Commons Sitting of 15 February 1994

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

    Training
    Mrs. Gillan: To ask the Secretary of State for Employment what assessment he has made of spending by industry on training in each of the last five years.
    The Secretary of State for Employment (Mr. David Hunt): We estimate that British employers spend about £20,000 million a year on training. The last recorded figure in 1987 was £18,000 million.
    Mrs. Gillan: I thank my right hon. Friend for that reply. Does he agree that one of the major contributing factors to our rapid recovery from recession in advance of all the other European Community countries is that British industry has continued to maintain its investment in training?
    Mr. Hunt: I agree with my hon. Friend. One of the many satisfactory features of the CBI survey last week was that 84 per cent. of firms in the United Kingdom intend to increase or maintain their spending on training. My hon. Friend is absolutely right—those firms will benefit most from that investment in training as we continue through recovery into growth in the longer term.
    Mr. Barry Jones: The right hon. Gentleman will know that there are no large apprenticeship schools in aerospace, steel and textiles, although, in his ministerial capacity, he may remember the existence of such schools. What action is he taking specifically to ensure the provision of apprenticeship schools? We have too many press releases from the right hon. Gentleman and not enough action.
    Mr. Hunt: All that I will say is that the hon. Gentleman will have noted that the Chancellor of the Exchequer used his Budget statement on 30 November 1992 to announce that we shall be introducing a modern apprenticeship scheme, which will be available for school leavers next year. In the Department of Employment budget, the Chancellor has allocated more than £1 billion for training credits and the new modern apprenticeship scheme. I hope that industry will respond by coming forward, especially this year, with trail-blazing apprenticeship schemes that will ensure that we have the most relevant structures in place for those modern apprenticeships next year.
    Mr. Heald: Will my right hon. Friend pay tribute to the work of the training and enterprise councils in helping women who want to get back to work by providing child
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    care facilities? Can he comment on the Threshold scheme in Northampton, which he visited last week, which is an example of partnership between the public sector, the private sector and training and enterprise councils to promote this sort of work?
    Mr. Hunt: I am grateful to my hon. Friend. Indeed, I pay tribute to more than 1,200 top business and community leaders who serve on 82 training and enterprise councils and who do a tremendous amount of work on equal opportunities. My hon. Friend is right to earmark them. The child care initiative, launched by my predecessor and involving expenditure of more than £40 million over the period, gives training and enterprise councils opportunity to come forward with some imaginative and innovative schemes. The scheme that I saw in Northampton is extremely impressive and is founded, as my hon. Friend said, on positive partnership.
    Mr. Tony Lloyd: What will shift the Secretary of State from his mood of complacency? Between 1990 and 1992, more than 1 million skilled workers were put out of work, nearly 500,000 semi-skilled workers lost their jobs, the number of people trained in industry dropped by 300,000 and the Secretary of State tells us that that is a success. This is not the Opposition talking the country down—it is the Government doing the country down.
    Mr. Hunt: I am sorry that the Opposition are continuing to talk the country down. We have an impressive record on competitiveness. In manufacturing, where there has been a decline in employment since the 1960s, 4 million workers now produce more than 7 million produced 15 years ago. That is a tribute to the British work force. The hon. Gentleman must not forget that we have 1.4 million more people in work in the United Kingdom than we had 10 years ago. Let him start talking up our achievements, rather than pointing to an agenda to which the Labour party has already signed up. That agenda would destroy millions of jobs through statutory works councils, a statutory minimum wage and a statutory compulsory working week. That is a recipe for disaster.

    Labour Statistics
    Mr. Pawsey: To ask the Secretary of State for Employment what are the levels of employment in (a) the United Kingdom, (b) Germany and (c) France.
    The Minister of State, Department of Employment (Mr. Michael Forsyth): The UK has 69 per cent. of the working age population in work and rising; Germany has 65 per cent. and falling; and France 60 per cent. and now also falling.
    Mr. Pawsey: I thank my hon. Friend for that helpful reply and for the encouraging figures that he has given to the House. They clearly underline the fact that the UK economy is in much better shape when compared with the economies of our principal European competitors.
    Does my hon. Friend agree that one reason why we have come out of recession so well is the fact that we do not have a social contract? Does he agree that the absence of a social contract certainly has not damaged rates of take-home pay?
    Mr. Forsyth: I agree entirely with my hon. Friend. The absence of the social chapter in Britain accounts, in part,

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    for the higher levels of employment and they have also been helped by the reforms that we carried out in the 1980s. The figures speak for themselves, as do the people who speak for industry. For example, Black and Decker announced its intention to bring its operations fully into Britain out of Germany. A company spokesman said:
    "Anyone familiar with the situation in Germany will grasp that, because of the costs, it has become very difficult to do business there."
    If Opposition Members had their way, it would be very difficult to do business here.
    Mr. Campbell-Savours: Will the Minister answer a question about something that concerns business men in the county of Cumbria? The tax increases in this year's Budget will be introduced on 1 April. Does the Minister believe that the increases have implications for the United Kingdom economy? Will the increases lead to further unemployment and will they increase unemployment in my part of the UK?
    Mr. Forsyth: I am sure that my right hon. and learned Friend the Chancellor's proposals to reduce the burden of national insurance contributions will have a beneficial effect on employment and on businesses. The hon. Gentleman clearly says what he thinks, but if Opposition Members are arguing that higher public expenditure and higher taxation will have an impact on employment, they are right. That is why the Government resist the proposals that come from Opposition Members to add to public expenditure every day of the week.
    Mr. Brazier: Does my hon. Friend agree that jobs are built in an economy through having successful businesses, such as Chartham Papermill, where one of our hon. Friends will be opening a new plant shortly? That firm has won national and regional awards for quality, training and exports during the past three years. Is not that the way to build jobs, and not through bureaucratic regulations?
    Mr. Forsyth: I agree entirely with my hon. Friend. Regulation and bureaucracy are the enemies of employment and that is why the Prime Minister has ensured that every Government Department is looking to reduce the burden of regulations and bureaucracy. At the forthcoming European elections, the Government will be arguing for less bureaucracy and regulation and not more, which destroys jobs.

    US-UK Summit
    Mr. Connarty: To ask the Secretary of State for Employment what matters he intends to raise at the summit with the United States Government which might assist employment prospects in Britain.
    Mr. David Hunt: This is a job summit and I intend to talk about jobs.
    Mr. Connarty: I am grateful to the Minister for being brief, although he passed on no information of any worth. There are 543,000 fewer people in employment in Britain than there were a year ago and 451,000 fewer people in employment than in 1979. Surely it is time to talk to the United States about how it succeeds by having a minimum wage in most states and giving people trade union rights which we deny to employees of the same firms in this country.
    Mr. Hunt: The hon. Gentleman said that I gave no information, but I said that I intended to talk about jobs at the forthcoming summit. In Britain we believe that three things are important: first, a stable economic framework; secondly, a flexible labour market; and, thirdly, the removal of barriers to enterprise. I agree with the hon. Gentleman that we have a great deal to learn from the United States, but not in the way that he suggests. It is a fact that over the economic cycle of OECD between 1979 and 1989, the United States saw growth of 26 per cent., which created 18.5 million jobs in that free enterprise economy. The European Community saw growth of output of 23.7 per cent., but that gave rise not to 18 million but only to 6 million additional jobs. The lesson for Europe is to go further down the route that I have suggested of deregulation, reducing bureaucracy and creating a stable economic framework, rather than going down the route that the hon. Gentleman advocated in his question. The way ahead lies with more free enterprise.
    Sir Peter Hordern: Will my right hon. Friend confirm that in the United States, which has the most rapid growth of technology and productivity, there are no government training schemes of any kind? Does not that make nonsense of the Opposition's repeated claims that Government training schemes are the way forward?
    Mr. Hunt: What I will say to my right hon. Friend is that when I recently visited the United States I found that the private industry councils, on which our training and enterprise councils were based, had provided the valuable lesson, to which he referred, that we must ensure that the private sector is fully involved in decisions on training. The figure that I gave to my hon. Friend the Member for Chesham and Amersham (Mrs. Gillan), combined with the more than £2 billion that my Department spends on training, forms an effective public-private sector partnership.
    Mr. Prescott: Will the Secretary of State make it clear to the summit that in 14 years of this Government we have seen unemployment treble to 3 million, that 3 million full-time employees have been replaced by 3 million part-time and self-employed workers, and that we have the worst trained and educated labour force of any country that will attend the summit? Will he also ask the Americans how they have created 18 million jobs—as he claimed—with a minimum wage provision? Will he make clear how much Britain is paying in family credit support to maintain low pay—wages subsidised by the taxpayer?
    Mr. Hunt: Still the hon. Gentleman talks down Britain. He must think seriously before he starts to decry the achievements of this nation. I have given one. We have almost 1.4 million more people in work now than we had 10 years ago. That is a signal achievement. The lesson that we learn from the United States is not to go down the route that the hon. Gentleman and his party advocate in signing up to a socialist manifesto for the European elections. He proposes statutory works councils, a statutory minimum wage and a compulsory working week. Those are the last things that one would find in the United States. It is about time that the hon. Gentleman dropped those proposals, which would cost millions of jobs.
    Mr. Alan Howarth: At the summit, will my right hon. Friend inquire about the progress in the employment of disabled people and the advantages to the American

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    economy in consequence of the Americans with Disabilities Act? Does he accept that in the United States of America—the land of free enterprise—it was concluded that voluntary arrangements would never sufficiently overcome discrimination against disabled people in respect of employment? Will he respond positively to the view of the Employers Forum on Disability and the Law Society, as well as the 311 hon. Members who have signed early-day motion 2, that the time has come for legislation to ban discrimination against disabled people in respect of employment in Britain?
    Mr. Hunt: I know that my hon. Friend feels strongly about this subject. I hope that Britain can achieve more through greater opportunities for disabled people to gain access into work. As my hon. Friend knows, we have suggested proposals. We are presently considering the position following the representations that were made to us after the new access to work scheme was announced. I hope to make an announcement on that shortly. I do not think that compulsion is the route which we should follow. I believe that we must give increasing opportunities to disabled people to get into work.

    Unemployment
    Mr. Enright: To ask the Secretary of State for Employment what steps are being taken to co-ordinate the variety of initiatives to combat unemployment in areas of industrial decline.
    Mr. Michael Forsyth: Examples include the introduction of new integrated regional offices and the creation of a single regeneration budget from 1 April this year.
    Mr. Enright: I am grateful to the Minister for that reply. Does he agree that where local authorities, local chambers of commerce, trades councils and his own Department are already working well with good small initiatives, imposing on them English Estates, TECs and British Coal Enterprise Ltd. will do precisely what he does not advocate—make bureaucracy mushroom? Will he undertake to evaluate those initiatives to see whether they really work, or whether they are just providing jobs for the boys?
    Mr. Forsyth: I agree with the hon. Gentleman that it is extremely important that the various agencies work together to ensure effective action with minimum bureaucracy. I know that the hon. Gentleman has been anxious to ensure that that happens in his constituency, where he is dealing with the problems of high unemployment and the fallout from the closure of pits. If he has any specific measures that he would like us to look at, I should be happy to consider them.
    Mr. Oppenheim: Is my hon. Friend aware that although employment prospects in Amber Valley were devastated by pit closures, mainly in the 1970s, the area now has one of the lowest unemployment rates in Europe—certainly lower than Germany? The reason for that is mainly due to the success of new manufacturing businesses. Does not that illustrate that the best way to create sustainable jobs in the long term is not by subsidising unsustainable old industries, but by allowing better conditions for enterprise and better labour relations, which in themselves attract new jobs to the area?
    Mr. Forsyth: I agree entirely. The way to secure future prosperity is by embracing change, not resisting it, and doing that, as my hon. Friend says, by using our skills to best effect and competitively in a global marketplace. Were we to embrace the policies of the Opposition in the European Community, we would shut the door to the jobs that will come from that inward investment. Because we have opted out of the social chapter, we have the opportunity that comes from being, if I may quote President Delors,
    "a paradise for inward investment".
    Mr. Barron: Can I bring the Minister back to the real world in relation to regeneration? The Government are about to announce a £3.75 million English Estates project for Templeborough in Rotherham, which I support. It is estimated that the project will create 175 jobs. Last year, 2,939 coal, engineering and steel jobs were lost in Rotherham and, in November, 260 jobs were lost at Templeborough steel plant. Only last week, 75 jobs were lost at Brinsworth strip mill. The loss of 400 jobs is being negotiated in United Engineering Steels in Sheffield and Rotherham. The regeneration project is a flea on a dog's back compared with the number of jobs that are being lost in that area. When will the Government meet those job needs, instead of proposing these developments, where less than 20 per cent. of jobs are replaced through regeneration?
    Mr. Forsyth: We shall start making progress when Opposition Members realise that jobs come from companies being competitive and from private enterprise being able to sell goods and services competitively. Opposition Members believe that the state can provide employment. Conservative Members believe that Government agencies can assist the market to operate effectively. Real jobs will come from free enterprise, which Opposition Members stand against.
    Mr. Steen: Is the Minister aware that in the economically declining fishing port of Brixham, in south Devon—the second-largest fishing port in the west country—the Employment Service agency wants to construct a new building on a prime site in the centre of the town to house both the paying out and job creation offices? It is prepared to pay over the odds, with Government money, and to push out private enterprise which wants to build on that site. Is not job creation and training a better use of public money than buying a prime site?
    Mr. Forsyth: I am very much aware of the case that my hon. Friend mentioned because he has written to me about it and I have looked into the circumstances. I understand that the Employment Service has made no final decision on the site. I shall be happy to respond to my hon. Friend, once I have had a chance to discuss the matter further with the chief executive of the Employment Service, who is responsible for the decision.
    The principle of integrating the work of the jobcentre and the payment of benefits on one site is a good one, which is for the convenience of people who use job centres and which—as the hon. Member for Workington (Mr. Campbell-Savours) is indicating from a sedentary position—was supported by the Public Accounts Committee. It makes sense to proceed on a value-for-money basis with that policy, but I shall consider with interest the example in my hon. Friend's constituency.

    South East London TEC
    Ms Hoey: To ask the Secretary of State for Employment what plans he has to increase the level of support to the South East London training and enterprise council.
    The Parliamentary Under-Secretary of State for Employment (Miss Ann Widdecombe): There is no such training and enterprise council as the South East London TEC. If the hon. Member is referring to her TEC—South Thames—the Department's regional director is negotiating the level of resources for 1994–95 with that and other London TECs.
    Ms Hoey: I thank the Minister for her reply. Some of us in south London will still call it the South East London TEC, no matter what the Minister wants to call it.
    The Minister will be aware that South Thames TEC is the first to become involved in kids club networks and that the setting up of the first after-school club for kids in Vauxhall is one of the useful things that have happened in my constituency. Will she welcome that initiative and ensure that South Thames TEC can put money into that scheme to enable the club to continue and will she allow the increase in after-school child care to continue, so that the many unemployed women in my constituency and in south London have an opportunity to get back to training and to work?
    Miss Widdecombe: Yes, of course, I welcome the initiative and I have visited that club, as I think the hon. Lady will know. I am pleased to congratulate all those concerned in setting it up. We have made it clear that those TECs that were piloting the out-of-school child care initiative will continue to be funded, as will all other TECs, from 1994–95. Although I cannot pre-empt the TECs' judgment and take a view on that scheme, I can say that funding to TECs for that purpose will continue.
    Mr. Ian Taylor: Does my hon. Friend recognise that Surrey TEC is just up the river from South Thames TEC and that it is doing an excellent job with local industry in reskilling people, especially younger people? That partnership with industry depends not merely on what the Government do, but on what industry does to help people to get back to work, given the new challenges presented by the need for people of a higher calibre—especially school leavers. Does she welcome Surrey TEC's initiative?
    Miss Widdecombe: Yes, I have pleasure in welcoming Surrey TEC's initiative and similar initiatives at other TECs. I am delighted to welcome the various initiatives that result from partnerships between industry and Government and, in particular, "Investors in People", which encourages training and skilling on a lifelong basis.
    I have pleasure in confirming that that is not confined to the private sector and that the Advisory, Conciliation and Arbitration Service today became the first nationwide civil service body to receive the full award of Investors in People.

    GCHQ
    Mr. Winnick: To ask the Secretary of State for Employment if he intends to meet representatives of trade unions to discuss the position of the ban on union membership at GCHQ.
    Mr. David Hunt: The Prime Minister and I had such a meeting on 20 December.
    Mr. Winnick: Is the Secretary of State aware that the campaign against the ban on union membership at GCHQ is as strong as ever and that it will continue until victory is secured? There was no justification for it in the first place. Is the Secretary of State not bothered by the fact that the International Labour Organisation has expressed much concern about the continuing ban and that, as the Government are unwilling to compromise in any way, the ILO may well decide to issue a formal rebuke or reprimand? If that happens, it will be the first ever case of a western Government being so reprimanded.
    Mr. Hunt: There are a number of points in the hon. Gentleman's supplementary question. Let me say, first, that we did exactly what the ILO requested us to do: we had discussions with the civil service unions to see whether a solution could be found. No one ever imagined for a moment that it would be easy to secure a solution capable of satisfying both sides. So far as the Government are concerned, the dialogue remains open. I am confident that we have nothing to fear from an examination by the ILO of our industrial relations policies. We believe that we can demonstrate that those policies comply with all the ILO conventions that we have ratified.
    Mr. Allason: Will my right hon. Friend confirm that the former director of GCHQ, Sir Brian Tovey, has stated that during the imposition of martial law in Warsaw and during the Soviet invasion of Afghanistan about 10,000 working days cover was lost at GCHQ? Will he confirm that that is a perfectly good reason for the ban on external interference by trade unions in the activities of GCHQ? Can he assure the House that the existing staff association works perfectly well and that there is no reason whatever for interference by an external trade union?
    Mr. Hunt: I can confirm what my hon. Friend has said—that, between 1979 and 1981, 10,000 working days were lost at GCHQ. We just cannot run the risk that anything like that will ever happen again. My hon. Friend is right. Indeed, we suggested that the staff federation should be affiliated to the Council of Civil Service Unions to enable people who belong to the federation to have access to the facilities that are available to unions affiliated to CCSU. Sadly, the civil service unions did not feel able to accept that proposal.
    Mrs. Clwyd: Is it not true that, according to reports in the Financial Times, the Government are currently planning to withdraw the United Kingdom from the ILO, precisely because the ILO has censured this country—a sanction which is normally applied to countries like Haiti and North Korea? Are not the British Government becoming isolated, not only in Europe but throughout the world, for their anti-worker and anti-union policies?
    Mr. Hunt: There is no truth in the assertion that Ministers intend to withdraw from the ILO or to seek an opportunity to do so. Despite criticism from the Trades Union Congress, we believe that our policies comply with all the ILO conventions that we have ratified. As my hon. Friends have pointed out, our overriding objective is to ensure the maintenance of continuous operations at GCHQ, which is vital to the protection of national security. However, the Prime Minister has made it clear that the

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    Government are ready to discuss any further proposals that the unions may wish to put forward, provided that they are consistent with our overriding objective of safeguarding national security.
    Mr. Riddick: Does my right hon. Friend agree that, because of their irresponsible behaviour in disrupting the vital work of GCHQ in the 1980s, the trade unions have only themselves to blame for the ban?
    Mr. Hunt: I could not agree more. It is important to ensure that GCHQ staff are not subject to potential conflicts of interest. As I said earlier, the Prime Minister and I listened for some considerable time to the points put forward by the trade unions to see whether or not that overriding national objective could be maintained, but we were not convinced that the trade unions could overcome those potential conflicts of interest. It ill behoves the Opposition to try and put a different gloss on the fact that, thanks to our legislation, we have put harmony in place of strife. We are not prepared to allow the Opposition to put that major achievement at risk.

    Banking and Financial Services
    Mr. Raynsford: To ask the Secretary of State for Employment if he will estimate the number of jobs which have been lost in banking and financial services in London over the past four years.
    Miss Widdecombe: Figures from the labour force survey show that in the banking, finance and insurance business services in greater London the number in employment has risen by 7,000 since 1989.
    Mr. Raynsford: What message has the Minister for the 505 employees of Barclays bank in London whose new year began with a redundancy notice at the very moment when the bank's new chief executive was having his pay doubled to £737,000 a year? What comment has the Minister about that example of corporate ethics or does she believe, like the Prime Minister, that it is no matter for her?
    Miss Widdecombe: What is a matter for the hon. Gentleman is giving his constituents hope, which he appears completely unable to do. The House will note that the phraseology of the hon. Gentleman's original question was how many jobs have been lost. Jobs have risen and he did not even have the grace to welcome that. Perhaps he would like to tell his constituents that, with London's share of world trade in financial services increasing to 27 per cent. the financial services sector earned the United Kingdom £4.3 billion and that the employees to whom he refers work in an industry which, even if it is redistributing employment, is nevertheless growing. Why does he not give encouragement to Britain's performance in the financial services sector? Why do not the whole lot of them start encouraging things?
    Dr. Spink: Is my hon. Friend aware that employment in London and the south-east has risen by more than 200 in the 10 years since March 1983? Will she confirm that some of the 150,000 places in the new apprenticeship scheme will be available in London?
    Miss Widdecombe: Yes, I have pleasure in confirming that. I also have pleasure in confirming that another good sign for young people, apart from the creation of modern apprenticeships, is that the number waiting more than eight
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    weeks for a youth training place has declined from more than 3,000 to just over 300. There are now a large number of TECs with no young people waiting. Modern apprenticeships will help that process even further. Why are modern apprenticeships not being welcomed? [Interruption.] I take it that hon. Members are cheering the Government. Thank you very much.
    Mr. Tony Banks: Is the Minister aware that Barclays bank has declared 7,000 redundancies and National Westminster bank has announced 4,000, yet we still have to wait ages at the queue at the bank? Why is that?
    Miss Widdecombe: Perhaps the hon. Gentleman should do a competitiveness survey and go somewhere else for his queue. Although there have been job losses in the banking industry in the past year, there have been strongly offsetting rises in insurance and business services. It is generally good news in the financial sector. The hon. Gentleman might pass on that message to those in the queue and to the cashiers.

    Labour Costs
    Mr. Congdon: To ask the Secretary of State for Employment what evidence he has on non-wage labour costs in (a) the United Kingdom, (b) France, (c) Germany and (d) Italy.
    Mr. Michael Forsyth: Non-wage costs never get into the employees' wage packets, but do make it more expensive for employers to provide a job. On average, for every £100 of wages an employer in Britain must pay £20 extra, in Germany £30 and in France and Italy £40.
    Mr. Congdon: Does my hon. Friend agree that those lower non-wage labour costs are part of the reason for our success in attracting inward investment? Does he also agree that the imposition of the social chapter—which both Opposition parties would like to force on this country—would not only destroy our competitive advantage, but, more important, destroy jobs?
    Mr. Forsyth: I entirely agree. Lower non-wage costs are not only a reason for the attraction of inward investment to Britain but—along with our general economic policy—the reason for the fact that in real terms workers in Britain enjoy some of the best take-home pay packets in Europe.
    Mr. Alex Carlile: Given the favourable non-wage labour costs to which the Minister has just referred, how does he justify the enormous discrepancy between the average wage in England and Wales and wages in areas such as south Wales and Northumberland, where average weekly earnings are up to £65 less than the overall average? Why are the Government not tackling such huge wage differentials?
    Mr. Forsyth: I am amazed that the hon. and learned Gentleman should ask that question. If he had his way and we signed up to the social chapter, the extra costs would have to be met out of those pay packets, and there would be even less for people to take in wages. The hon. and learned Gentleman should not complain about low pay when, like the rest of his party, he wants to add to the costs of employment.
    Mr. Bates: Does my hon. Friend agree with Klaus Kratzenberg, a supervisor with Black and Decker in Limburg, Germany? When asked why he thought that Black and Decker was closing its German plant and moving it to Spennymoor in County Durham, he replied:
    "It is simple. Industry must be flexible—the social chapter isn't."
    Mr. Forsyth: I entirely agree with the sentiments expressed by Black and Decker. I must tell Opposition Members that when companies such as Mercedes are starting to source outside Germany, and when Volkswagen, Peugeot and others are beginning to look outside Europe, alarm bells should be ringing in the minds of hon. Members who are genuinely concerned about jobs. There is no doubt that the social chapter is driving people out of work; the longer that Opposition Members adhere to it, the greater will be the possibility that people in Europe will embrace policies that will make their countries less competitive and less able to provide employment.
    Mr. Prescott: In view of his many visits to America, will the Minister tell us whether he agrees with the Secretary of State's earlier statement that America had no minimum wage legislation?
    Mr. Forsyth: I think that if the hon. Gentleman checks the record he will find that my right hon. Friend said that America did not have a national statutory minimum wage. However, I am grateful to the hon. Gentleman for reminding us of the international comparisons to be made. He will know that the European country that has embraced his policy of a statutory minimum wage is Spain—where the unemployment level is twice the European average, and twice the level in this country.
    Mr. Anthony Coombs: In recognising the crucial importance of Britain's lower non-wage costs compared with the rest of Europe, is my hon. Friend aware that Lemmerz, a German wheel maker, has transferred all its heavy wheel-making operations to my constituency for precisely that reason? Is he also aware that carpet companies in my constituency are now going to Germany to buy up its now-redundant carpet-making machinery precisely because German companies cannot compete under the regime that has been imposed on them?
    Mr. Forsyth: I am grateful to my hon. Friend for giving yet another example of the way in which the social chapter has exported jobs out of the Eleven into Britain. That is good news for Britain, so long as we ensure that we never ever sign up to the social chapter and its job-destroying characteristics.

    Apprenticeships
    Mr. Clapham: To ask the Secretary of State for Employment how many modern apprenticeships will be available in 1994–95; and in which industries they will be concentrated.
    Mr. David Hunt: A full range of modern apprenticeships will be offered to 16 and 17-year-olds in September 1995. Some prototypes will start later in the year.
    Mr. Clapham: I note that the Minister does not give the number of apprenticeships and there is a possible reason for that. He will be aware that in the final year of the Labour Government there were 150,000 apprenticeships in
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    manufacturing alone, while in manufacturing in 1991 there were only 51,000. Clearly, the Minister's response is inefficient and inadequate and a more positive stance is required. Will the Minister give mature entrants—the people who have been thrown on the scrap heap over the past 15 years—the opportunity to join the apprenticeship scheme? Has he had discussions with British Coal Enterprise Ltd. to allow miners who have been made redundant to join the new apprenticeship scheme so that they can learn new skills to help them get new jobs?
    Mr. Hunt: The hon. Gentleman knows that the new, modern apprenticeship scheme that the Chancellor of the Exchequer announced on 30 November is designed to encourage more young people to train up to national vocational qualification level 3 and to encourage even more young people to train to even higher levels. Of course, during the year we shall be considering prototypes which will enable those young people to reach that high level of qualification.
    The hon. Gentleman will be aware that some of the national training and education targets directly relate to the points that he has raised. The important priority for the Government is to ensure not only that we have young people training to an even higher level, but that through programmes such as Investors in People we shall encourage every member of the work force, and primarily those who are currently unemployed, to train to even higher levels of qualification.

  PRIME MINISTER

    Engagements
    Rev. Martin Smyth: To ask the Prime Minister if he will list his official engagements for Tuesday 15 February.
    The Lord President of the Council and Leader of the House of Commons (Mr. Tony Newton): I have been asked to reply.
    My right hon. Friend the Prime Minister is in Moscow for a series of meetings, including meetings with President Yeltsin and Prime Minister Chernomyrdin.
    Rev. Martin Smyth: Has the Lord President of the Council noticed the response of Mr. Reynolds in Dail Eireann when Miss Mary Harney asked what representations had been made to the United States over the Gerry Adams visit? His response is that we do not get involved in trying to tell foreign Administrations what decisions to make. Will the Lord President press the Prime Minister to exercise the same restraint with the United Kingdom, especially Northern Ireland?
    Mr. Newton: As the hon. Gentleman will know, the issue of the visa was a decision for the United States authorities, although our own advice, as the House knows, was clear. The hon. Gentleman will know that we believe it to be right and in the interests of all people in Northern Ireland that the British and Irish Governments should work closely together. As he knows, the talks process brings together the two Governments and the main constitutional parties who will work together to find an accommodation. I believe that that is right.
    Mr. Day: Would my right hon. Friend agree that the appearance of Gerry Adams on "Walden" proved beyond

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    any doubt that whatever Sinn Fein says, it has rejected the Downing street declaration? Would he join me in urging Sinn Fein to reconsider its position and would he also agree and confirm to the House that the Government will never do what Mr. Adams requests—become a persuader of the people of Northern Ireland to join an united Ireland? Does he recognise that many Conservative Members remain committed to the Union of Northern Ireland and Great Britain?
    Mr. Newton: My hon. Friend will know that my right hon. Friend has on many occasions made clear the position of the British Government on the question of persuasion. Of course, I suspect—in fact, I know—that everybody in the House would urge Sinn Fein to consider seriously a positive response to the joint declaration.
    Mrs. Beckett: As Ministers are still proclaiming that "back to basics" is the lodestar guiding Government policy while the Prime Minister is dodging all questions about it, does that not show yet again that "back to basics" is making the Government a laughing stock?
    Mr. Newton: I do not know whether I am sorry to have to say that the right hon. Lady is a bit out of date. My right hon. Friend has today given a clear explanation of the "back to basics" theme and has once again made it clear that it is especially important in such spheres as standards in education, law and order and the provision of public services, and it applies also to the range of our increasingly successful economic and business policies.
    Mrs. Beckett: I notice once again that the Lord President's list, and presumably the Prime Minister's, does not include standards in telling the truth about tax. Why are the Government refusing to come clean about the size of the further tax increases that British families will face in 1995?
    Mr. Newton: What I and my right hon. Friend will continue to emphasise is the contribution that our tax policies are making to the economic strength and improved standards of living in this country.
    Mrs. Beckett: As the Lord President must be aware, my hon. Friend the shadow Chief Secretary has tabled questions about the extra taxes that people will pay in 1995, but no answers are being provided. The Government must have the figures—we know that the Government have the figures—and the people of Britain will have to pay the extra tax, so why do the Government not have the guts to tell people how much they will have to pay?
    Mr. Newton: My right hon. and hon. Friends have answered many questions and will continue to answer the questions that the right hon. Lady's colleagues ask—[HON. MEMBERS: "Answer this one."]—but what we want to know from the right hon. Lady is when the Labour party will come clean about its public spending policies which will put up taxes.
    Mr. Shersby: Is my right hon. Friend aware that the chairman of the Board of Inland Revenue yesterday told the Public Accounts Committee that some £550 million of unclaimed tax remains to be picked up by taxpayers who have been affected by changes in the tax regime in the past couple of years whereby, for example, women are now assessed independently? Is he further aware that that
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    amounts to about £880,000 per parliamentary constituency? Will the Government do everything possible to ensure that the Inland Revenue makes that fact known to every taxpayer?
    Mr. Newton: The Government and, I am sure, the Inland Revenue are always anxious to ensure that taxpayers are properly informed of their rights and receive their correct entitlement. I am sure that every effort will be made to achieve what my hon. Friend seeks.
    Mr. Ieuan Wyn Jones: To ask the Prime Minister if he will list his official engagements for Tuesday 15 February.
    Mr. Newton: I have been asked to reply.
    I refer the hon. Member to the answer I gave some moments ago.
    Mr. Jones: As the real value of pensions has been falling for many years, following the breaking of the link with earnings, the value of pensions in the United Kingdom is out of line with virtually every other comparable European country, the compensation package for value added tax will not compensate pensioners in full as was promised, and we have had extremely cold weather for the past week, will the Government now introduce a special heating allowance for pensioners?
    Mr. Newton: The hon. Gentleman must have a rather curious source for his statistics, because the truth is that not only have the Government protected the real value of the state retirement pension but the combination of our policies on social security and pensions and in the economic world have led to a position in which pensioners' average real incomes have risen by more than 40 per cent. since the Government took office.
    Lady Olga Maitland: To ask the Prime Minister if he will list his official engagements for Tuesday 15 February.
    Mr. Newton: I have been asked to reply.
    I refer my hon. Friend to the answer I gave some moments ago.
    Lady Olga Maitland: Will my right hon. Friend join me in condemning the nonsensical advice given by Liberty to truanting schoolchildren that they should defy police and is it not typical that the Labour party tends to support them?
    Mr. Newton: I would certainly join my hon. Friend in condemning the advice which has been reported in the papers today. The Government's efforts to improve the campaign against truancy and to succeed in getting errant pupils back to school—which is where they should be—is, and should be, widely supported. For Liberty to oppose it in the way it does shows that it does not remotely understand the best interests of our children or our schools.
    Mr. Jamieson: Will the Leader of the House therefore express his concern that at the end of the March, when the Tory party conference comes to Plymouth, 135 children will miss one and a half days' schooling because of that conference?
    Mr. Newton: I do not suppose that they will be playing truant.
    Mr. Whittingdale: To ask the Prime Minister if he will list his official engagements for Tuesday 15 February.
    Mr. Newton: I have been asked to reply.
    I refer my hon. Friend to the answer I gave some moments ago.
    Mr. Whittingdale: Has my right hon. Friend had time to study the recent annual survey of grant-maintained schools, which shows that since becoming grant maintained the schools have been able to recruit more teachers, improve their results and offer better facilities to their pupils? Does he not therefore find it extraordinary that the Labour and Liberal parties remain committed to the abolition of grant-maintained schools, and that in local government they are waging a relentless campaign of hostility against GM schools, as typified by the behaviour of Essex county council?
    Mr. Newton: My hon. Friend is right that the latest survey confirms the benefit of grant-maintained status. Those schools are achieving improved academic results, better staying-on rates and lower pupil-teacher ratios. They are popular with parents and it is no surprise that well over 1,000 schools have voted in favour of such status. As to my hon. Friend's worries about Essex—his constituency borders mine—he will be as pleased as I am to know that in Essex there are now 63 secondary and 55 primary schools operating with grant-maintained status. That represents 60 per cent. of secondary schools and 17 per cent. of primary schools. In spite of the endeavours to which he refers on the part of Essex county council, the latest school to decide to hold a ballot on such status is The Notley high school, Braintree.
    Mr. Bryan Davies: To ask the Prime Minister if he will list his official engagements for Tuesday 15 February.
    Mr. Newton: I have been asked to reply.
    I refer the hon. Member to the answer I gave some moments ago.
    Mr. Davies: When my constituents complain about high fuel bills and watch the bosses of privatised utilities coining money, am Ito say to them that so far as the Prime Minister is concerned it is nothing to do with him?
    Mr. Newton: The hon. Gentleman's question appears to be founded on a rather curious premise. Electricity prices have decreased by 6 per cent. in real terms in the past two financial years. If the hon. Gentleman wants to know another interesting statistic, I can tell him that, in 1979, the electricity companies—then nationalised—lost the equivalent at today's prices of £465 million. In 1992–93, they paid £420 million to the Exchequer in corporation tax.
    Mr. Butcher: Does my right hon. Friend agree that the use of American, French and British planes to bomb the hills around Sarajevo may not necessarily produce lasting peace in Bosnia? Does he further agree that if the idea is to achieve a demilitarised zone, policed effectively, around Sarajevo, the best chances of so doing are by ensuring that Russian soldiers in United Nations uniform, in integrated units with British and French forces, help in the policing of that zone?
    Mr. Newton: My hon. Friend knows well that the purpose of what has been said and what is being considered in relation to air strikes is to bring about the cessation of the
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    type of bombardment that has taken place in Sarajevo. I think that everyone will want that effort to be successfully completed.
    Mr. Foulkes: To ask the Prime Minister if he will list his official engagements for Tuesday 15 February.
    Mr. Newton: I have been asked to reply.
    I refer the hon. Member to the answer I gave some moments ago.
    Mr. Foulkes: Will the Leader of the House confirm that the Government will announce today, by means of a written answer, an increase of 50p in the prescription charge? Why will there be no oral statement in the House? Is it because, having taxed the disabled and the divorced, the Government are afraid to face the music and announce that they are to increase tax on the sick?
    Mr. Newton: First, I confirm that an announcement will be made today. Secondly, I confirm that it is not usual for such announcements to be made by way of oral statement. Thirdly, 80 per cent. of prescribed items are now free of charge, compared with 60 per cent. in 1979. Fourthly, prescription charges will raise nearly £300 million in the forthcoming year. Fifthly, that amount will pay for more than 200,000 cataract operations or more than 70,000 hip operations. Sixthly, will the hon. Gentleman tell me where he would find the money?
    Mr. Nigel Evans: To ask the Prime Minister if he will list his official engagements for Tuesday 15 February.
    Mr. Newton: I have been asked to reply.
    I refer my hon. Friend to the answer I gave some moments ago.
    Mr. Evans: Has my right hon. Friend had an opportunity to read the report from 3i—Investors in Industry—which surveyed 500 of the companies in which it invests? The confidence of those businesses is higher now than it has been since the 3i started the survey in 1988. Is that not further evidence that the Government have the right policies for British business and the British people?
    Mr. Newton: My hon. Friend is right. The survey shows that firms in both the north and south of the country report greater improvement than in the previous survey and that they have become more optimistic about their prospects. British business is now increasingly confident about the economy and about the Government's policies for business.

    Points of Order
    3.31 pm
    Mr. David Blunkett: On a point of order, Madam Speaker. I seek your ruling on the fact that the Secretary of State for Health has declined to make a statement to the House on the 50p increase in prescription charges. The Leader of the House effectively made a statement in Prime Minister's Question Time on the same issue and misled the House into believing that the Government were applying the money to patient care rather than to make up for their political incompetence. Is not it a disgrace that the Government should duck the opportunity to make a clear statement on the increase, which is the 16th increase since they promised in 1979 that they would not increase prescription charges?
    Madam Speaker: Ministers always determine whether they answer by means of a written reply or come to the Dispatch Box and make a statement. That is something over which I, as Speaker, have no control.
    Mrs. Alice Mahon: On a point of order, Madam Speaker. I am seriously concerned that a Minister has misled the House and I seek your general guidance. Last night on the "World in Action" programme, the right hon. Member for Peterborough (Dr. Mawhinney), the Minister for Health, categorically denied that there was a two-tier system, saying that he had no evidence that such a system was developing in the NHS. The Minister has made the same statement to the House. The programme went on to produce evidence that a two-tier system exists. It showed, for example, that radiotherapy patients were treated, not on the basis of need, but on the ability to pay through GP fundholding. Has the Minister said whether he intends to make a statement to the House to acknowledge that the two-tier system exists and to admit that he has misled the House?
    Madam Speaker: The hon. Lady would not expect me to comment on something that was on television last night and which I did not even see. It is up to the Minister to decide whether he wishes to come to the House to make a statement. It is not a point of order for me.
    Mr. Graham Riddick: On a point of order, Madam Speaker. Will you confirm that it has never been the practice to have oral statements in the House on prescription charges, either under the Conservative Government or the previous Labour Government, who were always deeply embarrassed by increasing prescription charges?
    Madam Speaker: If the hon. Gentleman looks at the Official Report tomorrow he will see that the Leader of House has dealt with that matter.
    Mr. David Winnick: On a point of order, Madam Speaker. You are, of course, aware of the severe weather affecting most of the country. In view of the agonising difficulties faced by so many elderly people on low incomes, is there any way that the House can this week ask the Minister to make a statement on whether cold weather payments can be made and all the red tape regulations removed? Those payments are not made unless there are seven days of freezing weather. The welfare of the old should have priority.
    Madam Speaker: The hon. Gentleman asks me for procedural advice across the Floor of the House which he knows that I do not give.
    Ms Liz Lynne: Further to the original point of order, Madam Speaker. Is it in order for the press to hear about the proposed rise in prescription charges before the House? Would it not have been better if the Secretary of State had come and made a statement so that we could have questioned her on the subject?
    Madam Speaker: I dealt with that matter earlier. I believe that the answer to the question was available at precisely 3.30 pm today.
    Mr. Peter Kilfoyle: On a point of order, Madam Speaker. I have received a fax of a letter sent to the leader of Liverpool city council, Councillor Harry Rimmer, by the right hon. Member for Sutton Coldfield
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    (Sir N. Fowler) in which he invites him to join the organisation, Team 1000. He has been invited to attend functions and briefings at Westminster at which Cabinet Members, Ministers and Members of Parliament will be present. Is it in order for Ministers of the Crown to abuse their office by inviting people here for party fund-raising purposes?
    Madam Speaker: The fax was sent by a Back-Bench Member of the House, not a Minister. I receive all sorts of mail shots inviting me to all manner of functions, all of which find their way into the waste paper basket.
    Mr. Bruce Grocott: On a point of order, Madam Speaker. At Question Time today, the Leader of House said that the Prime Minister had made a further statement on the "back to basics" policy. We are told that that theme has permeated the whole of Government policy since the Prime Minister's speech to the party conference last October. Therefore, is it not time that the Prime Minister was asked not to give statements to correspondents and at press conferences, but to make a statement to the House about that policy? He should, at the very least, place a copy of his speech and his thinking on the "back to basics" policy in the Library.
    Madam Speaker: The Prime Minister is normally here a couple of times a week to answer questions. Perhaps the hon. Gentleman will catch my eye soon so that he can put his question to the Prime Minister.
    Mr. Brian Wilson: On a point of order, Madam Speaker. I understand that a major announcement in connection with rail privatisation is being made at this moment by way of a written answer and a press conference. The statement will reveal a huge increase in access charges for railway operators and, ultimately, huge increases in costs for taxpayers and passengers. The announcement has been delayed by almost a year; the firm of Coopers and Lybrand has been paid £1.6 million to come up with the access-charging fiasco. Surely, the House is as entitled as the press to a full statement of Government intentions so that—
    Madam Speaker: Order. The hon. Gentleman will recall that I ruled on that matter in answer to an earlier point of order. It is for Ministers to determine whether they make announcements by means of written answers or through oral statements. It is something over which I have no control. I have already made a ruling on that.
    Sir Ivan Lawrence: On a point of order, Madam Speaker. Is there some form of sanction that the Chair can take against hon. Members who persistently raise bogus points of order?
    Madam Speaker: It is a very good question, but I fear not. It is up to individual hon. Members to exercise restraint and to use the procedures of the House properly and correctly, not abuse them.
    Mr. Bob Cryer: On a point of order, Madam Speaker. I understand what you say about Ministers determining whether they make announcements by means of an oral statement or a written answer, but surely the Speaker has the power, if he or she so determines, to summon a Minister, especially if there is pressure in Parliament to require a Minister to make a statement here. That must be right; otherwise how could

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    Speaker Lenthall have told the King that the Speaker could be instructed only by Parliament? Surely Ministers are inferior, not superior, to Parliament and to the Speaker.
    Madam Speaker: As the hon. Gentleman is fully aware, the Speaker of the House has no authority whatever to demand that Ministers come here to make statements. It is for Ministers themselves to decide whether they do that, and the Speaker has no authority in so determining.
    Mr. Tony Banks: On a point of order, Madam Speaker. We understand that the Tory Whips are busily arranging marriages for certain Conservative Members. If such marriages were arranged, would it be in order for them to be performed in St. Stephen's Crypt?
    Madam Speaker: That is barely a point of order for me—and on that note we pass on to the presentation of Bills.

  BILLS PRESENTED
    REFERENDUM (SCOTLAND)
    Mrs. Ray Michie, supported by Mr. James Wallace, Mr. Archy Kirkwood, Sir Russell Johnston, Sir David Steel and Mr. Menzies Campbell, presented a Bill to make provision for the holding of a referendum, for all persons eligible to vote, on Scotland's future constitutional status: And the same was read the First time; and ordered to be read a Second time upon Friday 11 March, and to be printed. [Bill 50.]
    MARRIAGE (AMENDMENT)
    Mr Harry Cohen, supported by Mr. David Clelland, Mr. John Garrett and Mr. Neil Gerrard, presented a Bill to amend the Marriage Act 1949: And the same was read the First time; and ordered to be read a Second time upon Friday 11 March, and to be printed. [Bill 51.]

