision by the Milk Marketing Board and, subsequently, Milk Marque not to purchase the milk is purely a commercial decision between those organisations and the owners of the milk.
    For many years, the virus has occurred in numerous cases in America, Canada and, in particular, Australia. I can assure the hon. Gentleman that we have not been advised by those countries to restrict the sale and use of milk. I can also assure the hon. Gentleman that, even if the virus is detected in raw milk, it is killed by pasteurisation.

    Rural White Paper
    Mr. Jacques Arnold: To ask the Minister of Agriculture, Fisheries and Food what progress he has made on the rural White Paper.
    Mr. Waldegrave: An interdepartmental group of officials has been set up, led jointly by the Ministry of Agriculture, Fisheries and Food and the Department of the Environment. We have been in touch with more than 200 organisations to request their views. A very wide welcome has been received from interested organisations.
    Mr. Arnold: Does my right hon. Friend agree that the rural White Paper is a magnificent opportunity for our rural areas—in particular, their towns and villages—to make considerable progress? Should we not broaden the

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    scope of the White Paper to take in other Departments of State, so that they, too, consider their services to the rural areas?
    Mr. Waldegrave: It is a good opportunity. For many years, people have argued for a White Paper that looked across the board at policy affecting the rural economy. I agree with my hon. Friend that other Departments should be involved. The steering group is based on the two principal Departments, but others, such as Education, Transport and the Home Office, will be closely involved.
    Dr. Strang: Before the Government start to write the White Paper, will the Minister remove the sword of Damocles that he is hanging over the heads of hundreds of thousands of rural workers? Since the report by the London School of Economics, which the Government commissioned, has repudiated any adverse link between minimum wage rates and employment levels, will the right hon. Gentleman now abandon his plan to abolish the agricultural wages boards and, instead, retain them as they stand?
    Mr. Waldegrave: The hon. Gentleman knows that we are still considering the replies which we have received, which were not unanimous. There are two views on the matter, which I am considering.
    Sir Kenneth Carlisle: Does my right hon. Friend accept that it is good news that he and the Department of the Environment are working closely together to take policies forward? Does he agree that one of the most beneficial things for the countryside generally would be the spread of farm woodlands? Will he and his Department ensure that pressure is put on the Commission to allow the planting of farm woodlands to count against set-aside?
    Mr. Waldegrave: Immediately after questions in the House today, I shall be meeting the German Minister, Herr Borchert, who holds the presidency of the Agriculture Council. I shall be raising that matter with him in the hope that we can at least get an agreement in principle on what my hon. Friend is arguing for in the Council next week.

    Agricultural Tenancies
    Mrs. Angela Knight: To ask the Minister of Agriculture, Fisheries and Food what representations he has had indicating support for the Government's proposed changes to agricultural tenancies.
    Mr. Waldegrave: During the last 18 months my Department has received 185 representations via hon. Members and a further 28 addressed to Ministers directly. The majority of these were supportive. The proposals in the Bill are based on an agreement between the Country Landowners Association, the National Farmers Union, the Tenant Farmers Association and the National Federation of Young Farmers' Clubs.
    Mrs. Knight: Can my right hon. Friend confirm that an independent survey has estimated that, as a result of his proposals, there will be an increase of 10 per cent. in the land available to let? Does he agree that that will give significant encouragement, particularly to young farmers to enter the industry?
    Mr. Waldegrave: There has been an immensely wide welcome for the proposals, and I can confirm that there
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    has been such an independent survey. The Institute of Chartered Surveyors said that there may be 1 million acres of land under management by its members which are likely to come forward for new tenancies as a result of the measure. That is welcome indeed.

    Common Agricultural Policy
    Mr. Simpson: To ask the Minister of Agriculture, Fisheries and Food what has been the net United Kingdom contribution to the common agricultural policy for each of the last 10 years as measured in current prices.
    Mr. Jack: The United Kingdom does not contribute to the CAP directly but to the Community budget as a whole.
    Mr. Simpson: Is the Minister aware that, as part of our contribution to the budget as a whole, we have been contributing to the accumulation of a wine lake which amounts now to 19 billion bottles of wine? That could provide a Christmas gift of 500 bottles of wine to every adult in the United Kingdom. Does the Minister agree that—while he is not in a position to distribute the surplus freely—it is a wasted accumulation to which we ought not to contribute?
    Mr. Jack: A voice of irreverence behind me has suggested that the hon. Gentleman might like to contribute to removing some of that lake himself.
    On a more serious note, my right hon. Friend the Secretary of State will be including in his discussions with the German presidency the question of the reform of the wine regime which the Community must and will address.
    Dame Elaine Kellett-Bowman: Does my hon. Friend concur that the contribution is by no means a one-way street? In this country, out of £600 million pounds of compensation payments, £100 million comes from the Treasury and £500 million from Europe.
    Mr. Jack: I think that my hon. Friend is referring to issues connected with hill farms and her analysis, which points to greater receipts from Community schemes to hill farmers of both sheep and cattle, is absolutely right. I was also delighted by my right hon. Friend's announcement that we were able to maintain unchanged this year's hill livestock compensatory allowance payments.
    Dr. Strang: The Secretary of State's think tank is all very well, but when will the Government seriously tackle common agricultural policy fraud? Does he recognise that fraud is inherent in the market support mechanisms of the CAP? Will he now take the bull by the horns and come out unequivocally against the open-ended state intervention buying of all agricultural commodities?
    Mr. Jack: It sounds to me as though there is a typical Opposition stance on this: pull out the rug from underneath the farmers, with no idea whatever. The Government, at least, are thinking carefully about the future of the CAP. Judging by the hon. Gentleman's question, he has not a thought in his head. I heard him interviewed on "Farming Today". When asked what he would do, there was a bit of radio silence. I am disappointed that the hon. Gentleman does not acknowledge what the United Kingdom has done in leading the fight against fraud. If he were keeping up with affairs, he would know that only yesterday we agreed the beginning of a Community black list to stop fraudsters illegally claiming money in different parts of the

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    Community when they are under investigation. With our support, more than 50 new members of staff have been allocated within the Community's anti-fraud unit. I could go on. The Conservative party takes the fight against fraud extremely seriously.

    Research
    Sir Peter Emery: To ask the Minister of Agriculture, Fisheries and Food what sum was spent by his Department on research for the last three years; what percentage this was of the total annual budget; what is the budget for the forthcoming year; what percentage this is of his total budget; and what additional new research is to be undertaken.
    Mr. Jack: The Ministry has spent £121.5 million, £132.9 million and £137.3 million respectively. This represents 17 per cent., 18 per cent. and 19 per cent. of the total annual budgets for those years. Funding for a wide range of research and development in 1995–96 will be around £140 million or 17 per cent. of the total budget.
    Sir Peter Emery: The increase which the Minister announced is obviously welcome. What part of it applies to the west country? Will he ensure that aspects of research on grasslands, which are important in terms of milk production, will continue?
    Mr. Jack: My right hon. Friend refers to the £140 million, which represents a maintenance of our resources for research and development following successful negotiations by my right hon. Friend the Minister. We do not allocate research and development funds by region, but the type of project on silage to which my right hon. Friend refers will benefit not only west country farmers but dairy farmers throughout the United Kingdom. Such work is safeguarded by our excellent settlement on research and development.
    Mr. Robert Hughes: Has the Minister commissioned, or will he commission, research into the use of the flavour enhancer monosodium glutamate, which is now used in almost every manufactured food product, including bread? It has no nutritional value and there is strong evidence that it builds up a severe allergy that is affecting many people. Is not the time now right to take a proper look at the matter?
    Mr. Jack: I am not aware of any research that I have commissioned on that subject. On food safety, great care is taken before an ingredient is allowed to be used. However, if the hon. Gentleman knows of research that he believes should be evaluated, I shall ensure that a scientist does that job.
    Mr. Bill Walker: Is my hon. Friend aware that at Mylnefield in Tayside, we have one of the finest crop research centres in existence? It is important that it continues its good work, particularly its research into raspberries and other crop fruits but also into potatoes, which are vital to the Tayside economy.
    Mr. Jack: I am glad that my hon. Friend gives yet another indication of how Government-funded research is helping to boost prospects, particularly for British horticulture. As we said earlier, the opportunity for our raspberries—[Interruption.] If hon. Members are not careful, I shall blow them one. The work being undertaken is resulting in increased fruit consumption. I hope that the
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    research to which my hon. Friend referred will enable our raspberry growers to take full advantage of those commercial possibilities.

    Carcase Meat
    Mr. Miller: To ask the Minister of Agriculture, Fisheries and Food what steps he is taking to promote the export of carcase meat.
    Mr. Jack: We continue to support the Meat and Livestock Commission's excellent promotion of meat products and exports.
    Mr. Miller: Does the Minister agree that, if he banned the export of live animals, the British slaughterhouse industry could cope with the increased throughput of some 2 billion animals? Does he agree that such a step would not only remove some of the barbaric practices in the transport of live animals but stop the export of British jobs?
    Mr. Jack: Sadly, the hon. Gentleman's question does not relate the enormous amount of work that my right hon. Friend the Minister is undertaking to try to find a Europe-wide solution to improve the welfare of animals in transit. However, I gather from the nature of his question that the hon. Gentleman would, at a stroke, do away with a trade worth £200 million to British farmers, and farmers will have noted carefully the terms in which he put it.
    The Meat and Livestock Commission is working extremely hard to open up new opportunities for sales of carcase beef, and the work that we have done on bovine spongiform encephalopathy has kept European markets such as Germany open to us. It is sad that, on the day that we announced the new opportunities for young beef cattle to be exported from the United Kingdom, the hon. Gentleman does not refer to that in his question.
    Mr. Marland: Can my hon. Friend confirm that exports of British meat have almost doubled since 1991, thereby emphasising that, internationally, British meat is seen to be of the highest standard? It is important to keep that industry alive and vital. Does my hon. Friend agree that, in 1976, the hon. Member for Edinburgh, East (Dr. Strang) introduced statutory succession rights for tenants, that he thereby denied new entrants the opportunity of coming into the farming market, that it was a disgraceful thing to do and that we should quickly undo that bad work?
    Mr. Jack: My hon. Friend is entirely right. The meat industry will be worth £891 million in exports this year and it is certainly true that the reform of agricultural tenancy, which hon. Members on the Conservative Benches unequivocally support, will open the door to new, young, innovative farmers who will be able to take advantage of the excellent opportunities for exporting British meat.
    Mr. Tony Banks: Will the Minister join me in congratulating the animal welfare organisations and the travelling public on putting such pressure on the ferry companies that most of them have banned the carrying of live animals across the channel?
    Mr. Jack: What I will do is join those people who support my right hon. Friend the Minister in his attempt to find a Europe-wide solution to ensure that continental

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    practice is brought up to the standard of the United Kingdom. I am disappointed that, in spite of his tremendous efforts, people have unilaterally withdrawn an important transport link for our cattle producers. It is perhaps a sad day when they have not listened to what the Minister has done, especially in working to develop a code of practice, to regulate the movement of live animals into Europe.

    Nitrates
    Mrs. Roe: To ask the Minister of Agriculture, Fisheries and Food what action he is taking to defend United Kingdom interests in respect of new EC provisions on the level of nitrates in leafy salads and vegetables.
    Mrs. Browning: We have firmly opposed the proposal and demanded its withdrawal. It is now blocked while the Commission examines the comprehensive dossier that we have sent in, challenging the scientific basis for the measure and detailing the serious economic implications that it would have for our glasshouse growers.
    Mrs. Roe: Does my hon. Friend agree that British lettuces are perfectly safe and nutritious, and that distinguished scientists have shown that there is no public health problem that justifies a regulation?
    Mrs. Browning: My hon. Friend is exactly right. In the UK, intakes of nitrate in vegetables are well below the acceptable daily limit and are calculated on a very sound scientific basis. We want to share that scientific information with our partners in Europe, where we believe that the scientific basis has not been as sound as our own.
    Mr. Cohen: Do not British farmers use far too much pesticide on their lettuces and salad items, and should not the Minister concentrate on telling them to use less, rather than attacking the Common Market?
    Mrs. Browning: The specific problem relates to lettuce grown in glasshouses, not lettuce grown in the open. I assure the hon. Gentleman that we are sure, from our scientific basis, that British lettuces are quite safe to eat. In fact, I would encourage hon. Members to eat more of them, because British lettuces are good for you.

    Agricultural Tenancies
    Mr. Tredinnick: To ask the Minister of Agriculture, Fisheries and Food what assessment he has made of the likely effect of the proposals in the Agricultural Tenancies Bill on the supply of farmland available for rent.
    Mr. Waldegrave: Recent research carried out independently by the Royal Institution of Chartered Surveyors suggests that, if enacted, the proposed reforms could be expected to increase the area of let land by up to 10 per cent. of its current level.
    Mr. Tredinnick: How many tenancies were lost as a result of the 1976 tenancy laws, and are there any provisions in the Bill to enable tenants who improve their land to receive adequate compensation when they give up their tenancies?
    Mr. Waldegrave: One of the important reforms in the Bill is the strengthening of the hand of the tenant in relation to compensation for investment that he may have made during his tenancy. That will equalise the position.
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    My hon. Friend is correct to say that the hon. Member for Edinburgh, East (Dr. Strang) wrongly predicted the outcome of the Bill that he introduced, I am sure in good faith, in 1976. He said then that there would be no significant drop in the supply of tenanted farms. As he will be honest enough to admit, there has been a catastrophic drop in the supply of tenanted farms. I hope that he has learned from the mistake that he made at that time.

    Coastal Defences
    Mr. Whittingdale: To ask the Minister of Agriculture, Fisheries and Food how much his Ministry is spending this year on improving coastal defences against flooding from the sea.
    Mr. Waldegrave: My Department expects to provide some £19 million in grant towards the cost of improving coastal defences against flooding from the sea in 1994–95.
    Mr. Whittingdale: I am grateful to my right hon. Friend for his answer. I welcome the work that the National Rivers Authority is doing to evaluate different means of sea defences, including managed retreat. But will my right hon. Friend confirm that it remains the Government's policy to protect, not just populated areas, but prime agricultural land?
    Mr. Waldegrave: I can, indeed, confirm that my hon. Friend is right. There may be areas where it is better not to waste money on defences that will be overwhelmed. The importance of defending both human habitation and prime agricultural land is always taken into consideration.

