Commons Sitting of 30 January 1995

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

    Competitive Sports
    Mr. John Marshall: To ask the Secretary of State for National Heritage what steps he is taking to encourage competitive sports among young people.
    The Parliamentary Under-Secretary of State for National Heritage (Mr. Iain Sproat): A priority of my current proposals for restructuring the Sports Council is to ensure that sports governing bodies develop and implement structured programmes for young people. My Department and the Department for Education are also looking at a number of other initiatives to ensure that young people take part in competitive sports in schools, and an announcement will be made in due course.
    Mr. Marshall: Will my hon. Friend join me in congratulating the English cricketers on their magnificent victory, and wish the English rugby players every luck on Saturday so that they can show that they are good Europeans by trouncing the French? Does he agree that the message would be even better if in primary schools a greater emphasis was placed on competitive sports instead of on sports such as aerobics?
    Mr. Sproat: I certainly echo my hon. Friend's congratulations to the England team; it was a magnificent performance. On the question of competitive sports in schools, my right hon. Friend the Secretary of State for National Heritage and my right hon. Friend the Secretary of State for Education are currently working together to produce what I hope will be some happy proposals.
    Mr. Maxton: Does the Minister agree that the best place to encourage sport of all sorts—whether competitive or not—is within the schools, and that that can be done only by mobilising the enthusiasm, expertise and time of teachers? Does he agree, however, that the time when teachers could be exploited to take part and do those things in their own time, without being paid, has long gone, and that therefore he must look at a structure that will ensure that they are properly paid for the work that they do?
    Mr. Sproat: Yes, I certainly agree that the best place for young people to learn is in schools, and I certainly agree that the co-operation and enthusiasm of teachers is extremely important—in fact, it is absolutely
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    essential. As far as payment is concerned, that is a matter for my right hon. Friend the Secretary of State for Education.
    Mr. David Evans: The Minister knows very well that the lot opposite do not believe in competition in anything, whether it is public utilities or school sports days. Can the Minister assure me that we will not have competition in volleyball and other sports like that, but real competition in football, cricket and rugby, so that we might build on the success that we had in cricket this very day?
    Mr. Sproat: My hon. Friend makes a very good point. It is quite interesting to consider that, of the schools attended by the England team, in Adelaide this week, half of them no longer play any cricket at all—it may be more; I will have to check that. My hon. Friend is right to emphasise the importance of proper competitive games in schools.

    Disabled People (Arts)
    Mr. Rooney: To ask the Secretary of State for National Heritage what discussions he has had with the Yorkshire and Humberside regional arts board about improving arts opportunities and facilities for the disabled.
    Mr. Sproat: The Government are committed to access to the arts for people with disabilities—as members of audiences, as performers and as employees. My Department works with the Arts Council in pursuit of that objective and the council liaises closely with individual regional arts boards.
    Mr. Rooney: I thank the Minister for that reply, but does not he consider the work of Access for Disabled People to Arts Premises Today as extremely important and very good value for money? In those terms, does he agree that its grant of £43,000 last year was miserable?
    Mr. Sproat: I agree that the work of the ADAPT trust is extremely important. Its grant last year went up by 10 per cent., which is something for which we should all be grateful.
    Mr. Chris Smith: The Minister cannot be proud, however, of the fact that many arts facilities in Yorkshire, Humberside and elsewhere are not, as yet, fully accessible to disabled people. Nor can he be proud of the fact that the disability unit within the Arts Council was ended last year, as a direct result of Government cuts. Will he now give a guarantee that when the ADAPT grant comes up for renewal in June of this year, it will at the very least be kept at this year's level?
    Mr. Sproat: I look forward to hearing what the various members of the trust have to say about the grant; we shall consider that on its merits. What the Arts Council did with its unit was entirely a matter for the council itself. It decided that, instead of one unit examining the issue of disability in the arts, all its departments should consider the issue. That is what is now happening, and I think it a very sensible way to proceed.