Representation of the People (Amendment)
3.40 pm
Mr. Harry Barnes: I beg to move,
That leave be given to bring in a Bill to extend and improve methods of electoral registration and to allow disabled people to gain access to polling stations.
My Bill falls into two parts, one of which deals with the need for a full franchise. It is sometimes mistakenly believed that we already have a full franchise in this country, but whereas in the past legislation was enacted to extend the franchise, in recent years we have let the methods used for registration slip considerably, and we can no longer claim to have a full franchise.
The second part of my Bill is intended to provide access for disabled people and others to polling stations. Even if we achieve the objective of a full franchise, it will not work for disabled peopel if they do not have full access to polling stations. Their only option would be to use postal or proxy votes, so they would not be able to exercise the franchise in the same way as able-bodied people. So full rights for disabled people are among the measures in the Bill.
What is wrong with current methods of electoral registrations? Millions of people entitled to be included are missing from the electoral register. The problem is probably greatest among those known as "attainers", who, at the age of 18, qualify for registration for the first time in their lives. The percentage of attainers qualifying has fallen year by year, especially since the introduction of the poll tax, and that has not been rectified by the removal of that tax.
Official figures reveal that only 95 per cent. of the people eligible to be registered in England and Wales appear on the electoral registers. In Greater London, only 88·4 per cent. appear. Even those figures are artificially inflated, because people who have died and not been removed from the register are included. Also included are people who have emigrated or moved to other parts of the country, and it is unreasonable to expect that they will all use postal or proxy voting facilities.
There is also a great deal of double counting. Some hon. Members may appear on two electoral registers, one in London and one in another area in which they reside, normally in their constituencies. Many people are merely carried over from previous registers without any serious canvassing taking place to find out whether they should be on the register or someone else should be put in their place.
We also have a mobile disenchanted society in which people get on their bikes and move around from bed-sitter to bed-sitter with growing elements of homelessness, and there are serious problems with registration. The Office of Population Censuses and Surveys estimates that 3.4 million people in England and Wales are missing from electoral registers—probably 4 million people in the United Kingdom and 1 million in Greater London.
The method that we use for registration is outdated. The qualifying date for registration is 10 October and the registers come into operation on 16 February. Registers will come into operation tomorrow. Registers last for one year, so the information is 16 months old by the time they are finished. The Hansard Society says that the information on an average register is likely to be 16 per cent. out by the end of its life.
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My Bill seeks to tackle that serious problem by introducing a rolling register to allow for the addition and deletion of names as people move. It will provide extra authority and resources for electoral returning officers so that housing movement information, details of registered deaths, information from statutory undertakings, exchanges of information from other electoral returning officers and regular canvassing can take place. That will be subject to strict confidentiality rules so that the information is used only for electoral returning purposes.
Registers will roll until elections are announced. When an election is announced, the closing date will be the date of the announcement of the election and polling cards will immediately be issued, with massive publicity so that people who do not receive cards will know that they are riot on a register and will still have time to qualify to get on a register within a week before the election takes place. After an election, the registers will continue to roll. Annual registration will still be required, but that will be more of a check on the existing state of the rolling register, and extra information may be supplied on which the electoral returning officer can act.
Access to polling stations will require accessibility audits to be undertaken by electoral returning officers and full consultation with relevant voluntary organisations representing disabled people—bodies such as Links and the Spastics Society, which produced a substantial report at the last election to illustrate the problems. Designated polling stations will be established in which various characteristics such as wheelchair access and unaided wheelchair access will be required, although the problem of accessibility is for more people than only those in wheelchairs.
Many people who are not registered as disabled and who are merely old and infirm should have the opportunity to exercise their franchise readily and easily. Initially, designated accessible polling stations will need to cover about 50 per cent. of a constituency and people will be allowed access to a designated station if their own station has not qualified at that time. However, the aim will be 100 per cent. designated polling stations with full access.
The key to the Bill is how the Secretary of State for the Home Department will respond to it, because it is a re-run of the private Member's Bill that I introduced last year. At that time, the Minister said that he accepted the principle of seeking to achieve full registration, but felt that the measure was premature. It was premature in that the Home Office was investigating a number of matters concerning electoral registration and electoral provision arising from experience gained at the general election. It was beginning to be accepted that the poll tax had a serious impact on the electoral register, although there were many other elements that provided great difficulty.
We now must ask whether the Bill has begun to be acceptable to the Home Office. It would be nice if the Minister of State, Home Office, who is on the Government Front Bench, could indicate as I proceed through the measure that the time is now right for the proposal. My previous Bill was not voted against on Second Reading, but merely failed to overcome the hurdle of a closure motion. It was carried by 78 votes to nil, but that was not sufficient to ensure a closure so that the measure could move to Committee.
My proposal might not be appropriate if there were to be an alternative Government Bill to deal with such

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matters. I am pleased to say that, when I read out the list of sponsors, it will show the names of hon. Members from all parties in Britain who are true democrats.
Question put and agreed to.
Bill ordered to be brought in by Mr. Harry Barnes, Mr. Robert Maclennan, Mrs. Margaret Ewing, Dr. Norman A. Godman, Mr. Dafydd Wigley, Mr. Richard Shepherd, Mr. David Trimble, Mrs. Alice Mahon, Mr. David Alton and Mr. Bill Michie.

REPRESENTATION OF THE PEOPLE (AMENDMENT)
Mr. Harry Barnes accordingly presented a Bill to extend and improve methods of electoral registration and to allow disabled people to gain access to polling stations: And the same was read the First time; and ordered to be read a Second time upon Friday 20 May, and to be printed. [Bill 52.]

Representation of the People
[Relevant documents: European Community Document No. 9882/93, relating to the right to vote and to stand as a candidate in elections to the European Parliament, and the Seventh Report from the Select Committee on European Legislation, HC48—vii of Session 1993–94.]
3.51 pm
The Minister of State, Home Office (Mr. Peter Lloyd): I beg to move,
That the draft European Parliamentary Constituencies (England) Order 1994, which was laid before this House on 20th January, be approved.
Mr. Deputy Speaker (Mr. Geoffrey Lofthouse): I understand that, with this, it will be convenient to discuss the following motions:
That the draft European Parliamentary Constituencies (Wales) Order 1994, which was laid before this House on 20th January, be approved.
That the draft European Parliamentary Elections (Changes to the Franchise and Qualifications of Representatives) Regulations 1994, which were laid before this House on 2 February, be approved.
I shall deal first with the two constituencies orders which established new boundaries for European parliamentary constituencies. The orders give effect to the recommendations contained in the reports of the European Parliamentary Constituencies Committee for England and the similar committee for Wales. The committees were set up under the provisions of the European Parliamentary Elections Act 1993 to carry out the task of determining the European parliamentary constituencies into which England and Wales should initially be divided to give effect to the increase that section 1 of the Act made to the number of constituencies.
Mr. Andrew Mackinlay: May I ask the Minister a straightforward question? There is a suggestion that France may not promulgate the additional seats that were agreed as part of the Maastricht negotiations. If that were so, and the House passed the orders today, would new primary legislation be required to reinstate the old boundaries?
Mr. Lloyd: The hon. Gentleman said that he would ask a straight question, to which I shall give a straight answer—no, it would not.
I will return to my line of explanation, and I remind the House of the background to the matter. Agreement was reached at the European Council in Edinburgh in December 1992 that the European Parliament should be enlarged by allocating additional seats to some member states. The primary reason for that was the large increase in the population of Germany, arising out of the reunification of that country. Eighteen extra seats have been allocated to Germany to take account of the increased electorate there. The United Kingdom received six extra seats under the agreement. Five of those have been allocated to England and one to Wales. The Government believe that that is the fairest distribution on an arithmetical basis.
Mr. William Cash: Can my right hon. Friend explain why, although the German Government made it clear in the run-up to the negotiations about the increase in the number of seats that they did not want the additional

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seats, subsequently, for reasons that have never been fully explained, we found that Germany had an additional 18? Can my hon. Friend explain how that came about?
Mr. Lloyd: I cannot tell my hon. Friend the ins and outs of the negotiations. Suffice it to say that the negotiations provided for extra seats for Germany, on account of the additional population that accrued to Germany from the reunification of East and West Germany. At the same time, the opportunity was taken to allot extra seats to some other countries, reflecting more closely the differences in population sizes of the various countries that make up the Community.
The two special committees to which I referred were set up in July 1993. They followed, as far as possible in the time available, the practices and procedures of the permanent parliamentary Boundary Commissions. Indeed, of the six members of the committees, five were members of the parliamentary Boundary Commissions, and they were appointed to the committees after consultation with the Opposition parties.
The committees had to work to a very tight timetable. They published provisional recommendations last September, and allowed one month for representations and counter-proposals to be made. Copies of all the counter-proposals and representations were then placed on local deposit in council offices, and a further period was allowed for representations to be made about them.
The committees made their final recommendations to my right hon. and learned Friend just before Christmas. In making those recommendations, they made it clear that they took into account the representations made and the views expressed to them, while complying with the statutory requirement that they should aim to recommend European parliamentary constituencies with as nearly as possible equal electorates. Although I recognise that they may not have pleased everyone—an aim which I think that the House will agree would be impossible to achieve—I believe that they have carried out their task in an objective and impartial way. The orders give effect, without modification, to their recommendations and I hope that the House will approve them.
Mr. Richard Shepherd: I apologise to my right hon. Friend for interrupting, but I wanted clarification of the previous point. I did not quite understand the answer given to the hon. Member for Thurrock (Mr. Mackinlay). If the French do not proceed, as they have said that they will not, what will happen to the status of our constituencies? Will we have the constituencies as they were before the additional six seats were created, or will we continue with the additional seats?
Mr. Lloyd: We are empowered by the orders to set up the new constituencies. They will not come into effect to enable the elections to be held in them until all the countries of the EC have agreed to the changes that are necessary to accommodate the new numbers of seats that countries will have. The 1993 Act has a commencement power within it. The commencement power will not be put into effect by my right hon. and learned Friend the Home Secretary until he knows that the other countries have accommodated themselves to the new arrangements. If they do not, the commencement will not take place, and we shall continue on the existing boundaries.
Dame Elaine Kellett-Bowman: Will my right hon. Friend give way?
Mr. Lloyd: I will give way to my hon. Friend in a moment.
It would create massive inconvenience if commencement did not take place. I see no real reason why the states that have yet to ratify should not do so. My hon. Friend the Member for Lancaster (Dame E. Kellett-Bowman) wanted to intervene with a further thought on the matter, so I give
Dame Elaine Kellett-Bowman: I am curious to know whether the commencement order can be taken right up to the tape—say, the day before the elections? What will the time limit be on that?
Mr. Lloyd: Yes, it could. It will be for the judgment of my right hon. and learned Friend the Home Secretary how far to take it. He would have to balance the likelihood of other countries ratifying and the inconvenience of those taking part in the election here if uncertainty remains to the end, and perhaps have to revert to the current constituencies.
I hope and expect that these matters will be settled in the next few weeks. My right hon. and learned Friend will become increasingly concerned if there is no conclusion by mid-April. I think that hon. Members on both sides of the House may want to animadvert on when the last date should be. No last date has been set into the legislation; it provides only that, when ratification is required, the elections on the new constituency boundaries may, from the first day of the following month, take place under the new European rules. That means that a decision for an election in June will be needed by 1 May. It would be difficult after that.
Sir Teddy Taylor: As my right hon. Friend is well aware, this is causing considerable concern among the small percentage of the population in Southend-on-Sea who are interested in European elections, because, instead of our being linked with Chelmsford, as we are at present, it is proposed that we shall be linked with Thurrock. My constituents would like to know what President Mitterrand wants. What price will we have to pay the French before they agree to this? We really do not know.
Mr. Lloyd: That question would be better directed towards the French, or possibly my colleagues in the Foreign Office. My understanding is that the French assembly has approved ratification, but the French Government are declining to append the appropriate signatures to it until agreement on the Parliamentary building at Strasbourg is completed. My hon. Friend, in true parliamentary form, asked a question to which he already feels he pretty well knows the answer. I suspect that my answer squares with what he knows already.
Mr. Geoffrey Hoon: Following on directly from that point, will the Minister say whether the British Government support the attitude of the French Government? At the time of the Edinburgh summit, the British Government were wholly in favour of the agreement to require the European Parliament to meet in Brussels and Strasbourg. Therefore, I assume that an identity of interest exists between the British and the French Government on that question, because the French Government are maintaining their oppositioin to the six

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extra seats, simply because they want a new building constructed in Strasbourg. Do the Government support that position?
Mr. Lloyd: The British Government would like to see a resolution of these matters. Our precise position and attitude, and the assistance that we can give in reaching a conclusion, are much more matters for Ministers at the Foreign Office rather than myself. The hon. Gentleman invites me to tread in areas that do not belong to me and do not belong to the orders that are before us. They are not really relevant to whether we approve the orders.
Mr. Dennis Skinner: Is not there a precedent for all this muddle—an opt-out clause?
Mr. Lloyd: There is, indeed, a precedent for the current situation: when the Labour Government were last in power in 1978, we had to set up the European constituencies. We had a limited time in which to do that. All the countries of Europe had to agree to bring forward the same kind of agreement and put it into effect at the same time.
Mr. Michael Spicer: I am becoming increasingly intrigued and want to ask my right hon. Friend a question to which I do not know the answer. I thought that I heard him say that some discretion was involved and that, if the French do not go ahead, the British Government will have some discretion. I thought that it was automatic that if the French do not ratify we shall not be able to ratify.
Mr. Lloyd: The original question was whether we would have to pass new primary legislation to revert to our present Euro-constituencies if the French do not go ahead. I said that we would not, because the Home Secretary would not put the commencement date into effect until he was certain that all member countries were on the start line, that the new constituencies could come into effect properly and that the MEPs could be elected.

I said that the Home Secretary would have some discretion when he imposed the commencement date. He would not merely bear in mind what is happening in Community countries and when they are commencing their changes, but would also consider the amount of time that we, the political parties and their candidates would need to run an efficient election campaign here.
Obviously, we do not want to be in two minds until the last day and we would not do that. There is, however, quite some time for discretion, but we would have to make a judgment as the time got shorter. I suspect that the time for a judgment would come in April.
Mr. Cash: My hon. Friend will remember that, in part II of the Maastricht treaty, entitled "Citizenship of the Union", article 8b states not only that citizens of the Union are given certain powers but that they
"shall enjoy the rights conferred by this Treaty and shall be subject to the duties imposed thereby."
It continues:
Every citizen of the Union residing in a Member State of which he is not a national shall have the right to vote and to stand as a candidate at municipal elections in the Member State in which he resides, under the same conditions as nationals of that State."
It also states that the right "shall"—not may—
"be exercised … before 31 December 1994 by the Council, acting unanimously on a proposal from the Commission and after
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consulting the European Parliament; these arrangements may provide for derogation where warranted by problems specific to a Member State."
My right hon. Friend is saying that some solution may need to be found to deal with the problem of the intransigent French. Apparently, the treaty lays down a requirement, which cannot be abrogated by any member state, and which can be enforced only by reference to the European Court of Justice.
In the light of the deep-seated concern of the French about Strasbourg and the European Parliament building, and the knowledge that that has such importance to the comity of voting and representation in the Community and the European elections, do the Government intend, by some means or another, to ensure that that matter is brought before the court so that it can be sorted out?
Mr. Lloyd: If I have followed my hon. Friend, I think that he is confusing two things. He began by mentioning the right of citizens in other member countries to vote in a country where they are not a citizen; we shall come to that when we discuss the regulations. However, that right does not enable anyone to take legal proceedings against France or the French Government for not ratifying the arrangements that would lead to the election of six additional Members of the European Parliament in this country and six more in France. Those matters are quite separate.
The purpose of the regulations to which my hon. Friend the Member for Stafford (Mr. Cash) alluded is to extend to citizens of other member states of the European Union who are resident here the right to vote and to stand as candidates in elections to the European Parliament.
Our legislation on elections restricts the right to vote and to be a candidate to British and other Commonwealth citizens and to citizens of the Irish Republic. The treaty on European union signed at Maastricht, however, gave voting and candidacy rights to citizens of the Union who live in a member state without being a national of that state. Article 8b.2 related to elections to the European Parliament, which is the subject of the draft regulations. The regulations extend those electoral rights to citizens of the other member states of the European Union who are resident here, by making a number of technical amendments to existing legislation.
The overall aim of the draft regulations is, therefore, very simple. But the regulations themselves are somewhat long and complex—as those who have tried to read them will have noticed. The reason for the length and complexity is that our electoral legislation rightly goes into often minute details of prescription and practice. That level of prescription is valuable in safeguarding electoral procedures from ambiguity, but it means that even simple changes require complicated amendments to many legislative minutiae. That accounts for the complexity of the document before the House.
The general principle of article 8b.2 of the Maastricht treaty is that non-national residents in a member state should be treated, for electoral purposes, in the same way as the nationals of that state. The draft regulations seek to achieve that equality of treatment in practice, and we are not introducing of our own accord any requirements on citizens of other member states that we do not impose on our own citizens.
To register to vote, for example, a Union citizen must have been resident in Great Britain on the qualifying date of 10 October, or 15 September for Northern Ireland, in

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exactly the same way as British or other Commonwealth citizens. Citizens of other member states who wish to be candidates at the election to the European Parliament must also conform to the same nomination procedures as candidates have hitherto.
However, we are placing one or two small differences of procedure on Union citizens. These stem directly from the provisions of the EC directive implementing article 8b.2 of the treaty.
In mentioning the directive, I pause briefly to apologise to the House for the fact that the document was not made available at the draft stage. An unfortunate combination of human error and several failures of communication meant that the Select Committee was deprived of the opportunity to consider the directive at its draft stage. I have noted the Select Committee's report, which has been placed in the Vote Office in the usual way, and I acknowledge that the Government did not meet their scrutiny obligations with regard to this document in the normal way. I can only repeat here the apologies that have been made outside the House.
As I have said, the draft regulations impose on Union citizens a few minor differences from the procedures that we require of our own citizens. The main difference from our normal arrangements is that Union citizens will have to apply to register to vote and will have to do so to their local electoral registration officer by 29 March. We shall not be placing on electoral registration officers a duty to seek out non-British or non-Irish citizens for registration.
A further small difference is that we shall be requiring intending voters and candidates to supply information about their electoral rights in their home member states. Member states will be exchanging information on non-national electors and candidates, on the basis of the information provided, with the aim of preventing double voting or candidacy, and to enforce concurrently disqualifications imposed by a home member state. That requirement stems from the directive to apply the provisions of the treaty and is designed to meet the concerns of some other member states.
As I have said, the regulations seem complex, but they merely effect a simple extension of rights to vote and to candidacy, in conformity with our treaty obligations. I hope that the House will approve them.
4.13 pm
Mr. Graham Allen: I am glad that, at last—after some further delay—hon. Members have an opportunity to discuss the important matter of the boundaries on which the European elections of 9 June will be fought and the extension of the vote to European Community citizens in the United Kingdom for those elections.
The European project goes on. For many of the newer generations in the House it is no longer an article of faith but a part of the political landscape that has to be dealt with on merit. It is all the more ludicrous, therefore, that the Conservatives' internal divisions over Maastricht have led to a situation in which, in certain constituencies, candidates in the ever more important European elections are only now being selected—just 14 weeks before the election. Given the size of the European constituencies, it will be difficult, if not impossible, for candidates to be widely known and for an informed choice to be made.
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As we argued throughout the proceedings on the European Parliamentary Elections Bill, the Conservatives are entirely responsible for the fact that the process of drawing up the new European boundaries had to be compressed into such a short time. They are also responsible for the fact that the boundaries were drawn up not by the independent Boundary Commission, but by the new European Parliamentary Constituency Committee.
It took from the Edinburgh summit in December 1992, when the current Prime Minister first announced the Government's intention to legislate on the issue, until 30 June 1993 before the European Parliament Elections Bill was given its First Reading. We all know that the reason for this inordinate six-month delay was that the Government could not be sure of carrying a vote on anything European in the face of hostility from its Maastricht rebels—those whom the Prime Minister famously dubbed the illegitimate ones.
I understand that even at this late stage the review could be overturned by the refusal of France to agree the new allocation of seats. We have already had an exchange suggesting that whatever we decide today might be overturned completely by the inability of the French to ratify their part of the arrangement. The Minister referred to that as a massive inconvenience. If we have to resort to fighting the elections using the old boundaries—with all the problems that that will create for the selection of candidates—it will be one of the greatest understatements ever, even in the House.
Opposition Members will seek to press the Minister still further on the latest developments in France and on what influence we can exert to ensure that, if we pass the orders today, they will become the basis of the European elections.
When the Bill was in Committee, the Opposition believed, as we do today, that, had the Government been more efficient in the organisation of their parliamentary business, there would have been sufficient time for proper public inquiries. We now that the organisation of business is not the Government's strong point at the moment. Whether it is being run ragged by their own rebels or clumsily breaking down the usual channels, our non-co-operation policy seems merely an extension of the one that has been working so effectively within the Conservative party under the present Prime Minister.
Amidst all that confusion, it is important that the procedures used in the parliamentary review should never be deployed as a precedent for future boundary revisions for Strasbourg or Westminster. We must be clear that it must be the exception and not the rule. If people are to have confidence in our democratic system, they need to be sure that the electoral boundaries on which our system operates are beyond reproach.
When the Bill last came before the House, I stated that I did not believe that the Home Secretary intended to fiddle the boundaries. Some felt that I was being generous to the Home Secretary, but in his case we should be prepared to understand a little more and condemn a little less. It was always our contention that not only should justice be done, but that it should be seen to be done by the due process of public inquiry.
We have enjoyed the public inquiry process for more than 50 years, and it would be most helpful if the Minister could tell the House that the Conservatives do not intend to sidestep the public inquiry on any future boundary proposals, European or otherwise.
Mr. Peter Lloyd: In any boundary changes we would like the full panoply of inquiry. As the hon. Gentleman knows, the timetable was short and we had to follow the model that had been provided by the last Labour Government in 1978 which had similarly to timetable the legislation, took a similarly short time for the reviews and where the normal inquiries had to be dispensed with.
Mr. Jeff Rooker: The Government wasted a year.
Mr. Lloyd: One could look back to 1978 and say retrospectively that the process could have been started considerably earlier. The hon. Gentleman knows perfectly well that it was not practicable to launch an inquiry while the European Communities (Amendment) Bill was winding its way through the House—although the processes were started before the governing legislation was on the statute book. I understand why Opposition Members wish to make their party points, especially those who were not in the House in 1978. That does not, however, apply to the hon. Member for Birmingham, Perry Barr (Mr. Rooker), who knows very well that a similar machinery was used then—as fairly, honestly and impartially as time allowed.
Mr. Allen: I am more concerned about future possibilities—not least the possibility that, if we fight the next European election on the first-past-the-post system, further boundary changes will be needed in the near future as a consequence of the proposals of the parliamentary Boundary Commission.
I hope that the Minister will assure the House that this was a one-off decision caused by time constraints. I shall deal with the reasons for those constraints later. It is sad that the party political considerations to which the Minister alluded—the difficulties experienced by the Conservative party in relation to the Maastricht Bill—caused United Kingdom boundary procedures to be tampered with. We are currently seeing a welcome expansion of democratic forms elsewhere in the world—for instance, in eastern and central Europe, and in South Africa; at the same time, we are witnessing the erosion of such forms in the United Kingdom. We—people in the country and, indeed, the House of Commons—are capable of deep complacency at a time when we should be ever vigilant about our democracy and the precious forms that it takes. An example is the public inquiry stage of the Boundary Commission procedures.
Sir Teddy Taylor: The hon. Gentleman is being rather unfair to Conservative Members in regard to their attitudes to Maastricht. As a Euro-enthusiast, does he accept that an opinion poll published by the European Commission three weeks ago showed that the Labour party's tepid support for Maastricht was wholly out of line with the views of the average Labour voter? It clearly demonstrated that the majority of people in Britain were opposed not only to Maastricht but to the notion that the European Community was a good idea at all.
Mr. Allen: I feel rather like a stranger walking in on a Maastricht annual reunion dinner. I do not wish to cross swords with the hon. Gentleman over the details of the Maastricht Bill, but I must tell him that the false divide between Euro-sceptics and Euro-fanatics does not appeal to a number of people—perhaps including some Conservative Members, who may be prepared to admit it.
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The new generation of Members of Parliament—on both sides of the House, I suspect—consider that we are now in Europe; we need to make the best of it and treat Europe on its merits, rather than reliving the battles of the late 1970s and early 1980s.
The public inquiry process is no mere decoration; it has an important function. During the previous round of European parliamentary proposals, there were 10 European boundary inquiries, five of which overturned provisional recommendations because people's views were listened to in public. In Committee, on the Floor of the House, the Home Secretary admitted that a public inquiry stage would have added seven weeks to the boundary process. That could easily have been accommodated if the Bill had been introduced seven weeks earlier. The problem was not the extra seven weeks but the wasted 32 weeks between the Edinburgh summit and the introduction of the Bill. That delay was caused entirely by party political factors—Conservative splits over Europe in general and Maastricht in particular.
Mr. Richard Shepherd: The hon. Gentleman may not know, but perhaps the Home Office will be able to say how many EC nationals are presently registered to vote in the forthcoming election.
Mr. Allen: At the moment no nationals are registered. I shall return to that point, but I understand that, potentially, some 400,000 people could register.
The Labour party looks forward with confidence to the 1994 European elections, within whatever boundaries they take place. At the European elections in 1989, Labour took 45 seats to the Conservative's 32 seats. Labour Members are looking forward to the elections in June when the Conservative party, riddled with divisions and disagreements, will suffer further losses and Labour, we hope, will make further gains.
We all know that there is a fundamental divide in the Conservative party which no amount of packaging can camouflage. The packaging in the previous elections was not as good as it could have been. Perhaps the Conservative party will make a more serious effort in the European elections, given that a potential influence on the outcome of the next leadership contest lies in the balance.
In Europe, the Conservative MEPs are led by Sir Christopher Prout, who is the vice-president of the European People's party.
Mr. Cash: The vice-chairman.
Mr. Derek Enright: He is the vice-president.
Mr. Allen: A debate may take place on whether he is the vice-chairman or the vice-president, but my information, until it is corrected, is that he is the vice-president of the European People's party. The Conservatives have a rather ambivalent relationship with the European People's party. They sit with it in the European Parliament. They speak on the European People's party membership of committees—the only way in which they can find a voice in committees—and they take their share of the European People's party funding. There seems to be a close relationship between the European People's party and the Conservative party, if only on that circumstantial basis.
The European People's party manifesto calls for a single currency, a central bank, the incorporation of the

821
social chapter, a common immigration policy and a constitution for the whole of Europe, all of which have been greeted by Conservative Members with great acclaim as concepts obviously close to their hearts. I wonder whether it will bear much relationship to the manifesto which is finally produced by the Conservative party before the next European election.
Mr. Keith Mans: I am certain that the hon. Gentleman would not like to finish his speech before mentioning the relationship between the Labour party and the socialist parties in Europe and its own manifesto.
Mr. Allen: I certainly would not dream of finishing my speech without a substantial mention of that close relationship, of which we are proud to tell people. It is a close relationship—
Mr. Deputy Speaker (Mr. Geoffrey Lofthouse): Order. Before the hon. Gentleman goes any further, may I say that it would be of advantage to the debate if he returned to the subject of boundaries.
Mr. Allen: I shall resist the temptation to follow Conservative Members in what could have been an interesting line of debate.
Mr. Cash: Has the hon. Gentleman noted that on 9 February, only a few days ago, the European Parliament, through its rapporteur, Mr. Fernand Herman of the Christian Democrats group, together with socialist MEPs, endorsed a constitution which contains even worse things than the European People's party manifesto? Are the hon. Gentleman and his party to repudiate—
Mr. Deputy Speaker: Order. My recent remarks apply to the hon. Gentleman as they do to the Opposition spokesman.
Mr. Allen: The bad news for the hon. Gentleman is that Mr. Herman is, in fact, a member of the European People's party—[Interruption.] With great respect, the hon. Gentleman said that Mr. Herman was a Christian Democrat. He is a member of the European People's party, and I hope that the hon. Gentleman will take up that point with his Conservative colleagues who have close connections with the European People's party, as I made clear earlier.
Dame Elaine Kellett-Bowman: Is the hon. Gentleman aware that, whereas all the Conservatives voted against the Herman report, the socialists voted for it?
Mr. Allen: I am grateful for that information.
It is important that I make clear the Labour party's position in respect of the article of the treaty of Rome which calls for uniform electoral procedures to be established for elections to the European Parliament.
Hon. Members will recall that the matter was raised during a debate on an amendment during the Committee stage of the European Parliamentary Elections Bill of 1993. We argued then that it was not feasible for an entirely new electoral system to be set up for the European elections in June 1994 and that it was silly to apply a different system for the additional six seats from that applying for the other 81. However, we also made it clear that as part of Labour's wider democratic agenda we would view sympathetically the notion of a plurality of electoral
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systems, which might include legislating for a regional list system of proportional representation for future European elections.
During a debate in the House on 7 July, I said:
"The Plant commission, established by the Labour party to look into electoral systems, proposed, as one of its many recommendations, a system of proportional representation—the regional list system—for the European Parliament. Its report said:
'Such a system could be used by an incoming Labour Government for the 1999 elections at the earliest.'
That report was sent to our national executive committee. On 19 May the leader of the Labour party stated:
'The Committee concludes that different elected bodies can be chosen by different electoral systems. That is a view which I share and I support the proposals made both for a reformed Second Chamber and the European Parliament. The proposal on the European Parliament sensibly recommends consistency of voting for the one election that we share with other members of the European Community.'"—[Official Report, 7 July 1993; Vol. 228, c. 401–02.]
The strong sympathy expressed at the time of the last debate on those matters was approved overwhelmingly by the Labour party conference last October. I state that for the record lest there be any misunderstanding of our position on the voting system. It also highlights the fact that the Government are yet again lagging behind even right-wing and Christian Democrat parties in Europe and are utterly isolated in their unwillingness to contemplate electoral change of any kind.
The European parliamentary constituency committees have now made their recommendations. We have a number of specific disagreements about the way in which boundaries have been drawn. In addition, hon. Members will remember that we called strongly for an additional Scottish seat. Nevertheless, we are generally satisfied that the English and Welsh constituency committees have done a thorough job and, on behalf of my colleagues, I pay tribute to those who served on them and discharged their responsibilities with great professionalism in circumstances made unnecessarily difficult by ministerial dithering and delay.
We live in dark days for democracy, days of Executive decree, 'Henry VIII' clauses and Bills being passed without proper parliamentary debate. I suppose that in that context we should be grateful that Ministers have not used their power to modify the recommendations of the boundary committees. It is a sad day when the House is grateful for not being abused, but it is just about all that we have to be thankful for until this wretched system is altered root and branch.
I deal now with the regulations that cover the enfranchisement of EC citizens resident in the United Kingdom. We welcome the change which allows EC citizens resident in the United Kingdom to vote in European elections. The regulations, which will give effect to the European Council directive of 6 December, will of course alter the long-standing position whereby only British and Commonwealth citizens and citizens of the Republic of Ireland are entitled to vote in European parliamentary elections. It is a sensible and a desirable change which is welcomed by Opposition Members. I understand—the Minister may correct me if I am wrong—that the order relating to local government elections and European community citizens will be before the House by the end of 1994.
The Opposition believe that extension of the franchise to EC citizens who are resident in Britain is a clear affirmation of our practical commitment to greater

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European co-operation and rights that apply to all European citizens. Consequently, we have been greatly worried by the Government's delay in bringing forward the legislation, which was adopted in draft on 23 June 1993 and became a Council directive on 6 December 1993.
It is indicative of the Government's approach to all matters European that every obligation under the Maastricht treaty appears to be discharged grudgingly and after unnecessary delay. Often the wheels appear to grind exceeding slow, especially where democratic change is concerned. It was in 1977 that the European Parliament first passed a resolution on voting rights in European elections. I hope that many of the pioneers of that time feel a sense of satisfaction this evening that the Bill and the orders are going through. It may interest them to know that in the past few months the European Parliament has agreed to press for a Bill of Rights for the citizens of Europe and for a written constitution for Europe. Who knows how quickly that may come to fruition?
The principles underlying that change are relatively straightforward. As the Minister has already said, article 8 of the treaty on European Union, passed last year, entitled "Citizenship of the Union", guarantees the right to move and reside freely in the territory of member states.
Mrs. Teresa Gorman: Is it not also true that the European Union or Community—whatever one likes to call it—also intends to introduce a compulsory identity card in the form of a smart card, carrying details of the citizen's health, but on which there will be ample room to put all types of other information?
Mr. Allen: There are no proposals in draft directive form or before the House on that matter, as far as I know. If that were proposed, Opposition Members would object to it strenuously.
Article 8b(2) provides that citizens of the union
"shall have the right to vote and to stand as a candidate in elections to the European Parliament".
At present, there are considerable disparities between the way in which the right to vote and the right to stand as a candidate are treated in various member states. On the right to vote, for example, the United Kingdom grants that right to all United Kingdom citizens who have been out of the country for less than 20 years, while Germany extends voting rights to all German nationals residing in another member country of the Council of Europe and those who have lived in a non-member country for less than 10 years.
Certain member states—Denmark, the Netherlands and Portugal—grant such voting rights only to those expatriate nationals who are living in another EC member state. There are also differences between the states on the ability of people to stand as candidates. The order that we are debating this evening will ensure that there is greater harmonisation in respect of elections to the European Parliament.
Mr. Christopher Gill: When the hon. Gentleman became a Member of the House, it seemed to me that he challenged the establishment, and many of us welcomed that; it seemed to be a breath of fresh air. Now it seems that he has become entirely institutionalised. Can he explain that to the House?
Mr. Allen: Absolutely. I plead guilty. The hon. Member has found me out. I am totally institutionalised, and no doubt the hon. Gentleman will see the truth of that if and when the Jopling report is debated in the House.
The proposals also include additional checks on nationality to prevent multiple candidature and voting. Community voters living outside their home country will be required to meet the same qualifying rules of residence as any other national in that state. That is a reasonable principle, which we support. Regulation 4, rightly, creates an offence of standing as a candidate in more than one member state at the same election.
It is also right that there should be, in new rule 8(5), a declaration on the part of prospective EC candidates that contains details of nationality, address and last constituency in the home member state and evidence that the individual is not standing as a candidate in another member state. We also support the element of flexibility in the new arrangements whereby Community citizens have the option of voting in their country of residence or in their home country via a postal ballot.
While there is much to support, we need to draw attention to the Conservative's half-heartedness in one particular area, registration of voters. We note that the transitional arrangements that apply to the United Kingdom should enable the electoral registers to include as many EC citizens as possible. Regulation 8 authorises electoral registration officers to register relevant citizens of the union as European parliamentary electors. Regulation 9 requires the officer to publish a register of relevant citizens of the union entitled to vote. However, delay has meant that the ordinary electoral register is already published, so regulation 18 substitutes the publication date of 9 May for the European Community citizens register. Applications must therefore be in nine weeks from now at the very latest; in other words, by 22 April.
Mr. Peter Lloyd: I understand that the hon. Gentleman wants to establish that the Government have been extraordinarily dilatory, that there has been massive delay and that there are problems for electoral registration officers; but the regulations depend upon the directive. The directive was agreed and promulgated in December 1993. We have been two months in producing this very complicated set of regulations. That is not slow; it is moving with considerable speed.
Mr. Allen: The directive was promulgated when the Minister said, but it was hardly a bolt out of the blue. It had been around for some considerable time before that, and that excuse hardly applies to the delay in establishing the European parliamentary constituency committees. As the Minister knows well, it was merely a matter of seven weeks, the excuse being that had they had another seven weeks they could have had the public inquiry stage. In reality, there was plenty of time to do this in good order and without the present confusion over the candidatures and the existing European boundaries.
On the registration of electors, if we now have less than nine weeks from this evening for a possible 400,000 people to seek registration, it is essential that the Minister and the Department engage in a serious advertising campaign to ensure that people can exercise their rights. I should like the Minister, in his later remarks, to expand on what, if any,

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measures the Government intend to take to publicise EC voting rights for those 400,000 or so European citizens of voting age resident in this country.
Needless to say, other European countries are taking the job more seriously. There is an advertisement, for example, in a recent issue of The Guardian, and if my Dutch were a little better, I would quote it into the record, but I am afraid that it does not make very much sense to me. I understand, however, that, literally translated, it says that Dutch citizens in this country should contact their ambassador at 38 Hyde Park Gate and ask for the relevant forms in order to register for the election and vote in the United Kingdom. Our friends in the Binnenhof seem to have taken that a little more seriously than the Home Office has.
Similar exercises are being undertaken by other Governments, and there is a tremendous contrast between what they have done and what our own Government have done. No publicity whatsoever has appeared yet, and once again I offer the Minister the chance to tell us later in the debate how the Government are prepared to exert themselves on this matter and whether they want people to register. It is not clear whether this is part of some idea of the Government that people should not register, and the Minister needs to make this clear so that people outside hear the message. Nine and a half million people did not vote even in the last general election.
May I therefore ask the Minister, on another matter, to agree to the proposal that the right to a postal vote should be highly publicised in the RPF 9A form in the newspapers well before the closing date of 20 May, not least because many people will be away on holiday in the summer and some may well be involved in the D-Day celebrations.
It is self-evident that the Government are utterly unconcerned to carry out an obligation to which they are bound by a treaty freely entered into. The Minister must tell us how he squares this inactivity with regulation 9(3), which obliges registration officers to
"take reasonable steps to obtain information"
about who should be eligible to appear on the electoral roll.
The Government should declare a willingness this evening to put some energy or resources into maxirnising electoral turn-out among EC voters. The importance of ensuring a high turn-out among EC nationals surely warrants something more than the complacency and drift that has come to characterise the Government's whole policy towards the European Community.
Tonight the Conservatives have gone through the motions. Law and treaty demanded that boundaries be redrawn and EC citizens be given the vote. These statutory instruments fulfil that bare minimum, and it will be left to others to do the job well.
4.46 pm
Mr. Michael Spicer: I must confess that it is a matter of some indifference to me how many Members we are to elect to the European Parliament. If 81 is to be the new magic number, so be it, although I suppose that one must make a passing reference to the information which has come out in another place and been publicised this weekend in the press that, at almost £1 million a slug, Members of the European Parliament do not come cheap. I suppose that one should make allowances for the fact that they have three parliamentary buildings, they have to go on trips and they have to pay German rates for their bureaucracy, so there are exceptional factors and I would not want to make too much of that.
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What I really want to put before the House is the question of what those Members of the European Parliament will do when they get there, and hence their cost-effectiveness.
Mr. Deputy Speaker: Order. In this very short debate it may be advantageous to draw to the attention of the House the scope of the debate. It is confined to the desirability of the proposed boundaries for European parliamentary constituencies and the introduction of changes to the franchise and qualifications of representatives for use in parliamentary elections in the manner specified. If hon. Members will keep to that in the debate, it will be of great advantage to the House. It is a short debate and going outside its main scope leaves less time for other hon. Members to speak.
Mr. Spicer: I accept that ruling entirely, Mr. Deputy Speaker, but the point that I want to make—I assure you that I intend to speak only very briefly—is that, if we are trying to assess the correctness of the numbers for which we are going to vote and the boundaries associated with those numbers, it is perfectly fair to ask, as they go off from us, what they are going off into. I assure you, Mr. Deputy Speaker, that I do not plan to speak for more than two minutes and I hope that that will allow me to make a very brief point on this, because otherwise it is almost impossible—
Mr. Deputy Speaker: Order. I am not allowing anything outside the scope of the debate.
Mr. Spicer: On a point of order, Mr. Deputy Speaker. Is it in order for us to discuss the cost-effectiveness of Members of the European Parliament and the costs associated with them?
Mr. Deputy Speaker: The simple answer to that is no, it is not in order.
Mr. Spicer: If we are not now to discuss the costs associated with electing a greater number of Members of the European Parliament and the boundaries associated with it, I have nothing further to say.
4.49 pm
Mr. Matthew Taylor: I suspect that the brevity of the speech of the hon. Member for Worcestershire, South (Mr. Spicer) will be welcomed if only because a number of us were not sure how much time would be available for our speeches after those of the Front-Bench spokesmen.
I advance two specific arguments: the first relates to the overall boundary review and the second involves my county. If the proposals for electoral reform in the European Union had been adopted, today's debate would not be taking place and boundaries would not be a relevant issue. A common electoral system would mean that the citizens of the European Community could be properly represented. It is unacceptable in any democratic institution for a region to be represented in an unfair and undemocratic way which distorts the Parliament. Under paragraph 3 of article 138 of the treaty, a common electoral system is required.
Mr. Bernard Jenkin: On a point of order, Mr. Deputy Speaker. In view of your previous

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ruling, is it in order to discuss different voting systems? Are we not discussing those eligible to vote and the parliamentary constituencies?
Mr. Deputy Speaker: The hon. Gentleman can safely leave the matter for the Chair to decide.
Mr. Taylor: If the hon. Member for Colchester, North (Mr. Jenkin) pays attention, he will appreciate that the boundaries are the nub of the issue in terms of the electoral systems. The Commission should have been asked to address the principle of a common electoral system, to which this country is a signatory and towards which it has agreed we should aim. That system should have been introduced long ago, but sadly both Labour and Conservative Governments have preferred to ignore it for their electoral benefit.
The arguments that have been used to block the introduction of a fair electoral system in the United Kingdom Westminster elections should not block the reform of electoral procedure in Europe. The De Gucht proposals, which demand a common electoral system, have been passed by the European Parliament. They rest on the table of the Council of Ministers. It is common knowledge that the Government have shown the greatest reluctance to make any progress. Such reform is necessary.
It is a pity that the Government have not taken the opportunity of the change in the number of seats to bring a measure of proportionality to the British European elections. Even if the Government did not wish to take that opportunity for a full reform leading to a fair voting system, the extra six seats offered them the chance of creating a more proportional system by creating so-called additional member top-up to ensure that under-represented views gained their rightful place in Europe. They could have created a fairer system and avoided the problems such as trying to redraw boundaries at short notice before the European elections and of getting candidates in place. Given that even that partial reform has been rejected, Liberal Democrats cannot be expected to support the proposals.
I also want to deal with a narrower issue—how the proposals affect my county of Cornwall. I may be the only hon. Member to discuss a specific European seat in any detail, but the proposals are important to our region, as we have long argued.
The European Assembly Elections Act 1978 states:
"The electorate of any Assembly constituency in Great Britain shall be as near the electoral quota as is reasonably practicable having regard, where appropriate, to special geographical considerations."
The relative importance given to the second half of that statement is crucial to the argument for a Cornish seat. There is strong evidence that Cornwall fulfils the requirements of those special geographical considerations.
The committee proposals for a Cornwall and West Plymouth European parliamentary constituency provoked an enormous response from those opposing the link with Plymouth. That has occurred on each occasion that the constituency has been reviewed. The late David Penhaligon argued for a separate constituency in 1978 and I argued for it in Select Committee in 1988.
The sheer weight of numbers of democratically elected organisations in Cornwall was the most important feature of those responses. Those organisations included the
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county council, all six Cornish district councils, the Cornwall Association of Town and Parish Councils and 48 Cornish town and parish councils. Those councils are run by various political groupings or, more importantly, by independent councillors at parish level.
Those organisations have responded with a united voice and have declared their support for a separate Cornish constituency. I think that all hon. Members will recognise that it is remarkable to achieve such widespread agreement among councillors working at different tiers and in different regions.
The responses are all the more impressive when one considers the short period for consultation on the proposals. The case for a Cornish constituency has also been supported by the business community and leading academics. Peter Fitzgerald, one of the largest manufacturing employers in the county, and chairman of the Cornwall Economic Forum, has emphasised the importance to local business of Cornwall having its own Member of the European Parliament. The Institute of Cornish Studies, the University of Exeter and even Cambridge university advanced strong arguments for a separate Cornwall constituency and many individuals took their views personally to the Commission.
I want to explain why Cornwall is a special case and why so many local people advanced that argument. There are five reasons: first, precedents exist for concessions on the electoral quota; secondly, Cornwall has a separate cultural identity; thirdly, it has a special geographical location; fourthly, it has economic needs; and, fifthly, Plymouth also has relevant concerns.
The criteria for the mean electorate size for a European parliamentary constituency have been used as a justification for ignoring Cornwall's case. Yet concessions that have led to the establishment of constituencies which do not meet the size requirement have been given to other regions because it is accepted that European parliamentary constituencies should be created along the lines of natural communities, with common identities and interests. Cornwall has a strong identity as a separate community. The present arrangement that links Cornwall with west Plymouth does not benefit either area.
Although the English review is being conducted independently from the rest of the United Kingdom, it is relevant to examine the overall picture. Northern Ireland returns a representative for every 384,000 electors and even on the mainland, there are marked variations. I understand that the proposed West Wales seat will have an electorate of only 400,000. The electorate in the Highlands and Islands seat is 310,000.
Cornwall's electorate of 372,000 is higher than that of the Highlands and Islands and virtually the same as that of Northern Ireland and West Wales. There are only 36,000 electors per Member of the European Parliament in Luxembourg and 161,000 in the Republic of Ireland. The size of the constituencyt is not the most material issue. The European Parliament has a wide range of electors per Member and, if Cornwall were to obtain its own seat, its electoral quota would not be extraordinary.
Mr. D. N. Campbell-Savours: What size are the Devon seats?
Mr. Taylor: A wide range of changes would follow. I accept that a change in Cornwall should not create an