  PRIME MINISTER

    Engagements
    Mr. Wilshire: To ask the Prime Minister if he will list his official engagements for Thursday 8 December.
    The Prime Minister (Mr. John Major): This morning, I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today.
    Mr. Wilshire: Will my right hon. Friend convey my best wishes to the officials who will be leading the negotiations tomorrow with Sinn Fein-IRA? Will he also accept my congratulations on the way in which he has handled the peace process? Could he ensure that, on day one it is made crystal clear that there can be no real progress unless all paramilitaries give up weapons and intimidation? Will he also make it crystal clear that there can never be any question of an amnesty for murderers or bombers?
    The Prime Minister: My hon. Friend is right to feel strongly about these matters. Our position is clear: those people convicted of criminal offences will serve their sentences and an amnesty for murderers simply does not arise.
    Sinn Fein must accept unequivocally the rules of democratic politics. Guns and bombs need to be taken out of commission and intimidation must end—that is, of course, equally true for the loyalist paramilitaries. We have invited the loyalist political representatives to begin a separate exploratory dialogue with the Government on

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    15 December. I hope that both they and Sinn Fein will show a serious commitment to exclusively peaceful methods so that we can ensure that a peace remains and becomes stable in Northern Ireland.
    Mr. Blair: May I say how much I support what the Prime Minister has just said on Northern Ireland?
    Does the Prime Minister recall that last year he said that he was unequivocally against a referendum on Europe—a view that he has repeated this year—yet last night he said that he did not rule one out? What has changed?
    The Prime Minister: I continue to welcome the right hon. Gentleman's support on Northern Ireland. It is a strength to the peace process that it carries the support of hon. Members in all parts of the House. On the subject of a referendum, let me make clear the point that I made yesterday—there are many people who see the referendum simply as a tactical device. I strongly suspect that that is true of many Opposition Members. But I do not see it in that fashion; we have to consider the constitutional implications for British democracy of referendums generally—there are advantages and there are disadvantages. What I have said and what my right hon. Friend the Foreign Secretary has said is that we are not prepared to rule one out.
    Mr. Blair: Is not it clear that what has changed is not the Prime Minister's belief about a referendum, but his ability to unite his party without one? Is that not his problem and that of the country—[Interruption.]
    Madam Speaker: Order. The House must come to order. [Interruption.]
    Mr. Blair: I see that the yobbos are out in force today. Is not this the right hon. Gentleman's problem? Whether it is the referendum, or VAT, or Post Office privatisation, or the Tory rebels, is not his problem the fact that the Government's decisions are now being taken by a Cabinet of crisis managers, driven by each day's headlines, making or unmaking policy according to the tyranny of the factions—when what this country is crying out for is a Government who will serve the national interest?
    The Prime Minister: Perhaps if the right hon. Gentleman feels that way about referendums, he will explain why he is committed to referendums for Scotland and for Wales. Perhaps it is to heal divisions among his right hon. and hon. Friends.
    As to the question of country and party, that is a sound bite which the right hon. Gentleman has been trailing around from studio to studio over the past day or so. Let me make it entirely clear to him: we shall put the country first, as we always do. It is precisely because we have put the country first that we have not shrunk from difficult decisions. This country is now in position for the longest, most sustained recovery for all its people that has been seen for many years.
    Mr. Spring: To ask the Prime Minister if he will list his official engagements for Thursday 8 December.
    The Prime Minister: I refer my hon. Friend to the answer I gave some moments ago.
    Mr. Spring: Is my right hon. Friend aware of a number of important initiatives to combat crime in rural areas such as Suffolk, including the introduction of a rural inspectorate in addition to cluster neighbourhood watch
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    schemes and parish constables? Will he join me in welcoming the fact that crime in the Bury St. Edmunds sub-division has fallen by 15.2 per cent. so far this year, and, in the Newmarket sub-division, by a full 22.2 per cent?
    The Prime Minister: I am delighted to hear those statistics on falling crime; they are mirrored in some other parts of the country. I understand that my hon. Friend was instrumental in setting up a drugs prevention initiative in Newmarket, and I hope that many other people will follow the same sort of idea in other parts of the country. The reduction in crime to which my hon. Friend refers demonstrates the effectiveness of a community-based approach.
    Mr. Ashdown: Let me remind the Prime Minister of his actual words, used in answer to me in June 1992. He said:
    "I am not in favour of a referendum in a parliamentary democracy".—[Official Report, 3 June 1992; Vol. 208, c. 830.]
    Are we to take it that that was not a statement of principle but yet another flexible policy from our eternally flexible Prime Minister?
    The Prime Minister: The right hon. Gentleman accuses me one day of being inflexible and criticises me on the next for being flexible. I suppose that that shows that he himself is unsure whether flexibility is good or bad—just as he is unsure about every single policy that he advocates in one House one day or his hon. Friends advocate in another House another day. They change from hour to hour, from day to day, from House to House and from Question Time to Question Time.
    Sir Fergus Montgomery: Did my right hon. Friend have the chance to read yesterday's Daily Mail, about what £60 would buy today? Does he agree that £60 for a haircut is a bit much, even for the Leader of the Opposition?
    The Prime Minister: As it happens, I did not read the Daily Mail yesterday, so I was certainly not aware of the right hon. Gentleman's haircutting exploits. Indeed, it would be indelicate of me to refer to them.
    Mr. Gordon Prentice: To ask the Prime Minister if he will list his official engagements for Thursday 8 December.
    The Prime Minister: I refer the hon. Member to the answer I gave some moments ago.
    Mr. Prentice: Has the Prime Minister visited Dudley, West yet? If not, does he intend to do so? Is he aware that his candidate there said on television last night that he wanted to fight the by-election exclusively on local issues? Today of all days, are there no national issues on which to engage the electors of Dudley, West?
    The Prime Minister: If the hon. Gentleman had cared to look even at today's news he would have seen that there is another record set of export figures, that industrial production is rising yet again, that over recent months unemployment has been falling consistently, that there is a growth rate of over 4 per cent. and that there is an inflation rate of 2 per cent. He would see prospects for this country that his party in office has never managed to

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    produce. I suggest that that is a good prospectus for people at any by-election at any time and certainly for the one at Dudley, West.
    Mr. John Marshall: As chairman of the all-party Friends of the Northern Line group, may I welcome today's announcement of 100 new trains for the Northern line? That is good news for London and will be warmly welcomed. [Interruption.]
    The Prime Minister: There seems to be a voice of dissent—the hon. Member for Bolsover (Mr. Skinner)—but I think that most people who use the Northern line will be pleased to see this substantial investment and the improved rolling stock that will be available for many millions of Londoners and others.
    Mr. Gunnell: To ask the Prime Minister if he will list his official engagements for Thursday 8 December.
    The Prime Minister: I refer the hon. Gentleman to the answer I gave some moments ago.
    Mr. Gunnell: Given the Prime Minister's claim to support small business, and recognising that over the past 10 years British Coal Enterprise has created or expanded 5,000 companies in coalfield areas, would the Prime Minister now guarantee the future of British Coal Enterprise?
    The Prime Minister: The hon. Gentleman, in the way that he posed his question, shows what an excellent record we have on small businesses, because he quoted the number of extra small companies that there are. That is true of other parts of industry and in other parts of the country, and I am sure that they will continue to grow.
    Mr. Hawkins: To ask the Prime Minister if he will list his official engagements for Thursday 8 December.
    The Prime Minister: I refer my hon. Friend to the answer I gave some moments ago.
    Mr. Hawkins: Does my right hon. Friend agree that it is always welcome when parents exercise the right of choice in education for their children, a choice which only the Conservative party has introduced? Does he further agree that it is contemptible for most Opposition Members to seek to deny that choice from which so many of them and their children have benefited? Does he agree that this is a case of, "You're all right, Tony, pull up the ladder"?
    The Prime Minister: I am always delighted to see people exercising choice in all areas, and it is certainly right to exercise choice in favour of one's children to ensure that they get the best possible education. The point about education generally is that there is no choice where only bad schools exist. That is why we have introduced a range of measures, including regular inspection, and a range of education policies, to raise standards. I am delighted that, despite its past hostility to those policies, the Labour party is increasingly recognising that our
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    education policies are right and is now following them. I recommend to the Opposition that they begin to follow some of our other policies on a whole range of issues.
    Mrs. Helen Jackson: To ask the Prime Minister if he will list his official engagements for Thursday 8 December.
    The Prime Minister: I refer the hon. Member to the answer I gave some moments ago.
    Mrs. Jackson: Does the Prime Minister accept that last Thursday he misled the House in claiming that the disposable income of all people at every level had risen, and that the facts are that the bottom tenth of the population's real disposable income has fallen by 17 per cent. since 1979 while the incomes of the top tenth have gone up by 62 per cent? Does not that demonstrate the unfair society that we shall be left with following this Tory Government? Will he now put the record straight?
    The Prime Minister: The hon. Lady is playing with statistics and she knows it. [Interruption.] The statistics that she quotes incorporate all sorts of people who run businesses and declare no income but whose spending pattern is way above the average. That is how she produces those statistics. The people at the bottom end of the scale are those who exist completely on social security payments. The hon. Lady knows that they have risen in value and she should not try and pretend otherwise.
    Q7. Mr. Patrick Thompson: To ask the Prime Minister if he will list his official engagements for Thursday 8 December.
    The Prime Minister: I refer my hon. Friend to the answer I gave some moments ago.
    Mr. Thompson: Returning to the subject of education, will my right hon. Friend take this opportunity to commend the good work that is being done in independent schools throughout the country? Will he also confirm again the Government's commitment to the assisted places scheme which has done so much for children from less well-off families? Is not it surprising that the new modern Labour party should once again attack freedom of choice in education and, indeed, make it more difficult for its leader to exercise choice for his own family?
    The Prime Minister: It is entirely apt that my hon. Friend should ask that question when the hon. Member for Sheffield, Hillsborough (Mrs. Jackson) has just been talking about people at the bottom of the income scale. The assisted places scheme is a way to help people at the bottom of the income scale and the hon. Lady opposes it, as do her right hon. and hon. Friends. Parental choice is a fundamental principle of our policy. We choose to exercise it for everyone, not just for some, and I fail to understand how members of the Labour party, which claims to pride itself on equality of opportunity, would deny the opportunities under the assisted places scheme to some of the poorest children in Britain. What it shows yet again is the gap between what they say and what they practise.

Tax Revenue
3.31 pm
The Chancellor of the Exchequer (Mr. Kenneth Clarke): With permission, I should like to make a statement. It is a statement, not a Budget statement. I regard it as a corrigendum to an earlier Budget, on which the House has decided to change its mind.
Following the vote on Tuesday night, I told the House that the Government remained committed to taking all the necessary measures to put the public finances on a sound footing.
The reductions in the public sector borrowing requirement that I announced were welcomed at the time by the business community, by the financial markets and by the House. During the course of our Budget debate, very few right hon. and hon. Members questioned that judgment.
To keep those borrowing plans intact, I said on Tuesday that I would be bringing forward measures to make good the gap in the public finances from holding the rate of value added tax on domestic fuel and power at 8 per cent. I can now tell the House what those measures will be. A press note filling out the details of my proposals will be available from the Vote Office as soon as I have sat down.
Holding the rate of VAT at 8 per cent. will reduce revenue by about £1 billion in 1995–96 and, as a result of the quarterly profile of payments, £1.5 billion in subsequent years. Those are the amounts I have sought to recover.
As VAT on fuel will remain at 8 per cent. it would be quite wrong to increase social security expenditure by providing the full compensation package previously announced to help people with VAT at 17.5 per cent. We will adjust the amount that would have been paid had VAT on fuel been increased. By adjusting that amount, we will save about £200 million in 1995–96 and subsequent years.
We will, of course, keep in place the help already given for 8 per cent. VAT on domestic fuel and power. We will increase benefits fully in line with the relevant cost of living index, including the component reflecting the impact of last year's VAT increase. After those adjustments, pensioner couples will receive help of at least £1.05 a week from next April. This will be more than the average weekly cost to pensioners of paying 8 per cent. VAT on fuel. I am also keeping unchanged the increases in cold weather payments and spending on the home energy efficiency scheme which I announced in the Budget and in last Tuesday's debate.
That small change in the previously announced pension rates has a knock-on effect to the national insurance system, since the lower earnings limit is automatically linked to the single pension. National insurance contributions will therefore start at £58 rather than £59 a week from April 1995. The upper earnings limit will be unchanged. That will raise receipts from national insurance contributions by about £50 million next year.
So the remaining gap for 1995–96 amounts to about £800 million. My first option was to look at public spending. In my last two Budgets, I have been able to find savings of £43 billion in public spending over the four survey years. That is much larger than the increases in taxation that we found it necessary to make to restore healthy public finances after the recession. We have
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managed to find those savings while increasing spending in real terms on key public services, such as the national health service and the police. My objective remains to reduce Government spending to below 40 per cent. of total national output. Both Budgets made that objective much more achievable.
The details of this year's extremely tight public spending settlement have already been announced by the relevant Secretaries of State. I do not consider it practicable or sensible to reopen those settlements today. At the time of my Budget, I struck a balance between spending and revenue designed to ensure that the economy remains on track for steady and sustainable growth. Nothing that has happened since has led me to change that judgment for this year's settlement.
The next area that I considered to recover the shortfall in revenue was direct taxation. Since 1979, the Government have reduced the basic rate of taxation from 33p to 25p in the pound. We also introduced the new lower rate of 20p—one fifth of all taxpayers now pay tax only at that lower rate of 20p. When seeking to raise revenue in the 1993 Budgets, my right hon. Friend the Member for Kingston upon Thames (Mr. Lamont) and I considered it necessary to freeze personal allowances and reduce the married couple's allowance and the mortgage interest relief allowance.
I considered then that those increases in direct taxation were a sufficient and reasonable contribution to our revenue needs. That remains my view today. I do not intend to reverse my decisions to index the personal allowances and to over-index above inflation the elderly person's allowance and the 20p band.
As my next option, I also considered raising additional revenue through business taxation— [Interruption.] It is my clear impression from the debates that I have been listening to that hon. Members need to be taken through the options for the consequences of their votes. They need to be taken through them— [Interruption.] It is all very well voting at the behest of Conservative Euro-rebels, but certain consequences do follow.
I also considered raising additional revenue from business taxation. In my Budget, I provided as much help as I could for the business community. The reason was simple—strong and thriving businesses are essential for a strong and thriving economy.
During last week's debate, I also listened to the Labour party's proposals for closing loopholes and introducing a windfall tax on utilities. I have done some work to study them. The hon. Member for Dunfermline, East (Mr. Brown) asked me to do so.
The proposals are not serious options for revenue raising. This Government have never been a friend to the tax avoidance industry. Conservative Chancellor after Conservative Chancellor has closed loopholes, year after year. The last two Budgets speak for themselves. I will raise nearly £3.5 billion between 1994–95 and 1997–98 by closing loopholes. The hon. Gentleman's proposals on loopholes are undesirable changes in taxation on legitimate business. I have considered his proposal on executive share options many times. The policy behind the existing tax relief for such share options is geared to encouraging companies to motivate key employees and to benefit all shareholders. Executives are liable to capital gains tax once they sell their shares. The hon. Gentleman's suggestions totally exaggerate the cost of the scheme. He claims that I could raise £200 million by