    Press Regulation
    Sir David Knox: To ask the Secretary of State for National Heritage when he proposes to publish his White Paper on the regulation of the press.
    The Secretary of State for National Heritage (Mr. Stephen Dorrell): The White Paper on privacy and media intrusion will be published when we have completed our consideration of the issues raised by the proposed criminal and civil remedies.
    Sir David Knox: I commend my right hon. Friend's caution, but does he not think that the time has come for the White Paper to be published, especially in view of the low standards currently applied by many newspapers?
    Mr. Dorrell: I certainly agree that the time for consideration must be drawing to a close. No purpose is served by indefinite delay, and I very much hope that we shall be able to present proposals in the not too distant future.
    Mr. Soley: Is the Secretary of State saying that we really have reached the stage of drinking-up time in the last chance saloon?
    Mr. Dorrell: No; I am saying that we are thinking about it.
    Mr. Jessel: May I remind my right hon. Friend that, when the Select Committee on National Heritage considered privacy and the media two years ago, the Lord Chancellor personally gave evidence to the Committee and said that we should recommend the appointment of a press ombudsman?
    Mr. Dorrell: My hon. Friend mentions one of many current proposals. As a member of the Select Committee, he will know that many ways of improving the performance of the press in respecting individuals' right to privacy have been suggested. It is not a matter of controversy in the media; indeed, it is written into the Press Complaints Commission code. The question is how that undertaking can be given more tangible form.

    Disabled People (Access)
    Ms Lynne: To ask the Secretary of State for National Heritage what plans he has to meet groups representing disabled people in the near future to discuss access to buildings.
    Mr. Dorrell: Ministers in my Department meet groups representing disabled people regularly. The most recent such meeting was between my noble Friend Lord Astor and the Holiday Care Service on 25 January. The Government's White Paper, "Ending Discrimination against Disabled People", makes it clear that disabled people will be consulted on the detailed implementation of its proposals. My Department will play an active part in that consultation process.
    Ms Lynne: Is the Minister aware that access means not only the provision of ramps but the availability of information in Braille, audio descriptions and allowing people to take guide dogs to arts venues? Is he aware that training and employment opportunities in the arts
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    for disabled people are also important? Does he agree that the Government's Disability Discrimination Bill is woefully inadequate in all those contexts?
    Mr. Dorrell: I agreed with everything that the hon. Lady said until the last sentence. I do not agree that the Government's Bill is inadequate in dealing with the issues that she has correctly raised. She is right to emphasise that a disability policy in the area for which I am responsible must consider the rights of both employees and potential audiences; it must consider all the ways in which disabled people come into contact with sport, the arts and the national heritage. That is my Department's commitment.
    Mr. Corbett: Is the Secretary of State aware of what some theatres, galleries and museums in London have done to provide tape guides, Braille signs and audio aids? Does he accept that, none the less, access to buildings, performances and exhibitions remains inadequate? Does he know, for example, that six out of 10 drama schools have no physical access for people with disabilities, and that some 40-odd colleges are little better in that regard?
    What will the Secretary of State do to help provide more cash for organisation such as ADAPT and the arts and sports councils to end discrimination against people with disabilities? Will he also monitor progress made on access with the money allocated to good causes from the national lottery?
    Mr. Dorrell: The hon. Gentleman rightly mentioned progress made by the museums sector in London. He might also have mentioned progress made by the national museums sector in the north-west. Museums and galleries on Merseyside, which are part of that sector, have set up a disability access group to implement priorities there, and the museum of science and industry in Manchester—which I visited before Christmas—has taken a number of steps to improve access to exhibitions of artefacts and processes. The progress is not confined to London, nor should it be.
    In terms of resources to improve facilities for disabled people, the Sports Council distributes substantial quantities of money to the British Paralympic Association, the British Sports Association for the Disabled and to the United Kingdom Sports Association for People with Learning Difficulties. Therefore money goes specifically to assist access for the disabled.
    The hon. Gentleman is right to say that the lottery is potentially a further new source of cash. That is why in his guidance to lottery distributors my predecessor emphasised the importance of the access-for-the-disabled theme and why I fully intend to carry forward that commitment.