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over-size Devon seat. We have argued from the first that any change should be part of the review and that Cornwall should not be considered in isolation.
Cornwall has one of the most rapidly growing populations in the country and it is expected that it will not remain much under quota for very long. It is estimated that the population will grow to 500,000 relatively rapidly. The electoral quota argument is not final. Other arguments run counter to the Commission's suggestions and its brief.
Cornwall has a separate identity with its own traditions, history, customs and language. Those attributes are firmly rooted in a Celtic past that bears more relation to Scotland and Wales than to Devon. There would have been objections if regions in Scotland or Wales had been linked with parts of England for the convenience of the review. It seems that Cornwall, which has a distinct and separate identity, continues to be ignored. The European Union recognises that special regard must be paid to areas with strong regional identities. Indeed, the European Parliament's resolution is specific on that point and I believe that the boundary commission has failed to take the opportunity to observe that requirement.
Thirdly, it is disappointing that the committee has ignored the well-defined geographical boundary of Cornwall along the River Tamar. That is still a substantial physical and psychological barrier between Plymouth and Cornwall. The Tamar bridge is the only road vehicle crossing for 23 miles from Rame head northward to Gunnislake bridge. Cornwall is almost an island, with natural boundaries fixed by the coastline and the River Tamar. It is effectively isolated from the rest of the country. That is often forgotten in conversation, when people tend to say, "I was in Bristol at the weekend, in your part of the world," forgetting that Bristol is nearer to London than it is to Cornwall. Indeed, for some Cornish people the distance between their home and Plymouth is longer than the journey from London to Bristol.
My fourth point is probably the single most important reason why Cornwall should be treated as a special case. It is not an emotional reason; it is the fact that there has been a failure to take into account the economic geography of the county. Plymouth and Cornwall have totally different economic identities, so European entanglement between them will be mutually economically detrimental. The economy of Cornwall is still heavily reliant for its income on traditional industries such as fishing, farming, tourism and mining. Plymouth relies mainly on the fact that it is a conurbation with a growing and diversified industrial and commercial base.
The two economies' distinctive and incompatible needs have been recognised in a development that occurred since the committee met. Europe's regional economic development programme has afforded Plymouth objective 2 status, which is targeted at areas fighting industrial decline. Cornwall, on the other hand, has objective 5b status, which is aimed at developing rural areas. That demonstrates the difference between the two. I do not oppose links where they are relevant. I argue for them, encourage them and defend them when I believe that they are important, but I do not believe in links that are irrelevant and unhelpful.
Cornwall is one of the worst black spots in the country for unemployment, poverty and other economic difficulties. It has one of the lowest gross domestic products in Europe. According to the Central Statistical Office's regional figures for Cornwall, the county is so badly off that in 1991 our GDP was only 73 per cent. of the national
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average. Devon's GDP was 87 per cent. of the national average. The different progress of the two areas is shown by the fact that in 1989 Cornwall's GDP was 75·6 per cent. of the average, so it has fallen comparatively, whereas that of Devon was 85·5 per cent. in 1989 and has since grown. The two areas have been moving in opposite directions. Their economic performance is divergent and they have a different set of problems.
Linking part of Plymouth with Cornwall will create a wholly artificial unit unrelated to geographical, social or economic reality. Indeed, the creation of a split within the city of Plymouth makes that divide even more stark. As Plymouth city council has been keen to point out, it is even clearer that that is not in the interests of Plymouth. Plymouth's interest is as clear as Cornwall's, and its natural links into south Devon provide the basis for a seat in which it could be better represented.
Cornwall needs a voice of its own to argue its case for regional funding to improve its infrastructure, reduce its unemployment and encourage its industry. Funds need to be directed at improving Cornish roads, rail links and other communications.
The Liberal Democrats oppose the basis of the review. We believe that at national level an opportunity has been missed, or perhaps ducked, to encourage the common fair electoral system to which this country is supposedly a signatory. But even if the chance for a fair electoral system has been lost, at least we should have played to what strength there is in a single-Member system and recognised properly the individual communities of the United Kingdom. That chance has been missed, and on that ground I do not believe that the review should take effect.
5.3 pm
Mr. Richard Shepherd: As the Government and the Opposition Front-Bench spokesmen want to introduce the measure fulfilling their commitments to the Maastricht treaty, I accept the methodology and precedents that the Government cite. They are indeed appropriate.
However, I must say briefly that the vote is no longer like the generality of the population voting for membership of a golf club in which we have varying degrees of interest. We are now trying to affirm citizenship through the vote, so the way in which we distribute the seats and the affirmation that we give through the vote will not relate to any of the sentiments expressed by the Opposition Front-Bench spokesman, the hon. Member for Nottingham, North (Mr. Allen). Both he and the spokesman for the Liberal Democrats, the hon. Member for Truro (Mr. Taylor), ally themselves to an outer reach of lunacy not shared by the general populace outside the House.
I understand that at the previous European election only 31 per cent. of the population could find their way to polling stations, although that may be because they were denied the Liberal Democrat's panacea for everything—proportional representation. There is a profound and deep argument that that system is no more representative and provides no truer a democracy than do single-Member constituencies. That is a legitimate debate and the parroting of proportional representation as the only way forward is inappropriate for serious people trying to discuss the

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matter. One understands why the Liberal Democrats wish to pursue the idea, but not necessarily why the Labour party wishes to do the same.
Mr. Campbell-Savours: Boundaries.
Mr. Shepherd: This has a great deal to do with boundaries, as the hon. Gentleman well knows, but the essence of the argument is that the procedure is wholly inappropriate in terms of trying to attest citizenship through an arrangement of six additional boundaries into a union and a political state. That is the profound objection that Conservative Members have long expressed and it reflects the public mood in the country about the elections and the way in which the boundaries are drawn. In conclusion, we now have further evidence of the irrelevance of the House in reflecting and attesting to public opinion.
5.5 pm
Mr. Jeff Rooker: I do not wish to follow the hon. Member for Aldridge-Brownhills (Mr. Shepherd), who is one of my parliamentary neighbours, but I believe that it is part of grown-up politics to ensure that the political opinion of a nation is adequately represented in the forums of that nation, whether they be this place or the European Parliament. For that reason, I make no bones about the fact that I wish that we were debating a different electoral system.
I did not wish to intervene in the Minister's speech because this is a short debate and I did not want to take up too much time. However, our electoral system, which is unique in Europe, means that our deadline will be different from that of all the other member states. They all use proportional representation with either national lists or large regional lists, so it is easy for them, even literally the day before, as the Minister said, to change the cut-off point. That will not affect the value of anybody's vote in those countries, but that cannot be the case with single-Member constituencies. For us, there will have to be at least 21 days; that is the rock-bottom minimum.
I suspect that the French have us over a barrel, and we shall have to cough up for the enormous expenditure on an extra building in Strasbourg which I believe is not needed—although I do not have the details of that argument.
I sincerely hope that these are the last boundary changes that we shall have to debate. It has been said that we may have to go through the process again, but I hope that we do not. I suspect that the wipe-out of the Conservative party in the European elections on 9 June may make even Conservative Members think that to save their own skins in future they had better start thinking about a fairer electoral system.
Indeed, I am sure that a unified system is on the way, and if we do not take it upon ourselves to act it will be forced on the House by Europe. That will be our own fault because we will have shirked our responsibilities. As my hon. Friend the Member for Nottingham, North (Mr. Allen) said, the Labour party is now firmly committed, both by the voices of the leadership and by the votes and resolutions at our party conference, to a system of proportional representation for the European Parliament.
I hope that when the elections come on 9 June, and people argue about why they are voting for European
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candidates according to one set of boundaries rather than another, and why there are different rules for European elections—the registration will be different, allowing all kinds of "foreigners" to vote in European elections in this country—we shall be able to say that different arrangements will be made in future.
My second point, which relates wholly to this clutch of 18 articles plus a schedule, which the Minister did not have the time to go through in great detail, explains why I tabled an amendment to provide that the order should not be approved until the citizens of Gibraltar are represented in the European Parliament. I know that my amendment was not selected and I am not complaining about that. Far from it—I would never complain about the Chair. [Interruption.] I do not complain about the Chair and I would not do so. I introduced a Bill on this matter yesterday.
If hon. Members have read the orders, which run to at least 10,000 words, they will see that, by and large, all and sundry—citizens of the European Union—will be able to vote on 9 June. On one or two occasions, the Minister said that all citizens of the Union will be able to vote. However, that is not true. Citizens of the Union who live in south America, the West Indies or the Pacific, and are members of the French colonies, will be able to vote in the European elections. But citizens of the European Union who are members of the only mainland European colony belonging to this country—Gibraltar—will not have a vote. That is not right, fair or democratic.
For years, we have shied away from handling this issue. But the House now has total responsibility for the 30,000 citizens of Gibraltar. That is not the electorate—it is the total population. We continue to deny those citizens a vote, yet they are citizens of the European Union under our legislation, and they are accepted as such by the European Parliament.
It is wrong that the boundaries that we are talking about were not drawn—it could easily have been done—in such a way as to incorporate the 20,000 or so European Union citizens of Gibraltar who do not wish to be part of Spain and who will not be until it has been a democracy for 50 years or more. We could easily have given them a right to vote by absorbing them into one of the English constituencies. I accept completely what the hon. Member for Truro (Mr. Taylor) said. It is absolutely right that the cultural and geographical identity of people matters to the European Parliament.
We have a responsibility to the citizens of Gibraltar. If they live in this country on a semi-permanent basis, and if they were here last October, they will have a vote, as will everyone else who is a citizen of the European Union. Peers of the realm who live elsewhere will also have a vote under these and previous regulations, whether or not they are in this country. It is wrong that citizens of France—it is remarkable that the French will be the cause of this whole edifice collapsing if we do not submit to their extra demands—who are living in the colonies in south America, the West Indies, and the Pacific will have a vote in the European elections on 9 June.
We cannot shirk our responsibility to the citizens of Gibraltar. We are denying them that responsibility, and it is time that the House addressed the matter.
5.13 pm
Sir Teddy Taylor: I shall say three brief things about the boundaries. Before doing so, I must declare a personal interest. I have put my name forward to be considered as a candidate to stand for the Conservative party in the new constituency of South Essex. It is possible that I may not be selected, for all sorts of reasons. However, if I am selected, it may at least give the people of that lovely part of the world the opportunity of having the referendum that they never had on the Maastricht treaty because of the shameful way in which Labour Members were not willing to allow the people to have their say on that vital issue.
The first issue that I want to put to the Minister is: does this matter? My hon. Friend the Member for AldridgeBrownhills (Mr. Shepherd) rightly said that only 31 per cent. of the people bothered to vote, so why are we bothering with new things at all? Logically, we would ask why on earth, because the Germans are getting more seats and East Germany is being added to the Union, Britain should get more seats as well. It is very difficult to explain why we should have extra seats at all.
Another factor that we should bear in mind is that the great majority of people are not only not interested, but are hostile to the whole business. If hon. Members have looked at The European, they may have noticed that 53 per cent.—the highest figure ever—of all the people of Britain are now totally and completely opposed to the whole business of the EC; they do not think that it is a good idea. In that case, why should we have new boundaries?
There is a special interest in south Essex. The people are concerned that while the Government wanted to give aid to south Essex because of its unemployment, unfortunately that was stopped by two Commissioners. Mr. Van Miert and Mr. Millan. The Government requested assisted area status and objective 2 status for south Essex. That was turned down by the two Commissioners simply because we sliced 2 per cent. from the application.
Can the Minister give any more assurance that the orders will come into effect? Has he been in touch with the French Government? It is important that people in, for example, Southend-on-Sea should know where they are going. If the new regulations are passed, they will be part of a new seat. However, if the regulations do not come into effect, they will belong to another seat. As Southend-on-Sea had the lowest recorded percentage voting of any constituency in England at the last European elections, it is important to explain to people whether all this is likely to happen.
People are getting more concerned about the way in which the French Government are disrupting so many worthwhile things for silly reasons. The GATT negotiations were held up for a long time simply because the French wanted even more cash for agriculture—and, of course, they got it. When we are spending £250 million a week on dumping and destroying food, it is silly that we agreed to give more money to the French for agriculture.
Mr. Enright: Does the hon. Gentleman agree that the GATT negotiations failed in the end because Caribbean bananas were not protected?
Sir Teddy Taylor: It would not be in order for me to go into that, but I do not agree with the hon. Gentleman. The
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filthy protectionism of the common agricultural policy forces up the price of food by £28 a week for the average family in Britain.
Mr. Deputy Speaker: Order. I must insist that we get back to the boundaries. I have insisted on that repeatedly this afternoon and I thought that hon. Members had got the message.
Sir Teddy Taylor: You are absolutely right, Mr. Deputy Speaker. I wish that hon. Members would not raise such irrelevant points. The hon. Gentleman's argument; is rubbish. It is bad for the third world and bad for the people of Europe. I shall be glad to give the hon. Gentleman an answer outside the House, but I cannot give it here.
I ask the Minister to tell us what we will have to do on these new boundaries. I understand that the European Parliament has many buildings. It built a great building in Brussels at enormous cost, and it wants a new building in Strasbourg. It is now paying rentals of £24 million a year. Frankly, if we want these new constituencies, including South Essex, it seems that we will have to tell the French that they have lots of money to build lots of new buildings for this ridiculous Parliament. In voting for the new boundaries, we will have to decide what we want to do. Will we simply chuck out these extra six constituencies and tell the French that we will not agree to silly extra expenditure, or will we cave in, as we have done so often?
Hon. Members should bear in mind the cost of caving in to French blackmail. We did it over the GATT negotiations at great expense to the people of this country and Europe, and at great damage to the third world. It seems that if we agree to the new constituencies, we will do it only by having additional buildings which are an utter waste. Honestly, I think that our constituents are distressed about the waste, the fraud and the mismanagement of the EC.
Mr. David Winnick: Of course, the buildings are all related to these orders, which provide that MEPs can be elected in the first place. It is interesting to note that if agreement cannot be reached, as is the position at present, in what is called the European Union over where the Parliament will sit—one would have thought that agreement could easily be reached on that matter—what on earth is the possibility of reaching agreement on much more substantial matters? We are supposed to believe that the European Union is one—that it is all unanimous and the rest of it. There does not seem to be much evidence of that, even on the question of where MEPs will meet.
Sir Teddy Taylor: How right you were, Mr. Deputy Speaker, to say that I could not go into this matter, because it is out of order. On the other hand, if the hon. Gentleman looks at the basic policies he will see that the flaw of the EC is that it cannot solve problems.
All the new Members of the European Parliament whom we are sending over should bear it in mind that they are going to something where problems cannot be solved. An ideal example is the common agricultural policy, where reform after reform is talked about, but nothing happens.
My final point is that expenditure is at an all-time high, mountains are at an all-time high, and the gap between consumer prices and world prices is the highest ever recorded. My right hon. Friend the Foreign Secretary said to me that a sum of £28 a week extra per family—
Mr. Deputy Speaker: Order. I am afraid that the hon. Gentleman is testing my patience now. I must insist that he, and hon. Members who make interventions, should stay within the terms of the debate on the boundaries.
Sir Teddy Taylor: How right you are, Mr. Deputy Speaker. I have been trying hard to stick to the regulations. Unfortunately, hon. Members can ask a direct question and if one does not answer, it gives the impression that one is ignoring them. The hon. Member for Walsall, North (Mr. Winnick) attends European debates with great regularity, and I will be only too glad to speak to the hon. Gentleman and the hon. Member for Hemsworth (Mr. Enright) to clarify the matters.
My final point is important. Bearing in mind the fact that so few people bother to vote, is there any possibility that, before the regulations come into effect, a little pamphlet can be distributed which says exactly what the additional MEPs—and the existing ones—actually can do? In the progress of democracy, people can sometimes gain the impression that the European Parliament can do things which it cannot. Many people who study it carefully take the view that if it closed down tomorrow, nobody would notice apart from the taxi drivers in Strasbourg.
People ask whether anything can be done by the European Parliament about the export of live cattle—the answer is no. They ask whether the flood of legislation can be stopped—of course not, as it goes through by majority vote in the European Council.
Do we need the order at all? Why should we have extra seats just because Germany is getting more? Are we to cave in to French blackmail again, and what will that cost us? We are to send even more people to Strasbourg, Brussels or anywhere else, and the people of Britain are becoming more worried, concerned and perplexed about the EC. [Interruption.] That is particularly the case in places such as the constituency of my hon. Friend the Member for Harrow, East (Mr. Dykes), where they take a special interest in public affairs. They want to know what is going to happen, and whether it would make any difference if there was not a European Parliament at all.
5.23 pm
Mr. Geoffrey Hoon: I am delighted once again to have the opportunity to follow the hon. Member for Southend, East (Sir T. Taylor) in a debate on European matters. I wish him well in his efforts to become a candidate for the forthcoming European elections, and I am looking forward to seeing a copy of the election manifesto on which he will fight those elections. I am also looking forward to seeing how it will be possible for the Conservative party to have a manifesto that both the hon. Gentleman and the right hon. Member for Old Bexley and Sidcup (Sir E. Heath) will be comfortable with. No doubt that is a matter for the Conservative party.
The great advantage of having a fixed date for the European elections of 9 June—a date well known for a considerable time—should be certainty for the electorate. The electors should know not only the date of the election but the geographical boundary of the constituency in which they live. They should also know the candidates from whom they can choose and the number of MEPs who will represent the United Kingdom. However, even if the House agrees the order, none of those issues will be resolved.
There is a temptation—I regret that the hon. Member for Southend, East succumbed to it—to blame the French, and
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the French Government, for the present uncertainty. That assertion needs to be examined a little more closely, because the British Government are not without blame in the matter.
The issues affecting the forthcoming elections should have been resolved at the Edinburgh summit during the British presidency in December 1992. It was decided at that summit that Germany would have an extra 18 seats and that France, Italy and the United Kingdom would each have an extra six seats. In addition, however, the Government went along with the French Government's demand that Strasbourg should be recognised as a meeting place for the European Parliament in perpetuity. The British Government agreed to that demand, and that has caused the present difficulties and uncertainties.
The Prime Minister came back from the Edinburgh summit and told the House that he was entirely happy with the negotiations and with the results of the summit. In so doing, he overlooked two crucial aspects of what was decided there. He overlooked the fact that the European Parliament had consistently voted for Brussels as a meeting place. The Parliament was often led by Conservative MEPs on the issue, and they had argued strongly that Brussels should be the single meeting place for the Parliament.
Clearly, there are MEPs who support Strasbourg as a meeting place, but the majority do not; they want to meet in a single city. In so doing, the majority have accepted that there should be a new European Parliament building in Brussels. That building now operates, but on a limited basis. During 1994, it is likely that only eight half-day meetings of the full European Parliament will be in Brussels.
The Prime Minister also overlooked the fact that the existing chamber in Strasbourg is simply not large enough to accommodate the extra MEPs who will be elected. Those extra MEPs will come as a result not so much of the Edinburgh agreement as of the enlargement which is in prospect. That idea has been strongly supported by the Government.
The Government have supported the idea of Strasbourg as a permanent meeting place for the European Parliament. The proposals for the boundary changes are affected by the decisions of the French national assembly and the French Government to make life difficult for the other member states in terms of ratifying the proposals. It is right that we should ask what the Government's position is.
I asked the Minister earlier about this matter, and I appreciate his difficulties. He is a Home Office Minister, rather than a Foreign Office Minister, and I quite understand that he is reluctant to stray too far from his departmental portfolio. The Government agreed that the European Parliament should continue to meet in Strasbourg, but we heard nothing from the Minister as to where the money should come from to make that commitment a reality.
I am sure that every Conservative Member would say that the uncertainty about the present boundaries is the responsibility of the British Government, and they should sort out which boundaries will be in place by 9 June. The reality is that the British Government have gone along with the arrangement of having Strasbourg recognised as a seat of the European Parliament, and they have done so without recognising that there will be a cost.
Conservative Members have consistently criticised the European Parliament for having a number of buildings

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from which to operate, and they are right to do so. That is not of the making of the European Parliament, which would be delighted to hold meetings in the new building in Brussels. The truth is that the British Government—
Mr. Deputy Speaker: Order. This is all very interesting, but can we hear something about the boundaries?
Mr. Hoon: I will certainly stay in order, Mr. Deputy Speaker.
Even if we pass the proposals tonight, the British electorate will not know in which constituencies they will vote on 9 June. The hon. Member for Truro (Mr. Taylor) gave an illustration by referring to his European constituency. If I may, I will give a similar example in my area. The European constituency of Derbyshire and Ashfield will be divided into three different sections if we pass the order. A series of new constituencies will be created across the east midlands, and the electorate will expect to know who the candidates are. The political parties are selecting the candidates in preparation for the elections. There will be an extra constituency in the east midlands as a result of the order. At some stage, the political parties will have to select new candidates for the six extra seats across the United Kingdom. That is under way. The political parties' processes for choosing candidates are an important part of our democratic process.
The political parties undertake considerable organisation in selecting candidates. I assume that that is the case for the Conservative party. I know that it is for the Labour party. I assume that the same is true for the Liberal Democrats and other parties represented in the House. It will cause astonishing confusion among the electorate if the parties undertake the selection process only to find a few weeks before 9 June that, as a result of the difficulties with the French Government's attitude to the elections, we have to revert to the existing arrangement and the new boundaries cannot be put in place. The Government will seek to blame that on the French.
It is important that the record is set straight about the French Government. The British Government not only went along with the agreement at the time of the Edinburgh summit but positively endorsed the arrangement and urged it on other member states of the European Community. That is a relevant matter, with respect, Mr. Deputy Speaker. I appreciate that other issues relating to the constituencies are of greater concern to right hon. and hon. Members. However, who is to pay for any new building for the European Parliament is a matter that the Government cannot avoid.
I appreciate the Minister's difficulty. He represents the Home Office, which has no specific responsibility for Europe. Nevertheless, the matter affects the electorate and the House should take note of it.
5.31 pm
Mr. Rhodri Morgan: I rise to sum up the debate for the Opposition. We welcome the orders, delayed as they are and besmirched as they are by the usual examples of Government incompetence. The Government failed to send them to the Scrutiny Committee in the proper manner and to allow the usual processes to take place; that is par for the course these days.
I particularly welcome the order relating to Wales because it confers on Wales one additional seat, giving us
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five altogether. That reflects the rise in the Welsh population in the past 10 years. Wales was underrepresented under the previous distribution of seats. We had only four seats. We shall be slightly over-represented when we have five seats because we cannot have four and a half seats—it has to be one or the other.
As the Welsh population is continuing to grow rapidlly, it is likely that the over-representation will be put right. In percentage terms, the Welsh population is increasing more rapidly than that of England. By the year 2001, when the next review will take place, we shall certainly fully occupy that seat—if I can put it that way—in terms of average size. In the past 10 years, Welsh Euro-constituencies were slightly larger on average than those in England. So we are moving from under representation to slight overrepresentation for a temporary period simply because Wales is regarded as indivisible for the purpose of Euro-elections. That is why we welcome the debate.
Mr. Paul Tyler: I am listening carefully to the hon. Gentleman's argument. Obviously, the integrity of Wales is important to him; otherwise, he would presumably be prepared to accept that part of England could have gone with one of the new seats. Will he deal with the fact that, because the orders for Wales and England are taken separately, it is not possible to apply the quota in the same way in different parts of the United Kingdom? Wales has been given a different quota to that for England, and because Cornwall has been included in England for this purpose we are being unfairly treated while Wales is being generously treated. Would the hon. Gentleman care to comment on that inequality?
Mr. Morgan: Cornwall is a special case. The people of Cornwall are our Celtic cousins. Cornwall is the only non-Anglo-Saxon county in England. As a result, we feel a strong, almost uncle-nephew relationship with Cornwall. The Cornish are certainly not Welsh, but nor are they Anglo-Saxon English. We have a great deal of sympathy with Cornwall. However, we do not think that the ideas that have been floated tonight for a Cornwall and Gibraltar, West seat or some link between Cornwall and the tail end of a Welsh seat are practical. The hon. Gentleman must solve the problem within the confines of Cornwall being regarded as part of England, if not Anglo-Saxon England. It is not a problem with which I can deal.
Wales takes an interest in Europe that most of the Conservative Members who have spoken—in summing up the debate, one has to refer to them—have not been able to show. A definite anti-European theme came through in he speeches of most of the Back-Bench Conservatives who took part in the debate. It is difficult to sum up the debate without some reference to the points that they have made.
Their attitude is in complete contrast to the attitude that we in Wales have to Europe. We are anxious to promote the Wales in Europe theme, because it is important to us. We have built up links with other regions of Europe, including Catalonia, Rhône-Alpes, Lombardy and Baden-Wurttemberg. They are our strong neighbours and they can teach us a lot about industry. Those are the areas with which we want to link up by having the extra seat in the European Parliament.
We have some sympathy with the occasional point that is made by the anti-Europe Conservative Members. There is an excessive proliferation of European bodies. We have the European Parliament, the new Committee of the

839
Regions and the Economic and Social Committee. In the end, something will have to be done to sort out that excessive proliferation.
We welcome the recognition of the fact that the population of Wales is growing. The additional population is not primarily in industrial south Wales, which people think of as the most typically Welsh area. It is in the two counties of Clwyd and Dyfed which are growing more rapidly as a result of the life style there and retirement migration. That is why the additional seat is the Mid and West Wales seat. It has been taken from the four previous seats.
The hon. Member for Truro (Mr. Taylor) compared it to parts of Cornwall. The new Welsh constituency has a population of only 401,000. However, it is an extensive seat because the population is much more sparse than in Cornwall. The constituency will stretch from south of Milford Haven to the Llanrwst area, within about 20 miles of the north Wales coast. It will include two whole counties plus one additional sparsely populated area in the county of Gwynedd. It is an awkward constituency, but we look forward to fighting and winning it, to give us five out of five seats, when the new boundaries are accepted.
The third order deals with the registration of overseas voters. In the 1992 election, overseas voters had their first opportunity to participate in Westminster elections. The Conservatives in Wales have taken the principle much further. They do not merely allow overseas voters to participate in Welsh elections; they encourage them to become chairmen of our quangos. We have David Rowe-Beddoe, the chairman of Conservatives Abroad—
Mr. Deputy Speaker: Order. I do not want to hear anything whatever about quangos. I want to hear something about the boundaries of the European parliamentary constituencies.
Mr. Morgan: We are dealing with three orders. The third order relates not to boundaries but to the registration of overseas voters, to enable them to vote in the European parliamentary elections for United Kingdom constituencies. That is why the position of Mr. David Rowe-Beddoe, as the chairman of Conservatives Abroad in Monte Carlo, is relevant.
For the first time, the European Parliament, with the new constituency boundaries, will be able to remedy part of the democratic deficit. European Members of Parliament will have a voice in choosing the chairman of the European Commission—which is a Euro-quango, in a way. I see a parallel which I want to put to you, Mr. Deputy Speaker. We are remedying the democratic deficit in the giant Euro-quango in the same way as we would like to remedy the democratic deficit with respect to the proliferation of quangos in Wales.
Mr. Deputy Speaker: Order. That is all very interesting, but let us now talk about the boundaries of the European parliamentary constituencies.
Mr. Morgan: We have heard a great deal about how the bigger European Parliament needs to be incorporated in a bigger building at a cost of £200 million. The extra European Members of Parliament—we shall have one in Wales—would not have anywhere to sit if they could not go to the building in Strasbourg. The Labour party accepts
840
that, if there is to be a bigger Parliament, the logical consequence must be followed right through. That is unlike the attitude that has been displayed by the Conservatives. They are going to take part in the election, but one is never sure whether they are enthusiastic about it. The hon. Member for Southend, East (Sir T. Taylor) said that we do not want the additional six seats. The hon. Member for Worcestershire, South (Mr. Spicer) said that he did not give a damn whether it was 81 or 87. The Labour party thinks it important to have the additional six seats.
I can well imagine that, if the Germans had said that they wanted all the additional seats in the European Parliament, the Conservatives would have complained about the Germans grabbing all the sun beds and European seats. That would have been seen as not right, as well.
The Labour party does not share that hypocritical attitude. Either the Conservatives want to be part of Europe, in which case they should take part in all the boundary changes and the debate tonight in an enthusiastic way—as we are doing—or they do not. They are completely hypocritical about it. We read in The Guardian only last Saturday of the extraordinary visit to the new European Parliament building by members of the Commons-Lords hockey team. The article said:
"Some MPs turned up with young relatives or assistants including a tall blonde in her mid-twenties who was clad in jodphurs"—
Mr. Deputy Speaker: Order. We have had quite sufficient about that. Let us get back to the European boundaries.
Mr. Morgan: It was a terribly brief point about being clad in jodphurs, riding boots and hacking jacket.
I have heard about riding roughshod over Europe, but that is ridiculous. Hon. Members who took part in that visit to the European Parliament took public money, yet all they do tonight is criticise its existence. Either they—
Mr. Deputy Speaker: Order. The hon. Gentleman is trying my patience. Please get back to the European boundaries.
Mr. Cash: On a point of order, Mr. Deputy Speaker. You will have observed that hon. Members on the Front Benches have spoken at incredible length and that you have had to reprimand them—certainly the Opposition—for going away from the subject matter. Do you not believe that it would have been far better to allow some Back Benchers to get into the debate?
Mr. Deputy Speaker: I have no control over the length of speeches, but I am perfectly able to control the debate.
Mr. Morgan: The Labour party believes that the additional six seats are important because the European Parliament elections will be important. We regard it as important to fight the elections on the new boundaries with the minimum of delay, in spite of the delay that was caused by the Government's incompetence. We regard the debate tonight as important to approve the orders. We cannot thus far work out whether the Government will fight the whole campaign on "back to basics" while the European Peoples party will fight it on the basis of some other manifesto—"Vorsprung durch technik". Perhaps the Government will try to merge the two slogans into "Vorsprung durch back to basics".
We do not know whether the Government want to be part of Europe and whether their Back Benchers will be

841
willing to co-operate with the EPP. They take the money from the EPP but do not want to participate with it in its manifesto. The Labour party has an agreement in fighting the 87 seats. Certainly in terms of Wales, we will win all five of the seats.
5.42 pm
Mr. Peter Lloyd: I am sorry that some of my hon. Friends have not been able to speak, as I would have liked to hear them.
I will use the few minutes that are left to me to comment on some of the points that have been raised. I shall start with the remarks made by the hon. Member for Nottingham, North (Mr. Allen). I was grateful for his tribute to the members of the two boundary committees. They did an excellent job. They did it—as he implied slightly less generously to the Government—in a considerably shorter time than they and we would have liked, but they did it well and fairly.
In organising the new seats, we have taken about the same time as the Labour Government took in 1978. Although I said that earlier, it is worth repeating for the record. Exactly the same pressures were on us as were on them. The timetable for the constituency changes and the problems that we are facing are nothing to do with any action in the compass of the British Government, but because France has yet to ratify. One hopes that it will.
The regulations about candidates and voters from EEC countries are complicated. The directive of December 1993 contained details that we were neither expecting nor looking for, so there was a great deal of new work to take on board. The hon. Gentleman wondered whether we would ever have a truncated view again. We certainly will not under the 1993 legislation, because that was one off, as careful reading of it will show.
The hon. Member for Birmingham, Perry Barr (Mr. Rooker) hoped that there would be no more reviews of European boundaries. He was talking about proportional representation. We shall certainly have one new review of Euro constituency boundaries. As soon as the parliamentary boundaries are completed there will have to be a new review of all the European seats. Full inquiries on that will be held in the normal way.
Mr. Allen: If the French do not ratify the proposals, which now appears likely, how late can the Minister leave it before he informs people that they must fight the European elections on the old boundaries, not the new?
Mr. Lloyd: I do not accept that the French are unlikely to ratify—rather the contrary. That remains finally for them and not for me. I think that the final time comes some time in April; otherwise, there would be—I use the term again—massive inconvenience for those fighting the elections here.
Mr. Jenkin: Will my right hon. Friend take the opportunity to repudiate the comments made by the hon. Member for Perry Barr, who said that we will not have an alien voting system inflicted on this country by the institutions of the European Community? I reiterate what my right hon. Friend said in a meeting last year:
"I do not see that uniformity means adopting a system of proportional representation, and I have yet to see a good case as to the merits of the different states adopting the same procedure."
Will we continue to veto any proposals that do not match our culture in this country?
Mr. Lloyd: What my hon. Friend has just read out is certainly my view. We will of course engage in any discussions on this subject that come up in the Council of Ministers. But it would take a lot to convince me and my colleagues that any other form of election would be an improvement on first past the post.
Mr. Enright: Will the Minister give way?
Mr. Lloyd: I will not give way, because I have only about four minutes left and I want to make a couple of other points. If there is any time left, the hon. Gentleman shall have it.
The hon. Member for Nottingham, North said that he was not looking to proportional representation for these elections. He was absolutely right. I hope that he will invest his thoughts in that piece of good sense when we come back to these questions later.
I am sorry that my hon. Friend the Member for Worcestershire, South (Mr. Spicer) was unable to make all of his points, as I would have been interested to hear them.
The hon. Member for Truro (Mr. Taylor) talked about PR. He thought that, if there was proportional representation for this election, it would save time. It most certainly would not. We would have to decide on the system and who drew up the list. Would it be a United Kingdom list or a regional list? Or would it be one of the separate countries that make up the United Kingdom? There is a huge amount of discussion to be had there. It is not a missed chance at all.
The hon. Gentleman wanted a separate seat for Cornwall. Many other counties would like a conterminous seat—I know that Norfolk would—but the rule is that constituencies should have, as far as possible, equal numbers of electors.
The committees were able to take in special geographical considerations, but those do not apply to Cornwall. The problem with Cornwall having a seat of its own is that its population is too small. No brief was given to the committee. All the criteria that it should have taken into account were included in the legislation. The hon. Gentleman referred to the Highlands and Islands. That is a different matter, because the geographical considerations that do not apply to Cornwall apply in their case.
My hon. Friend the Member for Aldridge-Brownhills (Mr. Shepherd) also spoke about PR. I have mentioned that, so he will excuse me if I do not go over his remarks.
I have considerable sympathy with what the hon. Member for Perry Barr said about Gibraltar. I cannot deal with that matter in this debate. I am afraid that a decision was taken within the Community which was made part of the European Community Act on direct elections of 1976 and there is no way that we can change it without the agreement of all the other members of the Community. I know that my colleagues at the Foreign Office are extremely concerned about that matter, sympathise with what the hon. Gentleman said and certainly sympathise with the feelings of the citizens of Gibraltar.
My hon. Friend the Member for Southend, East (Sir T. Taylor) asked whether all this mattered. In the sense of whether it matters if there are 651 Members of this House rather than 640 or 655, no it does not. However, the change reflects rather more accurately than the previous arrangements the various sizes of electorates in European countries, and that is the logic and sense behind it.

843
My hon. Friend the Member for Southend, East also aked whether I had been in tough with the French Government. I am flattered that he should think that I might help be doing so, but that matter lies with the Foreign Office and I am not able to intervene.
My hon. Friend also wanted to know what the job of a Member of the European Parliament entails. He is applying for a Euro-seat, and I wish him the best of luck. When he has been there a little while. Perhaps he will come here with all the authority of a MEP and tell us the answer to his question
The hon. Member for Ashfield (Mr. Hoon) referred to the positioning of the European Parliament and to where it should meet. There are three sites. The British Government regret the inconvenience and expense and would like a sensible resolution, but they knwothat matter will be resolved only through unanimity—as the hon. Gentleman knows—and they do not expect that in the near future, although they will work for it.
The hon. Member for Cardiff, West (Mr. Morgan) replied for the Opposition. I am glad that he is pleased that Wales for an extra seat—
It being two hours after the commercemnt of proceedings on the motion, MR. DEPUTY SPEAKER put the Question pursuant to Order [11 February].
The House divided:Ayes 368, Noes 71.

Division No. 124]

[5.51 pm

AYES

Ainsworth, Peter (East Surrey)

Brazier, Julian

Aitken, Jonathan

Bright, Graham

Alison, Rt Hon Michael (Selby)

Brooke, Rt Hon Peter

Allason, Rupert (Torbay)

Brown, M. (Brigg & Cl'thorpes)

Allen, Graham

Browning, Mrs. Angela

Amess, David

Bruce, Ian (S Dorset)

Anderson, Donald (Swansea E)

Budgen, Nicholas

Anderson, Ms Janet (Ros'dale)

Burns, Simon

Arbuthnot, James

Burt, Alistair

Arnold, Jacques (Gravesham)

Butcher, John

Arnold, Sir Thomas (Hazel Grv)

Butler, Peter

Ashby, David

Butterfill, John

Ashton, Joe

Campbell, Mrs Anne (C'bridge)

Aspinwall, Jack

Campbell-Savours, D. N.

Atkins, Robert

Carlisle, John (Luton North)

Atkinson, David (Bour'mouth E)

Carlisle, Kenneth (Lincoln)

Atkinson, Peter (Hexham)

Carrington, Matthew

Baker, Nicholas (Dorset North)

Cash, William

Baldry, Tony

Channon, Rt Hon Paul

Banks, Matthew (Southport)

Churchill, Mr

Banks, Robert (Harrogate)

Clappison, James

Barron, Kevin

Clarke, Rt Hon Kenneth (Ruclif)

Bates, Michael

Clifton-Brown, Geoffrey

Batiste, Spencer

Coe, Sebastian

Battle, John

Colvin, Michael

Bellingham, Henry

Congdon, David

Benton, Joe

Conway, Derek

Beresford, Sir Paul

Cook, Robin (Livingston)

Bermingham, Gerald

Coombs, Anthony (Wyre For'st)

Betts, Clive

Coombs, Simon (Swindon)

Biffen, Rt Hon John

Cope, Rt Hon Sir John

Blackburn, Dr John G.

Cormack, Patrick

Blair, Tony

Couchman, James

Bonsor, Sir Nicholas

Cran, James

Booth, Hartley

Cunliffe, Lawrence

Boswell, Tim

Cunningham, Rt Hon Dr John

Bottomley, Peter (Eltham)

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

Bottomley, Rt Hon Virginia

Curry, David (Skipton & Ripon)

Bowden, Andrew

Darling, Alistair

Bowis, John

Davies, Bryan (Oldham C'tral)

Boyes, Roland

Davies, Quentin (Stamford)

Boyson, Rt Hon Sir Rhodes

Davies, Ron (Caerphilly)

Brandreth, Gyles

Davis, David (Boothfeny)

844

Day, Stephen

Howard, Rt Hon Michael

Deva, Nirj Joseph

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

Dicks, Terry

Howarth, George (KnowsleyN)

Dorrell, Stephen

Howell, Rt Hon David (G'dford)

Douglas-Hamilton, Lord James

Howell, Sir Ralph (N Norfolk)

Dover, Den

Howells, Dr. Kim (Pontypridd)

Dowd, Jim

Hughes Robert G. (Harrow W)

Duncan, Alan

Hughes, Roy (Newport E)

Duncan-Smith, Iain

Hunt, Rt Hon David (Wirral W)

Dunn, Bob

Hunt, Sir John (Ravensbourne)

Durant, Sir Anthony

Hunter, Andrew

Dykes, Hugh

Hutton, John

Eggar, Tim

Illsley, Eric

Elletson, Harold

Jack, Michael

Emery, Rt Hon Sir Peter

Jackson, Robert (Wantage)

Enright, Derek

Janner, Greville

Evans, David (Welwyn Hatfield)

Jenkin, Bernard

Evans, John (St Helens N)

Jessel, Toby

Evans, Jonathan (Brecon)

Johnson Smith, Sir Geoffrey

Evans, Nigel (Ribble Valley)

Jones, Barry (Alyn and D'side)

Evans, Roger (Monmouth)

Jones, Gwilym (Cardiff N)

Evennett, David

Jones, Jon Owen (Cardiff C)

Faber, David

Jones, Robert B. (W Hertfdshr)

Fabricant, Michael

Jopling, Rt Hon Michael

Fatchett, Derek

Kellett-Bowman, Dame Elaine

Field, Barry (Isle of Wight)

Key, Robert

Fishburn, Dudley

Kilfedder, Sir James

Flynn, Paul

Kilfoyle, Peter

Forman, Nigel

King, Rt Hon Tom

Forsyth, Michael (Stirling)

Kinnock, Rt Hon Neil (Islwyn)

Forth, Eric

Kirkhope, Timothy

Fox, Dr Liam (Woodspring)

Knapman, Roger

Fox, Sir Marcus (Shipley)

Knight, Mrs Angela (Erewash)

Freeman, Rt Hon Roger

Knight, Greg (Derby N)

French, Douglas

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

Fry, Sir Peter

Knox, Sir David

Fyfe, Maria

Kynoch, George (Kincardine)

Gale, Roger

Lait, Mrs Jacqui

Gallie, Phil

Lang, Rt Hon Ian

Gardiner, Sir George

Lawrence, Sir Ivan

Garrett, John

Legg, Barry

Gill, Christopher

Leigh, Edward

Gillan, Cheryl

Lennox-Boyd, Mark

Goodlad, Rt Hon Alastair

Lidington, David

Goodson-Wickes, Dr Charles

Lightbown, David

Gorman, Mrs Teresa

Lilley, Rt Hon Peter

Gorst, John

Lloyd, Rt Hon Peter (Fareham)

Grant, Sir A. (Cambs SW)

Lord, Michael

Greenway, Harry (Ealing N)

Luff, Peter

Greenway, John (Ryedale)

Lyell, Rt Hon Sir Nicholas

Griffiths, Peter (Portsmouth, N)

McAvoy, Thomas

Griffiths, Win (Bridgend)

McCartney, Ian

Grocott, Bruce

McFall, John

Grylls, Sir Michael

MacGregor, Rt Hon John

Gummer, Rt Hon John Selwyn

MacKay, Andrew

Gunnell, John

Mackinlay, Andrew

Hague, William

Maclean, David

Hamilton, Rt Hon Sir Archie

McLoughlin, Patrick

Hamilton, Neil (Tatton)

McWilliam, John

Hampson, Dr Keith

Madel, Sir David

Hannam, Sir John

Maitland, Lady Olga

Hanson, David

Malone, Gerald

Harris, David

Mans, Keith

Haselhurst, Alan

Marek, Dr John

Hawkins, Nick

Marland, Paul

Hawksley, Warren

Marlow, Tony

Hayes, Jerry

Marshall, John (Hendon S)

Heald, Oliver

Martin, David (Portsmouth S)

Heath, Rt Hon Sir Edward

Martin, Michael J. (Springburn)

Heathcoat-Amory, David

Mates, Michael

Hendry, Charles

Mawhinney, Rt Hon Dr Brian

Hicks, Robert

Meale, Alan

Higgins, Rt Hon Sir Terence L.

Michael, Alun

Hill, James (Southampton Test)

Michie, Bill (Sheffield Heeley)

Hill, Keith (Streatham)

Mills, Iain

Hinchliffe, David

Mitchell, Andrew (Gedling)

Hogg, Rt Hon Douglas (G'tham)

Molyneaux, Rt Hon James

Hoon, Geoffrey

Monro, Sir Hector

Horam, John

Montgomery, Sir Fergus

Hordern, Rt Hon Sir Peter

Morgan, Rhodri

845

Morris, Estelle (B'ham Yardley)

Spicer, Sir James (W Dorset)

Moss, Malcolm

Spicer, Michael (S Worcs)

Mudie, George

Spring, Richard

Mullin, Chris

Sproat, Iain

Murphy, Paul

Stanley, Rt Hon Sir John

Needham, Richard

Steen, Anthony

Nelson, Anthony

Stephen, Michael

Neubert, Sir Michael

Stern, Michael

Newton, Rt Hon Tony

Stewart, Allan

Nicholls, Patrick

Stott, Roger

Nicholson, David (Taunton)

Strang, Dr. Gavin

Nicholson, Emma (Devon West)

Streeter, Gary

Norris, Steve

Sumberg, David

O'Hara, Edward

Sweeney, Walter

Onslow, Rt Hon Sir Cranley

Sykes, John

Oppenheim, Phillip

Tapsell, Sir Peter

Ottaway, Richard

Taylor, Mrs Ann (Dewsbury)

Page, Richard

Taylor, Ian (Esher)

Paice, James

Taylor, John M. (Solihull)

Parry, Robert

Taylor, Sir Teddy (Southend, E)

Patchett, Terry

Temple-Morris, Peter

Patnick, Irvine

Thomason, Roy

Pattie, Rt Hon Sir Geoffrey

Thompson, Sir Donald (C'er V)

Pawsey, James

Thompson, Jack (Wansbeck)

Peacock, Mrs Elizabeth

Thompson, Patrick (Norwich N)

Pendry, Tom

Thornton, Sir Malcolm

Pickles, Eric

Thurnham, Peter

Porter, David (Waveney)

Townend, John (Bridlington)

Portillo, Rt Hon Michael

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

Powell, William (Corby)

Tracey, Richard

Quin, Ms Joyce

Trend, Michael

Radice, Giles

Trimble, David

Rathbone, Tim

Trotter, Neville

Raynsford, Nick

Turner, Dennis

Redwood, Rt Hon John

Twinn, Dr Ian

Renton, Rt Hon Tim

Vaughan, Sir Gerard

Richards, Rod

Viggers, Peter

Riddick, Graham

Waldegrave, Rt Hon William

Rifkind, Rt Hon. Malcolm

Walden, George

Robathan, Andrew

Walker, Bill (N Tayside)

Roberts, Rt Hon Sir Wyn

Waller, Gary

Robertson, Raymond (Ab'd'n S)

Ward, John

Robinson, Mark (Somerton)

Wardle, Charles (Bexhill)

Roche, Mrs. Barbara

Waterson, Nigel

Roe, Mrs Marion (Broxbourne)

Watts, John

Rooker, Jeff

Wells, Bowen

Rowe, Andrew (Mid Kent)

Wheeler, Rt Hon Sir John

Rumbold, Rt Hon Dame Angela

Whitney, Ray

Ryder, Rt Hon Richard

Whittingdale, John

Sackville, Tom

Wicks, Malcolm

Sainsbury, Rt Hon Tim

Widdecombe, Ann

Scott, Rt Hon Nicholas

Wiggin, Sir Jerry

Sedgemore, Brian

Willetts, David

Shaw, David (Dover)

Wilshire, David

Shaw, Sir Giles (Pudsey)

Wolfson, Mark

Shepherd, Richard (Aldridge)

Worthington, Tony

Shersby, Michael

Yeo.Tim

Sims, Roger

Young, David (Bolton SE)

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

Young, Rt Hon Sir George

Smith, Sir Dudley (Warwick)

Smith, Tim (Beaconsfield)

Tellers for the Ayes:

Soames, Nicholas

Mr. Sydney Chapman and Mr. Timothy Wood.