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reforming it. The actual total cost of the relief is estimated at around £50 million to £60 million, which is all one would gain by abolishing it.
The suggestion of a windfall tax is, by definition, a one-off tax—a one-off sum of money. It could not replace permanent annual loss of a flow of revenue. In any event, it appears to be based on the suggestion of taxing profits on gains, which, as the right hon. Gentleman appears to have discovered in this morning's press, are already liable to taxation. A windfall tax would simply be another tax on a particular sector of industry. Like other taxes on business, it would inevitably have adverse effects on that business sector's investment and prices.
My third and remaining option for 1995–96 therefore has been to look to indirect taxation. As the House has rejected an increase in indirect taxation to which the House had previously agreed, it is wholly consistent with my Budget strategy, and it preserves the shape of the Budget, to fill the hole with increases in indirect taxation. I have decided to bring forward certain increases in taxation in addition to those announced in my Budget, and the increases will take effect from midnight, 31 December 1994.
I propose that the duty on tobacco products, with the exception of hand-rolling tobacco, will increase by just under 4 per cent., equivalent to a further 6p on a packet of 20 cigarettes. This further increase in tobacco duty is consistent with our policy of increasing prices to discourage smoking.
I also propose that the duties on road fuels will rise by a further 1p a litre. I have kept these increases to the minimum to limit the burden on business users and the rural motorist. Even after these increases, petrol will still be cheaper in real terms than it was a decade ago, and it will still be cheaper than in our main European competitors.
The increase will also play a part in our strategy for curbing emissions of carbon dioxide. We remain fully committed to the target of reducing carbon dioxide emissions to 1990 levels by the year 2000, as do the Opposition.
Finally, I propose that duties on alcohol will rise by around 4 per cent. This is equivalent to 1p on a pint of beer, 5p on a bottle of wine and 26p on a bottle of whisky.
Mrs. Ann Taylor: What about champagne?
Mr. Clarke: Eight pence on champagne.
For the reasons set out in my Budget statement, I had hoped to spare these industries any increase in duty this year, but in present circumstances, as a result of my need to raise revenue from sources other than value added tax on fuel, I have reluctantly judged it necessary to raise some additional revenue from them.
Taken together, these increases will raise £180 million in the current financial year and nearly £800 million in 1995–96. In total this is sufficient to meet the shortfall next year. I therefore expect the public sector borrowing requirement next year to be the same as I announced in my Budget statement.
Let me turn now to the following year, 1996–97. For that year I need to raise £1.5 billion. The tax measures that I have announced today will raise an additional £850 million. The impact of the higher duties that I have announced today on the retail prices index will not be as
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great as the impact would have been from the second stage of VAT on fuel. Inflation will therefore be very slightly lower than expected, leading to further public spending savings on benefits of around £160 million in 1996–97 and in later years, and there will be savings of around £200 million from the withdrawal of help to compensate for the second stage of value added tax.
There will therefore remain a further gap of around £300 million to be filled in 1996–97. I propose to finance this gap by reducing the public expenditure control totals for those years. For the time being, I will score that reduction through a reduction in the provision that I have made for the reserve. The eventual consequence for departmental programmes—of course, there must be a consequence for departmental programmes—will be addressed in next year's spending round. Again, I expect the public sector borrowing requirement to be as I announced in my Budget statement in 1996–97 and in subsequent years.
Resolutions under the Provisional Collection of Taxes Act 1968 to hold VAT on fuel at 8 per cent. and to increase other taxes with effect from 1 January 1995 will be tabled very shortly. My right hon. Friend the Leader of the House will then be arranging a debate before the House rises for the Christmas recess.
I said in my Budget speech that the British economy is currently facing the most favourable set of economic circumstances that it has seen for many years. Trade figures published only this morning show that exports are up 14 per cent. in the last year, and are once again at record levels. The trade deficit is the lowest that it has been for almost 10 years. The outlook for jobs and future prosperity for men and women in this country is improving day by day.
The House and the political leadership of this country have an obligation to behave responsibly and to keep this healthy recovery on track. We have an obligation to act responsibly and not be tempted by short-term populist measures which would undermine confidence in the Government's commitment to public finances. The measures that I have announced today ensure that that commitment is fulfilled.
Mr. Gordon Brown: While the whole country will be relieved that the House has forced the Government to abandon the rise in value added tax on fuel, it will now ask why they had to take 18 months and four Budgets to bring forward the alternative measures—including the indexation of tobacco taxation which we will support—which the Government could have proposed in the first place. Does not today's statement show why the House of Commons was right to inflict a defeat on the Government on Tuesday?
On the compensation for pensioners, will the Chancellor confirm in specific detail that he expects pensioners to continue to meet fuel bills that are up by £1 a week on average as a result of the VAT that remains[Interruption.]—yes, they are up by £1 a week on average—with only 50p cash compensation in their hands and only £36 a year, even after price indexing, to meet average fuel bills of £505 a year?
Will the Chancellor now explain to the country's pensioners why he is withdrawing not only the 25p a week that he promised his party on Tuesday evening but the 30p a week that he promised last year, which was announced in the social security uprating and which has

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been written into pension books that are now being sent out? Will he confirm that it is true that the Government are now recalling pension books that have been issued?
Will the Chancellor now explain to 10,000,000 pensioners and others on low income why he is so out of touch and his priorities so unfair that he is clawing back the compensation for pensioners while he insists on going ahead with cuts in the price of bottles of champagne? Will he explain why he is punishing pensioners when it is the Conservative party that should be paying the price for its mistakes?
As for public spending cuts, will the Chancellor confirm that he plans to cut £320 million next year and £255 million the year after? Will he explain where he is planning to make those cuts and how he squares them with his promise that there would be no cuts in public investment, and with the Prime Minister's statement at the election that cutting public spending was "not economically right"?
On taxation, will the Chancellor confirm this: that, on top of the national insurance rise that people are already paying, on top of the income tax rises resulting from the mortgage tax relief being withdrawn and the cut in the married couple's allowance, and on top of the other five tax rises, the effect of the tax rises that he is announcing today is another 43p a week for the typical taxpayer? Will he confirm that that means that the typical burden faced by millions of people as a result of all the tax changes that the Conservatives have made is now £875 a year, which is in breach of election promises that there would be no tax rises at all?
On alcohol, will the Chancellor confirm his assessment of the number of jobs that will be lost as a result of his complete U-turn on the price of beer? [Interruption.]. I am referring, as Conservative Members know, to beer and to the lobby that the Chancellor should listen to about the effect on jobs in the industry as a result of his changes today.
As the Chancellor raises questions about the alternatives that the Labour party would put forward, will he now confirm in detail that, if removed—on the recommendation of the deputy chairman of the Conservative party, who said that they were unfair—executive share options and the tax privileges would raise not only the money that he saves from capital gains tax but the money from the spouses of people who hold those executive shares, and that the true figure, as calculated by all the experts throughout the country, is not £45 million, but £200 million in total? [Interruption.] Conservative Members opposite do not want to listen, because they do not understand the unfairness of a Government who put up the taxation of ordinary people while refusing to deal with abuses in the tax system.
Will the Chancellor confirm that, as far as the de-merger of the national grid is concerned, which he mentioned in his statement, the Government are in a position to raise £1,000 million in capital gains tax and corporation tax, and that that has not been included in the public expenditure and taxation estimates that have been brought to the House? Will he also confirm that it is not only the Large Energy Users Council but a former Tory Member of Parliament—the secretary of that council—who said that the case for a windfall tax on the utilities is now pressing and that it should now be introduced?
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If the Chancellor says that our measures are a one-off, let me ask him in conclusion: is not the underlying truth of his Budget measures today that, to pay for the sole remaining policy that the Conservative Government now have—tax cuts next year—they will contemplate any tax rises? They will even take money that they promised to pensioners. They will contemplate additional reductions in living standards this year. Will he tell us specifically whether he agrees with the Governor of the Bank of England, who said this morning that the price of tax cuts next year could be interest rate rises as well?
This latest Budget statement shows a Government who have been stumbling from crisis to crisis, from panic measure to panic measure—a Government who are at their core incompetent and unfair. They are no longer fit to be in charge of our nation's finances. They are out of touch. They should now be out of office.
Mr. Clarke: I believe the hon. Member for Dunfermline, East (Mr. Brown) to be an intelligent and thoughtful man. If I did not, I would have come to the conclusion by now that he was completely unable to master his brief on either taxation or the economy. As I think that he can master it, I believe that he is trying to deceive people by pretending that there are accountancy devices that would produce money from nowhere to enable him to answer the questions that he is incapable of answering about the consequences of his own votes and his own irresponsible behaviour.
I deal first with the measures that I announced today, some of which the hon. Gentleman implied at one point he might support. They are not my first options; they are my second, and the hon. Gentleman has discovered that there are disadvantages with some of them. I shall tell him why I limited what I had already done in particular areas.
In the case of tobacco taxation, I had already committed myself to over-indexing it in the interests of health promotion, but there is a serious smuggling problem with tobacco, which is why I exempted hand-rolling tobacco, where the position is getting particularly bad. I had already increased tax on petrol and diesel, but had gone as far as I wished to go, bearing in mind the interests of the rural motorist and of business. I had been able to freeze again the tax on alcohol, again because of the smuggling problems, which we are going to tackle most vigorously by making our customs effort more effective, as it was yesterday.
I do not understand how the hon. Gentleman can have the nerve to start addressing me about the disadvantages of the measures that I have presented. Let him go and tell the Scotch Whisky Association, the Brewers and Licensed Retailers Association and the rural motorist why my statement had to be made. According to my recollection, only a handful of my hon. Friends were involved in the move to this second option. The hon. Gentleman has discovered rather late in the day that indirect taxation in other areas has disadvantages.
Then the hon. Gentleman has the nerve to claim that I am withdrawing more compensation than is consistent with my judgment. He talks of my withdrawing compensation related to next year's VAT increase—an increase that has now been cancelled. He says that pension books have been sent out; 6,000 or so have been sent out, but obviously they will be withdrawn and replaced.

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The hon. Gentleman wrote to me this morning; I have his letter before me. It stated that I must meet important requirements. Let me read out the most relevant:
"The Budget should ensure that there is proper compensation for pensioners and those on low incomes for the 8 per cent. VAT rise."
The hon. Gentleman then has the brass neck to get up and demand compensation for the 17.5 per cent. charge as well. He has cost us the compensation for that charge; I shall deal with the effect on pensioners.
I have already said that the compensation for the 8 per cent. increase that we have allowed for a couple will pay the average bill. The average bill is paid by prosperous pensioners with large houses and incomes; they will pay large bills. Poorer pensioners tend to pay below-average bills, and many of them will be over-compensated It is absurd for the hon. Gentleman, in his most populist mode, to say cheerily that they should receive more on top of that over-compensation.
The hon. Gentleman asked me where I would find spending cuts. I do not know how he has the brass neck to lecture Conservative Members on the need for public expenditure control, which he votes against at every opportunity—every time a proposal for such control is presented to the House. The Budget debate was littered with criticisms from Opposition Front Benchers of the public spending o control that we were exercising on matters for which they were responsible.
The fact is that we are going to find more public spending cuts. For two years, we shall be controlling public spending within our present constraints. As I have made clear, we shall recover the £300 million—on top of whatever else is required—in years two and three of a properly and professionally conducted public spending round.
The hon. Gentleman referred to various measures. He is straightforwardly wrong about share options. As for the tax on the national grid, the national grid has not yet been sold. We do not know what capital gain will be made, but whatever gain is made will he subject to capital gains tax.
The hon. Gentleman appears to imagine that I can start making guesstimates now of the bill that a particular taxpayer might pay next year, and start adjusting the Budget to take account of it. That is infantile. The hon. Gentleman is still talking about a windfall tax for industry, on top of the tax that industry is already paying—thereby tackling the gains that have been made, including the 3 per cent. downward effect on its charges.
I cannot believe that someone who graces the title of shadow Chancellor has come here and said that he has read in the newspapers that a particular taxpayer might pay a large bill next year, which might or might not affect the estimates that we have already made for corporation tax. That, apparently, is how a complete Budget should be altered to compensate for a loss of a tax.
A previous Labour Chancellor was fond of using the phrase "silly billy". I think that that is an accurate description of the hon. Member for Dunfermline, East.
Several hon. Members rose—
Madam Speaker: Order. The House will recall the Chancellor of the Exchequer saying that we shall have a debate on this matter before Christmas. I inform hon.
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Members that I shall not let the debate on the statement run a long time, so I want brisk questions and answers from now on.
Sir Terence Higgins (Worthing): Is my right hon. and learned Friend aware that his maintenance of tough action on the deficit will be welcomed by the financial markets? Is he further aware that his analysis of the choices available and the choice of tobacco and petrol duty are the right ones? But is not the reaction of the hon. Member for Dunfermline, East (Mr. Brown) extraordinary?
It is true that, as a result of the vote the other night, some pensioners will lose. It seems odd, however, that the hon. Gentleman should then come here and complain about it, given the way he voted. Is it not the case that my right hon. and learned Friend's approach to pensioners, generally speaking, has been sympathetic, and that they should welcome the overall effect of the Budget?
Mr. Clarke: I am grateful to my right hon. Friend. Despite the extraordinary and excited events of the past fortnight, we have kept confidence in our policy in the financial markets. We have kept confidence in our policy in the business community. That matters to a much wider group of people. I am not a man from the City or from the business community. It matters to men and women around the country who are trying to earn their livings and to make their jobs safer in the fevered political climate that is coming out of the House of Commons.
I agree that the hon. Member for Dunfermline, East will neither tell us what he would do nor take responsibility for his actions when he cast votes against measures that we had already proposed.
As my right hon. Friend the Member for Worthing (Sir T. Higgins) says, we are compensating pensioners. The campaign about VAT on pensioners was accompanied by pictures in some of the newspapers of little old ladies who would be taxed sitting in small rooms with bar fires. Those people with below-average bills were over-compensated by our proposal. The people at the very bottom end—the poorest pensioners with the smaller bills—have lost money as a result of the vote that the House cast earlier this week. The hon. Member for Dunfermline, East will not face up to the need to find £1,500 million of revenue to replace that which we have lost.
Mr. Malcolm Bruce: Does not the Chancellor of the Exchequer realise that he is demonstrating before the House this afternoon the politics of pique? He had in his Budget £1 billion, which he could have used, if he had chosen to do so, to prevent the VAT increase on fuel, without the need arising of having to come back to the House today. He chose not to do so. Is it not also extraordinary that he replaced one tax increase with no fewer than three, which demonstrates the enthusiasm with which the Tory party now increases taxes?
Will the right hon. and learned Gentleman explain why he chooses to increase the tax on whisky and gin, which we make, while protecting the makers of champagne, who are not British? Will he not recognise that he could have found all that money with no extra tax increases if he had cut waste in Government Departments on consultants, on advertising and on entertaining? He simply demonstrated

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the politics of pique, and the pain and anguish could have been avoided if he had only listened to the people in the first place.
Mr. Clarke: With the greatest respect to the hon. Gentleman, we have a strong and recovering economy, and the Liberal party and Labour party sound like the sort of politicians who ruined South American countries' recoveries when their economies got out of hand. I have the hon. Gentleman's letter about his policies. He is into share options as well. He does not like the duties that I am raising, but one of his suggestions is:
"extend employers' national insurance contributions to benefits in kind."
Does he realise the consequence for small employers of having to account, in calculating national insurance stamps, for all the benefits in kind as if they were an income tax? That is an extraordinary proposal for him to make, which would be costly to business. He has no alternatives.
Again, I can scarcely believe my ears when the hon. Gentleman talks to me about cutting waste in Government Departments. What I have announced in this year's public spending plans means level central Government running costs in cash terms over the next four years. I do not believe that the Liberal party could achieve that in a thousand years. Nor does it ever speak about any way in which it could do it. Despite the totally irresponsible behaviour of both Opposition parties, we have a package of measures and a Budget to keep the recovery on the rails and to help people out there in the real world, earning their livings and making this country more prosperous.
Mr. Peter Brooke: Does my right hon. and learned Friend agree that it is one of the laws of human affairs that, if one proceeds with one's eyes firmly fixed on the ground, looking for windfalls, one increases the danger of hanging oneself up on a loophole?
Mr. Clarke: I quite agree with my right hon. Friend. I hope that, between now and next year, some homework is done by the Labour party. My right hon. Friend and I welcome the serious challenge and various responsibilities that we have faced. Next year, perhaps someone from the Opposition will explain precisely their alternative, or at least give us another source of innocent merriment to match that provided by my right hon. Friend.
Mr. Robert Sheldon: Is the right hon. and learned Gentleman aware that the Red Book reveals serious errors of £10.5 billion each year in assessing the PSBR? Why is he seeking a spurious accuracy? He talks about £800 million when he makes errors of £2.5 billion every year. Could he not have waited? Why this frantic rush to try to achieve a spurious accuracy?
Mr. Clarke: I am not claiming a spurious accuracy. The PSBR estimates in the Red Book are properly worked out. I query them and go through them. We produce the best judgment we can of the profile for the PSBR. A wide margin for error exists on either side, because, as everyone has discovered, economic forecasting is a rather difficult process. The margin of error is around a
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calculated mean. If one raises that by £1.5 billion, the margin of error at the top and bottom goes up by £1.5 billion.
The right hon. Gentleman is arguing that, if we lose £1.5 billion, as we did in the rather extraordinary circumstances of Tuesday, we should ignore it. He is a former Treasury Minister and he knows perfectly well that he would never have advocated such an irresponsible step—or perhaps he might have done, given the Chancellor for whom he worked.
Mr. John Townend: May I say how pleased I am that the Chancellor has maintained his Budget stance, so that we will have a Budget surplus within the next three to four years? He will not be surprised, however, if I am slightly saddened that all the burden of filling the gap has fallen on the taxpayer, while no further cuts have been made in expenditure. I am rather mystified that we should attack the brewing and distilling industries, especially when we have a problem with smuggling, whereas expenditure on overseas aid and the heritage budget is sacrosanct.
Mr. Clarke: My hon. Friend is always consistent and extremely clear in the strategy that he urges. I know that he welcomes the fact that more than £40 billion has been saved from public spending plans so far. As I have made clear to him, a further £700 million—two sums of £350 million—will come out of those public spending plans in the next two years, quite apart from any judgment we may make about the practicability of making further cuts in those plans.
I assure my hon. Friend that I looked closely at the prospects for further cuts in year one, on top of the £28 billion in total Government spending already announced in my recent Budget. At this stage of the year, all the decisions have been announced, the plans have been made and budgets are being set by local authorities and health authorities, so one cannot resume a full public spending round. The only way to approach that would be by making a discretionary cut across all programmes to try to raise the necessary money. That would pose difficulties for defence, the health service, the police and many other services.
We are responsible for competent government, and the decisions we have taken, which have dramatically reduced public spending, have been made as a result of properly conducted public spending rounds. That is how we will get the £700 million required in years two and three, but at this stage it is obviously necessary to raise revenue. As I have already said to my hon. Friend, I regret the necessity to raise the revenue. It is my second choice. It would not have been my first choice, or that of my hon. Friend, but given that he has supported the Budget judgment so strongly, I hope that he will accept that it is necessary to raise that revenue to keep the recovery on course.
Mr. Giles Radice: As the Government have trouble in getting their financial measures through the House, would not it be sensible to consult the Opposition as well as Tory rebels before bringing forward such measures?
Mr. Clarke: If the hon. Gentleman counts my attendance at various stages of the Budget debate, I suppose that I have spent five days consulting the Opposition, and answer came there none. So far, we have