    Astley Castle
    Mr. Mike O'Brien: To ask the Secretary of State for National Heritage what steps he will take to safeguard the future of Astley castle in Warwickshire.
    Mr. Dorrell: Discussions on the future of Astley castle are taking place between the owner of the building, the local planning authority, English Heritage

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    and the Landmark Trust. My officials are monitoring developments but I see no reason to intervene at this stage.
    Mr. O'Brien: While I accept that discussions are going on with a view to finding a private sector solution to the problem of Astley castle, which is falling into dilapidation and is of national historic importance, does the Minister agree that private sector solutions have failed in the past, that it would be wrong for the burden to fall on the council tax payers of north Warwickshire of a castle that is of national importance, and that the Government must consider whether it is appropriate, if the private sector solution fails, to exercise their statutory ability to intervene and save that castle?
    Mr. Dorrell: As the hon. Gentleman knows there are powers in the hands of the local authority and there are reserve powers vested in me to ensure that listed buildings are maintained to an acceptable standard that reflects their national importance. Local authority powers and those vested in the Secretary of State are intended to be reserve enforcement powers because the law makes it quite clear that the primary responsibility for maintaining listed buildings rests on the owner. It is to secure that outcome that negotiations are proceeding between the district council and the owner of the castle.

    Training Centres
    Mr. Hawkins: To ask the Secretary of State for National Heritage what plans he has to establish further training centres for national sporting excellence in cricket and other sports, along the lines of the Australian Cricket Academy.
    Mr. Sproat: I am concerned that sporting structures should exist to enable our young sports men and women to reach their potential and I shall certainly be sharing the results of my recent fact-finding visit to Australia with the appropriate sporting bodies, including the cricket authorities.
    Mr. Hawkins: I thank my hon. Friend for that answer. Given that today we are all celebrating our team's wonderful fightback and victory, does my hon. Friend agree that, if we, like the Australians, had a cricket academy, we might have won the first three tests as well and not simply be celebrating a victory after the opportunity of winning the series has gone? I thank my hon. Friend for his encouragement to the team as reported in The Daily Telegraph, because it has obviously been successful.
    Mr. Sproat: I thank my hon. Friend for his remarks. The way in which the England team has conducted itself after appalling injuries and the kind of vicious criticism to which it has been subjected is remarkable. I congratulate Mr. Atherton on his cool concentration and confidence. My hon. Friend asked about cricket academies. The cricket world is rather divided as to whether they help. There is already a cricket academy in Yorkshire and the MCC helps young cricketers in London. I shall certainly consider what Mr. Rod Marsh and others showed me in Adelaide to see whether we can use it to advantage.
    Mr. Skinner: Why does not the Minister pay a special tribute to the two Derbyshire players, Malcolm
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    and DeFreitas? Will he bear it in mind that there are training centres in every coalfield for competitive and individual sport? They are run by the Coal Industry Social Welfare Organisation, but with the privatisation of British Coal, every single village that has produced cricketers and footballers for England and for many clubs and counties throughout Great Britain has been placed in peril. I ask the Minister again whether he will guarantee that CISWO will be safe from the hands of those who have privatised the coal industry and whether he will ensure that those sporting areas are kept in our villages.
    Mr. Sproat: The hon. Member raises an extremely good and important point. With my right hon. Friend the Secretary of State for Trade and Industry, I have done everything I can to protect those facilities, and I continue to do so. I hope that an announcement will be made shortly. I had the pleasure of sitting between Mr. Malcolm and Mr. DeFreitas at the test match in Adelaide. They said that the most important single thing that I could do would be to ensure that cricket was played in schools again, and I agreed.
    Dame Elaine Kellett-Bowman: Is my hon. Friend aware that the sporting structures to which he refers already exist in Lancashire schools, which have produced players of the calibre of Atherton and Crawley? Will my hon. Friend please note and take heart from the fact that a number of young cricketers are coming up in those fine schools in the footsteps of Atherton and Crawley? Will my hon. Friend please urge other schools to take example from the excellent coaching that takes place in Manchester grammar school and Lancashire Royal grammar school, and to follow their example?
    Mr. Sproat: My hon. Friend is right to draw attention to the success of Lancashire players and to the good things that happen in so many schools in Lancashire. We want even better things to come from schools everywhere.
    Mr. Menzies Campbell: Does the Minister agree that, in the pursuit of excellence in sport, we should not leave out football? Although the incident involving Mr. Eric Cantona last week may have been shameful, we should not forget that football is the national game of the United Kingdom, and that it gives a considerable amount of pleasure to many people Saturday upon Saturday throughout the season?
    Mr. Sproat: Yes. The hon. and learned Gentleman makes an important point. Many people look up to footballers. I hope that the football authorities will deal in a proper manner with Mr. Cantona and others who are tempted to behave like him.
    Mr. Pendry: Before the Minister proposes centres of sporting excellence along Australian lines, will he consider again the narrow focus that he proposes for the new sports councils of two or three dozen core sports? Surely centres of excellence can become effective only when set against the other Australian aim of sport for all—their aim should not, as he proposes, be sport for the few. Otherwise, he will marginalise many sporting groups, not least those for the disabled.
    Mr. Sproat: The hon. Gentleman misunderstands what we are trying to achieve in the Sports Council. I