Speed, Sir Keith

NOES

Ainsworth, Robert (Cov'try NE)

Cook, Frank (Stockton N)

Alton, David

Cryer, Bob

Anderson, Donald (Swansea E)

Cummings, John

Ashdown, Rt Hon Paddy

Cunningham, Jim (Covy SE)

Barnes, Harry

Davidson, Ian

Beith, Rt Hon A. J.

Davies, Rt Hon Denzil (Llanelli)

Bennett, Andrew F.

Dixon, Don

Bruce, Malcolm (Gordon)

Donohoe, Brian H.

Callaghan, Jim

Etherington, Bill

Campbell, Menzies (Fife NE)

Foster, Don (Bath)

Campbell, Ronnie (Blyth V)

Godman, Dr Norman A.

Carlile, Alexander (Montgomry)

Gordon, Mildred

Clapham, Michael

Graham, Thomas

Cohen, Harry

Harvey, Nick

Connarty, Michael

Hughes, Kevin (Doncaster N)

846

Hughes, Simon (Southwark)

Orme, Rt Hon Stanley

Jackson, Glenda (H'stead)

Parry, Robert

Jones, Ieuan Wyn (Ynys Môn)

Prentice, Gordon (Pendle)

Jones, Nigel (Cheltenham)

Redmond, Martin

Kennedy, Charles (Ross.C&S)

Rendel, David

Kirkwood, Archy

Rooney, Terry

Leighton, Ron

Shore, Rt Hon Peter

Lewis, Terry

Simpson, Alan

Litherland, Robert

Skinner, Dennis

Livingstone, Ken

Soley, Clive

Loyden, Eddie

Steinberg, Gerry

Lynne, Ms Liz

Wallace, James

McAllion, John

Welsh, Andrew

McKelvey, William

Wigley, Dafydd

Maclennan, Robert

Winnick, David

Madden, Max

Wise, Audrey

Maddock, Mrs Diana

Wray, Jimmy

Mahon, Alice

Wright, Dr Tony

Marshall, David (Shettleston)

Marshall, Jim (Leicester, S)

Tellers for the Noes:

Michie, Mrs Ray (Argyll Bute)

Mr. Matthew Taylor and Mr. Paul Tyler.

Mitchell, Austin (Gt Grimsby)

Olner, William

Question accordingly agreed to.
Resolved,
That the draft European Parliamentary Constituencies (England) Order 1994, which was laid before this House on 20th January, be approved.
MR. DEPUTY SPEAKER then put the Questions necessary to dispose of proceedings on the other motions.
Motion made, and Question put forthwith,
That the draft European Parliamentary Constituencies (Wales) Order 1994, which was laid before this House on 20th January, be approved.—[Mr. Peter Lloyd.]
The House divided: Ayes 365, Noes 28.

Division No. 125]

[6.06 pm

AYES

Ainsworth, Peter (East Surrey)

Brandreth, Gyles

Ainsworth, Robert (Cov'try NE)

Brazier, Julian

Aitken, Jonathan

Bright, Graham

Alexander, Richard

Brooke, Rt Hon Peter

Alison, Rt Hon Michael (Selby)

Brown, M. (Brigg & Cl'thorpes)

Allason, Rupert (Torbay)

Browning, Mrs. Angela

Allen, Graham

Bruce, Ian (S Dorset)

Amess, David

Burns, Simon

Arbuthnot, James

Burt, Alistair

Arnold, Jacques (Gravesham)

Butcher, John

Arnold, Sir Thomas (Hazel Grv)

Butler, Peter

Ashby, David

Butterfill, John

Ashton, Joe

Campbell, Mrs Anne (C'bridge)

Aspinwall, Jack

Campbell-Savours, D. N.

Atkins, Robert

Carlisle, Kenneth (Lincoln)

Atkinson, David (Bour'mouth E)

Carrington, Matthew

Atkinson, Peter (Hexham)

Channon, Rt Hon Paul

Baker, Nicholas (Dorset North)

Churchill, Mr

Baldry, Tony

Clappison, James

Banks, Matthew (Southport)

Clark, Dr Michael (Rochford)

Banks, Robert (Harrogate)

Clarke, Rt Hon Kenneth (Ruclif)

Bates, Michael

Clifton-Brown, Geoffrey

Batiste, Spencer

Coe, Sebastian

Beggs, Roy

Colvin, Michael

Bellingham, Henry

Congdon, David

Benton, Joe

Conway, Derek

Beresford, Sir Paul

Cook, Robin (Livingston)

Betts, Clive

Coombs, Anthony (Wyre For'st)

Biffen, Rt Hon John

Coombs, Simon (Swindon)

Blackburn, DrJohnG.

Cope, Rt Hon Sir John

Blair, Tony

Cormack, Patrick

Bonsor, Sir Nicholas

Corston, Ms Jean

Booth, Hartley

Couchman, James

Boswell, Tim

Cousins, Jim

Bottomley, Peter (Eltham)

Cox, Tom

Bottomley, Rt Hon Virginia

Cran, James

Bowden, Andrew

Cunningham, Jim (Covy SE)

Bowis, John

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

Boyes, Roland

Curry, David (Skipton & Ripon)

Boyson, Rt Hon Sir Rhodes

Darling, Alistair

847

Davies, Bryan (Oldham C'tral)

Hoon, Geoffrey

Davies, Quentin (Stamford)

Horam, John

Davis, David (Boothferry)

Hordern, Rt Hon Sir Peter

Day, Stephen

Howard, Rt Hon Michael

Deva, Nirj Joseph

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

Dicks, Terry

Howell, Rt Hon David (G'dford)

Donohoe, Brian H.

Howell, Sir Ralph (N Norfolk)

Dorrell, Stephen

Hughes Robert G. (Harrow W)

Douglas-Hamilton, Lord James

Hughes, Roy (Newport E)

Dover, Den

Hunt, Rt Hon David (Wirral W)

Dowd, Jim

Hunt, Sir John (Ravensbourne)

Duncan, Alan

Hunter, Andrew

Duncan-Smith, Iain

Illsley, Eric

Dykes, Hugh

Jack, Michael

Eggar, Tim

Jackson, Glenda (H'stead)

Elletson, Harold

Jackson, Robert (Wantage)

Emery, Rt Hon Sir Peter

Jenkin, Bernard

Enright, Derek

Jessel, Toby

Evans, John (St Helens N)

Johnson Smith, Sir Geoffrey

Evans, Jonathan (Brecon)

Jones, Barry (Alyn and D'side)

Evans, Nigel (Ribble Valley)

Jones, Gwilym (Cardiff N)

Evans, Roger (Monmouth)

Jones, Ieuan Wyn (Ynys Môn)

Evennett, David

Jones, Jon Owen (Cardiff C)

Faber, David

Jones, Martyn (Clwyd, SW)

Fabricant, Michael

Jones, Robert B. (W Hertfdshr)

Fatchett, Derek

Jopling, Rt Hon Michael

Fishburn, Dudley

Kellett-Bowman, Dame Elaine

Flynn, Paul

Key, Robert

Forman, Nigel

Kilfedder, Sir James

Forsyth, Michael (Stirling)

Kilfoyle, Peter

Forth, Eric

King, Rt Hon Tom

Fox, Dr Liam (Woodspring)

Kirkhope, Timothy

Fraser, John

Knapman, Roger

Freeman, Rt Hon Roger

Knight, Mrs Angela (Erewash)

French, Douglas

Knight, Greg (Derby N)

Fry, Sir Peter

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

Fyfe, Maria

Knox, Sir David

Gale, Roger

Kynoch, George (Kincardine)

Gallie, Phil

Lait, Mrs Jacqui

Gardiner, Sir George

Lang, Rt Hon Ian

Garnier, Edward

Lawrence, Sir Ivan

Garrett, John

Legg, Barry

Gill, Christopher

Leigh, Edward

Gillan, Cheryl

Lennox-Boyd, Mark

Godman, Dr Norman A.

Lester, Jim (Broxtowe)

Goodlad, Rt Hon Alastair

Lidington, David

Goodson-Wickes, Dr Charles

Lightbown, David

Gordon, Mildred

Lilley, Rt Hon Peter

Gorman, Mrs Teresa

Lloyd, Rt Hon Peter (Fareham)

Gorst, John

Lord, Michael

Grant, Sir A. (Cambs SW)

Luff, Peter

Greenway, Harry (Ealing N)

Lyell, Rt Hon Sir Nicholas

Greenway, John (Ryedale)

McAvoy, Thomas

Griffiths, Peter (Portsmouth, N)

McCartney, Ian

Griffiths, Win (Bridgend)

Macdonald, Calum

Grocott, Bruce

McFall, John

Gummer, Rt Hon John Selwyn

MacGregor, Rt Hon John

Gunnell, John

MacKay, Andrew

Hague, William

McKelvey, William

Hall, Mike

Mackinlay, Andrew

Hamilton, Rt Hon Sir Archie

Maclean, David

Hamilton, Neil (Tatton)

McLoughlin, Patrick

Hampson, Dr Keith

Madel, Sir David

Hannam, Sir John

Maitland, Lady Olga

Hanson, David

Malone, Gerald

Hargreaves, Andrew

Mans, Keith

Harris, David

Marek, Dr John

Haselhurst, Alan

Marland, Paul

Hawkins, Nick

Marlow, Tony

Hawksley, Warren

Marshall, John (Hendon S)

Hayes, Jerry

Martin, David (Portsmouth S)

Heald, Oliver

Martin, Michael J. (Springburn)

Heath, Rt Hon Sir Edward

Martlew, Eric

Hendry, Charles

Mates, Michael

Hicks, Robert

Mawhinney, Rt Hon Dr Brian

Higgins, Rt Hon Sir Terence L.

Meale, Alan

Hill, James (Southampton Test)

Merchant, Piers

Hill, Keith (Streatham)

Michael, Alun

Hinchliffe, David

Milburn, Alan

Hogg, Rt Hon Douglas (G'tham)

Mills, Iain

848

Mitchell, Andrew (Gedling)

Speed, Sir Keith

Moate, Sir Roger

Spicer, Sir James (W Dorset)

Molyneaux, Rt Hon James

Spicer, Michael (S Worcs)

Monro, Sir Hector

Spink, Dr Robert

Montgomery, Sir Fergus

Spring, Richard

Morgan, Rhodri

Sproat, Iain

Morley, Elliot

Stanley, Rt Hon Sir John

Moss, Malcolm

Steen, Anthony

Murphy, Paul

Stephen, Michael

Needham, Richard

Stern, Michael

Nelson, Anthony

Stewart, Allan

Neubert, Sir Michael

Strang, Dr. Gavin

Newton, Rt Hon Tony

Streeter, Gary

Nicholls, Patrick

Sumberg, David

Nicholson, David (Taunton)

Sweeney, Walter

Nicholson, Emma (Devon West)

Sykes, John

Norris, Steve

Taylor, Mrs Ann (Dewsbury)

O'Brien, Michael (N W'kshire)

Taylor, Ian (Esher)

Onslow, Rt Hon Sir Cranley

Taylor, John M. (Solihull)

Oppenheim, Phillip

Taylor, Sir Teddy (Southend, E)

Ottaway, Richard

Temple-Morris, Peter

Page, Richard

Thomason, Roy

Paice, James

Thompson, Sir Donald (C'er V)

Patchett, Terry

Thompson, Jack (Wansbeck)

Patnick, Irvine

Thompson, Patrick (Norwich N)

Patten, Rt Hon John

Thornton, Sir Malcolm

Pattie, Rt Hon Sir Geoffrey

Thurnham, Peter

Pawsey, James

Townend, John (Bridlington)

Peacock, Mrs Elizabeth

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

Pickles, Eric

Tracey, Richard

Porter, David (Waveney)

Trend, Michael

Portillo, Rt Hon Michael

Trimble, David

Powell, William (Corby)

Trotter, Neville

Quin, Ms Joyce

Turner, Dennis

Rathbone, Tim

Twinn, Dr Ian

Raynsford, Nick

Vaughan, Sir Gerard

Redwood, Rt Hon John

Viggers, Peter

Renton, Rt Hon Tim

Waldegrave, Rt Hon William

Richards, Rod

Walden, George

Riddick, Graham

Walker, Bill (N Tayside)

Rifkind, Rt Hon. Malcolm

Waller, Gary

Robathan, Andrew

Ward, John

Roberts, Rt Hon Sir Wyn

Wardle, Charles (Bexhill)

Robertson, Raymond (Ab'd'n S)

Waterson, Nigel

Robinson, Marie (Somerton)

Watts, John

Roche, Mrs. Barbara

Wells, Bowen

Roe, Mrs Marion (Broxbourne)

Wheeler, Rt Hon Sir John

Rooker, Jeff

Whitney, Ray

Rowe, Andrew (Mid Kent)

Whittingdale, John

Rumbold, Rt Hon Dame Angela

Wicks, Malcolm

Ryder, Rt Hon Richard

Widdecombe, Ann

Sackville, Tom

Wiggin, Sir Jerry

Sainsbury, Rt Hon Tim

Wigley, Dafydd

Scott, Rt Hon Nicholas

Willetts, David

Sedgemore, Brian

Williams, Alan W (Carmarthen)

Shaw, David (Dover)

Wilshire, David

Shaw, Sir Giles (Pudsey)

Wolfson, Mark

Shepherd, Richard (Aldridge)

Wright, Dr Tony

Shersby, Michael

Yeo, Tim

Sims, Roger

Young, Rt Hon Sir George

Skeet, Sir Trevor

Smith, Sir Dudley (Warwick)

Tellers for the Ayes:

Smith, Tim (Beaconsfield)

Mr. Sydney Chapman and Mr. Timothy Wood.

Smyth, Rev Martin (Belfast S)

Soames, Nicholas

NOES

Barnes, Harry

Livingstone, Ken

Campbell, Ronnie (Blyth V)

Loyden, Eddie

Clapham, Michael

McAllion, John

Connarty, Michael

Mahon, Alice

Cummings, John

Marshall, David (Shettleston)

Cunliffe, Lawrence

Marshall, Jim (Leicester, S)

Dalyell, Tam

Mitchell, Austin (Gt Grimsby)

Davidson, Ian

Olner, William

Davies, Rt Hon Denzil (Llanelli)

Parry, Robert

Dixon, Don

Redmond, Martin

Etherington, Bill

Rooney, Terry

Hughes, Kevin (DoncasterN)

Simpson, Alan

Lewis, Terry

Skinner, Dennis

849

Steinberg, Gerry

Tellers for the Noes:

Wise, Audrey

Mr. Bob Cryer and Mr. Andrew Bennett

Question accordingly agreed to.
Motion made, and Question put forthwith,
That the draft European Parliamentary Elections (Changes to the Franchise and Qualifications of Representatives) Regulations 1994, which were laid before this House on 2nd February, be approved.—[Mr. Peter Lloyd.]
The House divided: Ayes 364, Noes 45.

Division No. 126]

[6.18 pm

AYES

Ainsworth, Peter (East Surrey)

Conway, Derek

Aitken, Jonathan

Cook, Robin (Livingston)

Alexander, Richard

Coombs, Anthony (Wyre For'st)

Alison, Rt Hon Michael (Selby)

Coombs, Simon (Swindon)

Allason, Rupert (Torbay)

Cope, Rt Hon Sir John

Allen, Graham

Cormack, Patrick

Alton, David

Couchman, James

Amess, David

Cousins, Jim

Arbuthnot, James

Cox, Tom

Arnold, Jacques (Gravesham)

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

Arnold, Sir Thomas (Hazel Grv)

Curry, David (Skipton & Ripon)

Ashby, David

Dalyell, Tam

Ashton, Joe

Darling, Alistair

Aspinwall, Jack

Davies, Bryan (Oldham C'tral)

Atkins, Robert

Davies, Quentin (Stamford)

Atkinson, David (Bour'mouth E)

Davis, David (Boothferry)

Atkinson, Peter (Hexham)

Day, Stephen

Baker, Nicholas (Dorset North)

Deva, Nirj Joseph

Baldry, Tony

Dicks, Terry

Banks, Matthew (Southport)

Donohoe, Brian H.

Banks, Robert (Harrogate)

Dorrell, Stephen

Bates, Michael

Douglas-Hamilton, Lord James

Batiste, Spencer

Dover, Den

Beith, Rt Hon A. J.

Dowd, Jim

Bell, Stuart

Duncan, Alan

Bellingham, Henry

Duncan-Smith, Iain

Bendall, Vivian

Dunn, Bob

Benton, Joe

Durant, Sir Anthony

Beresford, Sir Paul

Dykes, Hugh

Betts, Clive

Eggar, Tim

Biffen, Rt Hon John

Elletson, Harold

Blair, Tony

Emery, Rt Hon Sir Peter

Bonsor, Sir Nicholas

Enright, Derek

Booth, Hartley

Evans, John (St Helens N)

Boswell, Tim

Evans, Jonathan (Brecon)

Bottomley, Peter (Eltham)

Evans, Nigel (Ribble Valley)

Bottomley, Rt Hon Virginia

Evans, Roger (Monmouth)

Bowden, Andrew

Evennett, David

Bowis, John

Faber, David

Boyson, Rt Hon Sir Rhodes

Fabricant, Michael

Brandreth, Gyles

Fatchett, Derek

Brazier, Julian

Fishbum, Dudley

Bright, Graham

Flynn, Paul

Brooke, Rt Hon Peter

Forman, Nigel

Brown, M. (Brigg & Cl'thorpes)

Forsyth, Michael (Stirling)

Browning, Mrs. Angela

Forth, Eric

Bruce, Ian (S Dorset)

Foster, Don (Bath)

Bruce, Malcolm (Gordon)

Fox, Dr Liam (Woodspring)

Burns, Simon

Freeman, Rt Hon Roger

Burt, Alistair

French, Douglas

Butcher, John

Fry, Sir Peter

Butler, Peter

Fyfe, Maria

Butterfill, John

Gale, Roger

Campbell, Mrs Anne (C'bridge)

Gallie, Phil

Campbell, Menzies (Fife NE)

Gardiner, Sir George

Campbell-Savours, D. N.

Garnier, Edward

Carlisle, Kenneth (Lincoln)

Garrett, John

Carrington, Matthew

Gillan, Cheryl

Channon, Rt Hon Paul

Goodlad, Rt Hon Alastair

Clappison, James

Goodson-Wickes, Dr Charles

Clark, Dr Michael (Rochford)

Gorman, Mrs Teresa

Clarke, Rt Hon Kenneth (Ruclif)

Gorst, John

Clifton-Brown, Geoffrey

Grant, Sir A. (Cambs SW)

Coe, Sebastian

Greenway, Harry (Ealing N)

Congdon, David

Greenway, John (Ryedale)

850

Griffiths, Peter (Portsmouth, N)

Lightbown, David

Griffiths, Win (Bridgend)

Lilley, Rt Hon Peter

Grocott, Bruce

Lloyd, Rt Hon Peter (Fareham)

Grylls, Sir Michael

Lord, Michael

Gummer, Rt Hon John Selwyn

Luff, Peter

Gunnell, John

Lyell, Rt Hon Sir Nicholas

Hague, William

Lynne, Ms Liz

Hall, Mike

McAvoy, Thomas

Hamilton, Rt Hon Sir Archie

Macdonald, Calum

Hamilton, Neil (Tatton)

McFall, John

Hampson, Dr Keith

MacGregor, Rt Hon John

Hannam, Sir John

MacKay, Andrew

Hanson, David

Mackinlay, Andrew

Hargreaves, Andrew

Maclean, David

Harman, Ms Harriet

Maclennan, Robert

Harris, David

McLoughlin, Patrick

Haselhurst, Alan

McMaster, Gordon

Hawkins, Nick

Maddock, Mrs Diana

Hawksley, Warren

Madel, Sir David

Hayes, Jerry

Maitland, Lady Olga

Heald, Oliver

Malone, Gerald

Heath, Rt Hon Sir Edward

Mans, Keith

Heathcoat-Amory, David

Marek, Dr John

Hendry, Charles

Mariand, Paul

Hicks, Robert

Marshall, John (Hendon S)

Higgins, Rt Hon Sir Terence L.

Martin, David (Portsmouth S)

Hill, James (Southampton Test)

Martlew, Eric

Hill, Keith (Streatham)

Mates, Michael

Hinchliffe, David

Mawhinney, Rt Hon Dr Brian

Hogg, Rt Hon Douglas (G'tham)

Merchant, Piers

Hoon, Geoffrey

Michael, Alun

Horam, John

Michie, Mrs Ray (Argyll Bute)

Hordern, Rt Hon Sir Peter

Milburn, Alan

Howard, Rt Hon Michael

Mitchell, Andrew (Gedling)

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

Moate, Sir Roger

Howell, Rt Hon David (G'dford)

Monro, Sir Hector

Howell, Sir Ralph (N Norfolk)

Montgomery, Sir Fergus

Hughes Robert G. (Harrow W)

Morgan, Rhodri

Hughes, Roy (Newport E)

Moss, Malcolm

Hughes, Simon (Southwark)

Needham, Richard

Hunt, Rt Hon David (Wirral W)

Nelson, Anthony

Hunt, Sir John (Ravensbourne)

Neubert, Sir Michael

Hunter, Andrew

Newton, Rt Hon Tony

Hutton, John

Nicholls, Patrick

Illsley, Eric

Nicholson, David (Taunton)

Jack, Michael

Nicholson, Emma (Devon West)

Jackson, Glenda (H'stead)

Norris, Steve

Jackson, Robert (Wantage)

Onslow, Rt Hon Sir Cranley

Jenkin, Bernard

Oppenheim, Phillip

Jessel, Toby

Ottaway, Richard

Johnson Smith, Sir Geoffrey

Page, Richard

Jones, Barry (Alyn and D'side)

Paice, James

Jones, Gwilym (Cardiff N)

Patnick, Irvine

Jones, leuan Wyn (Ynys Môn)

Patten, Rt Hon John

Jones, Jon Owen (Cardiff C)

Pattie, Rt Hon Sir Geoffrey

Jones, Nigel (Cheltenham)

Pawsey, James

Jones, Robert B. (W Hertfdshr)

Peacock, Mrs Elizabeth

Jopling, Rt Hon Michael

Pickles, Eric

Kellett-Bowman, Dame Elaine

Porter, David (Waveney)

Kennedy, Charles (Ross,C&S)

Portillo, Rt Hon Michael

Key, Robert

Powell, William (Corby)

Khabra, Piara S.

Purchase, Ken

Kilfedder, Sir James

Quin, Ms Joyce

Kilfoyle, Peter

Rathbone, Tim

King, Rt Hon Tom

Raynsford, Nick

Kirkhope, Timothy

Redwood, Rt Hon John

Kirkwood, Archy

Rendel, David

Knight, Mrs Angela (Erewash)

Renton, Rt Hon Tim

Knight, Greg (Derby N)

Richards, Rod

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

Riddick, Graham

Knox, Sir David

Rifkind, Rt Hon. Malcolm

Kynoch, George (Kincardine)

Robathan, Andrew

Lait, Mrs Jacqui

Roberts, Rt Hon Sir Wyn

Lang, Rt Hon Ian

Robertson, Raymond (Ab'd'n S)

Lawrence, Sir Ivan

Robinson, Mark (Somerton)

Legg, Barry

Roche, Mrs. Barbara

Leigh, Edward

Roe, Mrs Marion (Broxbourne)

Lennox-Boyd, Mark

Rooker, Jeff

Lester, Jim (Broxtowe)

Rowe, Andrew (Mid Kent)

Lidington, David

Rumbold, Rt Hon Dame Angela

851

Ryder, Rf Hon Richard

Townend, John (Bridlington)

Sackville, Tom

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

Sainsbury, Rt Hon Tim

Tracey, Richard

Scott, Rt Hon Nicholas

Trend, Michael

Sedgemore, Brian

Trotter, Neville

Shaw, David (Dover)

Turner, Dennis

Shaw, Sir Giles (Pudsey)

Twinn, Dr Ian

Shersby, Michael

Tyler, Paul

Sims, Roger

Vaughan, Sir Gerard

Skeet, Sir Trevor

Viggers, Peter

Smith, Sir Dudley (Warwick)

Waldegrave, Rt Hon William

Smith, Tim (Beaconsfield)

Walden, George

Soames, Nicholas

Walker, Bill (N Tayside)

Speed, Sir Keith

Wallace, James

Spicer, Sir James (W Dorset)

Waller, Gary

Spicer, Michael (S Worcs)

Ward, John

Spink, Dr Robert

Wardle, Charles (Bexhill)

Spring, Richard

Waterson, Nigel

Sproat, Iain

Watts, John

Stanley, Rt Hon Sir John

Wells, Bowen

Steen, Anthony

Welsh, Andrew

Stephen, Michael

Wheeler, Rt Hon Sir John

Stern, Michael

Whitney, Ray

Stewart, Allan

Whittingdale, John

Strang, Dr. Gavin

Wicks, Malcolm

Streeter, Gary

Widdecombe, Ann

Sumberg, David

Wiggin, Sir Jerry

Sweeney, Walter

Wigley, Dafydd

Sykes, John

Willetts, David

Taylor, Ian (Esher)

Williams, Alan W (Carmarthen)

Taylor, John M. (Solihull)

Wilshire, David

Taylor, Matthew (Truro)

Wolfson, Mark

Temple-Morris, Peter

Worthington, Tony

Thomason, Roy

Yeo, Tim

Thompson, Sir Donald (C'er V)

Young, Rt Hon Sir George

Thompson, Jack (Wansbeck)

Thompson, Patrick (Norwich N)

Tellers for the Ayes:

Thornton, Sir Malcolm

Mr. Sydney Chapman and Mr. Timothy Wood.

Thurnham, Peter

NOES

Adams, Mrs Irene

McKelvey, William

Barnes, Harry

Mahon, Alice

Beggs, Roy

Marshall, David (Shettleston)

Caborn, Richard

Marshall, Jim (Leicester, S)

Campbell, Ronnie (Blyth V)

Martin, Michael J. (Springburn)

Clapham, Michael

Michie, Bill (Sheffield Heeley)

Connarty, Michael

Mitchell, Austin (Gt Grimsby)

Cummings, John

Molyneaux, Rt Hon James

Cunliffe, Lawrence

Mullin, Chris

Cunningham, Jim (Covy SE)

Olner, William

Davidson, Ian

Parry, Robert

Davies, Rt Hon Denzil (Llanelli)

Patchett, Terry

Dixon, Don

Redmond, Martin

Etherington, Bill

Rooney, Terry

Godman, Dr Norman A.

Simpson, Alan

Gordon, Mildred

Skinner, Dennis

Graham, Thomas

Smyth, Rev Martin (Belfast S)

Hughes, Kevin (Doncaster N)

Trimble, David

Jones, Lynne (B'ham S O)

Winnick, David

Leighton, Ron

Wray, Jimmy

Lewis, Terry

Litheriand, Robert

Tellers for the Noes:

Livingstone, Ken

Mr. Bob Cryer and Mr. Andrew F. Bennett.

Loyden, Eddie

McAllion, John

Question accordingly agreed to.

Financial Services
6.31 pm
The Economic Secretary to the Treasury (Mr. Anthony Nelson): I beg to move,
That the draft Auditors (Financial Services Act 1986) Rules 1994, which were laid before this House on 15th December, be approved.
Madam Deputy Speaker (Dame Janet Fookes): I understand that with this it will be convenient to discuss at the same time the following motions:
That the draft Accountants (Banking Act 1987) Regulations 1994, which were laid before this House on 15th December, be approved.
That the draft Building Societies (Auditors) Order 1994, which was laid before this House on 15th December, be approved.
That the draft Auditors (Insurance Companies Act 1982) Regulations 1994, which were laid before this House on 14th January, be approved.
Mr. Nelson: The House will recall that Sir Thomas Bingham's report on his inquiry into the supervision of the Bank of Credit and Commerce International was published in October 1992. It concerned perhaps the largest fraud in the history of banking. When BCCI collapsed in 1991, it left behind it a trail of deception and criminality on an epic scale. Sir Thomas Bingham drew some clear lessons from his inquiry and set out a list of recommendations. When he introduced the report in the House, my right hon. Friend the Member for Kingston upon Thames (Mr. Lamont) made it clear that he accepted them all and that the Government were committed to carrying them out.
In a subsequent debate on the report on 6 November 1992, I spelled out in some detail how the Government intended to fulfil that commitment. One of the regulations before the House represents the culmination of our actions to give effect to one of Sir Thomas's recommendations—that the existing right, in section 47 of the Banking Act 1987, for auditors to report relevant information to the Bank of England should become a statutory duty.
As hon. Members will recall, Sir Thomas was persuaded to that view by, in part, a conclusion of the Select Committee on the Treasury and Civil Service which stated:
"although the existing permissive nature of Section 47 has worked well … it seems desirable to tighten the wording of the Act so that there can be no doubt, either from the point of view of the auditor, his client or the regulator, as to an auditor's duty to report."
In announcing the Government's intention, I also made it clear that my right hon. Friend the Member for Kingston upon Thames had decided that a similar duty should be introduced for auditors of building societies and financial service companies and that my right hon. Friend the President of the Board of Trade would want the approach extended to the auditors of insurance companies—hence the four statutory instruments before us.
In his speech in that debate, the hon. Member for Edinburgh, Central (Mr. Darling) welcomed the Government's acceptance of the recommendations of Sir Thomas and the Select Committee recommendations and agreed that it was
"important … that the statutory duty of auditors ought to be clear so that"—
to use the hon. Gentleman's colourful phrase—
"if whistles are to be blown they are blown without doubt"—[Official Report, 6 November 1992; Vol. 213, c. 541.]

853
Since that debate, the Government have taken the decision to introduce the duty into a fifth regulated sector—friendly societies—and a negative resolution order, under the Friendly Societies Act 1992, is also currently before the House.
There are a number of reasons for taking action across that wide front. First, and most important, the relevant provisions in the various Acts are similar and if we are to bolster the arrangements for banks, we should do the same for the other sectors entrusted with the public's investments, or with insuring their daily risks. It would be difficult for me or for any other Minister to have to defend leaving things unchanged in those other areas if the effect of having done so were subsequently to lead to a case of fraud in an investment firm, building society or insurance company, which the existence of the duty would have helped to prevent.
Mr. Austin Mitchell: It is good to see that the Government are at last acknowledging the justice of the amendments and doing exactly what was proposed in Committees on Bills such as the Building Societies Bill and the Banking Bill when they were discussed in the 1980s. However, Sir Thomas Bingham also said:
"Determination of the correct relationship between client, auditor and supervisor raises an issue of policy more appropriate for decision by Parliament than by the Bank and the accounting profession".
In view of that clear recommendation that Parliament should decide those matters, why has the Minister left regulation of that duty to the Auditing Practices Board—a non-statutory body?
Mr. Nelson: The hon. Gentleman is right to say that those matters were considered during the passage of those Bills. However, it is also true that in the Bingham report there was a broad acceptance that the present system for the supervision of banks should continue. The hon. Gentleman will know, because he has corresponded with me on the subject, that it is the view of the Government that the recognised professional body—the Institute of Chartered Accountants in England and Wales—is best placed to supervise that sector of auditors.
An argument may be mounted against that view and, no doubt, the hon. Gentleman may seek to use the debate to do just that and to say that it should be subject to some direct rule from Whitehall. That is neither the history nor the practice of our professional system, not only for accountants, but for the legal system as well. The system has stood the test of the time.
The hon. Gentleman will know that there is a procedure called the joint disciplinary scheme which enables the institute to investigate whether there has been compliance by member firms with the standards promulgated by the Auditing Practices Board. That seems to be the right way forward, but we shall return to those matters if the hon. Gentleman raises them further in the course of the debate.
Having determined the scope of the duty, the Government published a consultation document at the beginning of March. That made it clear that it was not the Government's objective to alter fundamentally the relationship between auditor and client. Nor were we looking to increase the costs of audit. Our objective was the same as Sir Thomas Bingham's—to clarify and strengthen the position of the auditor, not to change it. So the Government held back from imposing a duty on auditors to
854
seek out fraud, malpractice and wrongdoing. That would have meant straying too far from the auditors' traditional role.
The responses that we received to the consultation document were considered carefully and my officials discussed the issues raised with the Auditing Practices Board and with other interested parties in the regulated sectors. Some comments could be dealt with readily by changes to the draft statutory instruments, but others were not so easy to resolve as they raised more fundamental questions. In those cases, my officials were able to explore with the Auditing Practices Board whether issues could be more easily addressed in the statement of auditing standards, which was being developed to accompany the legislation, than in the statutory instruments.
I should like to take this opportunity to pay tribute to the helpful and co-operative attitude that the Auditing Practices Board displayed in what were often long and complex discussions and to thank it for the clear and helpful statement which it shortly plans to issue to accompany the orders and bring them into practical effect.
Mr. Anthony Steen: Is the board a new quango or is it a SEFRA—a self-financing regulatory authority—which has powers to issue rules and regulations and to charge for the job that it does?
Mr. Nelson: Although I am not entirely familiar with such jargon, I think that it falls within the latter rather than the former definition. The Auditing Practices Board is riot a body set up by statute, but it is certainly recognised as responsible. Indeed, under tax law and in various other ways its promulgations and the standards that it sets are generally regarded as acceptable. However, such matters are of course kept under review.
One of the difficulties dealt with during the consultation exercise was that neither the term "auditor" nor the phrase
"in his capacity as auditor"
was defined in the banking statutory instrument or in the Banking Act itself. The Government are mindful of the need to clarify who will be placed under a duty by the statutory instruments and in what circumstances the duty will apply.
Although it is ultimately a question for the courts, we take the view that the duty clearly covers any auditor of a bank appointed under United Kingdom company law, which means any auditor of an authorised institution incorporated in the United Kingdom. It also covers auditors of authorised institutions whose place of incorporation is outside the European Community and whose initial authorisation has been granted by another regulator, even though such auditors may be appointed under a foreign law. The Government also believe that the duty applies to United Kingdom accountants acting as agents of the appointed foreign auditors.
As for the circumstances in which an auditor might come under a duty to report, the Banking Act, as well as the Financial Services Act and the Insurance Companies Act, uses the phrase
"in his capacity as auditor".
Again, we have no powers to clarify the phrase in the regulations. If any greater certainty could be given, it could be done only by an unacceptable narrowing of the duty to restrict it to a part of the auditor's responsibilities. We were also concerned that to do so could have potentially wide-ranging implications for the scope of auditors' functions more generally. It may, however, be helpful if I

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seek to clarify when an individual auditor is operating in his capacity as such and whether a partner in an auditing practice who is not involved in auditing the regulated institutions is nevertheless deemed to be operating in his capacity as auditor.
In our view, it is reasonable to expect an individual who is conducting an audit to consider information relevant to an audit which is obtained in the course of other work for the same client. It seems realistic to expect the auditor to take such information into account in his review of the audit. The person, acting as auditor, also needs to be aware of other non-audit work on his client—for example, tax work—that partners in his firm may be doing and they, in turn, should consider whether any information that may arise from their work is relevant to the conduct of the audit. If it is, they should also consider whether it is relevant to the duty to report to the regulator. The partner carrying out the audit should also, if possible, discuss it with his client.
In the case of information relating to client A which is obtained by the auditor while auditing client B, the auditor should, as a matter of sound practice, usually use the information to make further inquiries for the purpose of the audit of A. These interpretations have been set out more fully in the statement of auditing standards and the professional guidance issued by the Auditing Practices Board that will accompany this legislation. As a matter of courtesy to the House, I have asked for a copy to be placed in the Library.
Once the extensive consultation process was over, the Government circulated amended versions of the draft statutory instruments for a second, more limited, round before setting them in their final form. In producing the drafts, we bore firmly in mind the fact that if this duty on auditors is to be effective, it is vital that auditors can continue to rely on the trust of their clients. We have therefore tried to set the duty at a level which makes it clear to those who seek to commit financial crime that they are more likely to be caught but which does not impose additional reporting burdens on costs on those who conduct their business honestly. That is a most important balance to strike.
Mr. Austin Mitchell: I am grateful to the Minister for his patience. It could be argued, however, that it is no good having a duty to report fraud unless there is also a duty to detect fraud. The Auditing Practices Board's proposals are for passive auditing, but the auditing profession argues that it is difficult to detect fraud. The Local Government Finance Act 1982 places a duty on local authority auditors to search for unlawful acts and report them. If that is good for the local authority goose, why is it not good for the banking gander when so much more money is involved?
Mr. Nelson: As always, the hon. Gentleman makes more than a debating point. He has raised a serious matter that deserves to be considered. It is not our intention that the orders should turn auditors into snoopers or narks. To do so would run the serious risk of undermining the relationship between auditors and their clients and imposing substantial additional cost burdens on auditors, which would have to be borne by companies and, ultimately, by their clients.
In addition, in the example that the hon. Gentleman cited, there must be some difference—I put it no more
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strongly than that—between public and private money, although I acknowledge that, in certain cases, we are talking about the trusteeship of public deposits and funds. There are difficulties but if we were to adopt the hon. Gentleman's suggestion, we should need to introduce primary legislation because orders introduced under the relevant legislation would not suffice. It is a matter to be discussed another day.
Mr. Steen: I am grateful to the Minister for giving way and making it two-all. He said that the costs of the statutory instrument and of the guidelines, rules, regulations and orders that flow from it will not impact on small businesses, which is the key to the Deregulation and Contracting Out Bill. Has the issue been considered and is the deregulation unit satisfied that additional costs will not be imposed on small enterprises?
Mr. Nelson: My hon. Friend, who is a prime champion of small businesses, makes an important point. The answer is yes, it has been considered by those dealing with deregulation. In fact, my hon. Friend the Under-Secretary of State for Corporate Affairs, who is responsible for deregulation, has sponsored one of the orders that we are debating—that relating to insurance companies. It is our intention that the costs should be negligible or nil and not go beyond what is already required or possible by way of a right to report.
In this case, we are imposing a duty to report but it should not impose any greater costs on auditors. It should, however, bolster the ability of auditors to insist that their client companies are forthcoming and open and, where necessary, enable them to correct problems that might otherwise bring their authorised status into question. That is the crucial point. The order is therefore a welcome enhancement and toughening of the law without imposing additional costs, about which my hon. Friend the Member for South Hams (Mr. Steen) is rightly worried.
Before I conclude, I should mention that there is a European dimension to the issue. In November 1992, the Vice-President of the EC Commission, Sir Leon Brittan, sketched out some general proposals for Community legislation in response to the BCCI affair. The proposals were subsequently turned into a Commission proposal for a directive, one element of which requires member states to impose a duty on auditors of financial undertakings to report breaches of laws or regulations, or other adverse circumstances, to supervisors.
As the House will know, following discussions in Brussels, political agreement has been reached in the Council on an amended draft directive which, if implemented in its present form, would impose on auditors a slightly wider duty to report than that contained in the regulations that we are debating. However, the proposed European directive has a number of further hurdles to be negotiated before it can be finalised and, even when it is, it is unlikely to be implemented before 1996.
Even though some minor changes may subsequently be necessary in order to conform with the directive, the Government do not want to risk a further period of delay before bringing these necessary measures into effect. In view of the widespread support from both parties for Sir Thomas's recommendations, the Government believe that we should now act promptly to pass the changes into law.
I conclude by expressing my gratitude to the Auditing Practices Board and the many other professional

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organisations which have been involved in considering the legislation legislation. We believe that the measures will greatly strengthen and clarify the position of the auditor and represent an important step forward in the fight against financial wrongdoing. I commend them to the House.
6.49 pm
Mr. Alistair Darling: As the Minister said, the measures impose a new statutory duty on auditors and, as he rightly reminded us, it is something that we welcomed when we held the debate on the Bingham report in Novermber 1992, about 15 months ago. I think that it is fair to say that although we welcomed that recommendation by Sir Thomas Bingham, we did not say that that was all that was required. Although the measures are welcome they are only a start in the battle against fraud and other crimes of dishonesty.
Action was promised, as the Minister said, in October 1992, by the former Chancellor of the Exchequer when the Bingham report was published, but I believe that the proposals before us are timid and are the bare minimum that was requested by Sir Thomas Bingham. They hardly live up to the Minister's announcement at the beginning of his speech; indeed, they are being introduced only after much discussion and some opposition from the auditing profession.
Although the Minister, understandably, pays tribute to those people who have spent considerable time and effort in getting the practice notes right and responding to the Government's proposals, it is fair to say that many people—not only people in the auditing industry but people who represent the companies that are audited—have expressed worries. The Minister has mentioned some of those worries—the relationship with clients, for example, bears closer examination. Many people believe that the relationship between client and auditor can be too close and that there ought to be a respectable distance between them. There is a question of professional indemnity, to which I shall return shortly because it might be helpful if the Minister said something about that.
The measures do not pay any attention to a number of matters that are in what I would regard as the public interest. Although the Minister has, rightly. Paid tribute to the involvement of professional organizations in the process, we must never forget that we are here to represent the public interest and not just specific professional interests that may be relevant in each case. Indeed, in the light of what has happened in enforcement during the past two years, the Minister must be aware that the public require higher standards of commercial probity.
The Government should have conducted a proper and wide review of the role and duty of auditors, not only the sector covered by the measures but throughout industry. I understand that various professional organizations in accountancy are doing so, but the Government should also do so, because we are worried about the probity of financial institutions and about the auditing of other commercial concerns.
It seems to me that in this case the public interest has taken second place to the Government's wish to do as little as possible. Yet again, the Minister said in the debate, in response to a question asked by my hon. Friend the Member for Great Grimsby (Mr. Mitchell), that if we were to do anything further it would need primary legislation. So what? That is what the House is here for: it is here to
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introduce primary legislation if we need it, and in my view we need it in this sector. It is high time that the Government recognised that. They should not be afraid to take action simply because primary legislation is required.
The Government have, for example, nothing to say about a central enforcement organization, which should be part and parcel of a proper and focused attack on crimes of dishonesty in financial institutions. The Government have said nothing about the need to end the fiction of self-regulation and to replace it with efficient, effective and cheaper direct regulation.
We need to tackle several questions specifically relating to the measures. The first question is what exactly the auditor's duty is. I notice that the phraseology adopted in each of the four measures is different. It is clear from the regulations relating to insurance and the order relating to building societies that the auditor has to act in his capacity as auditor.
The Minister said that he thought that the proper interpretation in respect of all the measures was fairly wide. If so, why do the measures relating to insurance and building societies specifically say that the auditor must be working in his capacity as auditor, whereas in the measures relating to banks and banking and financial services it may be implicit that the auditor is working in his capacity as auditor but that is not explicitly stated because the phraseology is different?
The Minister went far wider. He seemed to imply that there was not simply a duty on the accountant acting in his capacity as an auditor, but that the accountant would have the same duty if acting as an accountant or tax adviser or in any other capacity. That is to paint a picture of a far wider duty than I had thought. Indeed, people who follow those matters have suggested that that is a wider duty than the secondary legislation provides for.
Obviously, that will be crucial in any court proceedings. Because the court will have to decide whether an auditor was in breach of his or her duty, having regard to what is on the face of the statute. I know, following a fairly recent case in the House of Lords, that the courts are entitled to rely on what Ministers say in debate, but perhaps the Minister would spell out a little more clearly the apparent discrepancy between what he said in his speech and what is in the measures and why the phraseology in the measures relating to banks and banking and financial services differes from that used in those relating to insurance and building societies.
It could be something to do with the regulatory regime. Banks are supervised by the Bank of England and the financial services regime is supervised by the Securities and Investments Board plc. That may be a reason why it is not explicitly stated that the account has to be acting in his capacity as auditor. The Minister should clarify that point because in may be crucial not only to the industry but to the public interest, and the public will want to know the position.
The Chartered Association of Certified Accountants wrote to me recently asking what the position was. Its letter stated:
"Firms of accountants are quite likely to be engaged by the same client to perform services other than the statutory audit"
The letter lists financial planning, and so on. If the Minister is right, a partner or assistant in a firm acting as a tax adviser or financial planner might come across something that, if he were acting as auditor, he would be bound to report. As I understand it, the Minister's position is that the