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had no difficulty in getting this year's Budget measures through, and we have had no difficulty in getting previous years' Budget measures through. But the Opposition—because they did not have very much to say about this year's Budget—irresponsibly decided to readdress the question of VAT on fuel. [Interruption.] There was a difficulty, and I have accepted the wish of the House. I am sure that the hon. Member for Durham, North (Mr. Radice)—with his views on Europe—will accept that it was a very curious coalition indeed which defeated the Government on Tuesday, and it certainly was not one with any economic expertise.
Mrs. Jacqui Lait: May I welcome my right hon. and learned Friend's recognition that there is a problem with the smuggling of hand-rolling tobacco? May I suggest to him that the higher the profit that is to be made from alcohol and smuggled tobacco, the greater the availability, and hence the greater long-term effect on health. Other than prevention—which does not work—how does my right hon. and learned Friend propose to deal with the problem of smuggling?
Mr. Clarke: I am glad to say that we recovered an extremely successful haul yesterday, and serious charges will flow from that. We are being increasingly succesful in tackling organised smuggling, although I accept that a lot of revenue and trade has been lost through the differentials which legally apply in legitimate cross-border trading. Those must be addressed by trying to get an approximation of duty levels as soon as we reasonably can in the single market.
Our review of Customs and Excise is concentrating on further improving the effectiveness of our efforts to counter smuggling. There have been some criticisms, from the Opposition particularly, about some of the manpower consequences of the changes, because random checks and so on are not the most effective ways of dealing with the problem. One requires modern technology, efficient organisation and improving the flow of intelligence, and I hope that yesterday's news underlines to my hon. Friend that we are determined to tackle what I wholly agree with her is an extremely serious problem for legitimate traders and manufacturers.
Mr. Stanley Orme: On the right hon. and learned Gentleman's last point, surely he should explain why the cuts are taking place in Customs and Excise when the organisation needs to be strengthened. How can the Chancellor justify what he has just said to the House?
Mr. Clarke: The right hon. Gentleman is assuming that the only way to intensify effort is by increasing manpower. [Interruption.] I understand the campaign from the trade unions which are involved, and Opposition Members are perfectly entitled to represent that. [Interruption.] That is the case—Opposition Members are bound to argue that.
If one is looking to improve the effectiveness of an organisation, one must target its efforts to those areas where it is obvious that one is having the most effective results. One must also make sure that those aspects of activity which produce the best results have the proper resources and are taken further. Customs and Excise has
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an enormous job to tackle today, and I congratulate it on the steady stepping up of its efforts, which are beginning to produce spectacular results.
Mr. Quentin Davies: Does my right hon. and learned Friend agree and accept that there will be widespread admiration for a very astute, exemplary and sound package of measures which he has announced this afternoon? Will not the whole country draw the obvious conclusion from the fact that the shadow Chancellor got his sums shambolically and embarrassingly wrong?
Mr. Clarke: I am grateful to my hon. Friend, who does have considerable expertise in these matters. I am glad that he understands the options which I had before me, and I am also glad that he accepts that the shape for which I have opted and the measures which I have proposed are the right ones to preserve the strategy of the Budget and to keep on course the present extremely healthy recovery, which must continue if it is to deliver benefits to men and women across the country.
Mrs. Anne Campbell: If the handful of Conservative Members to whom the Chancellor referred a moment ago as Euro-rebels vote for the package, will the Whip be restored to them?
Mr. Clarke: Matters of the restoration of the Whip are not for me, but they are usually governed by the practice of voting for a Conservative Government. The same practice has been followed by the Labour party when it has had similar difficulties from time to time. I am quite sure that we will continue to have such difficulties frequently in the future.
Mr. Kin Duncan Smith: Does my right hon. and learned Friend accept that many Conservative Members regret his having to appear before us today with those measures? Furthermore, will he instruct all those in business who transport goods, publicans, those who run off-licences and everyone else engaged in the legitimate sale of alcohol now to take all their comments to the hon. Member for Dunfermline, East (Mr. Brown) and ask him why we have had to make their business much harder?
Mr. Clarke: I am grateful to my hon. Friend. Like me, he realises that this is a difficult package. He and I did not want to see the price of petrol, diesel, tobacco and alcohol go up in that way. I share his reaction. The next time Opposition Members attend gatherings allegedly to further the interests of those industries and the people who work in them, people should tackle them about how far their actions match the lobbying letters they write to me and the representations they make in the House.
Mr. Dennis Skinner: Is the Chancellor aware that there was another option? In the past 15 years of this Tory Government, the richest 10 per cent. have had £50 billion-worth of accumulated tax cuts. Instead of putting extra tax on fags, beer and petrol, the Chancellor could have chosen to take a couple of billion pounds back from the super-rich. Instead, he decided to hammer the working class. I shall give him this tip: when Labour gets into power shortly, I shall encourage those on our Front Bench to do exactly that.
Mr. Clarke: I well remember the hon. Member for Bolsover (Mr. Skinner) delivering a shadow Budget on the Floor of the House many years ago. I sat throughout

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it—he took more than an hour but put nobody to sleep. Indeed, it was an extremely well put together shadow Budget, and very much better than anything that I have ever heard today's occupants of the Opposition Front Bench outline.
At least the hon. Gentleman is consistent. He knows what the Labour party is for, and has always advocated taxing the rich as he describes. We have discovered and experienced that, if we tax those rich, we drive them abroad and damage British industry. We have also found that the proportion of total taxation now paid by higher earners has increased as a result of getting rid of the high levels of penal taxation that satisfy the politics of the hon. Gentleman and for which he still yearns.
Mr. Richard Alexander (Newark): May I remind my right hon. and learned Friend that one of the less well publicised aspects of his first Budget statement was the fact that the breakdown between pension increase and VAT was to be made clearer in the pension book? Despite Tuesday's vote, will he confirm that, in future, people will know from their pension book how much of the component of what they get is represented by VAT compensation?
Mr. Clarke: Because of the changes that are being made, my right hon. Friend the Secretary of State for Social Security is considering that matter. It is clearly a matter for him and I shall ensure that my hon. Friend's representations are passed on to him this afternoon.
Mr. Alex Salmond: The Chancellor's flippant remarks about old-age pensioners and fires come ill from somebody who will never have to go cold in the winter. Given the money that he is looking for, which he has admitted is only 10 per cent. of the standard error on the public sector borrowing requirement, is it not an issue only because of his extraordinary behaviour over the past few days? Has he not replaced one anti-Scottish tax of VAT on fuel with two anti-Scottish taxes on petrol and whisky? Why should the people of Scotland pay for the Chancellor's incompetence and the Prime Minister's petulance?
Mr. Clarke: I, personally, gain from the vote cast on Tuesday, as my heating bills will be reduced now that the higher rate of VAT will not be put on fuel. A pensioner in a small property with low bills loses as a result of Tuesday's vote, because the compensation would have exceeded the value added tax. There is no point in my arguing the case again. It was not accepted, and I accept the judgment of the House.
The hon. Gentleman must face up to the consequences of his actions. I regret the effect on rural motorists in Scotland, but it might have been less if the hon. Gentleman could do his arithmetic and work out the consequences of the votes he casts when he comes here.
Mr. Toby Jessel: I warmly welcome the increase in tax on tobacco, which I urged on Monday in my speech in the Budget debate, on the grounds that it would tend to reduce the number of deaths from lung cancer and other appalling diseases, and deter with more force the number of young people starting to smoke. Has
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my right hon. and learned Friend noticed the deafening silence from Opposition Members who claim to care about health? How does he expect them to vote on that?
Mr. Clarke: It is an ill wind that blows nobody any good. I know my hon. Friend's fierce commitment to the cause of reducing smoking, and increasing taxation on it to help that cause. He and those right hon. and hon. Members who agree with him will, I am sure, be pleased that their campaign has been reinforced by my being obliged to go back and take more money from tobacco in addition to the significant increase, in excess of inflation, that I had already imposed.
Mr. D. N. Campbell-Savours: Is there not a real problem that an increasingly uneven playing field is now developing between Britain and the rest of the European Union in taxation of tobacco and spirits? Is it not clear that what the Chancellor has done today, in spite of the problems, is to invite more job losses in the United Kingdom in both those industries? Is it not about time that British Chancellors went to Community economic summits and demanded harmonisation of the duties throughout the Community, so that at least there was a level playing field for production?
Mr. Clarke: If I went along and demanded harmonisation of taxation, quite a lot of hon. Members on both sides of the House might suddenly decide that they did not want that.
Mr. Peter Shore indicated assent.
Mr. Clarke: The right hon. Member for Bethnal Green and Stepney (Mr. Shore), sitting behind the hon. Member for Workington (Mr. Campbell-Savours), is nodding strongly about that.
I used the phrase "approximation of duty". I believe that the policy on taxation is a policy for the nation states, so I actually agree with the right hon. Member for Bethnal Green and Stepney, but obviously it is for those nation states to consider the consequences across their borders. I think that it is right for the member states of the European Union to seek to achieve greater approximation of duty, so that smuggling and artificial movement of trade is reduced, and that we will endeavour to do. There will be talks on that next year.
The difficulty is that Britain—like Ireland and Denmark—has always traditionally imposed high levels of tax on alcohol, compared with continental countries, which have a broader base for VAT. We have considerable zero rating of VAT, and we therefore do not obtain as much VAT as other countries do: and traditionally, for I think about 200 years, we have always raised far more revenue from alcohol and tobacco. We are entitled to make our choice; it is our national pattern of taxation and it always will be, but we do have to look to our trading interests, as do the other countries, and a closer approximation of duties is very much overdue.
Mr. Phil Gallie: May I congratulate my right hon. and learned Friend on sticking to the objectives of a Budget that, overall, was a very good Budget indeed? Can he rest assured that I will meet my responsibilities to the Scotch Whisky Association, just as I expect every Opposition Member to do, especially the Scottish

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Members? Can I say to my right hon. and learned Friend, having exposed the windfall tax as a windbag tax, that he can be assured of my support in the Lobby?
Mr. Clarke: I am grateful to my hon. Friend, and I congratulate him on the consistency and fairness of his position, and the way in which he puts it today. When disparaging the Labour party, I made disparaging remarks about one or two of those hon. Members who voted against my opinion on Tuesday. Last year, my hon. Friend came to visit me and told me what he thought about VAT on fuel. This year, he came and told me what he thought about VAT on fuel. He told me that he would not vote for it. His reasons were connected with VAT on fuel, and his constituents in Ayr. My disparaging remarks were made about one or two of his hon. Friends who told me one thing and then did another, and found themselves in alliance with the opportunists sitting on the other side of the House.
Mr. George Foulkes: I am grateful to the Chancellor. Will he confirm that, as his demeanour today suggests, he is disappointed that he was unable to raise the cost of fuel for pensioners, the poor and the disabled?
Mr. Clarke: The compensation package that we produced for the poor, disabled and pensioners meant that that section of the population was the least affected by the tax changes that we were making. The House is full of men and women who personally benefit from the vote on Tuesday to a much greater extent than the average pensioner.
Mr. David Shaw: Does my right hon. and learned Friend accept that most people in this country will regard the proposals as sensible, fair and just? Does he also accept that now, only two political parties in this country have a commitment to a carbon energy tax—the Labour party and the Liberal party? Can he confirm that there is indeed a crisis in this country—in the ranks of the Opposition, who cannot produce a properly costed Budget?
Mr. Clarke: I entirely agree with my hon. Friend, who is right to point out the commitments to a carbon energy tax. The Liberals are certainly committed to that tax—the Labour party sometimes is and sometimes is not. As my hon. Friend says, it would have a dramatic effect on fuel bills in this country. It would have a crippling effect on the cost of business and industry, which would damage our competitive position at a time when we are trading so well and coming out of the recession.
Mr. Terry Lewis: Before the Chancellor leaves the House, will he apologise to the poor, the elderly and the invalids whose pockets the House prevented him from picking?
Mr. Clarke: I have explained repeatedly that the hon. Gentleman did not vote to the particular advantage of the poor, the elderly and invalids on Tuesday. He voted because his right hon. and hon. Friends could not think of any other point to make about this year's Budget and returned, in a misleading way, to previous debates.
Mr. George Kynoch: Does my right hon. and learned Friend accept that, despite what has been said by the nationalists, my constituents will welcome his retention of the significant upgrading of cold
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weather payments and the home energy efficiency scheme, as well as the significant increase in the age allowance, which is well in excess of inflation? Most of all, they will be pleased that my right hon. and learned Friend has not been deflected from his overall policy of going for strong, sustainable growth—something that the Opposition parties cannot understand and are trying to destroy.
Mr. Clarke: I am extremely grateful to my hon. Friend. This Government invented the system of cold weather payments and keep improving it—we have raised the payments to £8.50, which will benefit many Scottish people if we have a freezing spell this winter. In the course of the debate, I kept dramatically raising the amount of money available for the home energy efficiency scheme. That scheme improves the comfort of its beneficiaries—it dramatically reduces their fuel bills. It is an effective way of improving energy efficiency.
We have directed ourselves to the causes that my hon. Friend has identified, together with the main causes that must dominate this country at present—reducing unemployment, increasing prosperity and ensuring that we have a strong and thriving economy in this country.
Mr. Rhodri Morgan: Does the Chancellor accept that he and his hon. Friends have this afternoon been behaving like demented Corgis—voting to give away Korean cook books for Christmas? Does he also agree that, when it comes to cooking the books, his statement about the raiding of the contingency reserve to close 25 per cent. of the finance gap that has arisen is most unorthodox in terms of fiscal propriety? Does he not agree that that reserve is not meant to cover shortfalls in revenue? Will he explain how 25 per cent. of that gap remains unallocated and unexplained as of this afternoon?
Mr. Clarke: As I have said, that gap will be dealt with by cuts in public expenditure provision over and above those that we would otherwise have made in the relevant years—the second and third years of the survey. I mentioned in passing how we would account for that provision to underline our commitment to it. At this stage, it will be based on the lines of the provision that I have made for the future contingency reserve. It will come out of programmes and public spending control when we have carried out a proper public expenditure survey for years two and three of the present survey years.
Several hon Members rose—
Madam Speaker: Order. We shall move on now to the business statement.