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    do not want the Sports Council to spread itself too thinly—I think that it recognises about 117 different governing bodies of sport—but to concentrate on sport for young people and on elite sport and excellence. That does not mean that we shall not do a lot about other matters as well, but a little concentration by the Sports Council on those matters should help everyone.
    Mr. Cormack: Does my hon. Friend accept that many people, including those who have served in the teaching profession, believe that coaching and supervising competitive sports are an integral part of the job and do not deserve extra pay?
    Mr. Sproat: I know that my right hon. Friend the Secretary of State for Education will consider that view closely.

    Tourism, London
    Mr. Simon Coombs: To ask the Secretary of State for National Heritage if he will make a statement on his plans to promote tourism to London.
    Mr. Dorrell: London's performance in tourism is important both in itself and as the gateway to the rest of country. I therefore announced on 29 November increased funding for London, to be matched by the private sector.
    Mr. Coombs: Will my right hon. Friend confirm that it remains the general policy of the Government to promote and to encourage the dispersal of visitors to all parts of the United Kingdom? If that is still the case, will he use his best endeavours to encourage bodies that are charged with responsibility for the promotion of tourism in parts of the United Kingdom outside London, to advertise and promote what they have to offer to visitors when they are in London, on the basis that it is a great deal cheaper to tell Americans about the rest of Britain when they are in London than when they are dispersed in America and the rest of the world?
    Mr. Dorrell: My hon. Friend has taken an interest in the subject for a long time and he has got the point precisely right. The biggest audience of overseas visitors to the rest of the UK is people who, as part of their visit—it may be their first visit or part of a visit to London and the provinces—are in London. London as a tourist destination is an essential part of the success of our tourist industry. That is why, as the first stage in the development of our tourist strategy, we are seeking to reinforce the marketing of London as a tourist destination.
    Mr. Austin-Walker: Does the Minister share my view that it is important that visitors to London should be encouraged to see sights on the fringes of London? Is he aware that 100,000 people a year visit the Thames barrier, which has been described as one of the eight modern wonders of the world and which is a superb advertisement for British engineering skills? Is he further aware that the National Rivers Authority proposes to close the visitors centre? Will he ensure that resources are made available not only to refurbish the exhibition there—it is now 10 years old—but to ensure that the centre stays open?
    Mr. Dorrell: If the hon. Gentleman cares to write to me about the visitors centre at the Thames barrier, I
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    shall be glad to examine the matter. The hon. Gentleman is of course right about promoting the development of tourist destinations on the London rim. Places such as Hampton court and Greenwich are major tourist attractions which are outside the centre of London, and the more visitors we can attract to them, the better pleased the Government will be.
    Mr. Harry Greenway: Will my right hon. Friend do all he can to persuade visitors to London to stay on the outer rim rather than concentrating on hotels in Mayfair? They would be made welcome and comfortable in Northolt, Hanwell and other parts of the borough of Ealing and would find it easy to get into London during off-peak hours. Would not all involved benefit?
    Mr. Dorrell: My hon. Friend raises an important point, which he makes in his own way. The key message for Londoners to take on board is the importance to London's economy of the tourist sector as a whole. Roughly 200,000 jobs in London depend directly on tourism, which contributes nearly £5 billion to the city's economy. It is therefore an important sector for us to develop.