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partner or assistant would be bound to refer that matter to the partner responsible for audit, and that partner would be put on notice that he ought to report it to the relevant authority. If that is correct, perhaps the Minister will say so in clear and explicit terms, because it is important.
Increasingly, many firms act in both capacities. Indeed, many of us are aware of the difficulty that now arises for the large firms, in that there are only half a dozen very large accountancy firms that are capable of providing accounting and auditing services. Most were beneficiaries of the Government's largesse in awarding public service contracts to a surprising degree. The Government must, therefore, be well aware of the problem.
Mr. Austin Mitchell: The problem is that the centres of accountancy power, the large accountancy firms—I think the big six—are pretty well uncontrolled. They dominate the institutions that are meant to regulate them. When it comes to international affairs, partners do not exchange information with one another. When the Senate inquired into the audit performance of Price Waterhouse, the British partners of Price Waterhouse claimed that they were an entirely separate organisation, that they had no obligation to give information to the Senate and nothing was effectively passed on. An inquiry was therefore conducted there without Price Waterhouse's partners in the United Kingdom co-operating in any way.
Mr. Darling: My hon. Friend mentions an interesting point. When I studied the law relating to partnerships, I learned that one of the basic principles was the personal relationship between partners. When one looks at the headed notepaper of the big multinational accountancy firms, sometimes the names of partners cover most of the letter and there is little room left for the message, and one wonders how on earth they speak to one another, or if they even know who the others are or where their offices are. There is not the personal relationship that one might expect to find in the normal concept of a legal firm.
We could leave the point and have a discussion as to whether a partnership is a suitable legal entity under which those people should trade. That raises an important matter, because in the Bank of Credit and Commerce International inquiry it was obvious that parts of Price Waterhouse were not fully aware of what other parts were doing. Worse still, in fairness to Price Waterhouse, some of the regulators in different parts of the world did not know what the other regulators were doing. The only people who knew what was happening were the principals behind BCCI, who exploited that situation.
Obviously, that is a matter for the accountancy profession, but there is also the problem that Price Waterhouse operating in the United States presumably comes within the jurisdiction of the accountancy profession in the United States. That is something to which the Government will have to address themselves. It is already accepted in money laundering, for example, that fraud is an international crime. It would be interesting to hear what steps the Minister proposes to take to look at the problem that was undoubtedly raised in the BCCI report.
Before I leave this particular part of my criticism, and in case the Minister does not accept what I am saying, perhaps I can quote the words of the right hon. Member for
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Henley (Mr. Heseltine) who, writing before he was President of the Board of Trade, in his book "Where There's a Will" said:
"Accountancy firms ought, I believe, to be debarred from doing any other work for a company for which they act as auditors. In a number of other countries there are laws which circumscribe the auditors in this way to prevent any possible conflict of interest. This discipline should be extended across the publicly quoted private sector."
That was certainly the view of the President of the Board of Trade before he returned to the Cabinet. I am not sure if he has now departed from it, but it is worthy of some weight. I acknowledge that there are problems but, as a general principle, that matter needs to be looked at.
The Minister has said that many of these matters will be dealt with by a statement of practice. He was asked by the hon. Member for South Hams (Mr. Steen) what the status of these people was. To me, it does not matter very much. This is a matter of public interest; it should not be just a matter of professional interest. For those reasons, the Government should take a rather livelier interest than perhaps they do.
The question of the rotation of auditors has often been canvassed. Is it wise to have the same firm of auditors year in, year out? We are all familiar with the last item at an annual general meeting, a motion to propose the re-election of the auditors. I can understand the question of expense, but there is also the question of transparency and efficiency. Firms ought to look at audit as a useful discipline. It is not a matter of snoopers or narks, as the Minister said. Audit is an essential function to provide for the efficiency of a firm as well as for the protection of the public.
To whom is the duty of care owed? As I understand it, the present law is clear: the auditors owe a duty of care to the shareholders collectively, not to individual shareholders or to what are called stakeholders—employees, for example. Nor do they have a general duty as regards the public interest. That aspect needs examination. If the Government were prepared to embark on a review of auditing generally, there would be some useful point in pursuing that further.
Bingham examined that point at paragraph 3.39 in his report. It is interesting that he had a long paragraph discussing those matters and, in the end, did not come to a concluded view, although he acknowledged that there were many people—for example, depositors, shareholders and employees—who might have an interest in a particular company. In paragraph 3.40 he went on to point out that the law, which was then recently established, was that auditors owed a duty of care to their client company and to the whole body of shareholders but not to individual shareholders and not to non-shareholding depositors. He was talking in the context of a bank.
The Government need to look at that matter. Given the nature of multinational companies or even publicly quoted or private companies in this country, where there is a public interest not just in efficiency but in probity, it is time that we looked at the role of auditors to see whether they should have a wider duty. We do not have a concluded view on the matter, but we need to look at it.
There is also substantial merit in the point put in an intervention by my hon. Friend the Member for Great Grimsby on the duty of auditors. He drew attention to the fact that, under the Local Government Finance Act 1982, auditors have a far wider duty than is proposed in the measures before us because the duty is to detect fraud. To

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my mind, that is not a question of being a snooper, a nark or even a policeman. It is interesting to see the words used in section 15 of the Local Government Finance Act 1982. The auditor is under a duty, among other things, to see
"that the accounts are prepared in accordance with regulations made under"
the Act, to see that "proper practices" are followed and to see
"that the body whose accounts are being audited has made proper arrangements for securing enconomy, efficiency and effectiveness in its use of resources."
That, particularly the last point, is something at which the audit committees which are established in most efficient companies want to look.
I come back to the point that audit ought to be regarded as something that assists a company in being efficient as well as being a mechanism for detecting fraud. The Government do not appear to be examining that point. They seem to be saying that it is entirely a matter for the profession. I should have thought that it was in the Government's interest to promote efficiency and it is certainly in their interest to maintain the public interest with regard to fraud or other wrong-doing. If there was a proper inquiry, that matter ought to be examined.
I note that reference is made in the measures to information that may be of material significance. It would be interesting to know how the Minister proposes to define material significance. Who will issue guidance on this point? Will it be the professional associations? Will the Government turn their mind to that? What does it mean?
For instance, if an auditor were looking at the Maxwell accounts, what would be a matter of material significance? Would it be materially significant that just about everyone to whom one spoke at the time thought that Maxwell was a crook, although, interstingly, that was not apparently the view of the regulators directly responsible for those matters? Even before Maxwell was exposed for the crook that he was, many people knew it from his conduct. The Department of Trade and Industry itself had said that he was a manifestly unsuitable person to be in charge of a company. Is that an example of what might be information of material significance? It would be helpful if the Government would say something about that.
There is another matter of broader significance. Although the measures cover certain financial institutions, they do not cover others. They do not cover Lloyd's of London, as far as I can see. I had half-expected to see the hon. Member for Gloucestershire, West (Mr. Marland) in his place to pursue his campaign—apparently, he is unable to be here—and to see others who sit on the Government Benches and who lost large sums of money at Lloyd's. They might have had something to say about it.
It seems odd that Lloyd's is not covered. No doubt the Minister will say that primary legislation is needed. I am sure that the Government would move heaven and earth not to introduce another Lloyd's Bill because of the problems that that would cause. But I wish that the Minister would tell us why Lloyd's is not covered and why, in particular, non-United Kingdom banks with branches in this country are not covered either. I may be wrong about that, but perhaps the Minister will address himself specifically to that point, and also to pension schemes. They may be covered by other legislation, but they are matters of some concern.
The Government have already accepted, with the introduction of provisions on money laundering in the
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Criminal Justice Act 1993, that there are far wider interests and implications than there have ever been before. The Government need to do a little more to show that they are aware of the international implications and of the sheer scale of what we are dealing with.
I touched on indemnity earlier. Perhaps the Minister will specifically address that point. I note that section 109 of the Financial Services Act 1986 explicitly provides an indemnity. What is the position with regard to auditors in this case? What is the indemnity? I assume that if they can bring themselves within the terms of the measures they will be indemnified. But if they can bring themselves only within the words used by the Minister, will they be protected?
I am thinking of the case of, say, a young accountant advising on financial management who finds something odd and perhaps reports it direct to the authorities. Will he be covered or will he have to go through some procedure to bring himself under that protection? That is important because, if the suspicion turns out to have been reasonable but not to bear further examination, an accountant could find himself in great pecuniary and professional difficulty. The Minister needs to look at that matter.
There are two substantial points that the House ought to address. I have mentioned the first again and again in debates such as this: the lack of a central enforcement agency. It has been brought to my attention on a number of occasions by reputable bodies such as the stock exchange that, because of the multiplicity of regulations, the complex nature of the legislation and the comparatively large number of regulatory or supervisory bodies, and because there are so many differences and standards, there is a need for a central enforcement body to bring together whatever evidence is available so that these matters may be prosecuted, if I may use that general term.
Mr. Steen: That is a mistaken view. The hon. Gentleman is probably right to believe that, because of the proliferation of rules and regulations, another quango or organisation is needed. That may not have an effect, but Conservative Members are saying, although not loudly enough, that we must reduce the number of rules and regulations, so avoiding the need for another organisation. we do not want another organisation to be set up as a result of rules and regulations; we want to reduce the number of rules and regulations
Mr. Darling: I agree with the hon. Gentleman to some extent. As he knows, we would scrap the self-regulatory system and make the Securities and Investments Board responsible for the regulation of industry. In time, we would merge the SIB with a banking regulatory organisation, which answers one of his arguments. The SIB could also be responsible for the enforcement of such matters—an extra quango would not be needed.
The hon. Gentleman is probably aware of the financial fraud information network which consists of a group of regulators and about which the Chancellor of the Exchequer made an announcement. It would be far better to have a streamlined regulatory system that would be much cheaper and more efficient. I am glad that the hon. Gentleman seems to agree. Perhaps he will try to persuade his hon. Friend the Economic Secretary to the Treasury that primary legislation is needed.
Mr. Steen: I am working on it.
Mr. Darling: I am glad to hear it.
I am not sure that I would agree with the hon. Gentleman that the best way to solve the problem is to have fewer regulations. I agree with the general thrust of what he might mean—it would help if the regulatory system concentrated on promoting higher professional standards and placed less emphasis on rules and regulations. To deal with fraud, as we are, there must be regulations and primary legislation. I am not the only who says that: the stock exchange and the SIB believe that we need a single enforcement organisation to consider such matters. Perhaps the Minister accepts that, but the Government should do so, too.
There is a feeling that, without such an organisation, many people who defraud the system or commit other crimes can exploit the different rules and regulations because they know that they will never be caught and there will be little chance of prosecution. They know that, even if they are prosecuted, the chances of conviction are remote. The judicial system shows that, even if they are convicted, the worst that they can expect is a few hours mowing the grass in front of an old folks' home or perhaps a few months in a country residence, albeit one owned by Her Majesty. The Government need to consider that issue, which goes hand in hand with the need to overhaul the regulatory system. Although I have often mentioned that subject before, I have no hesitation in doing so again.
There is a feeling abroad in the country that an audit certificate is rather like an MOT certificate: it is good for the minute when it is granted, but useless thereafter. That feeling must be dispelled. It is for those reasons that the Government need to turn their attention a little more to the issues that I have raised.
I refer the Minister to the Bank of England's memorandum, which was included in the report of the Treasury and Civil Service Select Committee. Page 185 of that report, which was published on 8 December last year, draws attention to the European directives to which the Minister referred. I understand that the proposal has run into difficulty, but I urge the Minister to press the Commission to get a move on, because the problem affects not only this country but Europe, particularly the European Union, and the rest of the world.
The problem needs international action. We in this country had a bitter experience with the Bank of Credit and Commerce International. Not only did it give a knock to the regulatory system, but—as I hardly need remind hon. Members—thousands of people lost all that they had. Many of those people believe that the House has not taken their concerns seriously. The Minister must give an assurance that the Government are willing to pursue the matter, even if it means introducing primary legislation.
I read in the newspapers today that there has been criticism of the fact that these measures are being taken on the Floor of the House, but they are serious matters and should be discussed here. Perhaps the debate will not be as lively and controversial as the one that we arranged to have on insider dealing, but it is important because auditing not only provides assistance to companies but reassures the public, who need great reassurance that the financial services industry and industry generally are being properly looked after. Although we support the measures, we have no hesitation in ensuring that they are debated properly and are not simply passed on the nod.
7.14 pm
Mr. Anthony Steen: As you, Madam Deputy Speaker, have kindly called me, I shall try to make the debate a little more lively, although I am not sure that I shall be controversial. Last week I made a speech about the significance of the Deregulation and Contracting Out Bill. I said:
"The Bill is so important because it is the first major attempt by the Government to slay the red tape dragon. The maxim that man learns nothing from history is often proved true, but the Bill shows the Government learning from history. Throughout the ages Governments have repealed legislation. There is nothing new about repealing legislation. It is repealed either because it has proved unworkable or because it has simply outlived its shelf life.
In the new world in which we live, legislation has grown like Topsy and thus requires more drastic pruning. Those in the House who are gardeners know that shrubs grow irregularly. To keep trees and shrubs in prime condition, pruning is essential."
I continued:
"In 1989 there were five times more pages of legislation than in 1979. Brussels churned out five volumes of legislation before we joined the European Community. It now churns out 37 volumes each year. However, the cause is not simply too many Eurocrats in Brussels. Directives from the Commission are often sensible and come to Britain suggesting a simple way of dealing with the problem. Once the directive hits Whitehall, bevies of officials are stirred into action, taking time and effort to interpret and rewrite the directive."—[Official Report, 8 February 1994; Vol. 237, c. 191–92.]
Throughout my speech last week, whenever I said anything about deregulation, I won approval from the Front-Bench team and approving nods, winks and cries of "Hear, hear" from my colleagues. The President of the Board of Trade made a stirring speech, stating that the 440 proposals that resulted from the booklet "Cutting Red Tape" were either being implemented or under active consideration. He talked about the explanatory guide to the Bill and the new security committees that might be set up in each House. He spoke about the business task forces that had made more than 600 recommendations.
I thought that the debate heralded a new age in which over-zealous officialdom would be a thing of the past and Whitehall mandarins would be sat on, especially those who over-interpreted general directives from Brussels. I am told that Conservative Members have been jostling for position to win a place on the Standing Committee which is about to start consideration of the Bill. The aim of the Bill is to cut rules and regulations and to reduce the number of statutory instruments, which in 1992 reached the record level of 3,359. Today we are debating banks—
Madam Deputy Speaker: Order. Is the hon. Gentleman treating us to a re-run of the speech he made recently? It would be more appropriate if we were to discuss the orders. If he does not do so, there will be a bit of pruning from the Chair.
Mr. Steen: There will be no need for any pruning from the Chair. I just mentioned the word "banks" when you, Madam Deputy Speaker, rose to your feet. I assure you that pruning would not be in order. We are debating banks and banking regulations, building society orders, auditors' regulations and financial services rules. I did not mention those matters in the speech that I made last week, which was so warmly received by the House.
My colleagues are rushing upstairs with great enthusiasm and diving into the Committee Room anxious to start work on curbing the ever-growing number of rules

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and regulations. While they merrily start to do so upstairs, we downstairs pass more regulations, which we say we do not want.
Mr. Austin Mitchell: In his pursuit of deregulation, is the hon. Gentleman in favour of scrapping all regulations and controls on fraud, and all attempts to stop it? Will his deregulation be a fraudsters' fun day?
Mr. Steen: That is the problem. There is always a good reason for passing every regulation that the House passes. If it is anything to do with safety, hygiene, security or fraud there will always, rightly, be a pressure group or an interest group to push for the regulation. I do not for a moment suggest that some rules and regulations are not needed. The trouble is that there is always an excuse, and usually a good reason, for all the rules and regulations passed by the House. That is the problem that the Government face.
Clearly the Treasury, too, faced that problem when it produced the statutory instruments before us. No one can disagree with the idea that fraud must be stamped out. I simply say that unfortunately, while we have a deregulation Bill in Committee going ahead at full speed with dozens of clauses and new rules to try to reduce the number of regulations, here we are on the Floor of the House passing—perhaps for good reasons—more rules and regulations. So tonight there will be four more sets of rules.
I believe that in every Department a Minister has been especially appointed to keep an eye on deregulation. The Minister said that the Department of Trade and Industry Minister responsible for deregulation has considered the statutory instruments, but is there a Minister in the Treasury responsible for deregulation, or is the Treasury above deregulation? I had the impression that every Department would have a deregulation Minister, and it would be useful to know who the deregulation Minister in the Treasury is.
Unless we are careful, deregulation could become simply another layer of bureaucracy, with a whole new subculture of civil servants being consulted on whether something should be deregulated, gloriously oblivious of what is going on next door. There could be a huge sub-structure, and deregulation would be the new in thing. There would be a new quango, a new self-financing regulatory body—a SEFRA—with a Minister and a lot of civil servants. We have already seen the deregulation unit. I am worried that we may all be being hoodwinked into believing that the Deregulation and Contracting Out Bill is opening a new chapter in our legislative history, when deregulation may be no more than a weasel word, describing one thing while something else is really happening.
I am sure that the Minister has a good reason why the four statutory instruments are necessary, and I am sure that hon. Members on both sides of the House recognise that reason. However, I have sat on an immense number of Committees on statutory instruments, and hon. Members always say that the new rules are greatly needed. They usually say that because they want to leave in three or four minutes; 10.30 arrives, and by 10.35 they have all gone.
The deregulation Bill may not affect the number of statutory instruments going through the House, but I believe that the City would still continue without the statutory instruments, and the country would still be a able to go on if we had not passed the regulations. Will those
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four statutory instruments really help to run the country more effectively? We are imposing duties on auditors and regulators in the Securities and Investments Board, another quango. Do we need all that?
The insurance regulations have a compliance cost assessment. Have the other statutory instruments had an assessment, too? Apparently the consultees found it difficult to assess the extent of any additional costs arising from the regulations. First there was a regulation, then there was a compliance cost assessment, and employed people were consulted on whether the statutory instrument would cost more. I wonder how much that cost. It could all become a dangerous industry, which could get out of hand.
We seem to live in gobbledegook land. We seem to be able to argue vigorously and passionately about anything and then, on reflection, to argue equally passionately that we did not really need the rule or regulation in the first place. As a nation we are now obsessed to the point of paralysis with rules and regulations. It is surprising that one can move without some rule impinging on one's freedom, so concerned is the state about issues of welfare, hygiene, security and safety.
Madam Deputy Speaker: Order. The hon. Gentleman seems to have forgotten my previous warning. We are not discussing all manner of rules and regulations. We have four statutory instruments before us, and he must address himself to those.
Mr. Steen: I hear what you say, Madam Deputy Speaker, but those four regulations stand in the framework of the whole Government policy towards rules and regulations. One may try, but one cannot separate them from all the other rules and regulations that we are passing all over the place.
I am questioning the wisdom of introducing more rules and regulations, but every time that I try to raise the issue, whether in Standing Committee or on the Floor of the House, the Chairman, Speaker or Deputy Speaker, understandably, says that I am going beyond the rules arid regulations under consideration. The result is that one can never challenge the general principle. Every time that one tries to do so one is picked up—that is a symptom of the disease facing the country.
Madam Deputy Speaker: Order. I remind the hon. Gentleman that there is no reason why he should not tear the four statutory instruments to pieces, if that is what he wishes—but that is what he must do. He must not deal with all the others.
Mr. Steen: I am grateful for that ruling, Madam Deputy Speaker. In my own way, although not as clearly as some hon. Members, that is what I was doing. I was pointing out that the statutory instruments before us are better than most, although perhaps we could have done without them.
I was about to give an example of what I am talking about, but perhaps I shall tell the House about it on another occasion, because I should prefer not to be prevented from telling you, Madam Deputy Speaker, the most vivid story illustrating what I am talking about—and clearly this is not the right time and place. In fact, I am never sure what is the right time, but it certainly does not appear to be now.
With reference to the statutory instruments before us, I have already asked the Minister about the drain on the private sector every time that a rule or regulation is passed. It was reassuring to learn that the rules and regulations

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before us would not impact upon private enterprise. It would be bad news for the country if we were to witness another fight between the private sector and the state. I hope that in the "rules and regulations industry v. the public" story we shall not see a repeat of the final fight between Moriarty and Sherlock Holmes, never knowing who wins in the end.
I intended to make a short speech, and I shall return to the subject from time to time, because it is a perennial annual problem. Every time that the Minister introduces a rule or regulation we understand that it is extremely useful. How can one say that regulations on fraud are not useful? However, the culture of our country seems to have been besieged by rules and regulations, and I am surprised that anyone can make a profit or do business, with all the weight of officialdom and all the rules and regulations that prevent anything from getting off the ground.
That is my message, and I am sure that the Economic Secretary to the Treasury has heard it. I apologise if I have laboured the point, but I shall continue my argument until we cease to pass more rules and regulations which all the legislation that comes before the House is designed to repeal, and we do not need fresh legislation but simply repeal what we introduced before because it was not helpful to the prosperity of this country.
7.27 pm
Mr. Austin Mitchell: I shall not attempt to follow the hon. Member for South Hams (Mr. Steen), with his re-run of the speech that he made last week on the Deregulation and Contracting Out Bill, except to note that now that my right hon. Friend the Member for Chesterfield (Mr. Benn) is issuing his former speeches as a video, it is a bit cheap to come and repeat one's former speeches in the Chamber, rather than publishing them for public consumption.
There are appropriate places in which the hon. Gentleman could repeat speeches such as the one that he has just made, but unfortunately the Government are closing most of them down and sending the inhabitants out into the community. The hon. Gentleman's speech was not relevant to the subject with which we are dealing.
Talking of re-runs, I feel as if I am involved in a series of re-runs with the Minister. In a series of Standing Committees in the 1980s, such as those on the Building Societies Act 1986, the Financial Services Act 1986 and the Banking Act 1987, he spoke in favour of more effective regulation, and sought the votes of Opposition Members for the kind of policies he is introducing today. Then he spoke in favour, but now—regrettably, because he is well informed on such subjects, and made a powerful and effective contribution to those Committees—we find ourselves on opposite sides.
As we are on opposite sides, I must say that what the Minister is introducing now is too little and far too late. It is inadequate. Indeed, it creates the impression that the Government are in favour of fraud, because they are doing too little. These rules are too little to stop fraud. Are the fraudsters the only people in society who will vote for the Tories at the next election? The reputation of the City of London is going down all the time because of the squalid
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frauds that are being perpetrated, and the Government are lagging behind in providing an effective regulatory framework to deal with them.
These rules are not the way to regulate on a major issue. We have not had an inquiry. The rules are not based on a thorough inquiry into the way in which audits of financial institutions are conducted. There has not been a thorough inquiry into what happened in the Bank of Credit and Commerce International case. We cannot regulate without a thorough inquiry, yet rules have been introduced without inquiry. The rules will not fit into any framework of stronger structures to back the proposals before us.
We have a confused and overlapping structure. The hon. Member for South Hams may be interested in how confused the structure is and how it can be simplified by agreeing with the proposals put forward by Labour Members. As there are so many overlapping authorities, it is not clear who is responsible for enforcement and compliance.
The regulatory area that we are dealing with today consists of the Bank of England, the Securities and Investments Board and the 24 organisations—the siblings—under it, the Building Societies Commission, the Serious Fraud Office, the Department of Trade and Industry, the stock exchange, Inland Revenue and five recognised supervisory bodies that deal with auditors. It is chaos. No one knows who is responsible for what. In that chaos, we get overlapping decisions and conflicting regulations. Everyone tries to insure themselves by regulating too much. The situation drastically needs simplification.
There are no proposals to make the framework more effective and back up the simple proposals before us. All we have is the Government tweaking the regulations from time to time, as they are doing here. We cannot rely, as the Government are doing in these rules, on auditors to be effective and the only police force of financial institutions. Auditors cannot be relied on as a guarantee of public interest and propriety as a counter against fraud because their powers, their role, their functions and the way in which they carry on their business are inadequate to deal with fraud.
Mr. Steen: I understand that the hon. Gentleman is saying that there is too much bureaucracy, which will prevent anyone from acting because it is all overlapping and, presumably, it is paid out of the public purse. An enormous number of public officials are preventing a clear, direct executive arm. Is that what the hon. Gentleman is saying?
Mr. Mitchell: I am saying that there are too many overlapping institutions; self-regulation has not worked, and has no adequate and firm base on which to work; and we can be effective against fraud only by replacing self-regulation with an independent, statutorily based regulator who has the power to strike hard, rather than obfuscating everything with the plethora of regulations in the financial sector.
We cannot rely on auditors to be the effective police force that will be required under these rules. We do not even have an effective definition of whom the auditors are responsible to. What the Government are proposing is the bare minimum. As it is so minimal, we must ask whether they are serious about dealing with the sort of fraud that has lead to this attempt to close the stable door after the horse has bolted.

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Effectively, we know little about what went wrong with BCCI and especially the audit of it, because, in this country, we have not had an inquiry into what went wrong. That case is the justification for these rules. We do not know exactly what happened because the Government have not seen fit to institute an inquiry. We need the information.
When there was a banking crisis in the early 1970s, the last Labour Government instituted a series of inquiries. There were inquiries into London and Counties and London and Capital. The information from those inquiries was published. We knew what went wrong, so we knew how to deal with it. In this instance, there is nothing.
Lord Justice Bingham specifically said that he was not pursuing the matter of audits because it was not his responsibility. The Government should have repaired that omission by pursuing the matter and inquiring into what went wrong. Ministers say that the Serious Fraud Office is looking into the matter. However, that has not precluded inquiries into other cases such as London United Investments and Maxwell. There should be an inquiry into the audits of BCCI so that we know exactly what went wrong.
During debate on the Companies Bill in 1989, the Minister argued that for any system to be effective, there had to be a distance between the regulators and the regulated. However, the only people who have inquired into BCCI, is the Mafia regulating the Mafia. It is auditors trying to regulate auditors. There is not that distance which the Minister asked for in the Committee on which we both sat in 1989.
The only inquiry into BCCI has been the American one. That was handicapped because the British partners of Price Waterhouse did not pass either to that inquiry or to the American partners of Price Waterhouse their information on what had gone wrong. Therefore, the inquiry was inadequate; but it is the only one. What that inquiry found was appalling. The report states:
"BCCI's accountants failed to protect BCCI's innocent depositors and creditors from the consequences of poor practices at the bank of which the auditors were aware for years."
That is a crashing indictment of the auditors
"BCCI provided loans and financial benefits to some of its auditors … Those benefits included loans to two Price Waterhouse partnerships in the Caribbean. In addition, there are serious questions concerning the acceptance of payments and possibly housing from BCCI or its affiliates by Price Waterhouse partners in the Grand Caymans, and possible acceptance of sexual favors"—
the report is more interesting than the book written by the hon. Member for Derbyshire, South (Mrs. Currie), although it does not have as much sex—
"provided by BCCI officials to certain persons affiliated with the firm."
That is an appalling situation. BCCI's books were certified by the auditors as a true and fair record from 31 December 1987 forward. That meant that people had confidence in BCCI. We are told that the auditors gave certificates as a true and fair view and, therefore, encouraged people to invest, yet before 1989 Price Waterhouse knew of gross irregularities in BCCI's handling of loans, especially to CCAH which was the holding company of First American Bank shares. All that was known to the auditors, but they did not spill the beans. Why have we not had an inquiry to reveal what happened in BCCI so that we can base proper and effective regulations on that inquiry?
870
The Government feel that they can rely on audit firms to protect the interests of shareholders, creditors and other stock holders. That reliance, which is strengthened by the rules before us, has always proved inadequate because poor auditing practices are always covered up. There is no way for anyone to know how good or bad an audit is as long as the company survives. We have not developed the proper institutional framework to regulate auditors effectively arid make them accountable. In debates on the Building Societies Bill and the Financial Services Bill, Labour Members proposed much stronger provisions on the detection of fraud.
These rules have been introduced much too late because the Government are continuing to rely on an industry and a framework which have a history of failure. They cannot rely on the auditors, who are, effectively, a replacement for regulations.
In the United States, state inspectors quite rightly visit and monitor banks. That is the only effective way in which we can know what is going on. There should be such a requirement in Britain instead of our relying—as we do by the statutory instruments—on the auditors themselves.
I mentioned earlier that Price Waterhouse partners in this country would not give evidence or provide information to Price Waterhouse partners in the United States. The Government can only deal with that by effective regulation of auditing, and by an effective independent regulator. A banking commission is needed to take those functions away from the Bank of England, which performed so poorly and was shown to have done so by the Bingham report.
My preference is for a securities and exchange commission, as in the United States. That would be an independent commission, with a banking commission and an accountancy commission under it. That would provide an effective framework of independent regulators to whom auditors could report when they found fraud.
My hon. Friend the Member for Edinburgh, Central (Mr. Darling) said that the gaps in regulations do not cover Lloyd's, pension schemes and funds, or banks that are not domiciled in the United States. I have pointed out to the Minister that unless there is a duty to detect fraud as well as to report it, it is doubtful whether auditors could perform their functions.
The Local Government Finance Act 1982 imposes both duties, and the audit industry was in favour of that at the time. The industry saw that it would be able to get its fingers into local authority audits, and so was prepared to accept it then. The industry is only now balking at the proposition, and saying that it is horrendous and it cannot do it.
The firms are advertising fraud detection services all the time. KPMG Peat Marwick advertises that

"investigating financial frauds, and rectifying and recovering from them, requires specialised accounting skills. KPMG Forensic Accounting offers: experience of the techniques of fraudsters and the procedures they may have followed; awareness of the indicators of possible irregularities; the resources needed for a fast and accurate investigation; experience of the quality of evidence required to support a successful case, and the expertise to assemble and present that evidence … we can assist in tracing funds and unravelling the most complex international cases".
The firm can provide all that for a fee. Why cannot the firm do it as a compulsory and necessary part of the service? The Minister may claim that it would be more expensive.

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If a proper audit is done, it cannot be more expensive as it is the effective way to detect fraud. That needs to be a requirement which is imposed on the industry.
I have pointed out that, at present, auditors are not effectively regulated, Lord Justice Bingham said that the
"relationship between client, auditor and supervisor raises an issue of policy more appropriate for decision by parliament"
than by the accounting profession. However, that is subject to control by the Auditing Practices Board, which is not a statutory body. We have already been told that the board will impose passive requirements on auditors in this very difficult area. Passive requirements are just not adequate for the detection of fraud.
The board's draft standard states:
"the duty to make a report direct to a regulator does not impose upon auditors a duty to carry out specific work".
It does not have to do specific work, and it has been told not to do anything. That is ludicrous. Unless the board does the work, it cannot make the report. The standard adds:
"no auditing procedures in addition to those carried out in the normal course of auditing the financial statements … are carried out …auditors are not responsible for reporting on a regulated entity's overall compliance with rules with which it is required to comply nor are they required to conduct their work in such a way that there is reasonable certainty that they will discover breaches."
The board is not actually required to go out and look for things—it will just sit there, be passive, and it will all come pouring in.
Fraud does not work that way. A fraudster will not rush in saying "Here's the evidence, Mr. Auditor!" It is all well concealed, and unless the auditor has an obligation to hunt fraud down—become the "white hunter" of the British economy—fraud will not be detected. A passive approach to audit, such as the Audit Practices Board is recommending, is simply a recipe for further disasters and further audit failings.
The Government should surely have clarified the responsibility of auditors. Whom are they responsible to and to whom do they owe a duty of care? It is no good saying that they can report fraud to the regulator. Auditors should be responsible also to shareholders and to everyone involved in a company. In fact, they are not, and they have responsibility to no one except the directors who appoint them. The company's shareholders are given little information, and the choice of auditors is firmly in the hands of the directors. The depositors, consumers and employees have no say in the appointment of auditors.
Recent legal cases such as Caparo, Al Saudi Banque and Berg Son and Co. Ltd. have shown that auditors do not owe a duty of care to individual shareholders, potential investors or current or potential creditors, even though that information is supposed to be there to help markets understand what is happening to that company.
The Government have given no indication that they want to reverse those judgments, but they should do so. There should be a specific responsibility attached to auditors to give them a duty of care, so that information is spread more widely and the shareholders and stakeholders know what is going on, as well as the bank or financial institution.
My hon. Friend the Member for Edinburgh, Central quoted the President of the Board of Trade's book "Where There's a Will"—there's a corpse. The President stated that there should not be a conflict of interest and that
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accountancy firms should not do other work. That should be a paramount objective of the financial institutions, because DTI inquiries have indicated that work is less adequate when it relies on a man
"checking either his own figures or those of a colleague."
The DTI report on Burnholme and Forder was critical of audit reports in that context.
None of the auditors who have been criticised by DTI reports over the years has been disbarred from practice. What kind of sanction is that to make auditors do their jobs properly? We need an effective, independent regulator, not the Mafia regulating the Mafia and saying, "It was quite understandable—we'll let you off this time." That is what happens now with the Institute of Chartered Accountants as a recognised supervisory body.
We must have effective control and discipline of auditors. In a written reply to me, the Secretary of State said:
"there has been no occasion where criticism of a company's auditors by my Department's inspectors in reports published since June 1979 has led to an audit partner being excluded from membership of a professional accountancy body".—[Official Report, 26 March 1990; Vol. 170, c. 25.]
He added in another written reply to me:
"no auditor criticised in an inspector's report has been debarred from auditing as a result of information in that report."—[Official Report, 22 November 1991; Vol. 199, c. 341.]
The Government have never initiated any criminal proceedings against auditors criticised in DTI report, so there are no effective sanctions. For all those reasons, the instruments are inadequate—they are too little, too late.
The Opposition cannot vote against them, although the hon. Member for South Hams seemed inclinded to vote against them. I only wish that the hon. Gentleman had the courage of his convictions. The Opposition are far more responsible that than. Voting against the measures might give an indication that we were as much in favour of fraud as Conservative Members are. We are not in favour of fraud, and we welcome any progress in its detection. That progress includes measures that we asked for when the relevant legislation was passed. For that reason, we must welcome the instruments, but they are just not good enough.
7.48 pm
Mr. John Greenway: The last half hour has shown that the quality of debate in the House remains extremely high. Even on an issue which, on the face of it, looks as dry as dust, some hon. Members will pick an argument when there should not be much of one.
I cannot say that I agreed with much of what the hon. Member for Great Grimsby (Mr. Mitchell) said. He implied early in his speech that most of the City of London was collapsing into a sea of sleaze and other goings on which are extremely to be regretted. We should remind him that all four measures follow the recommendations of the Bingham inquiry into what happened at the Bank of Credit and Commerce International, which was not a British bank but an international bank based overseas. I think that I am right in saying—my hon. Friend the Minister will correct me if I am wrong—that BCCI was the first difficulty that we had experienced for a long time.
I want to explore what role an auditor should play in the insurance and financial services industry in looking at particular firms. I have several interests, of which the hon. Member for Edinburgh, Central (Mr. Darling) is aware. The one that is relevant to tonight's debate is that I am an

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elected member of the Insurance Brokers Registration Council. The way in which we regulate insurance brokers is laid down by statute. It demonstrates the benefit of a statutory requirement for audit and for proper oversight of how the regulator reacts to what the auditor may say.
I greatly welcome the four measures, which are some of the most beneficial things to come out of the BCCI disaster. The hon. Member for Great Grimsby and I have debated the matter on many occasions. We usually do so on television, not on the Floor of the House and, therefore, not for quite so long. He said that what went wrong with BCCI was that Price Waterhouse knew that there was fraud but did not say so. Lord Justice Bingham pointed out that there was a clear conflict of interest between the interest of the client, for whom the auditor worked, and the public interest. He said that some amendment to the Banking Act 1987 was needed to clarify that, and that is precisely what the measures provide.
No one can seriously criticise the Government when they have not only come up with the regulations to deal with the problem, but have gone further and applied them to financial services, building societies and insurance companies, just to be absolutely sure. I am not a chartered accountant. I am an insurance broker. I am not aware of all the rules and regulations that affect accountants and the way in which audits are carried out. However, I was surprised to hear during the debate that the problem with BCCI was the conflict of interest. Fraud was known and was not declared. The regulations should make that considerably more clear.
I have sat through the debate because I wished to make one particular point. The hon. Member for Edinburgh, Central called for stronger regulation. I expected that. We had the argument the other week about whether we should have statutory regulation or make the self-regulation system for the financial services industry work. I believe that we should try to make the existing arrangements work. We are fast approaching a key point in that process.
I understand that on Thursday the Securities and Investments Board will consider the proposed Personal Investment Authority prospectus. Within a week or so we shall all be able to read it. The key question tonight is what regulatory framework the PIA should place on inter-mediaries, life assurance companies, pension funds and financial advisers in general, to ensure that the public interest is protected.
We heard earlier about the Levitt case. The hon. Member for Edinburgh, Central referred to community service punishment, so I think that he had that case in mind. What should we do to ensure that malpractice and fraud are picked up quickly? The order relating to financial services certainly helps because it places on the auditor the obligation to report any malpractice and potential fraud that he may see immediately to the regulator. As my hon. Friend the Minister knows, there will be quite an argument when we see the prospectus. I have not had the privilege of seeing it, although I have had the opportunity to discuss its contents with the chairman and the chief executive of the PIA.
It is important that we do not have too many regulations. That is why I have some sympathy with what my hon. Friend the Member for South Hams (Mr. Steen) said. We must not regulate to the point at which firms simply go out of business and give up because it is too expensive and
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burdensome to operate. We need to get the balance right between the amount and cost of regulation and making it effective.
I plead with my hon. Friend the Minister to bear in mind to what extent the Government should support the PIA prospectus and what should be done. We want a specific requirement not that firms must have this much or that much capital and so on, but that there is a regular audit trail and an annual look is taken at the figures and accounts of all the intermediaries and the firms with which difficulties have occurred in the past.
As I have told my hon. Friend the Minister before on the Floor of the House, that is what the Insurance Brokers Registration Council is required to do for all insurance broking firms. That is what Parliament required in the Insurance Brokers (Registration) Act 1977. It is not an onerous requirement on firms, nor is it excessively expensive. So it would meet any cost compliance test that the Department of Trade and Industry might wish to insist on. It would ensure that a proper look was taken each year at the finances of each firm and, if things were wrong, that they were reported immediately.
That is the lesson of BCCI. When things are not all that they should be, they must be dealt with and reported quickly. The orders go a long way to helping to ensure that. For that reason, the House should warmly welcome them.
7.56 pm
Mr. Nelson: This has been a curiously old-fashioned debate in some ways, with hon. Members on one side of the House calling for more regulation and hon. Members on the other side calling for less. My hon. Friend the Member for South Hams (Mr. Steen) eloquently called for less regulation again this evening.
My hon. Friend the Member for Ryedale (Mr. Greenway) takes a close interest in and is well informed on matters of financial regulation. I am grateful to him for the welcome that he gave to the measures. He is right that we have gone beyond what was strictly called for by Bingham. We have extended it to other sectors of the financial services industry. That is all to the good. Therefore, I reject roundly the accusation of the hon. Member for Edinburgh, Central (Mr. Darling) that the orders are timid. They are what was called for by the Treasury Select Committee. They are what was proposed by Bingham and we have introduced them here tonight.
My hon. Friend the Member for Ryedale will have ark early opportunity to consider the Personal Investment Authority prospectus, which is being published. I take: seriously his point about adequate monitoring procedures, and the need for an audit trail. A central criterion for the effectiveness of self-regulating organisations is the: methodical nature of their monitoring. I hope that all concerned will consider the matter carefully.
My hon. Friend the Member for South Hams made an amusing but perceptive speech about the growth of deregulation. Some would say that deregulation is the fastest growing part of bureaucracy in Whitehall. There have been calls to deregulate the deregulators. My hon. Friend is right to say that Parkinson's theory can be extended and that deregulation can acquire a life and momentum of its own. The underlying purpose of reducing unnecessary bureaucracy and stripping away the red tape that hinders enterprise and good governance in Britian is

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one to which the Government are very committed. We intend to promulgate that doctrine throughout all areas and it is being taken forward in legislation.
The hon. Member for Edinburgh, Central said there was a case for a wider inquiry into the auditing of companies. That was not specifically called for by Bingham, although I acknowledge that such a case can be made. We should be extremely careful before extending that, as was proposed by the hon. Gentleman and the hon. Member for Great Grimsby, beyond the direct responsibility to the members or owners of the company. It must be right for auditors to audit and regulators to regulate. It does not help the argument for there to be an overlap in responsibilities and in some way turn auditors into snoopers and narks and make one's regulators more supine. I do not think that there is a case for a widened inquiry into the auditing of companies.
It was said that there was a case for extending the duty of care of auditors beyond members, but again Bingham did not find that necessary as a result of his inquiry into BCCI. I was asked what "material significance" meant. That is set out in the guidelines in the statement on auditing standards. The hon. Member for Great Grimsby asked about Lloyd's. He is quite right that it is not covered by the measures, but it is a condition of the appointment of auditors into syndicates that they shall report. They have a duty to report where those circumstances arise.
I do not have time to deal with the other points, but if I have missed anything in particular, I will write to the hon. Members concerned. The whole import of these measures is to ensure that they look at the criteria of authorisation. They are concerned with the authorisation of firms that take public deposits and investments. When that is brought into question, and when there is evidence to suggest that those criteria are not being adequately met, it must be right to impose a non-costly duty on the auditors to bring that about. That is what the measures do and they are an extremely welcome addition to the stable of measures of regulation. They will improve depositor protection materially.
It being one and a half hours after the commencement of proceedings on the motion, MR. DEPUTY SPEAKER put the Question, pursuant to Order [11 February].
Question agreed to.
Resolved,
That the draft Auditors (Financial Services Act 1986) Rules 1994, which were laid before this House on 15th December, be approved.
MR. DEPUTY SPEAKER then put the Questions necessary to dispose of the other motions to be decided at that hour.
Resolved,
That the draft Accountants (Banking Act 1987) Regulations 1994, which were laid before this House on 15th December, be approved.
Resolved,
That the draft Building Societies (Auditors) Order 1994, which was laid before this House on 15th December be approved.
Resolved,
That the draft Auditors (Insurance Companies Act 1982) Regulations 1994, which were laid before this House on 14 January, be approved.—[Mr. Nelson.]