Business of the House
4.28 pm
The Lord President of the Council and Leader of the House of Commons (Mr. Tony Newton): With permission, Madam Speaker, I should like to make a statement on the business for next week:
MONDAY 12 DECEMBER—Second Reading of the Health Authorities Bill.
Motion on the First Special Report from the Committee of Privileges.
TUESDAY 13 DECEMBER—Until 10 o'clock, motions relating to the Chancellor of the Exchequer's statement of 8 December.
WEDNESDAY 14 DECEMBER—Until 7 o'clock, motions on rating and valuation orders and regulations. Details will be given in the Official Report.
Debate on the common fisheries policy on a Government motion.
THURSDAY 15 DECEMBER—Estimates Day (1st allotted day).There will be a debate on administration and miscellaneous services in so far as they relate to the Department of Social Security's responsibilities for the Child Support Agency and the operation of the Child Support Act, followed by a debate on the Office of the Parliamentary Commissioner and Health Service Commissioners, in so far as it relates to the powers, work and jurisdiction of the ombudsman.
At 10 o'clock the House will be asked to agree the civil and defence votes on account and the outstanding winter supplementary estimates. There will then be proceedings on the Consolidated Fund Bill.
FRIDAY 16 DECEMBER—Debate on the national lottery on a motion for the Adjournment of the House.
MONDAY 19 DECEMBER—Motion for the Christmas Adjournment.
Motions on parliamentary procedures.
The House will also wish to know that the following European Standing Committees will meet at 10.30 am to consider European Community documents as follows:
Tuesday 13 December: European Standing Committee A, European Community Document No. 4195/94 relating to food hygiene for milk and milk products.
European Standing Committee B, European Community Document No. 9101/94 relating to generalised schemes of preferences.
Wednesday 14 December: European Standing Committee A, Unnumbered memorandum submitted by the Ministry of Agriculture, Fisheries and Food on 28 November 1994 relating to reform of the agri-monetary system.
European Standing Committee B, European Community Document No. 8077/94 relating to action against drugs; and EC document No. 8929/94 relating to prevention of drug dependence.
[Tuesday 13 December:
European Standing Committee A—Relevant European Community document: 4195/94 relating to food hygiene for milk and milk products. Relevant European Legislation Committee Reports HC 48-vii (1993–94) and HC 70-i (1994–95).
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European Standing Committee B—Relevant European Community document: 9101/94 relating to Tariff Preference for Developing Countries. Relevant European Legislation Committee Report HC 70-i (1994–95).
Wednesday 14 December:
European Standing Committee A—European Community Document; unnumbered, Agri-Monetary Reform. Relevant European Legislation Committee Report HC 70-i (1994–95).
European Standing Committee B—European Community Documents: 8077/94 and 8929/94 Action to Combat Drugs. Relevant European Document HC 48-xxvi (1993–94).
Floor of the House—Motions on rating and valuation orders and regulations. The documents are as follows:
The Non-domestic Rating (Chargeable Amounts) Regulations; The British Gas Plc (Rateable Values) Order; The Electricity Supply Industry (Rateable Values) Order; The Docks and Harbours (Rateable Values) (Amendment) Order; The Water Undertakers (Rateable Values) Order; The Railways (Rateable Values) Order; and The British Waterways Board and Telecommunications Industry (Rateable Values) Revocation Order.]
And now, the bit they all want—or perhaps I should say, the bit the House wants. The House will wish to know that, subject to the progress of business, it will be proposed that the House should rise for the Christmas Adjournment on Wednesday 21 December until Tuesday 10 January.
Mrs. Ann Taylor: I thank the Leader of the House for that statement, and I welcome the fact that we shall at last have a chance to debate the Jopling proposals. I hope that we shall be able to make good progress, with the Leader of the House giving us as much notice as possible of future business on all occasions, even if that business is provisional.
I assure the right hon. Gentleman that, although we all welcome knowing the dates of the recess, it is his party, not ours, which is anxious for it to start as soon as possible.
With regard to the Committee of Selection, which met yesterday, the Leader of the House will be aware that the Committee was unsure as to how it should act now that we have a minority Government. Hence the Committee recommended that the whole issue of appointments to Standing Committees be referred to the Floor of the House. I wonder when the right hon. Gentleman intends to ensure that there is a debate on that matter on the Floor of the House, because we are obviously anxious to have it resolved; we believe that we have a strong case for parity on those Committees, given that the Government have lost their majority.
The Leader of the House will be aware that in July 1993 the Ministry of Agriculture, Fisheries and Food published a consultative document proposing the abolition of the Agricultural Wages Board, and that the responses to that document were overwhelmingly hostile. As the former Agriculture Minister promised a response by Easter this year, and as it has still not been forthcoming, when may we expect the Minister of Agriculture,

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Fisheries and Food to remove that threat to agricultural workers and their families? It should have been removed by Easter; will it be removed by Christmas?
Mr. Newton: I am afraid that I am not at the moment able to give the hon. Lady a precise date and time for resolving the uncertainty to which she has just referred, but I shall bring the fact that she has just raised it to the attention of my right hon. Friend the Minister of Agriculture, Fisheries and Food.
The hon. Lady asked about the Committee of Selection. We are all aware of what emerged from the Committee yesterday, and she will understand that the timing of any debate is a matter for discussion through the usual channels. I do not think that I can hold out expectation of it being before Christmas, but I am sure that discussions can resolve a satisfactory time. The hon. Lady's first question was rather routine, and I shall take it principally as welcoming the procedure motions arising from our negotiations on the Jopling report. Of course, I continue to take notice of the desire of the hon. Lady and others for further notification about business.
Mr. Michael Jopling: Is my right hon. Friend aware that there will be a broad welcome in the House for the fact that at last the recommendations of the Select Committee on Sittings of the House will be brought to fruition? Will he be kind enough to lay before us the changes in Standing Orders, whatever they are, as soon as possible, so that we may have a good chance to read them? Does he intend the new arrangements to operate when we return from the Christmas recess?
Mr. Newton: Essentially, the answer to the latter part of my right hon. Friend's question is yes. In answer to his earlier question, I can tell him that I shall do everything that I can to make sure that the detailed resolutions are laid at the earliest practicable moment, so that there will be a proper opportunity to consider them. In view of the contacts that I have maintained with my right hon. Friend over what is now more than months, it goes almost without saying that I greatly value his appreciation of the fact that we are now able to make a move on this front.
Mr. Archy Kirkwood: Does the Leader of the House accept that if the Jopling proposals were extant and we had their benefit, he would today have been able to give us the last two days' business before Christmas rather than keeping us all on tenterhooks? There is a clear feeling in all parts of the House that the more notice we get on important debates, the better. If there are substantial and fundamental changes to the rules of engagement in Bosnia, will the Government undertake to make not just a statement on such important and serious matters, but provision for a short debate if that is necessary? While I am on this matter, what about Hong Kong?
Mr. Newton: Perhaps for the moment I may confine my remarks to Bosnia. The hon. Gentleman will know that my right hon. Friend the Foreign Secretary made a statement yesterday. That responded to representations that I had received from various quarters about the desirability of such a statement. I think that I can claim some credibility because of my repeated assurances to the
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House about making arrangements for appropriate statements or debates as and when the need for them is clear.
Sir Peter Emery: Does my right hon. Friend realise that this is the ninth time that I have risen to press him on Jopling? I am delighted to congratulate him on being able to give a favourable response this time. Can he confirm that the motions will be amendable? As this matter of procedure is fairly wide, will he try to limit the amendments so that they relate only to the Jopling report and not to other aspects of procedure because, of course, to do so would be to go much wider?
Mr. Newton: Although those are ultimately matters for the Chair, I expect the motions to be amendable. However, I shall not presume on the judgment of the Chair about the scope and scale of amendments. As Chairman of the Procedure Committee, my right hon. Friend will understand that. I appreciate his warm welcome for what I said, and say to him in return that it feels like many more than nine times.
Mrs. Gwyneth Dunwoody: Will the Leader of the House arrange for the Department of Transport to send a Minister to the Dispatch Box to explain what has happened today to our rolling stock industry? That industry is virtually bankrupt and is now faced with the award of a major contract for London Underground trains to a firm that will give most of the work to France and Spain and very little work, which will be of an assembly type, to the west midlands. That is not only a disgrace but typical of what happens. No one can imagine the French Government awarding such a major contract for their transport system to any foreign supplier.
Mr. Newton: I am, of course, aware—and had I not been, I would have been made aware by my hon. Friend the Member for Hendon, South (Mr. Marshall), who has pressed so hard for new rolling stock for the Northern line—of the fact that a decision has been announced today. I have not had an opportunity to study the detail of that decision but, inevitably—and quite properly within the rules—London Underground will have had to have regard to the value for money of the various tenders that came in. I hope that the hon. Lady will understand that, while I understand entirely why she raised the issue and why the hon. Member for Bolsover (Mr. Skinner) and others may wish to raise it, I cannot add to that.
I acknowledge that all hon. Members representing Derbyshire and the surrounding area have quite rightly worked very hard for the award of the contract, which they wished to go to Derby, including my hon. Friend the Member for Derby, North (Mr. Knight).
Mr. Eric Pickles: Will my right hon. Friend arrange an urgent debate on the appalling mismanagement of the Labour and Liberal Democrat-controlled Essex council, which is denying care in the community to frail and elderly people in that county? Does he recognise that the debate is urgent, given the shocking discovery that at the same time as the council is denying care to my constituents, it is sitting on more than £24 million, and that figure is growing with every profit? Surely the House should have an opportunity to debate the callous behaviour of councillors in Essex.
Mr. Newton: Again, as a Member of Parliament for Essex, as my hon. Friend knows, I well understand why

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he raises that point. In noting his remarks, I would make the point that, for all local authorities, the support funding for social services, including community care responsibilities, has gone up by 15 per cent. this year on last and, over four years, from just over £3.5 billion to nearly £6.5 billion.
Mr. Tam Dalyell: On Thursday's business, would the Leader of the House consider asking the Prime Minister whether he would answer the detailed Question 5 on Lockerbie at the end of questions, so that he can give the proper answer that he would wish, in view of the sensitivities of the relatives and to be fair to the noble Lord Parkinson, who, in good faith gave undertakings to the relatives that there would be a public inquiry, and to be fair to the right hon. Member for Southend, West (Mr. Channon), who, as Secretary of State for Transport, made a statement to journalists at the Garrick club for which he was later dismissed—possibly unfairly because of its complexity? Will the Leader of the House ask the Prime Minister whether he would consider answering that at the end of questions, for the sake of coherence?
Mr. Newton: I shall bring that request to the attention of my right hon. Friend the Prime Minister.
Mr. Harry Greenway: May I ask my right hon. Friend for a debate on health next week, so that hon. Members can examine properly the argument advanced on both sides of the House that increasing taxation on cigarettes improves health in Britain when that is not proven, bearing in mind the fact that cigarettes imported from Germany and France replace British cigarettes that would otherwise be smoked, not to mention smuggling, which my right hon. and learned Friend the Chancellor mentioned this afternoon? The fact that 204 jobs at Gallaher Tobacco in my constituency have been lost this week to cigarette makers from overseas should properly be discussed in the House.
Mr. Newton: I understand why my hon. Friend raises that point. Perhaps he will have the good fortune to catch the Chair's eye next Tuesday if he wishes to pursue it. I should acknowledge, however, that it is clear that price has played a part in reducing cigarette consumption and that the reduction in cigarette consumption has had beneficial health effects.
Mr. John Denham: Will the Leader of the House ask the Secretary of State for Social Security for a debate or statement on the thousands of women who are living on reduced incomes because they are denied invalidity benefit while the Government challenge a European Court decision that they should be entitled to it? It is outrageous and we are now told that it will be another 18 months at least before the matter is resolved. Millions of pounds are being denied to women living in reduced circumstances. If the Leader of the House has a word with the Secretary of State for Social Security, will he tell him that it really is not good enough consistently to refuse to estimate how much money is
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being withheld from those women? It is not good enough that the Secretary of State refuses to answer parliamentary questions on the matter.
Mr. Newton: I have to say to the hon. Gentleman, as I expect he anticipates, that I shall bring that question to my right hon. Friend's attention.
Mr. Patrick McLoughlin: In view of what my right hon. Friend has just said to the hon. Member for Crewe and Nantwich (Mrs. Dunwoody), is he aware of the concern of hon. Members representing Derbyshire about today's announcement from the Department of Transport? Would it be possible to have a statement next week? Will the Secretary of State, perhaps at that stage, draw to the House's attention early-day motion 71 in which a number of Labour Members demanded that the contract went to GEC?
[That this House welcomes the bid from GEC Alsthom for a 20-year service provision package, including new rolling stock, for London Underground's Northern Line and the job security which the award of this tender would bring to its factories in Birmingham and the North West; calls upon London Underground to make its tender decision strictly on the quality of the product and value for money; and commends the bid to London Underground on these criteria.]
Mr. Newton: I certainly take note of my hon. Friend's last point. My right hon. Friend the Secretary of State for Transport will answer questions on Monday 19 December. Lastly, I acknowledge the efforts that my hon. Friend has made as a Member representing Derbyshire, in the interests of his constituents and those nearby.
Mr. David Winnick: Would it be possible to have a debate in the very near future—next week, if possible—on the duties and responsibilities of Members of Parliament, bearing in mind how the standing of the House has improved considerably since the vote on Tuesday, because people have realised that there are Members of Parliament who vote according to what they believe to be in the national interest and according to their conscience, and who are not willing to be stamped on and bullied by Whips? If the Leader of the House has seen some of the letters that appeared in the national press yesterday and today, he will know full well that I am absolutely correct in saying that the authority of the House has gone up and that that is far more important than any proposed change over Jopling.
Mr. Newton: The hon. Gentleman may possibly care to reflect on those remarks when he starts to get the complaints that we heard so vociferously from the Opposition in relation to what my right hon. and learned Friend the Chancellor said this afternoon.
Mr. Alan Duncan: Notwithstanding the welcome collapse of the iron curtain, will the Leader of the House admit that it is a matter of grave concern if ever it is discovered that a British subject has been in the pay of a foreign security service? Will he consider, therefore, having an urgent debate on national security and perhaps the remit of the Nolan committee, given that Mr. Richard Gott, who still writes for The Guardian, has been accused this week by The Spectator of having been in the pay of the KGB for a number of