    Disabled People (Cinemas)
    Mr. Hanson: To ask the Secretary of State for National Heritage what steps he is taking to improve access by disabled people to cinemas.
    Mr. Sproat: The Government's Disability Discrimination Bill was introduced to Parliament on 12 January 1995. It seeks to introduce a right of access for disabled people to goods, facilities and services, including cinemas.
    Mr. Hanson: Is the Minister aware that, in a recent survey of 96 cinemas in London, only 22 were found to be accessible to disabled people, and that many disabled people now face the humiliation of being told that they are fire risks? Many of my hon. Friends share the view that the Disability Discrimination Bill does not go far enough. If the hon. Gentleman agrees with that assessment, what plans does he have to influence his right hon. Friend the Secretary of State to ensure that the Bill allows disabled people to enter London cinemas in the near future?
    Mr. Sproat: I was not aware of the exact statistics, but the hon. Gentleman is correct to say that the majority of cinemas do not have the facilities that we would like. In fact, only 25 per cent. of all cinemas around the country do, but a survey of facilities for disabled people is currently being updated by the Cinema Exhibitors Association and when we have the results, which we hope will be shortly, we hope that they can be fed in to consideration of the Bill.

    National Lottery
    Mrs. Anne Campbell: To ask the Secretary of State for National Heritage what plans he has to impose an upper limit on the amount of money available to individual prize winners in the national lottery.
    Mr. Dorrell: None.
    Mrs. Campbell: Why is not the Secretary of State prepared to regulate winnings? Is it not better for 17

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    people to win £1 million than for one person to win £17 million? Does he not feel that it would be better to spread the benefits to give individuals a greater chance of winning?
    Mr. Dorrell: No, I do not agree with that at all. The hon. Lady is focusing on the wrong issue. The key issue is what structure of lottery prizes will raise the largest sum of money for good causes. There is a wealth of evidence from around the world to suggest that the approach taken in our lottery is better targeted at raising money for good causes than that suggested by the hon. Lady or, it must be said, by the hon. Member for Stalybridge and Hyde (Mr. Pendry).
    Mr. Waterson: Does my right hon. Friend agree that the dogma that people should be rich but not too rich is one of the many things that the new and old Labour parties have in common?
    Mr. Dorrell: One of the entertaining things about listening to spokesmen from different parts of the Labour party is learning where different spokesmen draw the line on where true riches really begin—they cannot seem to agree.

    Disabled Athletes
    Ms Eagle: To ask the Secretary of State for National Heritage what representations he has made to the Department of Health regarding provision for athletes with disabilities in the Disability Discrimination Bill.
    Mr. Sproat: The Department of Social Security is in contact with all relevant Departments, including the Department of National Heritage, in taking forward the Government's policy in this sector. In addition, the Sports Council responded to the consultation document issued by the Department of Social Security in July 1994.
    Ms Eagle: Is the Minister satisfied with the level of provision for disabled sport in the Bill? Will he reassure disabled sportsmen and women, in the light of his failure to mention them at all in his statement on the restructuring of the Sports Council, that his plans and the Government's plans, as presented in their Bill, include disabled sportsmen and women and do not marginalise them?
    Mr. Sproat: We are strongly aware of the need for the Sports Council and other bodies in sport to take into full consideration the needs of people with disabilities. The Sports Council gives out more than £500,000 every year. In addition, the Foundation for Sports and the Arts, the Sports Aid Foundation and the sports match scheme all take fully into account the needs of people with disabilities. As my right hon. Friend said earlier, when the lottery letter went out last year from his predecessor, it specifically mentioned the need to take into account people with disabilities.
    Mr. Lidington: Is my hon. Friend aware of the tremendous opportunities that are already being given to many disabled athletes by the Ludwig Guttman sports stadium at Stoke Mandeville in my constituency? Will he confirm that it will be open to the operators of that stadium, or any other sports body, to seek funds under the national lottery provisions to improve their facilities to help disabled athletes?
    Mr. Sproat: It is a marvellous facility, and it would he eligible for lottery funding.