Local Government Finance (Wales)
8.1 pm
The Secretary of State for Wales (Mr. John Redwood): I beg to move,

That the Local Government Finance (Amendment) Report (Wales) 1993–94 (House of Commons Paper No. 169), which was laid before this House on 31st January, be approved.
Mr. Deputy Speaker (Mr. Michael Morris): With this, it may be convenient to consider the following motion:
That the Local Government Finance (Amendment) Report (Wales) 1994–95 (House of Commons Paper No. 168), which was laid before this House on 31st January, be approved.
Mr. Redwood: The report sets out my decisions on the local government revenue settlement for 1994–95.
The Second report puts right a mistake in the description of the basis for distributing the distributable amount for 1993–94 which was approved on 8 February 1993. I can assure the House that the amendment in this document does not affect the money that authorities should receive.
I announced my provisional settlement proposals to the House on 30 November last. I have given careful consideration to the representations that I have received on the level of the settlement and the views of the local authority associations in coming to my final decisions. I believe that my provisional proposals remain appropriate.
I propose to set total standard spending for 1994–95 at £2,704.8 million. That includes a sum of £86 million for care in the community—an increase of 4·2 per cent., or more than £100 million extra cash compared with 1993–94.
Mr. Win Griffiths: The Secretary of State said that the figures in the reports were in a sense provisional at the end of last year, but that he feels that nothing has happened to change his view. Will he tell us what impact he believes the pay settlements will have on the spending that he has allowed local authorities? It seems to me that there must be a cut in staff and services if they are to keep within the sums of money that he made available at the time when he was not aware of the settlements.
Mr. Redwood: I am grateful to the hon. Gentleman for posing the central question. I hope that during my remarks I will satisfy the House, if not all Labour Members, that the settlement proposals are fair and will mean that good quality services can be delivered by councils throughout Wales, and that they offer enough money to avoid sacking essential staff. They certainly offer enough money to avoid sacking any teacher who is needed in the classroom. I do not want to see that happen. I trust that hon. Members do not, too. It is up to local authorities. I believe that the extra grant—the extra spending permission—means that a good quality education can be delivered to children in Wales without it in any way being jeopardised by the proposals. I shall illustrate later the fact that local government has considerable flexibility to spend wisely and well. It has resources at its disposal to do a good job.
Mr. Nick Ainger: When the Secretary of State made his provisional announcement on the total standard spending assessment for Wales, was he aware that

877
the various salary review bodies would be making a recommendation that was almost twice the current rate of inflation?
Mr. Redwood: I did not know the exact amount of the recommendation, but I assumed that some pay increase was likely. I have made an increase in grant, which I am just about to explain to the House, and which will go some way to meeting the requirements of local authorities. They have other assets and resources. I will illustrate them later.
I propose to provide £2,419·2 million in central Government support towards this spending, an increase of 3·3 per cent. on 1993–94. Opposition Members will see that that is a good rate of increase compared with the current rate of inflation. The support package will comprise £1,740·1 million in revenue support grant, £464 million in distributable non-domestic rates and £215·1 million in other revenue grants. More than £89 in every £100 of Welsh local authority expenditure on revenue account will be funded by central Government support. That generous level means that Welsh council tax payers benefit from substantially lowered levels of tax than their English counterparts. Welsh taxpayers should continue to benefit from relatively low levels of tax next year, assuming sensible budgeting decisions.
The revenue settlement is matched by the substantial local government capital settlement for 1994–95 which I announced on 30 November. This totals £503 million in capital grants and credit approvals, a 4 per cent. increase on 1993–94. It means welcome permissions to improve capital stock in housing, education and other crucial local government service areas.
The Welsh non-domestic rate poundage—or business rate—for 1994–95 will increase by 1·8 per cent. in line with inflation to 44·8 p. That modest increase, coupled with the transitional arrangements announced in the Budget, will be of considerable benefit to business. About 20,000 business ratepayers who faced the largest increases following the 1990 revaluation will benefit by £5·3 million from the transitional changes.
This is a decent settlement for local government in Wales. It gives local authorities an additional £100 million to spend when the low level of inflation is helping them to keep down the cost of providing their services. The £86 million that I am providing for care in the community is an increase of almost £50 million on 1993–94 and will enable local authorities to build on the introduction of the service in 1993–94. Since the 1990–91 settlement, revenue resources for local authorities have increased by almost £530 million, or 27 per cent.
My provisional settlement proposals were met by some criticism that they could lead to substantial increases in council tax levels. Increases as high as 15 per cent. were suggested. Most local authorities have yet to set their budgets, but I am glad to report to the House that press reports indicate a far more modest level of increase.
Clwyd council council and Cardiff city council are reported to be proposing a reduction in their council taxes. South Glamorgan county council and the Vale of Glamorgan borough council are reported to be planning increases limited to 3 per cent. or below. That shows that it can be done and I hope that other councils will look after the interests of their taxpayers.
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On 14 December, I announced my provisional capping criteria. I will give careful consideration to local authority budgets and make my capping decisions in the light of all the information available to me when I have received it.
May I commend Welsh billing authorities for their better than expected performance in collecting the council tax? They estimate an overall surplus on collection funds of £17·6 million as at 31 March 1994, which translates into an average £18 reduction in council tax for a band D dwelling, which could be passed on to taxpayers in their 1994–95 bills or allows the council more flexibility in its general finance planning.
Local councillors have considerable flexibility in their budgeting. The sums of money that I am describing are large. Revenue and capital spending combined of more than £3,000 million is many times the amount spent by quangos in Wales, outside the health service, arid represents a large share of my total budget for Wales. [Interruption.] I hope that Opposition Members are not suggesting that I should cut spending on health—that is a vital service, which I thought they also supported.
Flexibility is increased by the payment of rate support grant and distributable non-domestic rates as a block grant. It is for local authorities to decide how to spend the money that they are given, in line with their priorities and with local needs. Councils can raise income through fees and charges; they have balances which they can choose to spend or retain; and they have assets which they use for service provision or sell to raise capital. They have large administrations, which they should always be looking to make more effective. In education, there are surplus places to be removed, there is energy to be used more efficiently and there are ancillary services to be contracted out, if that can provide better value for money for local taxpayers.
Mr. Ted Rowlands: I apologise for interrupting the Secretary of State. No doubt he is aware of the serious problems facing the South Wales constabulary and its funding by local authorities. Is there any hope that he and the Home Office Minister responsible might get around the table with the police and local authorities to sort out the problems? People are seriously worried about the growing crime problem and the lack of policemen on the beat. I hope that he will agree to that request, which I have made on behalf of many of my constituents and many people in other constituencies.
Mr. Redwood: I am about to come to the subject of the South Wales police, but I shall answer the hon. Gentleman's question directly. I and my hon. Friend the Under-Secretary of State for Wales are always willing to discuss with local government matters relating to local government finance, and have done so during the months leading up to the settlement. My hon. and right hon. Friends at the Home Office are always willing to discuss police matters, if they are important and warrant a ministerial meeting. There was such a meeting recently, and a Home Office Minister discussed that very issue.
The last thing I want is for local authorities to skimp on the police. The budget problems of the South Wales police have been much in the news. Recently published Audit Commission profiles show that the South Wales constabulary's expenditure per head of population is above average for comparable forces and that more police are on

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duty there than in similar forces. I trust that local authorities and the police authorities will make sensible decisions about future services.
Most of the issues that have been raised tonight are for the police authority, and I hope that it will get on with its job. Where necessary, police stations should be kept open and enough policemen should be made available for beat duties and detection work.
Mr. Roy Hughes: Wherever blame lies as regards the South Wales constabulary, surely it would be madness to merge the Gwent and South Wales forces at this unfortunate time. Gwent has a very good record and we want it to stay like that.
Mr. Redwood: I will ensure that the Home Office sees a transcript of this debate, and I have noted what the hon. Gentleman has said.
The last thing that I want is for local authorities—
Mr. Walter Sweeney: Does my right hon. Friend agree that the fact that the Home Office planned to allow £7 million extra for the police budget in Wales whereas local government has chosen to allow only £2·2 million is a disgrace and reflects very badly on the running of the police authority and the chairmanship of the committee involved?
Mr. Redwood: My hon. Friend is right. The allocation of budgets is a matter for the local authority, and that issue is a matter for public debate in the council chamber.
Mr. Alun Michael: In that case, can the Secretary of State explain why in England we can get a straight answer from the Secretary of State for the Environment and the figures for standard spending assessments for the past five years, this year and next, but we cannot get the same information for Wales from either the Home Secretary or the right hon. Gentleman?
Mr. Redwood: As the hon. Gentleman knows, standard spending assessment calculations for England are carried out on a slightly different basis from those for Wales, which we set out in the report. Local authorities should have the maximum flexibility to make their own decisions. It is therefore a matter for local debate whether the community values its police service enough and whether that service needs more money to do a good job or the authority should take a look at how it is being run.
Mr. Michael: I take it that that is an implicit criticism of the right hon. Gentleman's colleague, the Secretary of State for the Environment, because he and the Home Secretary—who has responsibility—can produce figures for England. The right hon. Gentleman cannot produce them for Wales. Why? Surely it is because he is not providing the money to Welsh local authorities.
Mr. Redwood: That was a fatuous remark. I have already answered the underlying question. Local authorities should have the maximum discretion and should be answerable for their decisions to local electors, who want good police and education services. The money is there for authorities to do it if that is their wish.
Alongside skimping on the police, the last thing I want is for local authorities to reduce the number of teachers if they are needed to teach pupils. I am delighted to report
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that education standards in Wales have been rising during the past few years, following the introduction of the national curriculum and our other reforms. As I said recently, we have much further to go and more progress to make. That is very much at the top of my agenda and that of my right hon. Friend the Secretary of State for Education.
Local authorities in Wales reduced the level of rent arrears by more than 10 per cent. between 1990–91 and 1992–93, but more progress must be made. Since 1987, the number of vacant local authority dwellings has also decreased. Those are the cuts that I want—cuts in the number of empty houses, in rent arrears and in tax arrears, so that the money is there to spend on the services that people want.
I am pleased to report that care in the community has in general been introduced successfully. It is a good example of a major service being given to local government so that local rather than national democracy can determine the details of its future. How that flies in the face of Opposition criticisms that we always take important decisions away from local government. Care in the community will be one of the fastest growing services in the public sector during the decade to come, and we have entrusted it to local government.
Mr. Gareth Wardell: By defining community care—by that I mean social care as opposed to health care—in a certain way, the Secretary of State might be seeking to increase the proportion of our vulnerable population who are pushed into the means-tested category. He must be careful that he does not end up by defining health care in one way and social care in another and thus denying health care its proper role. That can clearly be seen from the fact that elderly people are being discharged into the community—as he knows because he has heard it from me before—without the necessary facilities for the disabled. His Department has decided to put the disabled facilities grant in the basic credit allowance, where it must compete against other local authority priorities. Why does he not put it back into the special credit allowance?
Mr. Redwood: Opposition Members speak with forked tongues. They say that they want local government to be more responsible and more trusted and to have more freedom, and when I provide that freedom, they complain that I am not telling local government what to do. I do not intend to lay down every detail. I too happen to believe that the disabled should be a high priority. The money is available, and in my settlement for next year I have explicitly recognised the needs of the disabled by providing a substantial increase. I hope that local government will respond by doing the decent thing. I want elderly people to be looked after well. If they can be cared for at home, well and good, but the necessary facilities must be available.
Mr. Dafydd Wigley: Does the right hon. Gentleman know that, during the current winter, an increasing number of homes for the elderly, particularly nursing homes in the private sector—in referring to the private sector, I make no value judgment—are experiencing difficulty in filling beds as a result of the policy that is being pursued in this field? Does he realise that in some cases only half of the beds in a home are occupied and that therefore people are vulnerable because they are uncertain as to whether their home—their only home—will remain

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in existence? May we have an assurance that there will be coherent planning to ensure that the transition to care in the community will not make anyone vulnerable in this way?
Mr. Redwood: That is exactly what the authorities are asked to ensure. Of course, they must have sensible plans so that beds and facilities are always available for those who need them. In a way, the fact that more elderly people are now being looked after in their own homes is an indication of the success of the concept of care in the community. We have arrested the very rapid growth in the number of permanent residential places that we saw before the policy was introduced.
As we now see, local authorities, despite some gloomy warnings, have, in general, managed well in the first year of their responsibilities. They have examined thousands of cases, and many people have been helped to make decisions about their own future. Many are able to continue living, as they wish, in their own homes. This has meant a fall in the demand for residential care, which was increasing rapidly in previous years. It is the duty of the relevant authorities to plan future provision so that everything will work smoothly for those most in need.
I trust that local authorities will respond positively to this settlement. I believe in good local government. I believe that councils have an important role to play. I am disturbed if I learn of cases of alleged impropriety or irregularity in their financial performance or in their accounting. I trust that all parties in the Hosue will unite not only in believing in local government but also in agreeing that local government should set and maintain the highest possible standards of conduct when spending the very substantial sums of money that parliament votes to it.
This is a large settlement. It is a good settlement in an era of low inflation. It gives local government in Wales the money that it needs to provide high-quality services and to get on with the job. It need not lead to high tax increases or to the redundancy of crucial workers. Well run councils will flourish as a result of this settlement, and I offer them every encouragement to do so. I commend the settlement to the House.
8.23 pm
Mr. Ron Davies: We have just seen a new model Secretary of State. The right hon. Gentleman came to the Dispatch Box and talked about conciliation. He said that he had taken into account the views of local authorities put to him since he met them last year. He may have taken authorities' views into account, but he did not accept any of their observations. He commended Labour-controlled local authorities for their council tax and rent collection rates. He actually praised democratic local government for its value and compared it with his own quango state. He really is a new model Secretary of State, but his reality is quite different from his rhetoric.
The reality is that this is a poor settlement for local government in Wales. It has been roundly condemned, not least by the county councils, which, as the largest employers in Wales, will have to face the considerable burden imposed on them by the Government's acceptance of the public sector review body's recommendations without the additional cash to meet the awards.
This settlement represents a further step along the road that we have been travelling since 1979. The financing of local government is again circumscribed. Local government's ability to respond to the needs of the community it
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serves as it and its electors deem appropriate is being curtailed yet again, and local government is losing its independence to central Government. The centralising tendency of which this settlement is a further representation is one of the most pernicious and corrosive characteristics of the modern Conservative party.
It will not be lost on anyone who is concerned with the application of the settlement that, despite the Secretary of State's earlier remarks, as the democratically controlled public sector represented by local government faces further cuts, the undemocratic sector represented by the 111 Welsh quangos has seen budget increases. In the case of the major bodies—the Development Board for Rural Wales, the Welsh Development Authority and the Cardiff Bay development corporation—the figure is more than 8 per cent. Given the succession of scandals and the aura of sleaze hanging over the Secretary of State's quango sector, I do not think anyone will deny that, in terms of value for money and financial probity, direct democratic control is a far better watchdog than the financial control systems of the Welsh Office.
The total standard spending of £2,705 million is £105 million above the settlement for the current financial year. The Secretary of State has argued that this is an increase of nearly 4 per cent. In the strictest sense, it is an increase of nearly 4 per cent., but that statistic itself is absolutely meaningless. In the current financial year, budgets—what authorities will have spent on delivering services, not on what the Welsh Office considers that they should spend—amounted to £2,688 million. Against that, next year's settlement, which we are debating tonight, represents an increase of only 0·6 per cent.
Even that is not itself a true reflection of reality. As the Secretary of State indicated, the current settlement includes provision for community care to the tune of £86 million. That is some £40 million below the Assembly of Welsh Counties' assessment of what is required to meet the needs of the community. In any event, it is not available for general spending. If that figure is removed from the spending total, the current increase is only 2·3 per cent. above the settlement for 1993–94 and, being £28 million or 1 per cent. below the current year's budgets, represents a real terms reduction of 4 per cent.
That is a measure of the cuts that the Government wish to force on local government this year. In any circumstances it would be difficult enough, but this year Welsh local government has to suffer the cumulative burden of previous years' cuts. It has also to struggle with the social and economic consequences of the recession foisted on the country by central Government, and it is expected this year to meet the costs of an unwanted, costly and unsatisfactory reorganisation of local government.
Predictably, while the Government with one hand are distorting their expenditure and creating unnecessary expense, with the other hand they are reducing the discretion available to county councils to raise their own resources. The capping limits, unfair and arbitrary as they are, are again imposing a straitjacket. All Welsh counties, for instance, are limited to a budget increase of 1·75 per cent. over 1993–94, as are the cities of Cardiff and Swansea and the borough of Newport. As my hon. Friend the Member for Cardiff, South and Penarth (Mr. Michael) pointed out, this cap of 1·75 per cent. is at the root of the funding problems of the South Wales police authority area.
Mr. Jonathan Evans: Does the hon. Gentleman agree that the difficulties of the South Wales police authority are at least partly due to the authority's belief that it would underspend in the current year and the fact that its calculations were out by about £2 million? Does the hon. Gentleman agree that that is at least a factor?
Mr. Davies: Coming from the party that controls the Welsh Office and has £208 million unaccounted for last year, it ill behoves the hon. Gentleman to lecture anyone. There have been cumulative expenditure problems in the South Wales police authority going back to 1988. Since then, the authority has faced underfunding of £38 million and experienced enormous difficulties.
The hon. Gentleman will know that the South Wales police authority committee, its officers and its chief constable have visited Parliament to put their cases to hon. Members representing the South Wales police authority area and to Earl Ferrers, the Minister responsible for the police. They certainly have not encountered any criticism from the Government. If the hon. Gentleman believes that there is some criticism to be made, I suggest that he takes a leaf out of the Secretary of State's book and refers the matter so that it can be properly audited. He will then see that no blame whatsoever can be attached to the members or the officers of the police authority.
Mr. Evans: Is the hon. Gentleman aware that the district auditor has suggested that there is a total lack of accountability or any proper financial control in the police authority? As the shadow spokesman for Wales, is he unaware of that?
Mr. Davies: The hon. Gentleman might well have seen a copy of the provisional report. That report was made on the same basis as the one presented to Westminster city council, which referred not to a difficulty of £2 million created as a direct result of Government underfunding of the police authority, but to the expropriation of millions of pounds to line the pockets and further the political interests of his party. However, I did not notice the hon. Gentleman's vociferous condemnation of Westminster city council or any other Tory-controlled councils.
If there is any evidence of financial mismanagement in the policy authority, it has to be properly investigated; it has to be the subject of a proper report by the district auditor. If the district auditor finds any wrongdoing, wilful neglect or unacceptable maladministration, I shall certainly join the Secretary of State in condemning it.
I have the advantage of being condemning such maladministration, whether it applies in the democratic sector or the quango sector. Unfortunately, despite the corruption, mismanagement and fraud for which the Secretary of State is personally responsible in the quango sector, we have heard not one word of condemnation either from him or from his colleagues.
Mr. Sweeney: The hon. Gentleman has brought the case of Westminster city council into the debate, no doubt for comparison. Is not the difference between those issues that Westminster city council implemented a highly successful policy that resulted in political benefit to the party which introduced it, whereas in this case there was clearly no benefit, and the policy was disastrous for policing in south Wales?
Mr. Davies: I note the look of intense embarrassment on the faces of the Secretary of State, his Parliamentary Private Secretary and the Minister of State. The hon. Gentleman would do well to read the Official Report of tonight's debate. I am sure that he will want to reflect carefully on the justification that he has just made of corruption in local government.
Mr. Redwood: I wish to make it crystal clear to the hon. Gentleman, as I thought I had in the past, that of course I condemn fraud, wherever it is discovered and proven. That applies to my own staff and to outside bodies as well as to elected local government bodies. It must be condemned and rooted out if there is suspicion of it and it can be proven. Now that the hon. Gentleman has performed his mirrors vanishing trick with the extra billions, does he agree with two simple points—that there will be 3·3 per cent. more money available next year in central Government support, and that the RSG alone is up £71 million? Where is he spiriting it all away?
Mr. Davies: Nothing is being spirited away. The Secretary of State has raised two points and I shall deal with them both. First, he is anxious to ensure that corruption in public life is rooted out. I shall take the right hon. Gentleman at his word. I put it to him, however, that there is abundant evidence that the part of public life where corruption, sleaze and fraud flourish is that for which he is responsible. The democratic sector in Wales—the local authority sector—shows no such evidence of corruption, sleaze and fraud. If the Secretary of State wishes to root out the endemic corruption in Welsh public life, he should ensure that the 40 per cent. of his expenditure currently accounted for by quangos is brought under direct democratic control. That is how to ensure that corruption no longer exists.
Mr. Rod Richards: Will the hon. Gentleman give way?
Mr. Davies: With the greatest respect to the hon. Gentleman, I am replying to the Secretary of State. I know that the hon. Gentleman has only recently arrived in the Chamber; he is what we might call a sioni-come-lately. I shall give way to the hon. Gentleman when I have dealt with sioni coed coch.
Mr. Deputy Speaker (Mr. Michael Morris): Order. Will the hon. Gentleman translate that into English for the benefit of the Chair?
Mr. Davies: I am afraid that I cannot. If I were to do that, you would rule me out of order Mr. Deputy Speaker, but we all know to whom I am referring.
Secondly, the Secretary of State referred to a vanishing act. It is not a vanishing act. The most valuable comparison is between this year's standard spending assessment and last year's budget. The Secretary of State continues to compare this year's standard spending assessment with last year's standard spending assessment. The SSA last year bore no relationship whatsoever to the democratically expressed needs of Welsh local authorities. That is the heart of the difference between us. I see that the hon. Member for Clwyd, North-West (Mr. Richards) has regained his composure, so I happily give way to him.
Mr. Richards: The thrust of the hon. Gentleman's argument seems to be that the central Government

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contribution to local government expenditure is underfunded. Will he tell us by how much he believes it is underfunded, and how much more the Government ought to be contributing towards local government expenditure?
Mr. Davies: The heart of the problem is that, since 1979, the Government's policies have led to economic failure.
Mr. Richards: Answer the question.
Mr. Davies: It is a direct answer to the question. Since 1979, there has been a succession of economic failures. The Government have increased the tax burden on the British public and cut on local authority expenditure. Had we had a Labour Government for the past 15 years, we would not be in the state we are in now. That is the only answer that the hon. Gentleman will get.
Mr. Richards: Will the hon. Gentleman give way?
Mr. Davies: I will happily give way to the hon. Gentleman again, but he must understand that I shall repeat the answer that I have just given him, so there is not much point in repeating that question.
Welsh local government is underfunded. Had we had a Labour Government since 1979, we would not have experienced the disastrous economic performance, nor the increased tax burden, nor would we have the waste, fraud and corruption of the quango state. That is the answer to the hon. Gentleman's question. If he asks the same question again, I will merely refer him to the answer I gave some moments ago.
Mr. Richards: Thankfully, we have not had a Labour Government since 1979. The question was quite specific. We were talking about the revenue support grant for 1994–95. By how much would the hon. Gentleman recommend that the Government should increase their contribution to local government?
Mr. Davies: I refer the hon. Gentleman to the answer I gave a few moments ago, as I said I would. He might find it more fruitful to represent his own local authority, whose director of finance is clearly dissatisfied with the amount of representation that he receives from his Member of Parliament. In a letter dated 10 February, he wrote to me:
"The final local government revenue settlement for 1994–95 has resulted in a position where the Borough Council's draft budget for the new year is some £200,000 greater than the council tax limitation capping figure set by the Secretary of State."
That has obviously created substantial budgeting problems for the authority. The hon. Gentleman would do his constituents a better service by making his representations directly to the Secretary of State, thus ensuring adequate funding for his local authority.
Mr. Richards: Will the hon. Gentleman give way?
Mr. Davies: I have already given way to the hon. Gentleman.
Mr. Richards: On a point of order, Mr. Deputy Speaker.
Mr. Deputy Speaker (Mr. Michael Morris): I hope that it is a point of order for the Chair.
Mr. Richards: It is, Mr. Deputy Speaker. The hon. Member for Caerphilly (Mr. Davies) has quoted a communication that he says came from a constituent of
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mine, but he did not relay it to me. Is it in order for him to raise the matter on the Floor of the House in such circumstances?
Mr. Deputy Speaker: It is perfectly in order for any such reference to be made; if a particular matter is to be raised, however, it is courteous to inform the hon. Member involved.
Mr. Davies: With respect, Mr. Deputy Speaker, I ask you to reflect on that ruling. I certainly did not know that I was to be subjected to a barrage of interruptions from the hon. Gentleman.
Mr. Deputy Speaker: The hon. Gentleman will have made his own judgment on what material to use; he will have noted which hon. Members were present, and I assume that he made his judgment on that basis. My ruling stands.
Mr. Davies: I do not dispute your ruling for a moment, Mr. Deputy Speaker, but we find ourselves in bizarre circumstances: it appears that I should have anticipated the precise nature of the interventions of the hon. Member for Clwyd, North-West. I suppose, however, that that was rather predictable, and that I should have known better.
Let me return to what I was saying about the increase in aggregate external finance. It is 1 per cent. lower than the increase in total standard spending, and there will be an increase in the percentage raised by local taxation. We must welcome the principle, which would enhance democracy and extend freedom of choice at local level; if that principle is to be acceptable in practice, however, we need a central Government who both honour the role of local government and are themselves a Government of sound finance.
Unfortunately, the present Government meet neither criterion. The 2·5 per cent. VAT surcharge to pay for the poll tax fiasco is still with us, and from April this year the average family in Wales will pay an extra £14 per month in income tax, insurance charges and indirect tax. Moreover, if this financial settlement is approved tonight, it may mean a 10 per cent. increase in the average Welsh council tax—a rise from £328 in the current financial year to £360 in 1994–95. Perversely, if all authorities spend to their capping limits, the increase may be even higher, bringing the average council tax bill to £377.
The impact of the settlement on revenue expenditure will be both direct and severe. I shall give specific examples shortly; but, before I do so, I wish to comment on the capital programme, which gives the clearest possible demonstration of the Government's unwillingness to respond to the proven ability of local councils to be partners in the enterprise of economic development.
In cash terms, over £13 million has been cut from the capital expenditure plans, with programmes such as housing, environmental services and roads bearing the brunt. Most significant, more than £70 million has been cut from capital programmes under local authority control to allow supplementary credit approvals under Welsh Office control for European regional development fund schemes.
As a result of those policies, projects throughout Wales have now been approved for European regional development fund funding, but have been shelved because of insufficient credit approval. What attitudes prevail in the Welsh Office to allow such a waste of both additional resources and local opportunities? Alyn and Deeside has

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had to shelve nearly £1 million of infrastructure work; Brecknock has had to shelve a tourism venture; Meirionnydd has had to abandon £650,000 worth of seafront and townscape works. All those projects could have been financed with the aid of European moneys, but for Welsh Office policy.
The five urban counties—the three Glamorgans, Clwyd and Gwent—all report the loss of millions of pounds of available grant. I hope that the present Secretary of State will set aside his Europhobia, and ensure that Wales maximises its benefits from the European Union.
Mr. Jonathan Evans: Will the hon. Gentleman give way?
Mr. Davies: I will, because I mentioned the hon. Gentleman's local authority. Let me point out, however, that I have been very generous in giving way, and I want to allow others to speak.
Mr. Evans: I accept that the hon. Gentleman allowed me to intervene earlier, and I thank him for his courtesy for giving way now.
The hon. Gentleman specifically said that a tourist project in my constituency had been deferred. I know of a significant number of tourist projects that are being undertaken by Brecknock borough council in the current financial year; perhaps the hon. Gentleman will give details of the project that is not proceeding.
Mr. Davies: I will, but, if I may, I will convey them via my hon. Friend the Member for Torfaen (Mr. Murphy). I have the information in my files, but I want to proceed with my speech. My hon. Friend the member for Torfaen will reply in winding up—if he catches your eye, Mr. Deputy Speaker.
Let me refer specifically to two services which illustrate just how damaging are the policies reflected in the revenue support grant settlement. The Secretary of State would have us believe that he is concerned about educational standards; no doubt we shall debate that at some length in the near future. I do not know whether the Secretary of State has had any relevant experience, or whether his children attend a state school, but I know, from my experience and that of my constituents, just how difficult it is to strive for high standards in decrepit buildings with not enough resources, too few teachers and inadequate LEA support. That is what exists throughout much of Wales nowadays, and that is the situation that the settlement will perpetuate.
In the most cynical move of all, the Government have accepted the recommendations of their review bodies on public sector pay, and then left the cash-strapped LEAs to face the consequences. Let me put it in the words of the financial adviser to the AWC, Steve Dunster:
"All of the Counties are now wrestling with the problem of the pay award for school teachers of 2·9 per cent. The Government is not pretending that adequate funds have been provided, but rather that the additional costs must be met from efficiency savings and improvements in productivity. Frankly it is impossible to apply that sort of policy to a small primary school with a handful of teachers. West Glamorgan is struggling to find a contribution to schools budgets for the pay award of 2 per cent., leaving the schools to find the balance from their reserves if they have any. I would expect this to be a common experience across Wales—the first reaction of my colleague County Treasurers is that some shortfall will arise everywhere".
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Put simply, that means that LEAs will have to cut other parts of their education budgets to meet the cost of the pay awards independently calculated and approved by Government.
The problem of cuts is of precisely the same order as last year's. In our debate 12 months ago, I forecast that that settlement would mean the loss of 2,500 local authority jobs; that estimate proved correct. Two thousand of those 2,500 jobs were lost from the education sector alone. The pattern will be repeated next year as a result of this settlement.
In Dyfed, cuts across the board have been overshadowed by the ending of discretionary grants. Talented young people wishing to develop skills in areas such as the arts, or those wishing to further their studies to improve their chances of employment, will be denied the opportunity by the squeeze that central Government have imposed on local finances.
Mr. Gareth Wardell: Does my hon. Friend agree that, under local management of schools, the Audit Commission report "Adding Up the Sums" informs governing bodies that they should consider carefully when it comes to giving teachers their annual increases? They must often choose to employ young, untrained, inexperienced teachers and get rid of experienced teachers, which will lead to a radical decline to educational standards.
Mr. Davies: My hon. Friend is absolutely right. He has reminded me of the comment by Baroness Blatch, who I believe has some authority in such matters. She said that she was of the view that governing bodies and parents would be happy to see increased class sizes so that the teachers' pay bill could be met. I should be grateful if the Secretary of State would confirm that that is now the view of the Government. I am more than happy to give way to the Secretary of State if he wishes to confirm that the Education Minister who speaks for the Government in another place is speaking for him.
Mr. Richards rose—
Mr. Redwood: I have made my position clear on that matter. I want high-quality education and I think that the money is there to achieve it. Of course I do not intend to gainsay what my colleagues say.
Mr. Davies: The last comment was significant. The Secretary of State does not gainsay what his colleague says. Let us put on the record clearly that his colleague said that she believed that governing bodies and parents would be happy to see increased class sizes so that the teachers' pay bill could be met. We have that as official Government policy.
Mr. Richards rose—
Mr. Davies: I must proceed. I have given way.
Discretionary grants are also the main casualty of a £1·3 million cut in education spending in South Glamorgan and a £2·5 million cut in Gwent. Gwynedd faces a cut between £2 million and £3 million, redundancies are expected in Powys, and almost £5 million will be cut from education alone in Clwyd, with at least 200 teaching jobs at risk. My own county of Mid Glamorgan, the poorest and most deprived of any in England and Wales by any criteria, has to face cuts totalling £15 million, of which education has to take its share of the brunt.
Mr. Richards rose—
Mr. Davies: I have told the hon. Gentleman that I shall not give way.
My second illustration concerns the ability of Welsh local authorities to contribute to effective levels of policing. Every Opposition Member will testify to the sense of bitterness and bewilderment felt across whole communities whose collective experience tells them that policing levels have fallen below the minimum that can be regarded as adequate. Senior police officers and chief constables are being forced to speak out and to testify publicly that the services are inadequately funded by central Government and that they are unable to provide the level of funding which they, in their professional judgment, deem necessary.
The failure of the Government's economic and social policies has led to an increase in crime of 125 per cent. since they took office and to an increase of nearly 50 per cent. since 1989. Whole communities feel threatened. City centres are unsafe and elderly people cower in their homes. The response of the Government, the party that once prided itself on being the party of law and order, has been to cut, through the settlement, the resources available to police authorities.
In the South Wales police authority, on the basis of existing budgets, the chief constable is facing the prospect of closing 40 police stations. That is from a financial position of, at the end of the current financial year, being 220 officers below strength. The basic problem is that the county authorities are constrained to a 1·75 per cent. increase in overall spending by the capping procedures. That increase does not even meet the additional costs of previous pension increases.
Despite all the representations to the Secretary of State for Wales and the Home Secretary, the Government have remained intransigent and have refused to make adequate resources available to the police. Presumably, they are content to read headlines such as that in the Western Mail on 2 February 1994:
"Police 'volunteers' save crisis-hit force".
The article says:
"Police are working for nothing to stop criminals overtaking the crisis-hit South Wales force.
Officers are patrolling the streets knowing they will not be paid for their 'goodwill' overtime …
Barry, Townhill in Swansea, Llanedeym and Ely in Cardiff, Merthyr and Aberdare are among the places where police men and women are 'volunteering' to maintain the service.
One officer, who asked not to be named, said, 'it's happening all the time'.
Some admit being motivated by fears about the consequences to their own families if they clocked off on time".
It is patently clear from the Secretary of State's speech that the Government have no regard for the independence of local government and are indifferent to the damage being done to vital public services as a result of the cuts that they are enforcing. Like so much else to which the Government have turned their hand, their policies are heading for failure. Their central economic policy has failed and the British people are having to pay the price through the heaviest ever tax burden and through cuts in public services. The Government clearly care nothing for the principles of democratic accountability, but they will eventually have to face the electorate. They will then pay the price for their arrogance. The sooner that opportunity arises, the better.
8.56 pm
Mr. Walter Sweeney: The hon. Member for Caerphilly (Mr. Davies), the Opposition spokesman, seemed to blame defects in policing in Wales on failures by the Government to provide sufficient budgetary resources. I should like to put that in the context of some figures that I have obtained from the Home Office, to which I wrote seeking reassurance on that point. I understand that expenditure on the police service in England and Wales has risen from £1,100 million in 1978–79 to an estimated £5,862 million in 1992–93. That represents an increase in real terms of 83 per cent. since our Government came to office.
Mr. Michael: Will the hon. Gentleman acknowledge that the success of the Government is an increase in crime of more than 124 per cent. and that the reality of the spending on the police is that there has been an increase of only some 7 to 8 per cent. in the number of policemen and women on the streets? Is he proud of that?
Mr. Sweeney: What I am proud of is that the pay and conditions of the police have been tremendously improved while the Conservative Government have been in office. I am also pleased that absolute numbers, not only of police, but of civilians have been considerably increased over that period.
If one considers south Wales alone, one sees that at the end of October 1993, South Wales police had 3,159 police officers and 1,171 civilian staff. That represents an increase in actual strength of 515–214 police officers and 301 civilians—since May 1979.
My understanding is that there are two prime causes for the present financial situation affecting the South Wales police. The first is inadequate accounting arrangements by the South Wales police authority. The force budget for 1993–94 was set on the assumption that there would be an underspend for the previous year of something over El million. In fact, there was an overspend of well over £500,000. Moreover, the force was not told of that outcome until July last year.
I understand that the chief constable asked for a budget of £139·8 million for the present financial year in order to meet the expected demands on the force. That would have meant an increase of 8 per cent. on the previous year. The budget approved by the police authority provides an increase of only 1·6 per cent. Provision from central Government for police expenditure for the present financial year has increased by well over 5 per cent.
Mr. Michael: Will the hon. Gentleman explain how he has arrived at the conclusion that the increase for police purposes is 5 per cent? He said that he had received an answer from the Home Office, but the Home Secretary has refused to tell the House about Welsh local police authorities. The hon. Gentleman has produced a figure out of thin air and it cannot have come from the Home Office. Where does it come from? If the hon. Gentleman is basing this argument on the figure for England and Wales, be should know that only 1·75 per cent. of additional expenditure is allowed for by the Secretary of State for Wales. He should come clean.
Mr. Sweeney: If the hon. Gentleman is a little more patient, he will learn where the figures come from.
Overall provision for Wales for local authority funding of policing has been increased by 5·6 per cent. over last

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year. Provision for central Government specific grant, which meets 51 per cent. of police expenditure, has more than matched that figure. In other words, the police authority has given its force an increase of 2·2 million for the present year and central Government provision would have provided for an increase of some £7 million—only £1 million less than the chief constable asked for.
I submit that these are matters for the South Wales police authority to put right. It is the duty of the police authority to ensure that its police force receives an adequate budget, and it is regrettable that the budget provided by the South Wales policy authority to the force is insufficient to meet the demands being made on it.
The chief constable is tackling the problems by reducing overtime, cutting transport costs and adjusting recruitment. I deplore the fact that it has been necessary to take such drastic action, but we need to place the blame where it clearly lies—with the police authority and the three county councils that comprise its membership. It is their fault that there has been underfunding and a lack of budgetary control.
The problems have arisen partly because the police took on civilians, which was an approved policy. The intention was that civilians would be recruited and their salaries paid from the moneys saved by the reduction in the number of police which would be achieved through retirement. Unfortunately, it appears that the civilians were taken on, but the officers nearing retirement have not left the force, so the books have not been balanced.
Another problem is that the payment of overtime seems not to have been properly recorded. That matter needs to be examined and the South Wales police authority must get a grip on the situation to achieve proper value for money. All the elected representatives on the three county councils involved need to recognise the importance that the public attach to effective levels of policing.
9.2 pm
Mr. Win Griffiths: I begin by taking up the point on which the hon. Member for Vale of Glamorgan (Mr. Sweeney) surprisingly left the debate. It involves the relative merits of the Government's settlement for the South Wales police authority and the ability of the county council to finance it.
Even if the Home Office had provided double the amount that the hon. Gentleman mentioned, the capping criterion—the 1·75 per cent.—used for local authority expenditure means that the only way in which the council could provide the 5·5 per cent. would be to cut other aspects of their budget. They would have to sack more teachers or people involved in administration. The hon. Member for Vale of Glamorgan should have waited for a response to the issues that he raised, but he has now deserted the debate, presumably because he knew that he did not have a leg to stand on.
Mr. Jonathan Evans: In all fairness, I should point out that my hon. Friend the Member for Vale of Glamorgan is a member of the Standing Committee that is debating the Coal Industry Bill and which resumed at 9 pm.
Mr. Griffiths: All I can say is that the hon. Member for Vale of Glamorgan should have had the courtesy to tell us that he would not be able to stay for the rest of the debate.
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It is a pity that he did not stay, because there is the fundamental flaw in his argument that, whatever amount in excess of 1·75 per cent. might have been made available—I emphasise "might"—the county councils in the South Wales police authority region were always left with the difficulty of the capping criteria. If they put more money into the police force budget, they would have to cut other parts of their budget, and that cannot be gainsaid.
That is why police stations, such as those in Porthcawl and Kenfig Hill and Pyle in my constituency, will be no base from which the police can operate. In fact, all that I will have in my constituency is the major police station in Bridgend town. Elsewhere, there will be no police presence in those very important police stations.
Mr. Jonathan Evans: I am grateful to the hon. Gentleman for giving way a second time. Does he recognise that many of us in many parts of Wales may feel that our police authorities should have additional resources? It is well known that I have visited the Home Office many times, arguing for more resources for Dyfed-Powys police. The key thing, however, is that, whatever budget is set, it is the responsibility of a police authority to operate within the budget. The hon. Gentleman misses the point. The South Wales police authority has demonstrably not lived within its budget.
Mr. Griffiths: The key point to be made is that, whatever amount has been given to the South Wales police authority theoretically through Home Office funding, as a result of the 1·75 per cent. capping criteria on the county council the only way in which it could have made that amount of extra funding available to the South Wales police force would have been to cut other services. As a result of the way in which the Government have pressed and pressed upon local authority finance for years, there is no longer any fat to cut, and the muscle and bone are now being attacked. That can be demonstrated throughout Wales.
I shall draw attention to one special crisis point—I hesitate to say "bone of contention" in that context—of funding in my constituency, concerning the A4229 link from the M4 near South Cornelly down to Porthcawl, where that A road is nothing more than a country lane for a few miles. It passes a few houses called Jubilee gardens where, virtually every week, there is an accident involving motor vehicles, and every week cars plough into the front gardens of those properties. Fortunately, of late there have been no serious accidents to people, but there have been in the past.
Yet, as a result of the way in which the capping criteria work—the limitations on the spending of the county council—funding from the European Community that could be made avilable to upgrade and improve that road and remove a serious hazard to the public has had to be repeatedly postponed. The residents of Jubilee gardens—barely 20 of them—have laboured long and hard to present a petition to Mid Glamorgan county council, which is the responsible authority, but they have charged me with the duty of giving a photocopy of it to the Secretary of State for Wales. Fewer than 20 people have gathered together a petition of more than 10,000 names, demanding the improvement of that road.
Having mentioned Porthcawl, I will conclude on this point. I believe that the Secretary of State was enjoying himself in Porthcawl this very day, where I have no doubt

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many Conservative councillors in the area bent his ear about obtaining a change to the local authority boundaries for the unitary authorities. Money is being spent on those changes where there are three communities, Ewenny, in St. Brides Major and Wick, where more than 80 per cent. of the people who returned ballot papers from the Electoral Reform Society said that they wanted to stay with Bridgend. Indeed, there is one street there of which, one side is Bridgend and the other side could become the Vale of Glamorgan.
The Secretary of State had time to go to Porthcawl today but he has no time to come with me and meet the people in these communities so that he can see, first, what a foolish stand he is taking on this issue and, secondly, a great opportunity for money to be saved if he were only to leave the map as it is. Even at this late stage, I appeal to him to save money and let these communities stay with Bridgend.
9.9 pm
Mr. Jonathan Evans: The report needs to be seen in the context of the financial situation that the Government and the country face.
Mr. Rhodri Morgan: Ignore it.
Mr. Evans: We cannot ignore, as we hear from the hon. Gentleman from a sedentary position, the fact that there was a £50 billion deficit in the national finances, and we addressed that issue in the Budget. Subsequently, we have heard complaints from the Opposition about tax rises. Tax rises are inevitable if we are to address the deficit. Labour Members lack all credibility if they suggest to the House or to the country that if they were in government they could avoid this situation; presumably, if they are opposed to dealing with he deficit, they would be in favour of carrying on with it and thereafter adding to it all the costs of the various promises that they have made to local government and to their friends in various lobby groups.
I call these things "promises" because we now know, do we not, that they do not count as pledges unless they are declared in the House itself? That is the context of the announcement that my right hon. Friend the Secretary of State for Wales has had to make concerning local government finance in the current year.
In spite of these difficulties, Opposition Members seek to quote from reports by treasurers of various local authorities in Wales. [Interruption.] I cannot hear all these sedentary interventions. I cannot deal with them all. If any hon. Member cares to make one on his feet, I should be more than happy to give way.
Mr. Martyn Jones: The hon. Member mentioned promises about tax. Perhaps he would explain why his Government have made promises about tax which they have now broken.
Mr. Evans: I do not recognise that the Government made any promise in relation to tax, other than maintaining that we are a party that believes in low taxation and that we will always maintain significantly lower levels of taxation than Opposition Members.
Several hon. Members rose—
Mr. Evans: I should like to return to the kernel of the debate, which is the quotation that we heard from the treasurer of a district council in Clwyd, North-West. No
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doubt the hon. Member for Caerphilly (Mr. Davies) was delighted to receive the letter from the treasurer of that council. I should like to quote from a letter written to me by the treasurer of Radnorshire district council:
"The Government and the Secretary of State for Wales could take much pride in this year's settlement. With a 3 per cent. increase in SSA the average Welsh District can increase spending by nearly double inflation."
Mr. Ron Davies rose—
Mr. Evans: I will give way to the hon. Gentleman, because he will know, as I know, that Radnorshire and Newport were the only authorities to suffer reductions in the SSA. On behalf of Radnorshire, I have been making my concern about that plain.
Furthermore, the treasurer says that, when the overall settlement for Wales was announced, it was better than people in Radnorshire had been warned to expect. But the way in which the formula works in order to split spending between the various authorities in Wales means that it has worked substantially to the disadvantage of Radnorshire district council.
My hon. Friend the Under-Secretary of State knows, because I have raised the matter with him in correspondence, that I am concerned about the difficulties of rural local authorities. Local authorities in the rural parts of Wales have presented their case for a long time. We all recognise that they face additional costs in the delivery of local government services primarily because of the sparsity of population. We had always understood that the formula recognised the difficulties that such local authorities face. I have considered the documents that have been provided.
Mr. Ron Davies: For the sake of the completeness of the record, will the hon. Gentleman confirm that the letter to which he referred was dated 13 January? In a letter to me dated 13 January, the treasurer of Radnorshire district council states:
"I enclose herewith copies of letters which I have sent to the Welsh Office and also to Mr. Jonathan Evans, M.P. for Brecon and Radnor.
You will see from these letters that the Council is not at all satisfied with either the Revenue Settlement or the Capital Settlement for the 1994/95."
Mr. Evans: The letter from which I quoted directly was dated 24 December 1993. It made it clear that the specific problem was that Radnorshire district council and Newport district council, which lies in the constituency of the hon. Member for Newport, East (Mr. Hughes) faced a reduction in their standard spending assessment. That presented them with particular difficulties.
There are three reasons for the problems. I have mentioned that a sparsity factor should be built into the formula to meet the difficulties faced by some rural local authorities. My right hon. Friend the Secretary of State for Wales will be aware that the European regional development fund grants, which were given to Radnorshire district council in 1992–93, had a disproportionate effect on its SSA. They affected the composition of the formula for working out the council's SSA in the current financial year and that is likely to cause a problem next year.
I have received from my right hon. Friend an explanation of those difficulties, but he will be aware that Radnorshire district council has always spent at or below its SSA and has charged at or below standard levels. It has not been a profligate authority. It serves a small population, and the difficulties it faces are not caused, as the Labour