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years, despite which treason, he and his paper have continued to attack the supposed corruption of the British establishment?
Mr. Newton: While I have seen the front cover of The Spectator, I have not had the opportunity to read the story to which my hon. Friend refers. In view of what he said, he will understand that my proper course this afternoon is simply to take note of what he says.
Mr. Jimmy Wray: Will the Leader of the House allocate some time to discuss the escalation of violent crime and the use of firearms in Scotland? One of the reasons why I ask this question is that the Secretary of State for Scotland gave a very misleading reply yesterday to my hon. Friend the Member for Midlothian (Mr. Clarke), by telling him that such incidents represented only two incidents per 1,000 crimes, when in the past decade there were about 17,000 crimes—5,000 in the past three years—with 4,000 people injured and 60 people killed. It is a serious problem for the people of Scotland. Nearly all those incidents happen in deprived areas in Scotland. Will the Leader of the House raise the matter with the Secretary of State for Scotland?
Mr. Newton: I am not in a position to engage in a statistical dispute of the type that the hon. Gentleman describes without notice. I will, of course, bring his remarks to the attention of my right hon. Friend, but I know no one more determined to seek to tackle the problems of crime in Scotland, on which he has a Bill in this very Session of Parliament, than my right hon. Friend the Secretary of State.
Mr. Jacques Arnold: May we have a debate next week on British exports, during which we can congratulate British industry on its exceptional performance of late? Perhaps we could also consider the effect of the Government's announcement on reducing the rates of export credit guarantees, which has put Britain's exporters in a far better position than their competitors.
Mr. Newton: Much as I would like to arrange such a debate because I acknowledge what my hon. Friend said, I cannot readily envisage finding the time before the Christmas recess. I might be more encouraged even to seek to do so if I thought that there was the slightest chance that those well-deserved tributes to British industry would be paid by the Opposition Front Bench.
Mr. Frank Cook: I believe that the order relating to the local government reorganisation of Cleveland was tabled today and will appear on the Order Paper tomorrow. Does the Lord President of the Council recall his statement of 16 June that it would clearly be inappropriate to proceed while the judicial review was taking place? I invite him to repeat that assurance to the House today.
Mr. Newton: Clearly, we would not have laid the order as the hon. Gentleman described had we felt that it was any longer inappropriate to do so. He will know that there has been an extensive amount of legal action on the matter. My right hon. Friend the Secretary of State for the Environment would say that there must come a stage when it is appropriate to proceed.
Mr. Quentin Davies: May we have an urgent debate on the constitution, as the Opposition are making some extraordinary proposals
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these days? The Labour party is attacking the monarchy and suggests that if it were ever elected, it would spend the first year of government getting through legislation to introduce unequal representation. Those of us representing English constituencies would not be able to discuss matters relating to health, education, welfare and so forth in England and Wales, yet Members representing Scotland and Wales would be able discuss those matters here, in the same Parliament, as they relate to English residents. Unequal representation is a sinister idea and it is contrary to democracy wherever it is practised. May we have a debate to investigate that matter? Perhaps the hon. Member who represents West Lothian—the hon. Member for Linlithgow (Mr. Dalyell)—who has just left the Chamber, might like to take part.
Mr. Newton: That would certainly be the case and, indeed, that question—previously called the West Lothian question—has never even remotely been answered, to the embarrassment of many Opposition Members. In future, we shall have to describe it as the Linlithgow question, but it remains the same.
Mr. Harry Barnes: The Commons was absent for 13 weeks in the summer and for two weeks when Parliament prorogued. We shall be away for another three weeks over Christmas and the new year. Furthermore, this afternoon's business has collapsed and we have five and a half hours to discuss a bridge in Wales. Important though that might be, we could have discussed other matters later. Why then has a junior Transport Minister offered me a private Member's Bill to introduce, instead of a measure of my choice, because there is not enough time for it to be debated in Parliament? Should not we alter our arrangements so that we can get through our business correctly and properly?
Mr. Newton: I am sure that any hon. Friend who approached the hon. Gentleman was merely trying to be helpful. On the first part of his question, we have had such exchanges many times before and, judging by representations made to me about sitting hours and all the rest, the hon. Gentleman's views are simply unrepresentative—for example, he had only to listen to the welcome given this afternoon to the proposed debate on what are known as the Jopling proposals.
Dr. Robert Spink: Further to the matter raised by my hon. Friend the Member for Brentwood and Ongar (Mr. Pickles), may I press my right hon. Friend for a debate on the monumental mismanagement by Liberal and Labour-controlled Essex county council, which has lost £8.5 million from its community and child care budgets, with reserves rising from £25 million today to a predicted £28 million at the end of the financial year? Surely the council should be using those reserves to protect the vulnerable elderly people and children in my constituency and in Brentwood and Ongar.
Mr. Newton: I would certainly tell my hon. Friends the Members for Castle Point (Dr. Spink) and for Brentwood and Ongar (Mr. Pickles) that the matter that they pointed out raises some very real questions. While I cannot promise a debate before the Christmas recess, I shall certainly bear it in mind.
Mr. Harry Cohen: The Leader of the House will remember that my hon. Friend the Member for Nottingham, South (Mr. Simpson) mentioned the United

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States-United Kingdom nuclear agreement last week, which the Government extended for another 10 years. Does not he think that it is deplorable and damaging to democracy for such an agreement to be extended without the House having the opportunity to debate it and without hon. Members who oppose that nuclear strategy having the opportunity to express their opposition?
Mr. Newton: No, I do not, for reasons that I sought to explain in the letter that I sent to the hon. Member for Nottingham, South (Mr. Simpson) following the exchange last week. I shall arrange for a copy of that letter to be sent to the hon. Gentleman.
Mr. Alan Simpson: May I follow that question? I understood when I raised the matter in the House last week that the Government were extending the treaty under the Ponsonby rule whereby, for the matter to be debated by the whole House, an hon. Member is required to object in this Chamber. I asked the Leader of the House to arrange such a debate and I have not yet received a reply. Is he saying that the Ponsonby rule is being ignored and that the House is being denied the opportunity of having the debate that the rule should require?
Mr. Newton: I am certainly not saying that. I need hardly say that I signed a reply to the hon. Gentleman earlier today and I must apologise if it has not yet reached him. I shall ensure that it does as soon as possible.
Mr. Dennis Skinner: In line with the other representations that the right hon. Gentleman has heard this afternoon, may I ask for a statement by the Secretary of State for Transport about the contract that has been awarded to GEC, which will result in 600 immediate job losses in Derby and up to 3,000 losses eventually, if no other contracts are awarded in lieu of that loss? Will the Leader of the House convey to the Secretary of State that it is not good enough saying that France has got those jobs because of the minimum wage and the social chapter? The loss is a direct result of the Government's decision to allocate that contract to GEC, which will export jobs to France. It is not good enough and the decision should be reversed.
Mr. Newton: I have already made several comments on that matter in response to entirely understandable points from hon. Members on both sides of the House. I cannot add to them, but I shall add the hon. Gentleman's representations to those that I shall communicate to my right hon. Friend the Secretary of State for Transport.
Mr. Robert Ainsworth: May we have an early opportunity to debate the figures issued through a planted written question on the single regeneration budget the other day? The Leader of the House may know that the single regeneration budget represented a massive cut in its constituent parts—the different budgets that went into it originally. He may also know that the figures released in the Budget were a cut on those announced earlier this year. At least, if we had such a debate, we would have the opportunity to discuss
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the astonishing press release put out by the Secretary of State for the Environment, which claimed £800 million of new money for regeneration.
Mr. Newton: Perhaps I should declare an interest, in that one of the successful schemes was the regeneration scheme in Braintree, East. I was very pleased about that. On the main thrust of the hon. Gentleman's question, his remarks may simply reflect a misunderstanding, given that one of the most notable features of the single regeneration budget is the amount of money brought in, alongside what is strictly SRB money, from other parts of the public sector and not least from the private sector. What the economists would call the gearing is immensely high and the investment is much greater than the outlay in the SRB itself.
Mr. Greg Pope: Is the Leader of the House aware of early-day motion 211 on today's Order Paper, which was tabled in my name?
[That this House notes with concern the proposed loss of over 200 jobs at GEC Engineering (Accrington) as a result of the continuing recession in the aircraft industry; recognises that these redundancies are a disaster for the workforce and will cause real damage to the skills base of the East Lancashire economy; further notes that GEC is a cash rich company which recorded pre-tax profits in the last financial year of £866 million, and which can afford to bid for VSEL but apparently cannot afford to stand by its loyal workforce in Accrington; believes that GEC Engineering (Accrington) should be given further time to prove its economic viability; and therefore calls on the GEC board to defer these proposed redundancies pending talks with the trade unions, local authorities, honourable Members and other interested bodies.]
The job losses are not merely a tragedy for my constituents, but a disgrace from a company such as GEC, which made profits of nearly £900 million last year. Given that the job losses are in a crucial defence-related industry, will the Leader of the House find time for a debate on the matter before the House rises for the Christmas recess?
Mr. Newton: Perhaps I had better not be unkind enough to observe some tension between the demand to prevent job losses at one part of GEC and the attacks on the award of a contract to another part of GEC. But I shall certainly take note of the hon. Gentleman's understandable concern.
Mr. Jim Dowd: Does the Leader of the House agree that the prevarication and delay that have beset the channel tunnel rail link ever since the scheme's inception mean that the House really should get down to considering that matter as soon as possible? Can the right hon. Gentleman say how soon that might be?
Mr. Newton: I hope that it will be quite soon. I do not anticipate a debate before the Christmas recess, but I shall be very much looking to arrange one shortly afterwards.
Mr. Gordon Prentice: May I press the Leader of the House to have an early debate on insider share dealing? Does he appreciate that many people believe, as I do, that his noble Friend Lord Archer is guilty as sin of insider share dealing and made £80,000 in the space of a few weeks in January last year? Is he further aware that the Chancellor told me last week that the Government were keeping the law on insider dealing under review? He

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will have seen from today's Financial Times that the stock exchange is bringing forward new rules on insider trading. In view of those developments, surely there is a case for an early debate on the matter.
Mr. Newton: I do not know about you, Madam Speaker, but I am getting fed up with Opposition Members using the Floor of the House to make remarks about individuals which they would not dare to make outside because it would land them in court, and I shall certainly not provide time for a debate that would enable more of the same thing to occur.
Mr. Andrew Mackinlay: May we have a statement tomorrow on Gibraltar? Will the Leader of the House reflect that Parliament—the Government and other parties as well—has failed to address itself to the interests of British subjects, citizens of the European Union, who are being messed around, to say the least, by the Spanish authorities? It is unacceptable for the Foreign Secretary and the Prime Minister to pretend that they are macho in diplomatic affairs and not to address themselves to the interests of the people of Gibraltar. The House is failing them. It is time that we had a statement tomorrow on behalf of their interests, to show that Her Majesty's Government are being robust in their approaches to the Spanish Government. Secondly, we should have a debate in the House about the natural, legitimate aspirations of the people of Gibraltar for constitutional development. We are failing them.
Mr. Newton: I do not think that I can promise a statement, but the hon. Gentleman will no doubt be aware that my right hon. Friend the Foreign Secretary will be here to answer questions next Wednesday.

Consolidated Fund
Madam Speaker: I have an announcement to make about arrangements for the debate on the motion for the Adjournment that will follow the passing of the Consolidated Fund Bill on Thursday 15 December.
Hon. Members should submit their subjects to my office not later than 10 pm on Tuesday 13 December. A list showing the subjects and times will be published the following day. Usually, the time allotted will not exceed one and a half hours, but I propose to exercise a discretion to allow one or two debates to continue for rather longer, to a maximum of three hours. Where identical or similar subjects have been entered by different Members whose names are drawn in the ballot, only the first name will be shown on the list.
As some debates may not last the full time allotted to them, it is the responsibility of Members to keep in touch with developments if they are not to miss their turns.

Points of Order
5.2 pm
Mr. Andrew F. Bennett: On a point of order, Madam Speaker. I remained for business questions this afternoon in order to listen to the point raised by my hon. Friend the Member for Nottingham, South (Mr. Simpson), which he also raised last week. I understand that he has now received a letter from the Leader of the House suggesting that the Ponsonby rule might not apply in this particular case.
As you, Madam Speaker, are responsible for the rights of Back Benchers, do you agree that deciding whether the Ponsonby rule applies should not merely be a matter for the Government, but one in which you should be involved?
Will you take the opportunity to read the correspondence, which I am sure that the individuals concerned will make available to you, and perhaps make a statement on Monday about whether the Ponsonby rule applies in this case? Will you also confirm whether, if we are not entitled to a debate in Government time, the subject would be suitable for the Consolidated Fund debate later next week?
Mr. Harry Cohen: Further to that point of order, Madam Speaker.
Madam Speaker: I was ready to answer the point of order in great detail, but go ahead.
Mr. Cohen: I echo what my hon. Friend the Member for Denton and Reddish (Mr. Bennett) says. I have had a quick glance at the letter received by my hon. Friend the Member for Nottingham, South (Mr. Simpson) and it seems to say that the Ponsonby rule does not apply because extra money will not be spent. That is highly dubious in this case. If Britain is to move from Polaris to Trident missiles, extra money will definitely be spent. The agreement covers, a 10-year period, so extra money is likely to be spent during that period.
If that is the reason that the Government are giving why the Ponsonby rule should not apply, I put it to you, Madam Speaker, that that is not appropriate and, as has been said, you should consider that most carefully. The matter should be brought to the Floor of the House so that we can have an opportunity to debate it and opposition can be expressed to that nuclear weapons policy.
Madam Speaker: With regard to whether the subject would be suitable for debate on the Consolidated Fund, I can tell the hon. Member for Denton and Reddish (Mr. Bennett) that it would be a most appropriate matter to raise then.
I refer the hon. Gentleman to "Erskine May", page 215, which says:
"When a treaty requires ratification, the Government does not usually proceed with ratification until a period of twenty-one days has elapsed from the date on which the text of such a treaty was laid before Parliament by Her Majesty's command. This practice is subject to modification, if necessary, when urgent or other important considerations arise."

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For the interest of the House, I might say that the practice known as the Ponsonby rule has its origin in a departmental minute dated 1 February 1924 and signed by Mr. Arthur Ponsonby, then Under-Secretary of State for Foreign Affairs. I shall look at the points raised by hon. Members.
Mr. Bennett: Further to my point of order, Madam Speaker. Will you confirm that my hon. Friend the Member for Nottingham, South registered a protest last Thursday, so there should be a debate? I should be grateful if you considered the matter further.
Madam Speaker: Thank you.

EUROPEAN COMMUNITY DOCUMENTS

  SAFETY AT SEA
  Motion made, and Question put forthwith pursuant to Standing Order No. 102(9) (European Standing Committees),
  That this House takes note of European Community Documents Nos. 6655/94, relating to training for maritime occupations (the 'training of seafarers Directive'), 11496/93 and 7919/94, relating to a European vessel reporting system in Community waters, and 5841/94, relating to ship safety and control of pollution (the 'port state control Directive'); endorses the Government's agreement to the formal adoption of the training of seafarers Directive and to a common position on the port state control Directive; and welcomes the Government's commendation to other Member States of Lord Donaldson's report Safer Ships, Cleaner Seas (Cm 2560) as a valuable contribution to discussions on the proposed European vessel reporting system.—[Mr. Andrew Mitchell.]
  Question agreed to.

  PROTECTION OF PERSONAL DATA
  Motion made, and Question put forthwith pursuant to Standing Order No. 102(9) (European Standing Committees),
  That this House takes note of European Community Document No. 9400/92 and the unnumbered Supplementary Explanatory Memorandum submitted by the Home Office on 29th November, relating to the protection of personal data; recognises that the Council of Europe Convention on data protection provides an adequate framework for data protection within the Union; believes that the Commission proposal would impose significant unnecessary bureaucratic burdens and very heavy additional and unacceptable costs for data users in the United Kingdom; remains of the view that the Directive breaches the principle of subsidiarity as provided by Article 3b of the Treaty of Rome (as inserted by the Treaty on European Union); and supports the Government's view that the case for a Community Directive on the lines proposed has not been made out.— [Mr. Andrew Mitchell.]
  Question agreed to.

PETITION

  Cleddau Bridge
  5.6 pm
  Mr. Nick Ainger: Before my Adjournment debate, I wish to present a petition signed by approximately 10,000 electors of Pembrokeshire, which declares that they are suffering an unfair burden as a result of the level of tolls on the Cleddau bridge and that the new Pembrokeshire unitary authority will be saddled with an unacceptable level of debt when the bridge is transferred to it in April 1996.
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  The petition concludes:
  "The petitioners therefore request that the House of Commons resolves that the Secretary of State's 1979 pledge be met in full and that the Welsh Office must ensure the financial burden of the bridge does not fall on the people of Pembrokeshire."
  To lie upon the Table.

  Cleddau Bridge
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Andrew Mitchell.]
  5.7 pm
  Mr. Nick Ainger: As a result of the arrangements in this place, we now have an opportunity which I had not expected a couple of days ago to debate in full the complex issue and the long history of the Cleddau bridge. Basically, Mr. Deputy Speaker, as you will be aware from the petition that I have just presented, the people of Pembrokeshire are extremely concerned about the financing of the Cleddau bridge, the burden that has already fallen on the people of Pembrokeshire and its industry since its opening in 1975, and the future burden that will have to be borne by council tax payers as well as motorists and haulage contractors during the period of the new Pembrokeshire unitary authority unless significant changes are made by the Government.
  This is not the first time that the issue has been debated in the House. On 19 March 1990, my Conservative predecessor, Nicholas Bennett, raised the subject with the Minister's predecessor, the right hon. Member for Conwy (Sir W. Roberts), although, sadly, without success. Since that Adjournment debate, a number of factors relating to the Cleddau bridge have changed and make the argument that the Welsh Office should take over its running and financing even more compelling.
  It would be useful if I went over the bridge's rather sad history. It was first proposed to build a bridge across the River Cleddau in 1943, during the war, and again in 1945 when it was envisaged that the crossing should be downstream of Pembroke Dock. In 1959, there was a further proposal for a barrage across the river. None of those ideas was implemented, but the plans for a bridge were revived in 1964 and the Pembrokeshire County Council Act 1965 granted the council permission to build a bridge to replace a ferry which had been operating between Hobbs Point on the Pembroke Dock bank and Neyland on the northern bank of the River Cleddau or, as it is also known, the Milford Haven waterway.
  The House should be aware of the enormous limitation placed on Pembrokeshire's economy in the absence of a reasonable crossing between the north and south banks of the Milford Haven waterway. Before a bridge was built, if the ferry was not running due to bad weather or because it was too late at night or too early in the morning for shift workers to be about, an individual wishing to travel from Pembroke Dock to Milford Haven, which is further downstream than Neyland, would have to travel in excess of 30 miles. Clearly, it was of a matter of great importance to the Pembrokeshire economy that the natural barrier should be bridged.
  Tenders were invited in 1968. The original estimate for building the then brand new box-girder design bridge was £3,640,000. On 2 June 1970, the then partially completed bridge collapsed, tragically killing four workmen and damaging a number of properties in Pembroke Ferry, the hamlet below the bridge. Following that collapse and the collapse of bridges of similar design in Melbourne, Australia and in Munich, Germany, the Merrison committee examined the technical requirements to improve the structure before work continued.
  The council accepted the Merrison committee's recommendations which involved significant strengthening of the structure that was still standing and,
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  of course, of the new completed bridge. As a result of the adoption of those recommendations, the final capital cost when the bridge opened in 1975 was not just over £3 million but £11.83 million.
  The bridge has always been a political football in Pembrokeshire and it is worth while noting how it was treated throughout the 1970s. During the election campaign in October 1974—six months before the bridge was officially opened—the then Member of Parliament for Pembroke, now Lord Crickhowell, speaking with the full authority of a Conservative spokesman on Welsh affairs, said that the Conservative Government, were they elected, would take over the cost of constructing a bridge and would abolish proposed tolls. He said:
  "When the Pembrokeshire County Council planned the construction of the bridge they knew that it would make a great difference to the local economy but they could have had no idea of its crucial significance; they could have had no idea either that they might be faced with a disaster and a threefold increase in cost. It is quite clear that the burden of over £9 million is now too great for the ratepayers to shoulder and that any government will have to take over a substantial part of that burden … A conservative government would take urgent action to prepare for developments in the Celtic Sea and if oil were found they would see that resources were directed in those areas affected by the discoveries … It is wrong that local ratepayers should have to pay for something that is of key national significance, for the benefits of offshore oil will flow to the whole nation. We have said that Wales will benefit from offshore oil; I have now shown that we are determined to make that pledge a reality."
  It is worth noting that, on 2 November 1994, Marathon Oil announced the first strike of gas in the Celtic sea, 25 miles from the shores of Pembrokeshire.
  Let me take the House back to 1974.
  Mr. Ron Davies: I would not normally intervene during an Adjournment debate, but we are not suffering the usual time constraint. For the sake of accuracy, will my hon. Friend say whether the Lord Crickhowell to whom he referred is Nicholas Edwards, the Tory party candidate in Pembroke in 1979?
  Mr. Ainger: He is one and the same. I am glad that my hon. Friend has enabled me to clarify that point.
  In 1974, an inspector called Mr. J. R. Rawes reported on the proposed maximum tolls order on the Cleddau bridge. Paragraph 137 of his report stated that two thirds of the £11.83 million capital cost attributable to the Merrison committee's recommendation on the extra work needed to strengthen the bridge should be paid by the Exchequer. It continued:
  "This financial assistance from central funds should be an outright grant, inclusive of interest and inflation".
  Two thirds amounts to approximately £7 million. Inspector Rawes also said that if the county council subsequently won any damages from the designers or builders of the bridge no part of that settlement
  "should be claimable by, or payable to, the National Exchequer, as the transaction derives entirely from the provisions of the 1965 Act for which Dyfed County Council are alone accountable."
  The bridge opened on 20 March 1975, burdened from the outset by its tragic history and debts of some £11.83 million. Tolls were set at 15p for motor bikes, 30p for cars and 60p for heavy vehicles. Following a claim by the county council in the financial year 1978–79, it received some £3 million in insurance compensation from the designers and builders of the bridge.

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  The political history of the bridge did not end there. It again became a political football during the 1979 general election when the then Nicholas Edwards was still representing Pembroke. At his adoption meeting prior to the election he said that the pledge that he had given in the 1974 election to abolish tolls was no longer valid. He continued:
  "A pledge made at the time of an election does not stand if the party is defeated"—
  that is also true in this case or, from the experience that we have had during the past two years, when the party wins—
  "but in any case the situation today is totally different from that in 1974."
  Nicholas Edwards referred to the inspector's recommendation that the Government should pay for the Merrison elements, and said:
  "I now want to make it perfectly clear that a Conservative government would accept that recommendation and a commitment to that effect is contained in our Welsh election manifesto."
  I do not need to remind my hon. Friend the Member for Caerphilly (Mr. Davies) on the Front Bench, nor the Minister, that, following the 1979 general election, the then hon. Member for Pembroke became the Secretary of State for Wales, and on 21 December 1979, the Welsh Office gave Dyfed county council not a grant but a £4 million interest-free loan, repayable over 40 years at some £100,000 a year. That neither satisfied the commitment to pay in full the cost of the Merrison recommendations, which were £7 million; nor was it an outright grant—it was a loan. In that year, because of the burdening debt accruing on the interest, tolls were raised—to 35p for cars and 70p for heavy vehicles. In 1985, tolls were raised again—to 50p for cars and £1 for heavy vehicles.
  As I said in my opening remarks, this is not the first time the issue has been debated, and I shall refer to my predecessor's Adjournment debate of 19 March 1990. The right hon. Member for Conwy, who was then Minister of State, said that the figure of £4 million had been arrived at because of the £3 million legal settlement won by the council, which had been discounted against the deemed £7 million cost of the Merrison element.
  That totally contradicted the inspector's recommendation that compensation should not be claimable by the Exchequer, and also the assurance given by the then hon. Member for Pembroke and subsequent Secretary of State for Wales, Nicholas Edwards. The right hon. Member for Conwy said in 1990 that only a loan, not a grant, could be paid, because the Pembrokeshire County Council Act 1965 prevented toll income being used to pay for grant-aided roads. In other words, if a grant was given, one could not charge tolls. If one insisted on doing so, one could not give a grant. That was true in 1979 when the loan of £4 million was made, but it certainly was not true when he said that in March 1990. I am not saying that the hon. Member for Conwy was trying to mislead the House, but he was incorrect, and I shall go on to that later.
  In that Adjournment debate, the then Minister of State went on to say:
  "Further Government assistance is not an option."—[Official Report, 19 March 1990; Vol. 169, c. 988.]
  But by then the Dyfed Act 1987 was in force. That had repealed totally the Pembrokeshire County Council Act 1965. In a letter to me dated 8 February 1994, the then
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  Minister of State repeated that the Pembrokeshire County Council Act 1965 prevented a grant being given and made no mention of the fact that it had been repealed. I then wrote back to him pointing out that the Act had been repealed, and in a further letter to me on 11 April this year he said:
  "I accept that the Dyfed Act 1987 has now repealed the Pembrokeshire County Council Act and this Act contains no similar provision restricting the use of the toll income."
  That was as true in 1990, at the time of the first Adjournment debate on the subject, as it is now in 1994.
  There is therefore no legal impediment to prevent the Welsh Office from giving grant aid instead of a loan to cover the spiralling debts on the bridge. In the letter of 11 April, the Minister went on to say:
  "However, the question remains as to whether the Department can justify the provision of any further assistance towards the Bridge."
  Perhaps the real question still remains whether the Welsh Office is willing to honour the election pledge given in 1979 now that there are no longer any legal impediments. I think that it is a question of political will.
  On 26 May this year, the Minister—
  Mr Ron Davies rose—
  Mr. Deputy Speaker (Mr. Michael Morris): Order. Before the hon. Gentleman rises, it is, of course, a convention of the House that this is a Back-Bench debate. With the permission of the hon. Member for Pembroke (Mr. Ainger), who has the Adjournment debate, other hon. Members may take part, but by tradition not from the Front Bench. If the hon. Member for Caerphilly (Mr. Davies) wishes to intervene or contribute, he really should change the position where he is sitting.
  Mr. Ainger: I have no objection to any hon. Member from any position in the House making a contribution to the debate. We are not pressured by time. It is an important issue—certainly for my constituents—and it touches on a number of very interesting national points as well.
  On 26 May this year, the Minister of State wrote to me after I had written to request financial assistance and trunking, following a delegation that I had led with council officials from South Pembrokeshire district council, Preseli-Pembrokeshire district council and also representatives of Dyfed county council. Even though up to 9,000 vehicles a day cross that bridge, the Minister of State said that the traffic on the bridge remained mainly local.
  Despite efforts to contain the growing deficit, in October 1993, tolls were again raised from 50p to 75p for cars and from £1 to £1.50 for heavy goods vehicles. The tragic history to date means that when the new Pembrokeshire unitary authority comes into being on 1 April 1996, it will inherit an estimated debt of up to £40 million. I shall give a breakdown of that, because certain issues are worth examining in detail. Some £5 million of the projected debt is the remaining capital loan debt. Part of it is owed to the local authority loans pool. Some £2.65 million is the remaining interest-free loan being repaid to the Welsh Office. Another £4.8 million is the cumulative operating deficit on the bridge account, which is separate from other county council finances. More than £11 million of interest is owed to council tax payers to meet deficiencies in years when there is a deficit in the bridge account—when toll

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  income does not cover costs, including interest charges. Between £15 million and £20 million is also required for strengthening costs due to be incurred between 1996 and 1999 to meet European regulations that will allow heavy lorries of up to 44 tonnes on to British roads. The county engineer cannot give an accurate estimate until full engineering surveys are carried out, but his estimate is that the figure will probably work out at between £15 million and £20 million.
  Dyfed's current population is about 350,000, of whom some 124,600 are band D-equivalent council tax payers. When the bridge is transferred to the new Pembrokeshire county council in April 1996 there will be only a third of the current number of council tax payers, and the burden will obviously fall far more heavily on that smaller population.
  The Welsh Office has told me that the county council is really at fault for not raising tolls more often in the past to cover deficits. In his letter of 26 May, the Minister of State wrote that
  "if implemented with regular proposals to increase tolls to cover the increased costs, the forecast deficits should be containable."
  In the same letter, he questioned the interest liability on the operating deficit—that £11 million. He said that the council "may apply interest" at 10 per cent., but had chosen not to do so thus far and could not do so retrospectively.
  In fact, interest has been calculated. Sections 24 and 25 of the Dyfed Act 1987 clearly intend local taxpayers to be compensated for covering deficits. Section 25 states:
  "Any deficiency in the revenue of the bridge in any financial year shall be made good in the first instance out of the reserve fund (if any) formed in connection with the bridge and if there be no such reserve fund or such reserve fund be insufficient for the purpose then out of the other moneys of the county council and in such case any such other moneys shall be repayable out of any future revenue of the bridge."
  Council tax payers are to be reimbursed, and interest can be paid only out of future revenue. The £11 million plus interest may be only a paper debt, but the uncertainty should be lifted from the new Pembrokeshire county council. In 1992–93, the Department of Transport provided for expenditure of some £43.5 million for exactly the same kind of debt in connection with the Humber bridge; I shall say more about that later.
  The effect of raising tolls still further could be devastating. On 22 February 1994, Huw Morse, Dyfed's county treasurer, wrote to the Minister of State giving deficit forecasts based on the cost of strengthening the bridge—a cost of between £15 million and £20 million. Those are the most up-to-date estimates; as I have said, a full engineering report would be necessary to provide a final and accurate estimate.
  Mr. Morse's projections show that if the strengthening cost is at the lower end of the scale—around £15 million—and traffic grows in line with national Department of Transport forecasts, toll increases of 6.65 per cent. every year would be needed to reduce the deficit to zero by the year 2022. The deficit would peak at around £52.1 million in the year 2002, when tolls would have to be £1.34 for cars and £2.68 for heavy vehicles.
  If the worst happened and the engineering cost was nearer £20 million, and if there was no traffic growth, tolls would have to rise by some 9.57 per cent. to remove the deficit by 2022. It would peak at about £62.2 million in the year 2002, when tolls would have to be £1.50 for cars and £3 for lorries.
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  In his letter, Mr. Morse told the Minister of State:
  "As the County council is operating within a capped regime funding these costs can only be done at the expense of other services. One can imagine the critical nature of such a picture which, when added to the cash limit approach adopted for local government expenditure, will mean wholesale reductions in many of the services provided by the council.
  The impact on a major county like Dyfed is devastating enough but the effect on a smaller unitary authority, possibly less than a third of its size, would be catastrophic."
  At current levels, tolls are projected to take £1.8 million out of the economy in this financial year. It is worth noting that, because of the chronic unemployment from which my constituency suffers and because of the numerous defence closures announced just before the 1992 general election, the then Secretary of State for Wales set up the west Wales task force, giving it a budget of some £12.5 million over five years. That constituted £2.25 million of additional help for the west Wales economy. The contradiction is that, because the Welsh Office refused to take any action to assist in reducing the debt or the toll level, £1.8 million is now being taken out of our local economy.
  The petition that I presented earlier, signed by approximately 10,000 people, states that the burden of the Cleddau bridge should not fall on the people of Pembrokeshire. I do not want them to bear that burden, whether as motorists, commercial operators of heavy goods vehicles or council tax payers. Our economy has suffered more than its fair share in the past few years, as a result of defence closures and unemployment that has remained persistently high. In Milford Haven and Pembroke Dock, the two main towns nearest to each side of the bridge, unemployment rates were 17.8 per cent. and 12.8 per cent. respectively in October this year, on narrow base rates.
  Extracting yet higher tolls to try to contain the deficit constitutes a tax on jobs. That option, and cutting services to meet the debt burden, are both unacceptable. Many people have to cross the bridge to obtain essential services: the Minister of State will know that the Withybush general hospital is based in Haverfordwest, and the 30,000 or so people who live south of the Cleddau must cross the bridge to go to the hospital for admission or to visit relatives. People living south of the river who work in Haverfordwest or Milford Haven, in the Elf or Gulf refineries, must also cross the bridge. The same is true of people living in the north of the county who work in the Texaco refinery, or at the power station on the southern side of the Milford Haven waterway.
  Industry has developed on both sides of the Haven. People living on the opposite side from their workplace will have to find an additional £7.50 a week, at current levels. The Minister may know that, sadly, west Wales has one of the lowest pay levels in the United Kingdom. This additional burden is totally unfair.
  The Government really should accept their responsibility for both the economic well-being of the area and the whole trunk road system. The Welsh Office has been asked several times to designate the bridge part of the trunk road network, most recently in December last year. Trunking would clearly be the best solution to avoid the potential disaster that faces the new Pembrokeshire county council, along with recognition by central Government of their responsibilities. Clearly, the bridge is, in effect, part of the national road network. It is bracketed to the south by the A477, which is trunked and