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party would claim, by the fact that the overall settlement for Wales is inadequate. The representations that I have received show that that is far from the truth. The council's difficulties are caused by the way in which the settlement has impinged on it and on the authority in the constituency of the hon. Member for Newport, East.
I was surprised when the hon. Member for Caerphilly informed the House that my local authority, Brecknock borough council, would not proceed with a project. You may recall my surprise when I learnt that, Mr. Deputy Speaker, and my challenge to the hon. Member to give some details. I was aware that, during the past financial year, my right hon. Friend the Secretary of State approved the new Brecon leisure centre, a major project in my constituency. I was also pleased that only some months ago he provided a further £100,000 towards the centre's grandstand facilities around the athletics track. You can understand my surprise, Mr. Deputy Speaker, when I heard the Labour Front-Bench team suggest that the leisure centre project, or another project, would not proceed.
During the debate, I was challenged by Opposition Members for having disappeared briefly from the Chamber. I confess that I did leave the Chamber; I spoke to the chief executive of Brecknock borough council, Mr. Doylend, to check the information that the hon. Member for Caerphilly gave the House an hour or so ago. Mr. Doylend has told me that the council is pleased with the settlement as it affects itself. The borough council does not experience the same disadvantages from the working of the formula as Radnorshire does, so Mr. Doylend is perfectly happy for me to report to the House that it is pleased with the settlement.
Mr. Doylend also informed me that in the current financial year there will be an increase of 3 per cent. in the local council tax. He spoke to the treasurer of Brecknock borough council only this afternoon, and he knows of no project whatever within the council's area that is to be cancelled as a result of the settlement, yet the House was told of one only an hour or so ago by the hon. Member for Caerphilly.
When I challenged the hon. Gentleman he said that the hon. Member for Torfaen (Mr. Murphy) would give us some details of the project. In view of my conversation with the chief executive, which took place only a few minutes ago, I shall certainly give way to the hon. Gentleman if he is now in a position to give us some details about the project that he claimed was to be cancelled.
Mr. Ron Davies: I am happy to confirm that that was precisely the information given to me by the Council of Welsh Districts. I shall give the hon. Gentleman full sight of the information at the end of the debate; it appeared in a list of projects that had fallen foul of the rules on the European regional development fund, and I assure him that it was given to me in good faith.
Mr. Evans: In the circumstances, may I say with equal courtesy that I accept the hon. Gentleman's explanation for the erroneous information that he put before the House. The briefing from the Labour-controlled Council of Welsh Districts is demonstrably inaccurate yet again. With respect, I offer the hon. Gentleman the suggestion that if in future he wants to inform the House about projects that are to be cancelled, he might speak to the chief executives or
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to members of the councils, rather than to the Council of Welsh Districts, which provides so much of the briefing that he conveys to us from the Dispatch Box.
Mr. Redwood: I confirm that my hon. Friend has been assiduous in putting the case for Radnorshire. However, is he aware that, although Radnorshire does not benefit from the formula this year, it has benefited considerably in the past, for reasons that include its rural nature? The total SSA in 1991–92 was £2·493 million, in 1992–93 it was £2·971 million and in 1993–94 it was £3.281 million. That is one of the biggest rates of increase. I hope that it has been of benefit to Radnorshire, and I am glad that Brecknock is happy with this year's settlement.
Mr. Evans: I am very much aware of the point that my right hon. Friend makes, and I recognise the fact that those settlements were welcomed in previous years. However, the fact remains that Radnorshire district council has on-going programmes, and they must be funded during the coming financial year. Clear difficulties have been caused to the district council, although it has not joined in the misleading of public opinion that we hear from so many Opposition Members. What I have said during the debate shows that the settlement for Welsh local authorities in general has been welcome, but for Radnorshire in this specific year it has caused great difficulties.
I draw my remarks to a close by saying that this is a difficult financial time. The settlement announced by the Secretary of State is better than could have been expected, and the speeches that we have heard from Opposition Members have been as erroneous as the briefing that many of them received from the Council of Welsh Districts.
9.24 pm
Mr. Ieuan Wyn Jones: I do not want to enter into the argument between the hon. Member for Brecon and Radnor (Mr. Evans) and the Labour Front Bench. However, the hon. Gentleman made two statements which, frankly, cannot go unchallenged. The first was the amazing proposition that, because the Government have a public sector deficit of £50 billion, Opposition parties must somehow tailor their policies as a result. It is an amazing proposition that our policies should be coloured because the Government have created this massive deficit.
The second statement that must be challenged is that the hon. Gentleman was not aware that the Tories made any statements at the last election that the Government would not raise taxes. The reality is that they made statements time and again that the Government had no intention whatever of imposing value added tax on fuel. I remember the former Prime Minister, Baroness Thatcher, telling the House that the Government had no plans to impose VAT on fuel. However, that is what happened in last year's Budget.
The hon. Gentleman must accept that we are not constrained by the difficulties that the Government face because we have the opportunity to tell them what sort of settlement local authorities should receive and the level and range of services that they should provide.
The Secretary of State told us that he believed in good government. The test of whether he means what he says will be if, first, local authorities are given proper resources for the range of services that they provide and, secondly and just as importantly, if local authorities are given the freedom to deliver those services. For the past 10 years or

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more, local authorities have had their powers stripped one by one in the sort of salami-slicing approach of taking a bit year after year. Clearly, if powers are taken from local authorities, they will not be able to provide the range of services that one normally associates with them.
The hon. Member for Gower (Mr. Wardell) told us about the difficulties that many education authorities now face and I shall mention one or two of them. Following the transfer of higher and further education to the new quangos set up by the Welsh Office, and the transfer of some responsibility from education authorities to schools, local authorities are no longer able to provide the range of services that they provided 10 years ago. The difficulty is that schools are in the invidious position of having to choose to cut teacher numbers and increase the size of classes, or cut extra-curricular activities which have provided children in Wales with the breadth of education that was provided when we were at school. By that I mean provision of music, art and drama.
How many generations of young people from rural parts of Wales and the valleys of south Wales have made it in the international arena because local authorities were able to provide those services? Why are young people no longer able to participate in such activities unless they belong to middle-class families or families which can pay for the services? It is a shame that we are letting our young people down in this way. I would like local authorities and schools to be given the freedom, the opportunity and the resources to ensure that they can give this generation the opportunities that we had. Our parents fought to give us that opportunity, but I fear that our generation is letting down our children.
My final point relates to the resourcing of police authorities. We have heard a great deal about the difficulties of the South Wales police authority. I would not like the debate to go by without mentioning also the difficulties faced by the North Wales police authority. Year after year, the authority has asked the Home Office to provide the resources that would enable it to increase the numbers of personnel, and year after year it has been turned down.
Last year, the authority was given no increases. The difficulties which may be peculiar to the South Wales police should not cloud the fact that police authorities all over Wales are having problems. I hope that the Government recognise the need properly to resource police authorities in Wales.
We have heard about the massive increase in crime rates in rural Wales—rates that were unheard of a generation ago. It is essential that the police are given the resources necessary to allow them to carry out their task properly. We need to have more policemen on the beat, walking the streets and making sure that the elderly are safe in their homes. The police understand that they need more money to be made available, not only through the Home Office, but through the county councils.
Mr. Gareth Wardell: Will my hon. Friend add to his list the fundamental importance of the forensic science service? Unless the police have the resources to buy those services, they will be unable to undertake proper criminal investigations. There will be insufficient cash for the evidence collected to be made available to the Crown Prosecution Service, if a prosecution is necessary.
Mr. Jones: I am grateful to my hon. Friend and I am sure that his intervention will have been heard by the Government.
It is right that criminals should be dealt with properly and that we should have a range of sentences in our courts, it is equally necessary for the police to have proper resources to do their job. I hope that the Welsh Office now understands the crisis facing local authorities on a range of issues. Even if the Government were unable to address that crisis in this year's settlement, it will not be forgotten next year.
9.33 pm
Mr. Roy Hughes: I am glad to acknowledge the support of the hon. Member for Brecon and Radnor (Mr. Evans) regarding the financial difficulties of Newport borough—directly, of course, as a result of the decisions of this Administration. It was most magnanimous of the hon. Gentleman.
We all recognise that local government is highly complex and no one can deny that fact. For a Government intent on curbing local government activity at every turn, that complexity is a godsend. Tonight was no exception, of course. We had the usual juggling act from the Secretary of State, when he gave us the "now you see it, now you don't" act.
My hon. Friend the Member for Caerphilly (Mr. Davies) said that we live in an age of quangos; there are 111 of them. They are a blot on the landscape and many people feel that the sooner they are got rid of, the better. Those bodies are accountable only to the Secretary of State and they are invariably filled with Tory placemen. I am sad to say that there have been increasing examples of corruption in high places. By comparison, local government in Wales has been of a high order. In England, there have been minor difficulties in Lambeth, but they have been dwarfed into insignificance by what has happened in Tory-controlled Westminster. Our local government in Wales has been first class by comparison.
The democratic nature of local government needs encouraging, not throttling. The simple fact of the Welsh rate support grant settlement is that the council tax payer will pay at least an extra 10 per cent. That is several times the level of inflation. What is more, the 10 per cent. increase imposed on the council tax payer is in addition to all the other increases announced in the previous two Budgets. I shall briefly list but a few: VAT on domestic fuel will increase to 8 per cent. from 1 April, with more to come the following year; petrol tax is up; vehicle excise duty is up; national insurance contributions are up. Many more examples could be cited. Where are families to get the money to pay the additional council tax and other taxes?
I have been informed that in Newport borough, standard spending, instead of increasing by 2·3 per cent. as it should, has fallen by 0·5 per cent. The Government are shifting more of the burden on to taxpayers. In Newport, male unemployment is between 13 and 14 per cent. There is a need for economic regeneration. Yet our local authority is denied resources. Newport could provide jobs not only for the town itself but for so many of the areas in the valleys.
On housing, so much more could be done to house the homeless, let alone put construction workers back to do the work that they have been trained to do. Instead, many of them are languishing in the dole queue. Local government

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should be allowed to spend receipts from the sale of council houses. That could do a great deal to regenerate the economy of Wales and elsewhere. Local authorities have had to cope with much new legislation, including the Children Act 1989 and legislation on community care, the national curriculum and mental health services. In respect of those items, the settlement is harsh.
In conclusion, local government in Wales needs a better deal, but it is not likely to get one from the Conservative Government. They are a millstone round the neck of local government and of Wales in general. The sooner they are ousted the better. We need a Labour Administration who will create a democratically elected assembly for Wales.
9.37 pm
Mr. Rod Richards: I shall be brief, Mr. Deputy Speaker. A few weeks ago, the hon. Member for Caerphilly (Mr. Davies) stopped me and asked me whether I could please tell him the Welsh word for "idea". So I told him. The Welsh word for "idea" is "syniad". I said, "But surely what you want to know is the Welsh for no idea—`dim syniad'." What we heard from the hon. Gentleman this evening was absolutely no idea about the financing of local government. He said time and again that local government in Wales was underfunded. He said that the police were underfunded. He said that education was underfunded. Yet when he was challenged to be precise about by how much the police were underfunded, he could not say. When he was challenged to say by how much education was underfunded, he could not say.
I challenge the hon. Gentleman, through his spokesman who will reply to the debate for the Opposition, the hon. Member for Torfaen (Mr. Murphy). The hon. Member for Caerphilly said that he was unhappy with the settlement for teachers' pay. Will the hon. Member for Torfaen tell the House what he believes would be a fair settlement for teachers' pay in 1994–95? He must think that the people of Wales are naive if he thinks that his party would not spend more on local government, because his party proposes a Welsh assembly to oversee local government in Wales costing £1 million a day. Will he commit himself to £1 million a day?
The hon. Member for Torfaen said that education has been underfunded. It has been underfunded by Clwyd education authority in my constituency. I refer him to Llandrillo college of further education, on which Clwyd education authority has not spent a bean in 15 years. thanks to the Conservative Government, the college is about to receive its first tranche—£1·6 million—of a £6 million investment this year.
Mr. Wyn Griffiths: Does the hon. Gentleman recall what it cost Wales when the Conservative Government of the day last reformed local government? Will he tell us how much extra money the proposed reform will cost?
Mr. Richards: I am more than happy to answer that question. It will cost less than the proposals of the Labour party, which wishes to add an assembly to the cost of the reform of local Government in Wales.
Mr. Donald Anderson: on this, the hon. Gentleman has said boldly that—
Mr. Deputy Speaker (Mr. Geoffrey Lofthouse): Order. I think that the hon. Gentleman has finished his speech.
9.41 pm
Mr. Alex Carlile: I must apologise to the House for my absence during the early part of the debate, particularly to the Secretary of State. I have been following the Government's advice and getting "back to basics". I spent much of this evening with my own wife, but unfortunately underestimated the time at which the debate would start.
I will not detain the House long, but I want to tell the House something of what is happening in Powys in so far as it affects my constituency in Montgomeryshire. I hope that we shall hear a good deal more of the name Montgomeryshire in the years to come, despite the current ill intentions of the Secretary of State.
There are certain things with which we can possibly live. If highways are not repaired—the Government insists on failing to provide the money to repair them—I suppose that we can live with a few broken roads. We in Montgomeryshire are becoming used to broken roads. I have often raised problems relating to country roads with the county surveyor. I have letter after letter saying that Powys county council, which is not profligate—I do not think that it has ever been so accused—does not have the money to repair them.
Let us turn to other issues, such as social services and care in the community. We cannot afford to live with broken people. In some cases in Montgomeryshire, people are being forced to go "into the community". But they are sent not into their own community or to where their nearest and dearest are—if they have any surviving relations—but to the most convenient pigeonhole which falls within the Government's policy. That leads to broken people. I do not consider that an acceptable way of dealing with local government requirements.
I do not know whether the Secretary of State has asked the chairmen of social services committees or directors of social services about funding for care in the community, but if he does they will tell him and his hon. Friends on the Front Bench that it simply is not enough to meet the task. I take no issue with the task, as resettling patients in the community is entirely desirable, but I take issue with the failure to provide the wherewithal for that task. Nor can we afford broken futures.
Education provision in the county of Powys will be frozen in real terms for the forthcoming financial year. Powys will only achieve that freeze by cutting other services, such as the opportunity for adults, especially the elderly, to enjoy their share of knowledge. The mobile library service in Montgomeryshire, which is something of a lifeline to many pensioners who live in remote villages, is being cut to save the miserable sum of £25,000. Powys county council does not want to cut it, but feels that it has no choice. It is a disgrace that we should have reached the stage where, because of the Government's local government finance policy, the mobile library service has to be cut. Pensioners will not be able to obtain books because there is no public transport for them to get to libraries in Welshpool, Newtown or the other towns in my constituency.
What about education? The hon. Member for Ynys Môn (Mr. Jones) mentioned some of the effects of what are, in

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real terms, cuts in education. He mentioned music teaching. I am not so concerned about the cases he cited of international musicians of great stature who have come from rural Wales. Such people are likely to appear in any event, as great natural talent shows itself.
I am more concerned about the majority who are amateur musicians—there are probably many in the House—who sing in choirs, play the piano for their own enjoyment or play in small amateur orchestras. There are thousands of them and they form the basis for musical enjoyment in this country. They will not be able to become musicians because many schools are not able to buy music tuition for young people, which is so essential as a base on which to build their future enjoyment of music.
The other day, I received a letter from parents at one school in my constituency, which revealed that they are being forced to buy music tuition at a very high price—if they can buy it at all—from a commercial organisation, whereas only a few years ago such tuition was free [Interruption.] I wish that the hon. Member for Erith and Crayford (Mr. Evennett) who is sitting behind the Secretary of State and is not a Welsh Member of Parliament, would show a little less exasperation and amusement. Local government finance cuts matter in Wales. They may not matter to him, but they matter to us. Another aspect of education—[Interruption.] I wish that the hon. Gentleman would keep quiet.
Wales has produced its share of good artists, who learned art at school. Art teaching is not a luxury, but should be a part of every child's education. That provision, too, has been cut in Powys as a result of the Government's local government finance policies.
Teaching through the medium of Welsh is a core area of education that is facing privatisation in Montgomeryshire. Montgomeryshire—indeed, Powys—is the only county in Wales that does not have a Welsh-medium secondary school. Welsh teaching is provided in some schools in my constituency and it is done very well, but some parents reasonably wish to send their children to a Welsh-medium school. Plans for such a school have been prepared time and again. An entire school—or at least part of one—has been proposed, but the possibility has probably been put back for yet another year because of the Government's policies. Why is it that, in respect of all subjects and at all levels, children should suffer and possibly face broken futures as a result of the Government's policies?
The issue that causes most concern in education is class size. There is no doubt that the increase in teachers' pay will not be met in Powys this year without a significant increase in the size of classes. Powys county council, acting on what it believed, on the basis of Government policy, to be the likely outcome, made an allowance of 1 per cent. to cover the increase in teachers' salaries for the forthcoming year. The council got it wrong, and the result is that class sizes will increase.
Mr. Redwood indicated dissent.
Mr. Carlile: The Secretary of State shakes his head. I do not know what magic the right hon. Gentleman can conjure up to ensure that class sizes will not increase if there is not enough money to meet the teachers' pay increase.
Mr. Redwood: If the hon. and learned Gentleman had had the courtesy to be present for the entire debate, he would realise that exactly those points were covered
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extensively in some lively exchanges between Opposition Members and myself. I hope that the hon. and learned Gentleman will read the record of the debate so that he may understand the position that his constituents will face next year.
Mr. Carlile: I shall read the record with great interest. The fact is that the right hon. Gentleman did not begin to attempt to answer my question. If he can show Powys county council how to avoid cuts in the numbers of teachers and increased class sizes I shall certainly write to him in proper apology, as I hope he would expect me to do.
Mr. Jonathan Evans: As the hon. and learned Gentleman knows, I represent the other half of Powys—the major proportion of Powys; a bigger proportion than is represented by the hon. and learned Gentleman. He will know that the former director of education, Mr. Robert Bevan—now a member of the Powys authority—has come up with the very proposition that the hon. and learned Gentleman is putting forward: that there will be teacher redundancies.
The hon. and learned Gentleman will be reassured to hear that I spoke to the chairman of the education committee about this on Saturday and was informed that he hopes that it will be possible to make an arrangement whereby the matter can be dealt with without teacher redundancies. I hope that the hon. and learned Gentleman will welcome that statement from the chairman of the education committee.
Mr. Carlile: We have all this hoping that arrangements can be made; but the fact is that Councillor Robert Bevan, the immediate past director of education for Powys, made it quite clear, from his great fund of experience and his knowledge of the education system in the county, what will happen. I put it to the hon. Member for Brecon and Radnor (Mr. Evans), who represents what he describes as the other half of Powys—a description which may give rise to some interest in debates on another piece of legislation—that what Mr. Bevan said is what will happen.
The basic point that I wish to make is that, once again, we are witnessing cuts in local government services in rural Wales. Powys county council is not to blame—neither its members nor its officers. The public do not understand what the Government are up to when they see, in particular, every aspect of their children's education being hammered by the policies of the right hon. Member for Wokingham (Mr. Redwood). Month after month, people feel that Wales is being ruled more and more from London, and that is not acceptable.
9.53 pm
Mr. Martyn Jones: I should like to raise the question of the specific effect on Clwyd of the inadequate revenue support grant provision. Before doing so, however, I remind the hon. Member for Clwyd, North-West (Mr. Richards) that the Welsh for "promise" is "addewyd". The Government promised that they would not raise taxes or increase VAT, but they did just that. We face real cuts in services in Clwyd—indeed, throughout Wales—as a result of the Government's policies over the past 15 years. Significantly, the hon. Member for Clwyd, North-West mentioned that fact that for 15 years—precisely the Conservatives' period in office—Llandrillo college in Clwyd had not received any money for repairs.

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We learnt from my hon. Friend the Member for Caerphilly (Mr. Davies) that there is a real-terms cut in revenue support grant provision throughout Wales. Despite the flannel from the Government, that applies to Clwyd. Excluding community care provision, Clwyd will receive only 1.66 per cent. more than last year. Admittedly, inflation is low, but the figure is below inflation and hides the necessity for extra provision to meet the needs of new legislation such as the Children Act 1989, and measures relating to the national curriculum and mental health.
Central Government have agreed to wage rises but have not funded them, having said previously that they would not agree to any pay increases for teachers. Those increases now have to be funded out of already inadequate budgets. Even the additional community care money for 1994–95 is estimated by the Association of Welsh Councils to be £40 million below requirements.
Total standard spending is up by 4 per cent., but the aggregate external finance, including revenue support grant, non-domestic rates and specific grants, has increased by only 3·2 per cent. The gearing means that council tax payers in Clwyd face an increase of 11·8 per cent., or £20, on band D. The specific grants for the police and the courts have increased by 5·1 per cent. but that reduces the amount available for other services such as education. To add insult to injury, the Secretary of State assesses council tax at £233 for counties and £53 for districts, based on 100 per cent. collection, which is clearly unrealistic. A 5 per cent. loss on collection means another £15 on band D. Those factors affect all counties, but Clwyd has particular problems.
The standard spending formula for Clwyd is based on composite social indicators, including some features which do not exist in Clwyd, but mask its real needs. Although the sparsity of population provision which applies to large areas of Clwyd is some compensation, it is not sufficient, so Clwyd suffers lack of provision for sparsity population and for social deprivation indicators.
Despite that, Clwyd is the lowest spender in Wales. Last year it received £30 per head below the average for Wales. The grant we are debating tonight will mean £24 per head below the average this year. By pure coincidence, £24 per head in Clwyd represents £10 million in funding for Clwyd—exactly the amount that will have to be cut from education and other services this year. It will mean huge class size increases and redundancies among teachers. The councils do not want to do that. They have already had to charge for mentally handicapped day centres.
I realise that we are reaching the end of the debate, so I shall make just one further point on capping. If the Secretary of State will not put right the underfunding of education and social services in Clwyd, why does he not allow council tax payers to take the decision?
Mr. Wardell: Will my hon. Friend confirm that the Government have a simple solution to the problem—the market, of course? They are giving schools the opportunity to increase pupil numbers by poaching children from neighbouring schools. They are setting one school against another. That is the formula that the Government want to put in place to solve the problem.
Mr. Jones: I am sure that my hon. Friend will agree that that is a recipe for chaos in the education service throughout Wales.
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If the council tax payers of Clwyd were told that they could avoid charges for day centres for the mentally handicapped and cuts in the number of teachers and that they would have adequate discretionary grants if they were prepared to pay only £14 a year per head more in grant, I am sure that the overwhelming majority of people in Clwyd would accept that. After all, that is only the equivalent of a Mars bar a week for every person in Clwyd, which is peanuts compared with the cuts and their effects on the pupils in our schools.
9.59 pm
Mr. Donald Anderson: I remind the hon. Member for Brecon and Radnor (Mr. Evans) that the councillor to whom he referred, Robert Bevan, was one of the many directors of education in Wales who resigned because they could no longer stomach the cuts introduced by the Government. Mr. Bevan did so in his early fifties.
In response to what was said by the hon. Member for Clwyd, North-West (Mr. Richards), let me issue the bold challenge presented by my hon. Friend the Member for Caerphilly (Mr. Davies): will he tell us the precise amount by which provision should have been increased? Do I recall his saying that he believed that Clwyd county council's local education authority had underfunded its own provision? Of course, he will be unable to specify the precise amount.
Mr. Richards: I am more than happy to reply. During the past three years, all the education authorities in Wales have underfunded schools by £33 million in terms of capital provision.
Mr. Anderson: I wonder from what hat the hon. Gentleman pulled that figure. He said earlier that the Government had not resiled from any election promises about taxation; let me remind him that, in an Orwellian manner, the Government no longer describe themselves as the party of low taxation, preferring to style themselves as the party of lowest possible taxation.
The Under-Secretary of State must recognise that this is another example of the Government's centralisation tendency. That tendency can be seen in every sector of local government—with, I concede, the exception of community care—at a time when the quangocracy is increasing enormously and the accompanying sleaze is increasing as well. Although the Secretary of State is trying to civilise at the edges, the beast that he and his colleagues have created is growing.
The essence of the problem lies in the Conservative party's awareness that it can never achieve power in Wales through normal democratic means; it must create quangos to form a sort of authority through which it can work, bypassing the local authorities, whose power is being increasingly eroded and diminishing the morale of local councillors.
We have already heard about the effect of the settlement on public sector pay increases and local authorities' difficulty in accommodating the teachers' 2·9 per cent. pay increase—and other expected increases—in their budgets. Something will have to give, and what will give is other necessary services.
The Government assume that local authorities will be able to collect 100 per cent. of the council tax. That contrasts with the collection rate of taxes in direct Government control. The income tax collection rate, for

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example, is about 98 per cent.; the VAT collection rate is about 97 per cent.; and the BBC estimates that the television licence collection rate is 10 per cent. lower than it should be, while the Home Office accepts that it is 7.5 per cent. to 8 per cent. lower than the desired figure. Yet the Government boldly assume that local authorities can do what they cannot.
There have also been effects on council tax bills. The Government's contribution to spending in my city of Swansea, for example, is limited to an increase of only £60,000, or 0·2 per cent., on the previous year. When compared with the provision for the standard spending assessment and the gearing effect, it means an increase in the council tax of 15·3 per cent. in the city of Swansea. In that sector, the Government are trying to throw the blame for their own policy failure on to local authorities and, as a result, forcing them to put up the council tax.
My hon. Friends have already made forceful points about the effects of the elimination of discretionary grants on music, the arts and so on. It is clear that the position now is worse than ever. What earlier generations of school children were able to take for granted is no longer available because there is a clear deterioration in the provision in the education sector. In addition to music and the arts, we should consider the lack of discretionary grants for those who wish to become lawyers. The withdrawal of those grants will certainly mean that, in future, our solicitors and barristers will come only from those families who are able to pay for the training. I believe that that is socially wrong, and it derives directly from the policies of the Government.
10.5 pm
Mr. Paul Murphy: As always, the debate on the rate support grant settlement for Wales has been interesting, informed and, on occasions, quite exciting. The hon. Member for Clwyd, North-West (Mr. Richards) talked about the lack of knowledge or experience of Opposition Members in local government finance. I calculated that among all the Labour Members who have spoken in the debate, there were over 50 years of experience of local authorities. My hon. Friend the Member for Caerphilly (Mr. Davies) and I were chairmen of the finance committees of our local authorities. So I must tell the hon. Gentleman that we have some knowledge and experience of what has occurred under both Governments over the past two decades.
My hon. Friends the Members for Caerphilly and for Bridgend (Mr. Griffiths) referred to the backcloth of the reform of Welsh local government. The House will consider that in a few weeks; it is currently being dealt with in another place. When we see cuts in county and district council budgets that are a direct result of the 4 per cent. reduction in the settlement, we must contrast them with the £100 to £200 million that the people of Wales will have to pay to reform local government. There is no enthusiasm for that among people in the Principality.
The Secretary of State said in his press release that the settlement
"gives local authorities adequate resources to maintain services."
The vast majority of local authorities of all political persuasions in Wales do not agree with him. No more did they agree in July 1979 when the former Secretary of State for the Environment, the right hon. Member for Henley (Mr. Heseltine), said:
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"We will sweep away tiresome and excessive control over local government. They do not need, they do not want, the fussy supervision of detail that now exists."
Over the past 15 years, almost 150 Acts have taken away the powers and responsibilities of local authorities, and Wales is now the most centralised and the least democratic part of the European Union.
My hon. Friends the Members for Clwyd, South-West (Mr. Jones) and for Newport, East (Mr. Hughes) and the hon. Member for Brecon and Radnor (Mr. Evans) all said that, in their respective areas, the system of standard spending assessments had broken down. The formula on which the SSAs are based has also broken down. The Audit Commission said exactly the same thing when it stated that SSAs were used for capping, not for grant distribution. The Select Committee on the Environment recently said that the SSA formula was oversimplified and based on outdated information and did not take into account long-term unemployment and chronic ill health, both of which are extremely important factors in Wales.
What happened last year? We had the spectacle of the Secretary of State for Wales standing at the Dispatch Box wanting to cap Aberconwy council, of all councils. It is a small authority which has hardly been regarded as profligate and has nothing to hide. Capping is not only unfair but undermines democracy and does not work. Experts from the London School of Economics tell us that capping has led to higher spending because councils spend to their capping limit.
In June 1993, when he was quite new to his present responsibilities, the Secretary of State for Wales said:
"I believe that we have a good system".
He said that he was
"proud to inherit the Welsh model."—[Official Report, 23 June 1993; Vol. 227, c. 418.]
I have to tell him that the Welsh model existed until about a year ago. Successive Secretaries of State for Wales—the former right hon. Member for Worcester (Mr. Walker) and the right hon. Member for Wirral, West (Mr. Hunt)—said that they would not publish the criteria for capping. Since the right hon. Member for Wokingham has been Secretary of State for Wales, we have had slavishly to follow the English example on capping.
Some hon. Members have asked whether the Council of Welsh Districts is good at providing briefing information. I am sure that the hon. Member for Brecon and Radnor will join the council in congratulating the Secretary of State on overcoming the wild variations in SSAs about which it complained for a number of years. I suppose that the council is right in some aspects of its briefing.
Eighty per cent. of districts will still have problems in setting their budgets and gearing is still a great problem: a 2·1 per cent. increase in spending will mean an increase of 11·3 per cent. in the council tax in Wales. Some of my hon. Friends have mentioned the impact on district councils. Homelessness in Wales has increased in the past 12 months by 10 per cent., but, despite what the Secretary of State said, the capital available to local authorities to spend on housing has been cut by £10 million. That is why the district councils say that the settlement is inadequate for the provision of public sector housing.
Reference has also been made to taxes. Conservative Members said that it was important that taxes were increased in order to help the economy. Taxes are certainly going up in Wales, even though the Government are supposed to be anti-tax. For example, the cost of rent rebates will now have to be borne wholly by the local

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authorities, which will mean a significant increase in council house rents in the next financial year. At the same time, the Secretary of State has told Welsh housing associations that they face a cut of 9 per cent. in their grant. They now have the lowest grant since their inception in Wales.
The chairman of Tai Cymru has written to tell housing associations that he does not want rents to be increased, but how can it be avoided when the grant has been cut by 9 per cent? Ultimately, the cuts mean that the Government and the Secretary of State are unaware of how important it is to have a viable public rented sector in the Principality in order to do something about the 80,000 people who are on council house waiting lists in north and south Wales.
The biggest blow has been to the county councils. We heard about the impact of cuts on county councils from my hon. Friends the Members for Newport, East, for Swansea, East (Mr. Anderson), for Clwyd, South-West and for Caerphilly (Mr. Davies). Mid Glamorgan will have to make cuts of £15 million which, by any standard or measurement of deprivation, will mean cuts in public services. Gwynedd has to cut between £2 million and £3 million; South Glamorgan is cutting nearly £1 million off social services and £500,000 off highways; and in Gwent, the 1·6 per cent. increase must cover pay, inflation and capital development.
The worst effect on counties, as many of my hon. Friends have said, is the impact on the police service and on education. For example, my hon. Friend the Member for Bridgend spoke about the importance of considering the formulae for the police. The Home Office has already said that, for every police authority in England and Wales, it expects a 5·5 per cent. increase in expenditure to maintain the forces of law and order in England and Wales. How can police authorities increase their expenditure to that extent when the Secretary of State for Wales is saying that county councils can increase spending by only 1·75 per cent? It is impossible for those figures to match; as a result, there will be a reduction in the services provided by our police authorities throughout the Principality.
In education, we shall find that there is insufficient money to pay for the 2·9 per cent teachers' pay award. It will mean that that award will be paid for with other teachers' jobs, with larger classes and a reduced education service.
My hon. Friend the Member for Clwyd, South-West rightly spoke about Clwyd. A cut of £6 million to £7 million has to be made in the education service for north-east Wales. Cuts are taking place in South Glamorgan, Gwent and Dyfed. As the chairman of the local education authorities' employing body recently said:
"The real problem for local education authorities is the crippling financial limits imposed by this Government",
and nowhere is that truer than in Wales.
The Welsh Office claims that the average council tax will be about £280. All its claims that we have heard in the Chamber in rate support grant debates over the years have proved to be wrong. We believe that the council tax is much more likely to reach about £350. Part of the reason for that is that local government has had to grapple with a system of finance that has changed more dramatically in seven years than it has done in seven centuries. Another part of the reason is that councillors in Wales are still genuinely attempting to preserve our schools, to safeguard
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our communities, to maintain law and order, to house the homeless and to improve the quality of life of the people whom we represent.
My hon. Friend the Member for Caerphilly said that our councils have experienced constant underfunding of vital services for 15 years. The cumulative effect of all that is affecting and endangering the fabric of Welsh society.
Mr. Richards: The hon. Gentleman keeps speaking about underfunding, and he mentioned South Glamorgan county council. Will he therefore explain to the House how the chairman of South Glamorgan county council can put advertisements, with large photographs of himself, costing £500 a time, in the Western Mail and the South Wales Echo, wishing the readers a happy new year and a happy Christmas?
Mr. Murphy: The good people of South Glamorgan need to have some good will in their lives around Christmas time and I think that that is the only good news they have. Last year, for example, they had to cut their music departments, they had to cut their outdoor pursuits departments and they had to witness the spectable of their discretionary grant system being cut altogether. I could describe a litany of problems that South Glamorgan and other councils have had.
Mr. Sweeney rose—
Mr. Murphy: I will not give way.
If the hon. Gentleman can find only that example of what he would regard as reckless council spending, I am sorry for him. My hon. Friends the Members for Swansea, East, for Caerphilly, for Newport, East and others have pointed to the real problems of government in Wales, not what the hon. Gentleman has just been talking about. They mentioned the shame of the fact that we have to witness democratically elected Welsh councils being starved of funds year after year, while unaccountable and appointed quangos are responsible for nearly £2·5 billion in the Principality.
Worse, some of those organisations fritter away thousands of pounds—much more than the cost of the so-called photograph that the hon. Gentleman spoke about. Let him read the report of the Public Accounts Committee to see what it has revealed of the squandering of public funds—Welsh money—by those quangos in the past few months alone. They get little more than a mild rebuke from the Secretary of State.
What happens to our local authorities? They have to face the most savage capping restrictions and the inevitable suspicion that goes with them. Is it any wonder that the people of Wales now regard our system of government as potentially rotten and distinctly unwholesome? For that reason alone, I urge the House to vote down these measures.
10.19 pm
The Parliamentary Under-Secretary of State for Wales (Mr. Gwilym Jones): It would be desirable if I could come to the Dispatch Box now and say that we have had a good, constructive and worthwhile debate this evening. I noticed that the hon. Member for Torfaen (Mr. Murphy) began his lengthy summing-up by referring to what I think he would want to describe as the wealth of

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local government experience on the Opposition Benches. But did that contribute to ordered, constructive debate? [HON. MEMBERS: "Yes."] No.
All we have had from the Opposition Benches tonight is a bunch of uncosted wish lists. Possibly one of the lengthiest came from the hon. and learned Member for Montgomery (Mr. Carlile). The one point on which I would find myself in agreement with the hon. Member for Caerphilly (Mr. Davies) is in his description of the hon. and learned Member for Montgomery as a Johnny-comelately. Perhaps he has just rushed in from the robing room, as described in the Western Mail yesterday. He had a list that managed to cover practically every service of local government.
The hon. Member for Clwyd, South-West (Mr. Jones) referred to education services, and the hon. Member for Gower (Mr. Wardell) to forensic services. We have had a parade of hon. Members wanting to give the impression that they supported the police, that they wanted to support more money for the South Wales police authority: the hon. Members for Merthyr Tydfil and Rhymney (Mr. Rowlands), for Cardiff, South and Penarth (Mr. Michael), for Caerphilly, for Ynys Môn (Mr. Jones), for Torfaen and for Bridgend (Mr. Griffiths).
I welcomed the contributions from my hon. Friends the Members for Brecon and Radnor (Mr. Evans) and for Vale of Glamorgan (Mr. Sweeney), who referred to the reality of the budget of the South Wales police authority. I understand that the authority is studying a report by the district auditor on its financial arrangements. As my right hon. Friend the Secretary of State has already made clear, police funding is a matter for the police authority and its constituent local authorities, and I see that the South Wales police are already taking the steps that they see fit to resolve the budget problem.
The wish lists carried on. The hon. Member for Bridgend brought in the need to spend on roads in Porthcawl. He seemed especially stunned by my right hon. Friend the Secretary of State pursuing him into Porthcawl today, but he felt the need to mention it in Hansard tonight. An equally lengthy list came from the hon. Member for Caerphilly. He was concerned about pay increases. That was matched by a number of hon. Gentlemen who alluded to the teachers' pay settlement. They referred to the cost of the settlement, but at no time have I heard any of them say that the teachers' pay increase was justified. I wonder why some of them are here as representatives of teachers' unions.
Surprisingly, the hon. Member for Caerphilly volunteered one figure among the almost total lack of costings that we have been given tonight. He quoted the county councils as saying that they wanted to spend another £40 million on care in the community. Generally, the hon. Gentleman in his lament about insufficient money for local government was also concerned about the alleged loss of independence for local government.
Interestingly, in that the hon. Gentleman was echoed by the hon. Member for Ynys Môn, who made a plea for more power for Welsh councils. That is odd coming from the party that we would all identify as the devolutionary party, Plaid Cymru. He would effectively take powers away from the people and give them back to councils instead. He would take the power away from parents to have more influence and control over what happens in their schools.
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Presumably, he would take power away from council tenants so that they would have less control over housing, and the control would be given back to local authorities.
I can at least acknowledge the contribution of the hon. Member for Swansea, East (Mr. Anderson) who echoed the fact that community care was yet another example of the practical devolution that we have introduced, giving opportunities to local government to take that forward.
Perhaps the nutshell of today's debate was supplied by the contribution by the hon. Member for Newport, East (Mr. Hughes). He wanted more spending here and more spending there, with more spending on housing, but he preceded these comments by voicing his regret at extra taxation. The hon. Member for Caerphilly presented us with the same dichotomy. He wanted more spending but was not, so he said, in favour of more taxation.

I think that all hon. Members will have noticed that, when my hon. Friend the Member for Brecon and Radnor intervened in the speech of the hon. Member for Caerphilly, he received no answer from him about costings and how the extra expenditure would be met by the Labour party. On local government spending, as with every other sort of spending, the Labour party will not come clean, just as it did not come clean at the last general election. The Labour party is already showing that it will not come clean at the next general election.
Perhaps most worrying to many of us were the wild, sweeping statements of the hon. Member for Caerphilly. It was incredible that he appeared to equate the South Wales police authority with Westminster city council. Members of the Labour party rushed to judge Westminster city council, and the hon. Member gave the clearest impression that he applies the same judgment to members of the South Wales police authority. What confidence can any Labour member of that authority have in the man who is supposed to be Labour's shadow Secretary of State for Wales?
The hon. Member for Caerphilly made allegations about the endemic corruption in public life in Wales, and once more alluded to sleaze. It is said that beauty is in the eye of the beholder—sleaze must be in the eye of the sleazy. People such as the hon. Gentleman should realise the damage that they do and the way that they demoralise all those working in public service in Wales. It is true that there have been some failings in public service in Wales, none of which should be ignored. Such failings should be pursued as firmly as possible. The firmest line has been taken by my right hon. Friend the Secretary of State. Above all, when maintaining a proper balance, one cannot ignore the wilful damage that such people do to Wales. There are many fine people in public service in Wales who do fine work, but the Labour party smears them all with the same brush.
In his opening speech my right hon. Friend emphasised the Government's commitment to local government, and the facts speak for themselves. Even at a time of necessary restraint in public expenditure, the settlement proposals before the House increase the resources available to local government by more than £100 million or 4·2 per cent.—well ahead of inflation. Since 1990–91, the level of revenue resources has increased by 27 per cent.—if the functional changes are taken into account, the increase is well over 30 per cent. The amount of money that we are making available for care in the community will more than double.
Local authorities must budget within their means and those of the taxpayers they serve. Local government is not

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being singled out—it is the duty of all organisations that spend taxpayers' money to exercise prudence and restraint in their spending. That is vital if we are to maintain the momentum of economic recovery and build for the future.
I have confidence in the ability and willingness of local government in Wales to act responsibly. It is to be hoped that even the Labour councils will take forward the settlement with far more confidence than has been displayed among the Opposition tonight. I am sure that local government in Wales will do so.
Question put:—
The House divided: Ayes 303, Noes 269.

Division No. 127]

[10.28 pm

AYES

Ainsworth, Peter (East Surrey)

Clifton-Brown, Geoffrey

Aitken, Jonathan

Coe, Sebastian

Alexander, Richard

Colvin, Michael

Alison, Rt Hon Michael (Selby)

Congdon, David

Allason, Rupert (Torbay)

Conway, Derek

Amess, David

Coombs, Anthony (Wyre For'st)

Ancram, Michael

Coombs, Simon (Swindon)

Arbuthnot, James

Cope, Rt Hon Sir John

Arnold, Jacques (Gravesham)

Cormack, Patrick

Arnold, Sir Thomas (Hazel Grv)

Couchman, James

Ashby, David

Cran, James

Aspinwall, Jack

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

Atkins, Robert

Curry, David (Skipton & Ripon)

Atkinson, David (Bour'mouth E)

Davies, Quentin (Stamford)

Atkinson, Peter (Hexham)

Davis, David (Boothferry)

Baker, Rt Hon K. (Mole Valley)

Day, Stephen

Baker, Nicholas (Dorset North)

Deva, Nirj Joseph

Baldry, Tony

Dickens, Geoffrey

Banks, Matthew (Southport)

Dicks, Terry

Banks, Robert (Harrogate)

Dorrell, Stephen

Bates, Michael

Douglas-Hamilton, Lord James

Batiste, Spencer

Dover, Den

Beggs, Roy

Duncan, Alan

Bellingham, Henry

Duncan-Smith, Iain

Beresford, Sir Paul

Dunn, Bob

Biffen, Rt Hon John

Durant, Sir Anthony

Blackburn, Dr John G.

Dykes, Hugh

Bonsor, Sir Nicholas

Eggar, Tim

Booth, Hartley

Elletson, Harold

Boswell, Tim

Emery, Rt Hon Sir Peter

Bottomley, Peter (Eltham)

Evans, David (Welwyn Hatfield)

Bottomley, Rt Hon Virginia

Evans, Jonathan (Brecon)

Bowden, Andrew

Evans, Nigel (Ribble Valley)

Bowis, John

Evans, Roger (Monmouth)

Boyson, Rt Hon Sir Rhodes

Evennett, David

Brandreth, Gyles

Faber, David

Brazier, Julian

Fabricant, Michael

Bright, Graham

Field, Barry (Isle of Wight)

Brooke, Rt Hon Peter

Fishburn, Dudley

Brown, M. (Brigg & Cl'thorpes)

Forman, Nigel

Browning, Mrs. Angela

Forsyth, Michael (Stirling)

Bruce, Ian (S Dorset)

Forth, Eric

Budgen, Nicholas

Fowler, Rt Hon Sir Norman

Burns, Simon

Fox, Dr Liam (Woodspring)

Burt, Alistair

Fox, Sir Marcus (Shipley)

Butcher, John

Freeman, Rt Hon Roger

Butler, Peter

French, Douglas

Butterfill, John

Fry, Sir Peter

Carlisle, John (Luton Norm)

Gale, Roger

Carlisle, Kenneth (Lincoln)

Gallie, Phil

Carrington, Matthew

Gardiner, Sir George

Carttiss, Michael

Garnier, Edward

Cash, William

Gill, Christopher

Channon, Rt Hon Paul

Gillan, Cheryl

Chapman, Sydney

Goodlad, Rt Hon Alastair

Churchill, Mr

Goodson-Wickes, Dr Charles

Clappison, James

Gorman, Mrs Teresa

Clark, Dr Michael (Rochford)

Gorst, John

Clarke, Rt Hon Kenneth (Ruclif)

Grant, Sir A. (Cambs SW)

912

Greenway, Harry (Ealing N)

Moate, Sir Roger

Greenway, John (Ryedale)

Monro, Sir Hector

Griffiths, Peter (Portsmouth, N)

Montgomery, Sir Fergus

Grylls, Sir Michael

Moss, Malcolm

Gummer, Rt Hon John Selwyn

Needham, Richard

Hague, William

Nelson, Anthony

Hamilton, Rt Hon Sir Archie

Neubert, Sir Michael

Hamilton, Neil (Tatton)

Newton, Rt Hon Tony

Hampson, Dr Keith

Nicholls, Patrick

Hannam, Sir John

Nicholson, David (Taunton)

Hargreaves, Andrew

Nicholson, Emma (Devon West)

Harris, David

Norris, Steve

Haselhurst, Alan

Onslow, Rt Hon Sir Cranley

Hawkins, Nick

Oppenheim, Phillip

Hawksley, Warren

Ottaway, Richard

Hayes, Jerry

Page, Richard

Heald, Oliver

Paice, James

Heathcoat-Amory, David

Patnick, Irvine

Hendry, Charles

Patten, Rt Hon John

Hicks, Robert

Pattie, Rt Hon Sir Geoffrey

Higgins, Rt Hon Sir Terence L.