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  only 1 km away from the southern side of the bridge. To the north of the bridge, the A476 is only some 6 km away. The 8 km stretch containing the bridge is the only section of major road linking south, west and north Wales which is not trunked.
  The Welsh Office's refusal to help the people of Pembrokeshire sharply contrasts with the Department of Transport's attitude towards Humber bridge, which currently has debts of more than £430 million. In the financial year 1992–93, the Department of Transport provided £43.5 million to the Humber Bridge Board and it has promised legislation to avoid the board having to precept local authorities to solve the problem.
  It is interesting to note that, per metre of length, the Humber bridge is cheaper than Cleddau bridge. One pence of toll on Humber bridge allows one to travel 13.9 m whereas 1p of toll on Cleddau bridge allows one to travel only 10.9 m. The Government's inconsistent approach to the national importance of estuarial crossings has been highlighted in a report by the Select Committee on Transport in 1985. It said that tolls were a selective monopoly charge and the policy that the costs of estuarial crossings should be borne by the local population was applied inconsistently. It pointed out that the following bridges were estuarial crossings, but were untolled: Avonmouth bridge, Ballachulish bridge, Moray and Cromarty firth bridges, Friarton bridge in Perth, Runcorn-Widnes bridge, the Clyde tunnel and M8 Kingston bridge, the Medway crossing and Dornoch firth bridge.
  It is worth noting that, in Wales, the Conwy tunnel and the M4 over the Usk at Newport are untolled. The new extension of the M4 at Briton Ferry, again over an estuary, is untolled. I understand from my hon. Friend the Member for Alyn and Deeside (Mr. Jones) that the new Dee crossing will not be tolled, even though its estimated cost amounts to more than £50 million.
  The Select Committee on Transport report went on to say that, if the Government recognised Humber bridge's problems, they could recognise the problems of other bridges as well. It also said that assuming responsibility for debts would not mean finding cash. Debts to the Public Works Loan Board, like those owed by Dyfed county council for Cleddau bridge, and to central Government need have no effect on the public sector borrowing requirement. The report said:
  "The transfer of responsibility for servicing all the debt to central government would only be a transfer within the public sector".
  Therefore, it would have no impact on the PSBR.
  The Government response to that report was to reiterate the arguments about special local advantages for estuarial crossings, but they were
  "willing to consider reasoned argument for special treatment in particular cases."
  In the case of Pembrokeshire, the Welsh Office has said that the liabilities of the new authority would be reflected in its standard spending assessment. Before I entered this place, I was a county councillor in Dyfed. I regularly heard Welsh Office Ministers assure local government, when particular problems were raised with them and they accepted those problems, that the money would appear in the council's rate support grant. No one was able to find
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  it. I have heard promises like that before and it becomes extremely hard to identify where and whether extra money has been forthcoming for particular problems.
  If the Welsh Office is to provide extra money in the standard spending assessment or the revenue support grant, why does not it take over financial responsibility directly rather than use the new Pembrokeshire authority as a third party? Its approach implies that the Welsh Office accepts that there is a problem and money needs to be found, so why does not it go the whole way and take over full responsibility? If it will not provide extra money, it is meaningless to say that the burden of Cleddau bridge will be reflected in the new authority's settlement.
  It is clear that the new Pembrokeshire authority, which has been welcomed by everyone in my constituency, will face a massive financial problem because of the bridge. The Minister has been warned by the treasurer of the outgoing county council of a potential catastrophe. The problem arises from an undertaking that was made, not even by the present council, but by the previous one. It was greatly worsened by circumstances that were not of that authority's own making. There has been a fatal collapse of the bridge and the problem has been exacerbated still further by the Government's failure to live up to a pledge to provide help. The problem is likely to be doubled again because of the circumstances—the need to strengthen the bridge to meet new legislative requirements, which no one could have foreseen when the bridge was first built. For all those reasons, it would be a clear abdication of responsibility for the Welsh Office to refuse to help.
  This is now the second Adjournment debate on this subject. The first was raised by a Conservative Member and this one has been raised by a Labour Member. I urge the Minister to accept that Cleddau bridge can and should be treated in the same way as the Dee crossing, the Briton Ferry crossing and the Conwy tunnel. The Welsh Office should accept its responsibility.
  5.46 pm
  The Parliamentary Under-Secretary of State for Wales (Mr. Gwilym Jones): The hon. Member for Pembroke (Mr. Ainger) has raised concerns about various matters relating to Cleddau bridge and to the effect on his constituents. I noticed that he did it in a way that sought to emulate the standards of his distinguished predecessor, Mr. Nicholas Bennett. In going through so much history, I feel that I, too, am following in the footsteps of predecessors—my right hon. and noble Friend Lord Crickhowell and my right hon. Friend the Member for Conwy (Sir W. Roberts), who was Minister of State.
  Before we go too much into recycling, the reaction might be, "What is new about going down this road or going across this bridge?" The bridge is owned and operated by Dyfed county council. Apart from certain reserve powers possessed by the Secretary of State of Transport with regard to the revision of tolls, the county council has sole responsibility for charging, collecting and reviewing tolls under the Dyfed Act 1987.
  It was always intended that the bridge should be a self-financing project, with debt charges being recovered over a 50-year period. Those charges, together with operation and maintenance costs, are met by tolls levied on users of the bridge. That was clear to the then Pembrokeshire county council at the outset and has remained the case since.

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  The bridge opened to traffic in March 1975. Construction costs increased from the original estimate of £3 million to £12 million on completion. The increase was mainly due to a delay during construction following the collapse of the bridge superstructure and the need to comply subsequently with the recommendations of the Merrison committee on box-girder bridges.
  The Government inspector who took the public inquiry into a tolls review in 1974, under the previous legislation contained in the Pembrokeshire County Council Act 1965, recommended that the additional costs to the county council of applying the Merrison committee's standards should be transferred from local ratepayers to the Exchequer. The inspector estimated those costs to be £7 million or more.
  Dyfed county council, in an out-of-court settlement with the consulting engineers who designed the bridge, obtained compensation of £3 million. That left a sum of£4 million attributable to the Merrison requirements. The Government took the view that, because of the exceptional circumstances, it was appropriate to give assistance to the county council on a one-off basis. A £4 million interest-free loan that was repayable over 40 years was, therefore, made to the council. That represented a full response to the commitment made in 1979 by the then Secretary of State for Wales, my right hon. and noble Friend Lord Crickhowell.
  In 1979, the only way in which the Government could provide financial assistance to the county council was through an interest-free loan. Grant aid was not possible under the Pembrokeshire County Council Act 1965, under whose powers the bridge was constructed. If a grant had been paid, toll receipts could not have been used towards any construction, maintenance or improvement costs. As I understand it, Parliament's intention in 1965, under the then Labour Government, was to prevent tolls from being used to meet bridge costs that were also grant aided.
  Mr. Ainger: I accept what the Minister has said about the legal impediment—I, too, referred to it in my speech—but the argument concerns whether the loan should have been for £4 million or £7 million. Inspector Rawes argued that the loan should not take into account any compensation that the county council was to receive as a result of a legal challenge against the consulting engineer. Does the Minister accept that the £4 million loan did not fully meet the recommendation made by Inspector Rawes?
  Mr. Jones: No. As I understand it, the recommendation was that none of the compensation should go to the Exchequer. It did not; it went to Dyfed county council. To comply, the Government gave a grant for what the county council had not obtained by compensation to ensure that that bill did not fall on Dyfed county council.
  As the hon. Gentleman said in his speech, and as was confirmed by my right hon. Friend the Member for Conwy, the Dyfed Act 1987 has repealed the old Pembrokeshire County Council Act 1965. I accept that the 1987 Act contains no similar provision restricting the use of toll income. I do not believe, however, that the financial projections prepared by Dyfed county council justify the need for further central Government assistance towards the bridge. Traffic figures and income projections show that, if the highway authority behaves responsibly in reviewing and setting tolls, future revenue will be sufficient to meet future costs. The projections indicate
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  that the forecast deficits on the bridge should be containable without grant assistance, subject to regular increases in tolls to cover increased costs, such as the proposed strengthening programme.
  In March this year, the balance on the interest-free loan stood at £2.6 million, repayable over the next 26 years. The actual total debt was £5.1 million and is steadily declining year by year. The large accumulated deficits, which are often quoted, are misleading. I know that the hon. Gentleman seeks to guard the most extreme case when he arrives at his £40 million projection and the size of future tolls.
  The county council is empowered to charge interest at 10 per cent. per annum on deficiencies in the revenue on the bridge, but it has chosen not to do so. It is precluded from introducing retrospective charging of such interest. In fact, the bridge generated satisfactory surplus from 1986 to 1992. The 1992–93 deficit of £257,000 was primarily due to higher than usual maintenance charges. The bridge managed to break even in 1993–94.
  In response to the Select Committee's 1986 report on tolled crossings, the Government said that they were unable to accept the recommendation that they should write off or discharge the debts of tolled crossings. The Government felt there was no reason that the Exchequer should assume responsibilities for obligations freely incurred by the promoting authorities in accordance with their enabling legislation. It was felt that most crossings were either viable or could become so under prudent financial management. That does not, of course, include the exceptional case of the Humber bridge, which would represent a debt of £220 per person per year as local tax had it not been treated in a different way. The arrangement for that bridge is the legacy that we had to take on from a Labour Government, who were desperate to win a by-election.
  The 1991 annual inspection of the Cleddau bridge showed that major items of work were necessary in the following 10 years. In addition, with European legislation introducing a 40 tonne weight limit for vehicles from January 1999, it will be necessary to carry out an assessment of the structure to determine its capacity to carry such loads. An initial assessment by the county council shows that the maintenance and strengthening work will cost between £5 million and £20 million.
  Resources for assessing and strengthening bridges are provided via the local government revenue settlement, but strengthening work is not the only option. The costs and benefits of that work need to be assessed. It may be—I can say no more than that—more sensible for Dyfed county council to consider whether, subject to complying with the necessary statutory requirements, weight restrictions might be applied to the bridge.
  Under arrangements agreed with local authorities, transport grant can be available for major road improvements. Priority for transport grant is given to road improvements costing more than £5 million and which meet value-for-money criteria. I would not rule out the consideration of a transport grant bid to strengthen the Cleddau bridge. In the absence of an assessment showing that strengthening would be justified, it seems unlikely that such a bid would be supported within the parameters of the scheme. I will, of course, consider evidence which the authority may wish to provide.

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  The hon. Gentleman is right when he says that, following local government reorganisation, responsibility for the bridge will pass to the new Pembrokeshire unitary authority. He is right, too, when he says that the debt associated with the bridge will also transfer to the new authority. He ignores, however, two important points: first, the new authority will inherit the asset and receive the benefit of toll income; and, secondly, the allowance within the new authority's standard spending assessment for debt charges will reflect its total debt portfolio. The creation of the new authority represents a reversion to the original authority that introduced the legislation to build the bridge. I know that the new authority is warmly welcomed in the hon. Gentleman's constituency, as our popular reforms are usually greeted throughout Wales.
  The failure of Dyfed county council to use its powers under its veto to consider and, if necessary, revise regularly the level of tolls has contributed to the bridge's present financial position. Tolls did not increase for eight years between 1985 and 1993.
  The hon. Gentleman has repeated the calls that have been made previously for the A477 between Pembroke Dock and Johnston on the A4076 to be made into a trunk road. The trunk road network is a national system of routes for through traffic. While, at peak times, up to 9,000 vehicles per day might use the Cleddau bridge, in the main it deals with local rather than through traffic. According to the latest statistics for 1992–93, the average is even lower than 9,000, because a total of 2,582,108 vehicles crossed the bridge, which I equate with an average of slightly under 7,400 a day. The hon. Gentleman also referred to the third Dee crossing, which is used by 24,000 vehicles a day. The new link with the M4, Fabian way, is also a relevant consideration because it carries 30,000 vehicles a day.
  The bridge was provided by the local authority to meet the local need, and no evidence has been provided to suggest that it meets a broader national need. As the hon. Gentleman accepted, the area already has good access to the trunk road network at Pembroke Dock and at Johnston on the A4076. Those links provide good access to the dual carriageway at St. Clears via the A477 and A40 and thereafter to the M4. Those links are trunk roads.
  The Government's commitment to improving road communications in Wales is clearly demonstrated by a high level of expenditure. Since 1979, more than £2 billion has been spent on the construction and improvement of 25 miles of the M4 and more than 160 miles of trunk road. Nine major improvement schemes providing another 30 miles of motorway and trunk road are under construction.
  The rate of spend per head of population in Wales is greater than in England and Scotland. This high level of investment will continue with expenditure of about £200 million planned to be spent on trunk roads in the current financial year. Plans for 1995–96 will be announced shortly.
  Earlier this year, my right hon. Friend the Secretary of State for Wales undertook a review of our trunk road priorities in Wales. These were subsequently detailed in our document "Roads in Wales: 1994 Review". Our main strategic objectives for Wales are extending the A55
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  dualling in the north across Anglesey and, in the south, completion and further improvement of the M4 and dualling the A465.
  Completion of the M4 will be realised in four days' time when the two remaining sections of the "M4 missing link" between Baglan and Lonlas are finished. We will then have a continuous motorway of some 220 miles from Pont Abraham in Dyfed right through to London. Moving eastwards along the M4, work is progressing on the Brynglas tunnels-Malpas relief road scheme and on the approach roads to the second Severn crossing. Future M4 proposals include widening the Castleton to Coryton and Magor to Newport—Coldra—sections of the M4 and we are assessing responses in the recently completed second public consultation on the route for the proposed M4 relief motorway around Newport.
  Those improvements to the M4 underline our commitment to improving road links to west Wales. "Roads in Wales" confirms that improving the A40 to Fishguard and the A477 to Pembroke are high priorities. On the A40, work on the Whitland bypass is due to start next month and preparation work on the Fishguard western bypass is well advanced. Public consultation will take place this month on the planned Robeston-Wathen bypass. A preferred route for the A477 Sageston-Redberth bypass has recently been announced. Also on the A477, the improvement at Red Roses junction is being advanced and we are considering the scope for further improvements on the section between Llanddowror and Red Roses. Those improvements are designed to enable traffic to flow freely. Further improvements will be brought forward where those are justified.
  I can assure the hon. Gentleman that we remain committed to supporting the economy of west Wales, particularly through the west Wales task force. I am glad that he acknowledges our action in setting up the task force and providing the sums of money required. I am certain that the hon. Gentleman welcomes the fact that unemployment has been falling in Wales, as it has been throughout the country.
  I have looked at the unemployment figures for travel-to-work areas, and I note that in Haverfordwest unemployment has fallen from 11.7 per cent. in October of last year, to 9.9 per cent. in October this year. Similarly, in south Pembrokeshire, unemployment is down from 14.4 per cent. to 10.7 per cent. In Dyfed, unemployment is down from 9.5 per cent. to 8.2 per cent. That spread of figures compares appropriately with the fall in unemployment for Wales from 10 per cent. to 8.8 per cent.
  Mr. Ainger: There is a peculiar reason for that fall in Pembrokeshire between October 1993 and October 1994, which was the fact that the Texaco refinery blew up in July 1994. Literally hundreds of new jobs were created in a short period to make good the refinery. Overall, we were still no better off in October 1994 than we were in October 1993. The fall in unemployment is merely because of the work carried out on the refinery.
  Mr. Jones: Part of what the hon. Gentleman says must be true. I know the significance of the Texaco incident, as I visited the refinery a few days after that dreadful explosion. But what he says is not fully borne out, either by the figures which I quoted for the whole of Dyfed—which would not be affected by Texaco alone—or by the Welsh figures which I also quoted. The hon. Gentleman is seeing the fruits and the benefits of the Government's successful economic policies coming home. They are achieving a better framework which business and industry are taking advantage of in creating new jobs in Wales. The hon. Gentleman should know that Wales is leading the UK, as the UK, in turn, is leading Europe.
  For the current financial year, my right hon. Friend the Secretary of State announced a £4.9 million package of financial allocations under the 1994–95 round of the strategic development scheme in support of a range of
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  projects which will benefit the west Wales task force area. Nearly 800 bids were submitted under the 1995–96 round and an announcement can be expected shortly.
  I cannot respond to the hon. Gentleman as he would wish. The picture which he paints of, on the one hand, responsible action by Dyfed county council and a major problem looming for the new unitary authority and, on the other, an uncaring and miserly Welsh Office does not reflect the facts. The county council is already in receipt of a £4 million interest-free loan. That was an exceptional measure and was taken in specific recognition of the unique circumstances of the bridge following its collapse during construction. The new unitary authority will inherit an asset and its standard spending assessment will take account of servicing its loan debt. I have to tell the hon. Gentleman that I am not persuaded that there is a case for further assistance.
  Question put and agreed to.
  Adjourned accordingly at five minutes past Six o'clock.