Pawsey, James

Hill, James (Southampton Test)

Peacock, Mrs Elizabeth

Hogg, Rt Hon Douglas (G'tham)

Pickles, Eric

Horam, John

Porter, Barry (Wirral S)

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

Porter, David (Waveney)

Howell, Rt Hon David (G'dford)

Portillo, Rt Hon Michael

Howell, Sir Ralph (N Norfolk)

Rathbone, Tim

Hughes Robert G. (Harrow W)

Redwood, Rt Hon John

Hunt, Rt Hon David (Wirral W)

Renton, Rt Hon Tim

Hunt, Sir John (Ravensboume)

Richards, Rod

Hunter, Andrew

Riddick, Graham

Jack, Michael

Robathan, Andrew

Jackson, Robert (Wantage)

Roberts, Rt Hon Sir Wyn

Jenkin, Bernard

Robertson, Raymond (Ab'd'n S)

Jessel, Toby

Robinson, Mark (Somerton)

Johnson Smith, Sir Geoffrey

Roe, Mrs Marion (Broxbourne)

Jones, Gwilym (Cardiff N)

Rowe, Andrew (Mid Kent)

Jones, Robert B. (W Hertfdshr)

Rumbold, Rt Hon Dame Angela

Kellett-Bowman, Dame Elaine

Ryder, Rt Hon Richard

Key, Robert

Sackville, Tom

Kilfedder, Sir James

Sainsbury, Rt Hon Tim

King, Rt Hon Tom

Scott, Rt Hon Nicholas

Kirkhope, Timothy

Shaw, David (Dover)

Knapman, Roger

Shaw, Sir Giles (Pudsey)

Knight, Mrs Angela (Erewash)

Shepherd, Colin (Hereford)

Knight, Greg (Derby N)

Shepherd, Richard (Aldridge)

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

Shersby, Michael

Knox, Sir David

Sims, Roger

Kynoch, George (Kincardine)

Skeet, Sir Trevor

Lait, Mrs Jacqui

Smith, Sir Dudley (Warwick)

Lang, Rt Hon Ian

Smith, Tim (Beaconsfield)

Lawrence, Sir Ivan

Soames, Nicholas

Legg, Barry

Speed, Sir Keith

Leigh, Edward

Spicer, Sir James (W Dorset)

Lennox-Boyd, Mark

Spicer, Michael (S Worcs)

Lester, Jim (Broxtowe)

Spink, Dr Robert

Lidington, David

Spring, Richard

Lilley, Rt Hon Peter

Sproat, Iain

Lloyd, Rt Hon Peter (Fareham)

Squire, Robin (Hornchurch)

Lord, Michael

Stanley, Rt Hon Sir John

Luff, Peter

Steen, Anthony

Lyell, Rt Hon Sir Nicholas

Stephen, Michael

MacGregor, Rt Hon John

Stem, Michael

MacKay, Andrew

Stewart, Allan

Maclean, David

Streeter, Gary

McLoughlin, Patrick

Sumberg, David

Madel, Sir David

Sweeney, Walter

Maitland, Lady Olga

Sykes, John

Malone, Gerald

Tapsell, Sir Peter

Mans, Keith

Taylor, Ian (Esher)

Marland, Paul

Taylor, John M. (Solihull)

Marlow, Tony

Taylor, Sir Teddy (Southend, E)

Marshall, John (Hendon S)

Temple-Morris, Peter

Martin, David (Portsmouth S)

Thomason, Roy

Mates, Michael

Thompson, Sir Donald (C'er V)

Mawhinney, Rt Hon Dr Brian

Thompson, Patrick (Norwich N)

Merchant, Piers

Thornton, Sir Malcolm

Mills, Iain

Thurnham, Peter

Mitchell, Andrew (Gedling)

Townend, John (Bridlington)

Mitchell, Sir David (Hants NW)

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

913

Tracey, Richard

Wheeler, Rt Hon Sir John

Trend, Michael

Whitney, Ray

Trotter, Neville

Whittingdale, John

Twinn, Dr Ian

Widdecombe, Ann

Vaughan, Sir Gerard

Wiggin, Sir Jerry

Viggers, Peter

Wilkinson, John

Waldegrave, Rt Hon William

Willetts, David

Walden, George

Wilshire, David

Walker, Bill (N Tayside)

Wolfson, Mark

Waller, Gary

Young, Rt Hon Sir George

Ward, John

Wardle, Charles (Bexhill)

Tellers for the Ayes:

Waterson, Nigel

Mr. David Lightbown and Mr. Timothy Wood.

Watts, John

Wells, Bowen

NOES

Abbott, Ms Diane

Cunningham, Jim (Covy SE)

Adams, Mrs Irene

Dafis, Cynog

Ainger, Nick

Dalyell, Tam

Ainsworth, Robert (Cov'try NE)

Darling, Alistair

Allen, Graham

Davidson, Ian

Alton, David

Davies, Bryan (Oldham C'tral)

Anderson, Donald (Swansea E)

Davies, Rt Hon Denzil (Llanelli)

Anderson, Ms Janet (Ros'dale)

Davies, Ron (Caerphilly)

Armstrong, Hilary

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

Ashton, Joe

Dewar, Donald

Austin-Walker, John

Dixon, Don

Banks, Tony (Newham NW)

Dobson, Frank

Barnes, Harry

Donohoe, Brian H.

Barron, Kevin

Dowd, Jim

Battle, John

Dunwoody, Mrs Gwyneth

Bayley, Hugh

Eagle, Ms Angela

Beckett, Rt Hon Margaret

Eastham, Ken

Beith, Rt Hon A. J.

Enright, Derek

Bell, Stuart

Etherington, Bill

Benn, Rt Hon Tony

Evans, John (St Helens N)

Bennett, Andrew F.

Fatchett, Derek

Benton, Joe

Faulds, Andrew

Bermingham, Gerald

Fisher, Mark

Berry, Dr. Roger

Flynn, Paul

Betts, Clive

Foster, Rt Hon Derek

Blunkett, David

Foster, Don (Bath)

Boateng, Paul

Foulkes, George

Boyes, Roland

Fraser, John

Bradley, Keith

Fyfe, Maria

Bray, Dr Jeremy

Galbraith, Sam

Brown, Gordon (Dunfermline E)

Galloway, George

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

Gapes, Mike

Bruce, Malcolm (Gordon)

Garrett, John

Burden, Richard

George, Bruce

Byers, Stephen

Gerrard, Neil

Caborn, Richard

Gilbert, Rt Hon Dr John

Callaghan, Jim

Godman, Dr Norman A.

Campbell, Mrs Anne (C'bridge)

Godsiff, Roger

Campbell, Menzies (Fife NE)

Golding, Mrs Llin

Campbell, Ronnie (Blyth V)

Gordon, Mildred

Campbell-Savours, D. N.

Graham, Thomas

Caravan, Dennis

Grant, Bernie (Tottenham)

Cann, Jamie

Griffiths, Nigel (Edinburgh S)

Carlile, Alexander (Montgomry)

Griffiths, Win (Bridgend)

Chisholm, Malcolm

Grocott, Bruce

Clapham, Michael

Gunnell, John

Clark, Dr David (South Shields)

Hain, Peter

Clarke, Eric (Midlothian)

Hall, Mike

Clarke, Tom (Monklands W)

Hanson, David

Clelland, David

Hardy, Peter

Clwyd, Mrs Ann

Harman, Ms Harriet

Coffey, Ann

Hattersley, Rt Hon Roy

Connarty, Michael

Henderson, Doug

Cook, Frank (Stockton N)

Heppell, John

Cook, Robin (Livingston)

Hill, Keith (Streatham)

Corbett, Robin

Hinchliffe, David

Corbyn, Jeremy

Hoey, Kate

Corston, Ms Jean

Home Robertson, John

Cousins, Jim

Hood, Jimmy

Cox, Tom

Hoon, Geoffrey

Cryer, Bob

Howarth, George (Knowsley N)

Cummings, John

Howells, Dr. Kim (Pontypridd)

Cunliffe, Lawrence

Hoyle, Doug

914

Hughes, Kevin (Doncaster N)

Orme, Rt Hon Stanley

Hughes, Robert (Aberdeen N)

Parry, Robert

Hughes, Roy (Newport E)

Patchett, Terry

Hughes, Simon (Southwark)

Pendry, Tom

Hutton, John

Pickthall, Colin

Illsley, Eric

Pike, Peter L.

Ingram, Adam

Pope, Greg

Jackson, Glenda (H'stead)

Powell, Ray (Ogmore)

Jackson, Helen (Shef'ld, H)

Prentice, Ms Bridget (Lew'm E)

Jamieson, David

Prentice, Gordon (Pendle)

Jones, Barry (Alyn and D'side)

Prescott, John

Jones, leuan Wyn (Ynys Môn)

Primarolo, Dawn

Jones, Lynne (B'ham S O)

Purchase, Ken

Jones, Martyn (Clwyd, SW)

Quin, Ms Joyce

Jones, Nigel (Cheltenham)

Radice, Giles

Jowell, Tessa

Randall, Stuart

Keen, Alan

Raynsford, Nick

Kennedy, Charles (Ross.C&S)

Redmond, Martin

Kennedy, Jane (Lpool Brdgn)

Reid, Dr John

Khabra, Piara S.

Rendel, David

Kilfoyle, Peter

Robertson, George (Hamilton)

Kinnock, Rt Hon Neil (Islwyn)

Robinson, Geoffrey (Co'try NW)

Kirkwood, Archy

Roche, Mrs. Barbara

Leighton, Ron

Rogers, Allan

Lestor, Joan (Eccles)

Rooker, Jeff

Lewis, Terry

Rooney, Terry

Litheriand, Robert

Ross, Ernie (Dundee W)

Livingstone, Ken

Rowlands, Ted

Lloyd, Tony (Stretford)

Ruddock, Joan

Loyden, Eddie

Sedgemore, Brian

Lynne, Ms Liz

Sheerman, Barry

McAllion, John

Shore, Rt Hon Peter

McAvoy, Thomas

Short, Clare

McCartney, Ian

Simpson, Alan

Macdonald, Calum

Skinner, Dennis

McFall, John

Smith, Andrew (Oxford E)

McKelvey, William

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

Mackinlay, Andrew

Smith, Llew (Blaenau Gwent)

McLeish, Henry

Snape, Peter

McMaster, Gordon

Soley, Clive

McNamara, Kevin

Spearing, Nigel

McWilliam, John

Spellar, John

Madden, Max

Squire, Rachel (Dunfermline W)

Maddock, Mrs Diana

Steinberg, Gerry

Mahon, Alice

Stevenson, George

Mandelson, Peter

Stott, Roger

Marek, Dr John

Strang, Dr. Gavin

Marshall, David (Shettleston)

Straw, Jack

Marshall, Jim (Leicester, S)

Taylor, Mrs Ann (Dewsbury)

Martin, Michael J. (Springburn)

Taylor, Matthew (Truro)

Martlew, Eric

Turner, Dennis

Maxton, John

Vaz, Keith

Meacher, Michael

Walker, Rt Hon Sir Harold

Meale, Alan

Walley, Joan

Michael, Alun

Warden, Gareth (Gower)

Michie, Bill (Sheffield Heeley)

Wareing, Robert N

Michie, Mrs Ray (Argyll Bute)

Watson, Mike

Milburn, Alan

Welsh, Andrew

Miller, Andrew

Wicks, Malcolm

Mitchell, Austin (Gt Grimsby)

Wigley, Dafydd

Moonie, Dr Lewis

Williams, Rt Hon Alan (Sw'n W)

Morgan, Rhodri

Williams, Alan W (Carmarthen)

Mortey, Elliot

Wilson, Brian

Morris, Estelle (B'ham Yardley)

Winnick, David

Morris, Rt Hon J. (Aberavon)

Wise, Audrey

Mudie, George

Worthington, Tony

Mullin, Chris

Wray, Jimmy

Murphy, Paul

Wright, Dr Tony

Oakes, Rt Hon Gordon

Young, David (Bolton SE)

O'Brien, Michael (N W'kshire)

O'Brien, William (Normanton)

Tellers for the Noes:

O'Hara, Edward

Mr. Jon Owen Jones and Mr. Jack Thompson.

Olner, William

O'Neill, Martin

Question accordingly agreed to.
Resolved,
That the Local Government Finance (Amendment) Report (Wales) 1993–94 (House of Commons Paper No. 169), which was laid before this House on 31st January, be approved.
Motion made, and Question put,?
That the Local Government Finance Report (Wales) 1994–95 (House of Commons Paper No. 168), which was laid before this House on 31st January, be approved.—[Mr. Conway.]
The House divided: Ayes 292, Noes 178.

Division No. 128]

[10.43 pm

AYES

Ainsworth, Peter (East Surrey)

Day, Stephen

Aitken, Jonathan

Deva, Nirj Joseph

Alexander, Richard

Dorrell, Stephen

Alison, Rt Hon Michael (Selby)

Douglas-Hamilton, Lord James

Allason, Rupert (Torbay)

Dover, Den

Amess, David

Duncan, Alan

Ancram, Michael

Duncan-Smith, Iain

Arbuthnot, James

Dunn, Bob

Arnold, Jacques (Gravesham)

Durant, Sir Anthony

Arnold, Sir Thomas (Hazel Grv)

Dykes, Hugh

Ashby, David

Eggar, Tim

Aspinwall, Jack

Elletson, Harold

Atkinson, David (Bour'mouth E)

Emery, Rt Hon Sir Peter

Atkinson, Peter (Hexham)

Evans, David (Welwyn Hatfield)

Baker, Rt Hon K. (Mole Valley)

Evans, Jonathan (Brecon)

Baker, Nicholas (Dorset North)

Evans, Nigel (Ribble Valley)

Baldry, Tony

Evans, Roger (Monmouth)

Banks, Matthew (Southport)

Evennett, David

Banks, Robert (Harrogate)

Faber, David

Bates, Michael

Fabricant, Michael

Batiste, Spencer

Field, Barry (Isle of Wight)

Beggs, Roy

Fishburn, Dudley

Bellingham, Henry

Forman, Nigel

Beresford, Sir Paul

Forsyth, Michael (Stirling)

Biffen, Rt Hon John

Forth, Eric

Blackburn, Dr John G.

Fowler, Rt Hon Sir Norman

Bonsor, Sir Nicholas

Fox, Dr Liam (Woodspring)

Booth, Hartley

Freeman, Rt Hon Roger

Boswell, Tim

French, Douglas

Bottomley, Peter (Eltham)

Gale, Roger

Bottomley, Rt Hon Virginia

Gallie, Phil

Bowden, Andrew

Gardiner, Sir George

Bowis, John

Garnier, Edward

Boyson, Rt Hon Sir Rhodes

Gill, Christopher

Brandreth, Gyles

Gillan, Cheryl

Brazier, Julian

Goodlad, Rt Hon Alastair

Bright, Graham

Goodson-Wickes, Dr Charles

Brooke, Rt Hon Peter

Gorman, Mrs Teresa

Brown, M. (Brigg & Cl'thorpes)

Gorst, John

Browning, Mrs. Angela

Grant, Sir A. (Cambs SW)

Bruce, Ian (S Dorset)

Greenway, Harry (Ealing N)

Budgen, Nicholas

Greenway, John (Ryedale)

Burns, Simon

Griffiths, Peter (Portsmouth, N)

Burt, Alistair

Grylls, Sir Michael

Butcher, John

Gummer, Rt Hon John Selwyn

Butler, Peter

Hague, William

Butterfill, John

Hamilton, Rt Hon Sir Archie

Carlisle, John (Luton North)

Hamilton, Neil (Tatton)

Carlisle, Kenneth (Lincoln)

Hampson, Dr Keith

Carrington, Matthew

Hannam, Sir John

Carttiss, Michael

Hargreaves, Andrew

Cash, William

Harris, David

Channon, Rt Hon Paul

Haselhurst, Alan

Churchill, Mr

Hawkins, Nick

Clappison, James

Hayes, Jerry

Clark, Dr Michael (Rochford)

Heald, Oliver

Clarke, Rt Hon Kenneth (Ruclif)

Heathcoat-Amory, David

Clifton-Brown, Geoffrey

Hendry, Charles

Coe, Sebastian

Hicks, Robert

Colvin, Michael

Higgins, Rt Hon Sir Terence L.

Congdon, David

Hill, James (Southampton Test)

Conway, Derek

Hogg, Rt Hon Douglas (G'tham)

Coombs, Anthony (Wyre For'st)

Horam, John

Coombs, Simon (Swindon)

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

Cope, Rt Hon Sir John

Howell, Rt Hon David (G'dford)

Cormack, Patrick

Hughes Robert G. (Harrow W)

Cran, James

Hunt, Rt Hon David (Wirral W)

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

Hunter, Andrew

Curry, David (Skipton & Ripon)

Jack, Michael

Davies, Quentin (Stamford)

Jackson, Robert (Wantage)

Davis, David (Boothferry)

Jenkin, Bernard

916

Jessel, Toby

Robertson, Raymond (Ab'd'n S

Johnson Smith, Sir Geoffrey

Robinson, Mark (Somerton)

Jones, Gwilym (Cardiff N)

Roe, Mrs Marion (Broxbourne)

Jones, Robert B. (W Hertfdshr)

Rowe, Andrew (Mid Kent)

Kellett-Bowman, Dame Elaine

Rumbold, Rt Hon Dame Angela

Key, Robert

Ryder, Rt Hon Richard

Kilfedder, Sir James

Sackville, Tom

King, Rt Hon Tom

Sainsbury, Rt Hon Tim

Kirkhope, Timothy

Scott, Rt Hon Nicholas

Knapman, Roger

Shaw, David (Dover)

Knight, Mrs Angela (Erewash)

Shaw, Sir Giles (Pudsey)

Knight, Greg (Derby N)

Shepherd, Colin (Hereford)

Knox, Sir David

Shepherd, Richard (Aldridge)

Kynoch, George (Kincardine)

Shersby, Michael

Lait, Mrs Jacqui

Sims, Roger

Lang, Rt Hon Ian

Skeet, Sir Trevor

Lawrence, Sir Ivan

Smith, Sir Dudley (Warwick)

Legg, Barry

Smith, Tim (Beaconsfield)

Leigh, Edward

Soames, Nicholas

Lennox-Boyd, Mark

Speed, Sir Keith

Lester, Jim (Broxtowe)

Spicer, Sir James (W Dorset)

Lidington, David

Spicer, Michael (S Worcs)

Lightbown, David

Spink, Dr Robert

Lilley, Rt Hon Peter

Spring, Richard

Lloyd, Rt Hon Peter (Fareham)

Sproat, Iain

Luff, Peter

Squire, Robin (Hornchurch)

Lyell, Rt Hon Sir Nicholas

Stanley, Rt Hon Sir John

MacGregor, Rt Hon John

Steen, Anthony

MacKay, Andrew

Stephen, Michael

Maclean, David

Stern, Michael

McLoughlin, Patrick

Stewart, Allan

Madel, Sir David

Streeter, Gary

Maitland, Lady Olga

Sumberg, David

Malone, Gerald

Sweeney, Walter

Mans, Keith

Sykes, John

Marland, Paul

Tapsell, Sir Peter

Marlow, Tony

Taylor, Ian (Esher)

Marshall, John (Hendon S)

Taylor, John M. (Solihull)

Martin, David (Portsmouth S)

Taylor, Sir Teddy (Southend, E)

Mates, Michael

Temple-Morris, Peter

Mawhinney, Rt Hon Dr Brian

Thomason, Roy

Merchant, Piers

Thompson, Sir Donald (C'er V)

Mills, Iain

Thompson, Patrick (Norwich N)

Mitchell, Andrew (Gedling)

Thornton, Sir Malcolm

Mitchell, Sir David (Hants NW)

Thumham, Peter

Moate, Sir Roger

Townend, John (Bridlington)

Monro, Sir Hector

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

Montgomery, Sir Fergus

Tracey, Richard

Needham, Richard

Trend, Michael

Nelson, Anthony

Trotter, Neville

Neubert, Sir Michael

Twinn, Dr Ian

Newton, Rt Hon Tony

Vaughan, Sir Gerard

Nicholls, Patrick

Viggers, Peter

Nicholson, David (Taunton)

Waldegrave, Rt Hon William

Nicholson, Emma (Devon West)

Walden, George

Norris, Steve

Walker, Bill (N Tayside)

Onslow, Rt Hon Sir Cranley

Walter, Gary

Oppenheim, Phillip

Ward, John

Ottaway, Richard

Wardle, Charles (Bexhill)

Page, Richard

Waterson, Nigel

Paice, James

Watts, John

Patten, Rt Hon John

Wells, Bowen

Pattie, Rt Hon Sir Geoffrey

Wheeler, Rt Hon Sir John

Pawsey, James

Whitney, Ray

Peacock, Mrs Elizabeth

Whittingdale, John

Pickles, Eric

Widdecombe, Ann

Porter, Barry (Wirral S)

Wiggin, Sir Jerry

Porter, David (Waveney)

Wilkinson, John

Portillo, Rt Hon Michael

Willetts, David

Rathbone, Tim

Wilshire, David

Redwood, Rt Hon John

Wolfson, Mark

Renton, Rt Hon Tim

Wood, Timothy

Richards, Rod

Young, Rt Hon Sir George

Riddick, Graham

Rifkind, Rt Hon. Malcolm

Tellers for the Ayes:

Robathan, Andrew

Mr. Sydney Chapman and Mr. Irvine Patnick.

Roberts, Rt Hon Sir Wyn

917

NOES

Abbott, Ms Diane

Hall, Mike

Adams, Mrs Irene

Hanson, David

Ainsworth, Robert (Cov'try NE)

Hardy, Peter

Alton, David

Harman, Ms Harriet

Armstrong, Hilary

Hill, Keith (Streatham)

Austin-Walker, John

Hinchliffe, David

Banks, Tony (Newham NW)

Home Robertson, John

Barnes, Harry

Hood, Jimmy

Battle, John

Hoon, Geoffrey

Bayley, Hugh

Howarth, George (Knowsley N)

Beith, Rt Hon A. J.

Hoyle, Doug

Benn, Rt Hon Tony

Hughes, Kevin (Doncaster N)

Benton, Joe

Hughes, Robert (Aberdeen N)

Bermingham, Gerald

Hughes, Simon (Southwark)

Betts, Clive

Hutton, John

Blunkett, David

Illsley, Eric

Boyes, Roland

Jackson, Helen (Shef'ld, H)

Bradley, Keith

Jones, Barry (Alyn and D'side)

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

Jones, leuan Wyn (Ynys Môn)

Bruce, Malcolm (Gordon)

Jones, Nigel (Cheltenham)

Burden, Richard

Jowell, Tessa

Byers, Stephen

Kennedy, Charles (Ross,C&S)

Caborn, Richard

Kennedy, Jane (Lpool Brdgn)

Callaghan, Jim

Kilfoyle, Peter

Campbell, Mrs Anne (C'bridge)

Kirkwood, Archy

Campbell, Menzies (Fife NE)

Leighton, Ron

Campbell, Ronnie (Blyth V)

Litherland, Robert

Campbell-Savours, D. N.

Loyden, Eddie

Canavan, Dennis

Lynne, Ms Liz

Cann, Jamie

McAllion, John

Carlile, Alexander (Montgomry)

McAvoy, Thomas

Chisholm, Malcolm

McCartney, Ian

Clapham, Michael

Macdonald, Calum

Clark, Dr David (South Shields)

McFall, John

Clarke, Eric (Midlothian)

Mackinlay, Andrew

Clarke, Tom (Monklands W)

McMaster, Gordon

Clelland, David

McWilliam, John

Clwyd, Mrs Ann

Madden, Max

Coffey, Ann

Maddock, Mrs Diana

Connarty, Michael

Mahon, Alice

Cook, Robin (Livingston)

Mandelson, Peter

Corbyn, Jeremy

Marshall, David (Shettleston)

Corston, Ms Jean

Martin, Michael J. (Springburn)

Cox, Tom

Martlew, Eric

Cunliffe, Lawrence

Maxton, John

Cunningham, Jim (Covy SE)

Meale, Alan

Dafis, Cynog

Michie, Bill (Sheffield Heeley)

Dalyell, Tam

Milburn, Alan

Darling, Alistair

Miller, Andrew

Davidson, Ian

Morris, Estelle (B'ham Yardley)

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

Mudie, George

Dewar, Donald

Mullin, Chris

Dixon, Don

O'Brien, Michael (N W'kshire)

Dobson, Frank

Olner, William

Dowd, Jim

O'Neill, Martin

Eagle, Ms Angela

Orme, Rt Hon Stanley

Eastham, Ken

Patchett, Terry

Enright, Derek

Pickthall, Colin

Etherington, Bill

Pike, Peter L.

Evans, John (St Helens N)

Pope, Greg

Fatchett, Derek

Powell, Ray (Ogmore)

Faulds, Andrew

Prescott, John

Fisher, Mark

Primarolo, Dawn

Foster, Rt Hon Derek

Purchase, Ken

Foster, Don (Bath)

Quin, Ms Joyce

Foulkes, George

Raynsford, Nick

Fyfe, Maria

Redmond, Martin

Galloway, George

Reid, Dr John

Gerrard, Neil

Rendel, David

Gilbert, Rt Hon Dr John

Robertson, George (Hamilton)

Godman, Dr Norman A.

Roche, Mrs. Barbara

Godsiff, Roger

Rooney, Terry

Golding, Mrs Llin

Salmond, Alex

Gordon, Mildred

Sedgemore, Brian

Graham, Thomas

Short, Clare

Grant, Bernie (Tottenham)

Simpson, Alan

Griffiths, Nigel (Edinburgh S)

Skinner, Dennis

Griffiths, Win (Bridgend)

Smith, Andrew (Oxford E)

Gunnell, John

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

918

Smith, Llew (Blaenau Gwent)

Wareing, Robert N

Snape, Peter

Watson, Mike

Spearing, Nigel

Welsh, Andrew

Spellar, John

Wigley, Dafydd

Squire, Rachel (Dunfermline W)

Wilson, Brian

Steinberg, Gerry

Wise, Audrey

Strang, Dr. Gavin

Worthington, Tony

Taylor, Mrs Ann (Dewsbury)

Wray, Jimmy

Taylor, Matthew (Truro)

Turner, Dennis

Tellers for the Noes:

Walker, Rt Hon Sir Harold

Mr. Bob Cryer and Mr. Terry Lewis.

Wardell, Gareth (Gower)

Question accordingly agreed to.

BUSINESS OF THE HOUSE
Ordered,
That, at the sitting on Monday 21 February, the Criminal Justice and Public Order Bill may be proceeded with, though opposed, until any hour.—[Mr. Conway.]

Michael Lennon
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Conway.]
10.56 pm
Mr. Max Madden: I wish to introduce a short debate on the case of Mr. Michael Lennon, the nephew of a constituent of mine, Mrs. Clair Palmer.
Michael Lennon, who is in his late twenties, is a Jamaican citizen in full-time employment and lives in Jamaica with his two children. Mrs. Palmer invited Michael to stay with her and her husband and family in Bradford for Christmas and the new year. She arranged for him to come on a special Air UK charter flight, which offered seats about £150 cheaper than those on scheduled or regular charter flights. The flight—ULE 966–arrived at Gatwick on 21 December four hours late.
We now know that, on landing, it was sent by immigration to stand 21, which has a closed lounge. Immigration officers boarded the plane. British and European Communities passport holders were allowed to leave the aircraft. Jamaican passport holders were not allowed to leave for some hours. Anxious relatives and friends waiting were told that the delay was due to a baggage handling dispute. Eventually, Jamaican passport holders were taken off the plane in small groups.
Large numbers of officials were on duty at Gatwick that day–114 immigration officers, 93 Customs and Excise officers and 15 police officers. Each passenger was interviewed. Some were interviewed a second time after a long delay—in some cases, lasting hours. One woman, four months pregnant with a visa issued by the British high commission in Jamaica entitling her to settle in Britain, waited 11 hours to be interviewed and admitted.
Michael Lennon was interviewed. He was also strip-searched, as were two other passengers, including one woman. No illegal substances were found on anybody. Indeed, no illegal substance was found on any passenger on four Caribbean flights that arrived at Gatwick on 21 December. A small quantity of herbal cannabis was found by police on one person when he was placed in a police cell late on 21 December.
Michael Lennon, together with other passengers from his flight, including 14 children under 16, were refused entry to Britain. Four of those children were travelling unaccompanied.

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Several requests that I made over the next three days for Michael Lennon to be granted temporary admission so that he could go back to Jamaica on a booked return flight on 17 January were rejected. I spent hours on the telephone with Home Office officials, immigration officers and other officials. I was told that temporary admission was refused because officials could not be confident that Mr. Lennon would abide by the terms of any temporary admission. Their only evidence was that he was carrying a letter which suggested that he, rather than his aunt, had suggested the holiday and that he knew a young woman who had gone to Gatwick to meet him.
Who suggested the holiday seems to me to be wholly irrelevant. The young woman vigorously denied ever having met Michael Lennon, still less having any relationship with him. She had to take a photograph of Mr. Lennon to Gatwick to enable her to identify him. She was there to meet him only because Mrs. Palmer, a close friend of the young woman's deceased mother, was too ill to travel by road from Bradford to Gatwick.
I was told that Michael Lennon and another 26 Jamaican citizens refused entry would be returned to Jamaica in early January. The Home Office, desperately concerned that passengers refused entry might use solicitors to obtain applications for judicial review, bundled them out of Britain in extreme secrecy on Christmas night. Television cameras and reporters were prevented from witnessing the special charter which included 10 Group 4 staff at a cost of £126,000.
Flight ULE 966 was targeted. It was met by an unusually large number of officials. Special arrangements were made for interviewing the passengers and an unusually large number of passengers were refused entry, detained and deported.
A week before that flight, another charter flight, BA 1262/KT 310 from Jamaica to Gatwick, arriving on 16 December received the same special treatment; 38 passengers were refused entry, 33 of whom were deported.
The Air UK charter was warned to expect the same special treatment. In a bid to avoid such problems, contact was made with the immigration service at senior level at Gatwick airport. An offer was made to take two immigration officers to Jamaica without cost to check on passengers. The offer was refused by the immigration service, again at senior level. Other discussions were inconclusive. Eventually, immigration at Gatwick was supplied with a passenger list for the Air UK flight several hours before th plane landed. It is believed that the delay in the plane landing was due to passengers being checked against the Home Office computer records.
I should like to ask the Minister some questions of which I gave him notice. First, what were the ages of the unaccompanied children who arrived at Gatwick on flight ULE 966 who were removed from the United Kingdom to Jamaica? Secondly, did Ministers authorise the refusal of the offer to take British immigration officers to Jamaica to pre-check the travel documents of passengers before they boarded the flight? Thirdly, did Ministers authorise the unorthodox procedure whereby passenger lists on flight ULE 966 were checked on the computer before the flight arrived at Gatwick? What procedures are used at Gatwick
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and other points of entry to count and check visitors leaving the United Kingdom at or before the expiry of their leave to enter?
Did Ministers authorise any agencies at Gatwick, including the immigration service, to give the media information about Jamaican citizens leaving the United Kingdom; about Jamaican citizens, given temporary admission to the United Kingdom, failing to leave the United Kingdom or absconding; and about Jamaican citizens given leave to enter the United Kingdom for up to six months? What was the total cost of removing, detaining and escorting Jamaican citizens who arrived on flights BA 1262/KT 310 and ULE 966? Is there a dispute between the Home Office and the carrier, agent or tour operators over the defraying of all or part of the total costs, and what are the costs currently outstanding?
Why were so many passengers refused entry to Britain? The Minister and Home Office officials constantly told the media that it was because some had tried to enter Britain before, either to live here or to visit. In fact, only 10 passengers came into that category; four of those were allowed to enter the United Kingdom for up to six months. Leaks to the media suggested that many of the passengers were "yardies", violent criminals or drug dealers. I was assured that Mr. Lennon had no criminal convictions in Jamaica, or links with any known criminals here.
In a letter to my hon. Friend the Member for Nottingham, North (Mr. Allen) dated 12 January, the Minister said that all the passengers on flight ULE 966 who were refused entry were refused for immigration reasons; there was no substantive evidence that any of them were known criminals.
The whole incident attracted massive public attention and considerable media coverage. The Guardian and The Times published extremely critical editorials; more surprising was an editorial that appeared in The Daily Telegraph on 28 December. Under the heading "Race relations fiasco", it thundered:
"Immigration regulations were tightened this year in the Asylum and Immigration Appeal Act. Those like ourselves who supported a measure designed to cut down the abuse of refugee status will be alarmed to see it being used to inflict inconvenience, humiliation or worse on foreign citizens lawfully visiting friends and family in Britain for Christmas. The signals this sends out are all the wrong ones—that people of Jamaican origin living in Britain are suspect, that the abuse of their rights is acceptable, and that officialdom may single them out for unfair treatment with impunity (would white American tourists have been subjected to such a battery of indignities as this?)."
I believe that this was indeed a race relations fiasco: that is extremely clear from all the evidence that has been provided. I have asked more than 50 parliamentary questions about the incident, but obtaining information has been like drawing teeth. It is clear that this was a fiasco, and that it was targeted.
If immigration officers who planned the special operation to receive flight ULE 966 over days did not seek Ministers' approval, why are those officers still in place? If Ministers did approve the operation, why have they so far not seen fit to utter a word of apology to anyone—still less to consider their own positions?
That incident damaged relations between the British Afro-Caribbean community and the authorities. It undoubtedly gravely damaged the reputation of Britain as a tourist centre. The message being sent out to many black and Asian people is that they are not welcome in the country. The message to black and Asian people living in the country was that they were not entitled to have their

921
relatives or friends visit them for a brief holiday. Undoubtedly, it also gravely damaged the perception of our immigration policy as firm and fair, which the Minister does not lose any opportunity to state.
I hope that the Minister will give a full and clear explanation of why so many of those passengers were refused entry to Britain, were detained and were deported. He has even refused in his answers to parliamentary questions to name the passengers concerned. The explanations that we have received have been extremely misleading and certainly do not give any clear or concise reason why those people were refused entry. I hope that the Minister will be able to tell us for the first time why so many of those passengers were refused entry and why they were deported back to Jamaica on Christmas day.
11.12 pm
The Parliamentary Under-Secretary of State for the Home Department (Mr. Charles Wardle): I congratulate the hon. Member for Bradford, West (Mr. Madden) on his success in securing the debate. I know that he has tried repeatedly over the past several weeks to obtain an Adjournment debate and I am glad that his persistence has been rewarded. I shall seek in the next few minutes to answer the questions of which he gave me notice. There are one or two other points to which I shall turn straight away.
As the hon. Gentleman will appreciate on reflection, visas are not required from Jamaica. I am sure that he was referring to prior entry clearance. All the police at Gatwick were on standard security duties at the airport. No police were there in connection with that flight specifically. The hon. Gentleman also referred to judicial review. He will be aware that although an application for judicial review has to be lodged in Britain, it can, of course, be pursued from outside the country.
Michael Lennon arrived, as the hon. Gentleman said, on charter flight ULE 966 at Gatwick on 21 December and was refused entry. It is right to make it clear from the outset that flight ULE 966 was not one of the regular scheduled flights at Gatwick, which are normally handled without any difficulty. I made that point to the hon. Member for Nottingham, North (Mr. Allen) when I wrote to him on 12 January, a matter to which the hon. Member for Bradford, West referred. I wrote in some detail about what happened on that occasion. A copy of that letter has been placed in the Libraries of both Houses, so it is probably unnecessary for me to cover that ground again.
None the less, there are a few points which I ought to make. The hon. Gentleman has asked specific questions, to which I shall try to respond. There has been speculation that the flight has been targeted, as the hon. Gentlman has mentioned time and again, because all those on board were in some way under suspicion. That was not the case. Arrangements were made to deal with the flights separately from the main immigration control, but that does not mean that some kind of special operation was mounted because those on board were somehow under mass suspicion.
Mr. Bob Cryer: Why?
Mr. Wardle: I shall seek to expand on that point. In that case, the immigration service had advance information, including information from the carrier and the charter company, which led it to believe that more passengers would require a detailed interview than would be the case with a regular scheduled flight.
922
The airline approached the immigration service about the flight a few days before its arrival and inquired whether there might be problems in clearing the 300 or so expected passengers. It asked whether arrangements could be made to clear the flight in Kingston. It was informed that that would not be possible. There are no standing arrangements for the immigration service to operate controls overseas. Even if such an arrangement had been thought desirable, it would not have been possible to conclude the necessary agreement with the Jamaican authorities in the short time available.
The proposal was not practicable in the circumstances. The decision was not authorised by Ministers and did not need such authorisation. The hon. Gentleman was incorrect in referring to the check of the passenger manifest on flight ULE 966 as unorthodox. Such checks are sometimes carried out and they do not require ministerial authority.
There were 326 passengers on board flight ULE 966. Information from the airline as well as from the tour operator several days before the flight's arrival revealed that tickets had been on sale at heavily discounted prices. A similar charter flight operated by another company had arrived at Gatwick on 15 December. It had been handled in the usual way without any advance preparation. About 100 passengers had required a full interview and more than 30 had been refused entry.
An additional factor is that Gatwick is usually very busy in the week leading up to Christmas. In case a similar number of passengers to that on the previous flight needed further examination, it seemed a sensible precaution to set aside a separate area in order not to delay other arriving passengers. Arrangements were therefore made for the disembarkation and reception of passengers from flight ULE 966 so that, if the need arose, a potentially large number of interviews could be conducted quickly and in an orderly way.
The arrangements included the provision of a gate lounge in which passengers could sit while awaiting an interview and the provision of additional immigration officers. Neither Mr. Lennon nor any of the other 300 or so people who were on flight ULE 966 came under suspicion just because they were arriving on that flight. That is not the way in which we operate immigration control.
People seeking entry must, of course, satisfy the immigration officer that they qualify for entry under the immigration rules. These provide that a passenger seeking entry as a visitor, including one coming to stay with relatives or friends, will be admitted if he satisfies the immigration officer that he is genuinely seeking entry for the period of the visit as stated by him and that for that period he will maintain and accommodate himself and any dependants, or will, with any dependants, be maintained and accommodated adequately by relatives or friends without working or having recourse to public funds, and can meet the cost of the return or onward journey. In all cases, entry will be refused if the immigration officer is not so satisfied.
Each person is interviewed individually and the decision whether to grant entry is taken on the individual facts and merits of the case. Entry can be refused only on the authority of a chief immigration officer or inspector. Passengers on this particular flight were dealt with under precisely those criteria and procedures. The result was that a high proportion of them were questioned in detail and 68 have been refused entry, mostly because they did not satisfy the immigration officers that they were genuine

923
visitors. Mr. Lennon was one such passenger. A few were refused entry because they sought settlement without the necessary clearance.
Four children who arrived on flight ULE 966 were returned unaccompanied. Two were aged 11, one 12 and one 16. In each case, their family in the United Kingdom were informed of the removal directions which enabled reception arrangements to be made in Jamaica.
As reported in column 872 of Hansard, I explained on 3 February that detention costs were still being calculated. That is still the case. Discussions are taking place between the Home Office and the carrier about the costs of removal and the extent of the carrier's liability under schedule 2(8) to the Immigration Act 1971.
No Ministers or officials authorised any agency at Gatwick to give the media information about Jamaican citizens leaving or failing to leave the United Kingdom. Information was given by the Home Office press office in response to inquiries. With the exception of the channel ports, embarkation controls operate at all air and sea ports.
The facts of Mr. Lennon's case are that he sought entry as a visitor until 17 January 1994 in order to visit his aunt, Mrs. Palmer, who, I understand, is a constituent of the hon. Member for Bradford, West. Mr. Lennon had no funds of his own but had a ticket booked for the return leg of the charter flight on 17 January. He said that the ticket had been brought for him by his aunt whom he had not seen for many years.
Mr. Lennon described himself as a carpenter but said that he had been unable to find any steady carpentry work. For that reason, he worked as a casual farm labourer, earning the equivalent of about £25 a week. He lived with his girl friend and their two children. He said that he knew no one here apart from Mrs. Palmer, although he was aware that he had an uncle in this country whose whereabouts were unknown to him. As it happened, Mrs. Palmer was not able to go to Gatwick to meet her nephew—I understand that she was ill—but a Ms Edwards went on her behalf. She was described by Mrs. Palmer as a friend of the family who knew Mr. Lennon, whom she had met in Jamaica about year earlier while she was there on a visit.
The hon. Gentleman will no doubt recall, from his contact with my private office at the time, that Mr. Lennon's aunt had also said that she had invited him at his suggestion, whereas Mr. Lennon had said that his aunt had invited him on her own initiative.
In reaching the decision, the immigration officer assessed Mr. Lennon's application carefully in the light of all the information and, looking at all the circumstances, was not satisfied that Mr. Lennon intended to stay only for a visit for four weeks. The decision to refuse entry was taken after reference to a chief immigration officer.
The hon. Gentleman will know that the decision was reviewed again following his representations. The immigration service considered that they did not contain any new information that would justify reversing the decision already taken. There was no other reason for that decision. There was no underlying suspicion of Mr. Lennon having been involved in any criminal activity.
There has been some general speculation in the media about "criminal elements" on the flight. I can confirm,
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therefore, that none of the people who were refused entry were refused because of their personal undesirability on account of criminal activity.
The hon. Gentleman has referred also to Mr. Lennon having been personally searched. I understand that Her Majesty's Customs and Excise searched Mr. Lennon but did not find any illegal substance on him. That search was not at the request of the immigration service, which has powers to search for documents only.
Mr. Lennon was detained until his return to Jamaica on 25 December. Detention powers are not used lightly. A passenger who is refused entry will be detained only where an immigration officer is not satisfied that the person concerned will comply with the terms or conditions attached to any temporary admission. Where someone is detained, removal is arranged as quickly as possible to keep detention to a minimum.
The immigration service was not satisfied, in Mr. Lennon's case, that he would comply with any conditions. The uncertainty about the strength of his connection with Mrs. Palmer was a relevant factor in that. The decision was also reviewed in the light of the hon. Gentleman's request for Mr. Lennon's release, but it was felt that detention should be maintained. The hon. Gentleman will also know that I reviewed the case myself and could find no exceptional or compelling circumstances which would have justified my intervention.
I have set out in some detail the individual circumstances of Mr. Lennon's case. I should, however, like to make it clear that neither that case nor the cases of the other people who were refused entry from that flight should be taken as a signal of any change in the Government's policy. We remain committed to firm but fair immigration control. Genuine visitors are always welcome, and will continue to be welcomed. Those people who do not satisfy the immigration officer that they will leave at the end of their stay will be refused entry. That is a long-established principle.
We have estimated that about 100 visitors who might have been expected to leave on the return leg did not do so. We have, of course, made it quite plain that those people accepted as visitors from the incoming flight but who do not leave on the return leg are not necessarily here unlawfully. People can, and do, change their mind about the time that they will stay. Many will no doubt leave on other flights. It must be said, however, that, given the indications recorded on arrival that so many intended to leave on 17 January, fewer people than might have been expected to do so actually left on the return flight.
Of those people refused entry, 57 have left. Out of 10 people who are still here, seven are here unlawfully. The cases of the three others, all children, are being reviewed. One other passenger from the flight absconded before interview and is therefore also considered to be here unlawfully.
None of that is a precursor to the introduction of a visa regime for citizens of Jamaica. Naturally, we encourage people to apply for entry clearance before they set out so that their eligibility for admission can be determined in advance, but we have no plans to introduce compulsory visas for Jamaican nationals. The European Commission has tabled proposals for a common visa list under the treaty of European Union, as the hon. Gentleman knows. That is for discussion among the 12 member states. At present, it would require unanimous agreement in order to take effect. From 1996, a qualified majority vote will suffice.

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Most people, including Jamaican citizens, pass through our controls quickly after only a brief interview and, as I have said, scheduled flights from Jamaica are normally cleared without any difficulty or delay. About 26,000 Jamaicans came here in 1992, but about 400 only were denied entry and returned.
We have discussed the events of December with representative bodies. My right hon. and learned Friend the Home Secretary and I have met the West Indian Standing Conference, as has the director (ports) of the immigration service. I have also received a delegation, led by the hon. Member for Hackney, North and Stoke Newington (Ms Abbott), representative of the community; a member of the Jamaican high commission was there, too. The director has also discussed the events with a group drawn from the Caribbean Churches. The British high commission in Kingston has had discussions with the Jamaican Government and has met representatives of the travel companies involved in the flight.
926
More generally, the immigration service has developed good contacts with interested groups representing the Caribbean community in this country, including the Caribbean high commissions. That has led to visits to ports to observe our immigration controls at first hand. I believe that such contacts are well worth while in improving relations and dispelling misconceptions. They also provide access to named individual managers within the immigration service with whom any problems arising in particular cases can be discussed. I am most grateful to the high commissions which regularly send representatives to address immigration officer training courses.
I therefore hope that the hon. Member for Bradford, West can feel rather more assured in the light of what I have said this evening.
Question put and agreed to.
Adjourned accordingly at twenty-five minutes past Eleven o'clock.