    Disabled People (Arts)
    Mrs. Golding: To ask the Secretary of State for National Heritage what discussions he has had with the West Midlands regional arts board about improving arts facilities for the disabled.
    Mr. Sproat: I refer the hon. Member to the reply I gave earlier to the hon. Member for Bradford, North (Mr. Rooney).
    Mrs. Golding: The West Midlands regional arts hoard has an excellent record of promoting disability arts. Will the Minister study its policies, which not only give access to the disabled, but help the disabled to get jobs in the art world? Will he then promote those policies through his position in Government?
    Mr. Sproat: The hon. Lady is absolutely right in congratulating the West Midlands regional arts board on what it does. It spends something like £94,000 a year on improving the lot of persons with disabilities in the arts. I know that, in its latest corporate plan, it specifically put forward ways in which it could help further those with disabilities. It sets an example which could well be followed by many another.

    Tourism
    Mr. Spring: To ask the Secretary of State for National Heritage what measures have been undertaken in recent years to attract more visitors to Britain; and how successful those measures have been.
    Mr. Dorrell: My Department has provided funding of £33.2 million this year to the British Tourist Authority to conduct marketing campaigns through its 20 overseas offices to bring people here. Early estimates suggest that, during the first 10 months of 1994, 17.5 million visitors came to the United Kingdom, up 7 per cent. on the same period in 1993, which was itself a record year.
    Mr. Spring: Can my hon. Friend assure the House that, in areas where British exports are booming, especially in the far east and Latin America, not only is knowledge of the excellence of British goods and services available, but the tourist potential of Britain in those expanding market places is fully known?
    Mr. Dorrell: My hon. Friend is quite right to draw attention to the opportunity for this country to extend its tourism marketing effort beyond some of the more mature markets towards some of the emerging markets. My hon. Friend identifies two promising candidates.

    Departmental Staff (Disabled People)
    Mr. Pickthall: To ask the Secretary of State for National Heritage how many of the staff in his Department are disabled; and what proportion this represents of the work force.
    Mr. Sproat: The latest available figures show that 13 staff employed by my Department, excluding our two agencies, identify themselves as disabled. That represents 3.6 per cent. of all staff.
    Mr. Pickthall: If 3.6 per cent. is the correct figure across the Ministry, at least the hon. Gentleman's Ministry is doing a proper job on the quota. Why,

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    therefore, are the Government to abolish the quota in advance of the provisions of the new Disability Discrimination Bill being bedded down?
    Mr. Sproat: I am happy to accept the congratulations of the hon. Gentleman on what the Department of National Heritage has achieved. The second part of his question should be discussed as the Bill progresses through the House.

    VE Day (Tourism)
    Mr. Waterson: To ask the Secretary of State for National Heritage what benefit to the tourism industry he estimates will accrue from the Victory in Europe commemoration.
    Mr. Dorrell: The tourist boards estimate that events to commemorate VE day may attract up to an additional 10,000 visitors from overseas and perhaps as many as 1 million additional domestic visitors.
    Mr. Waterson: I thank my right hon. Friend for that answer. Does he accept the view held by many people in this country, including ex-service men and women's organisations, that the difficult and delicate decision to include German representatives and exclude Japanese representatives at VE and VJ commemorations is absolutely right?
    Mr. Dorrell: Yes. I can well understand that there is obvious sensitivity around those matters, and not everyone will feel wholly at home with the decision that has been taken. However, I believe that it is the right decision.
    Mr. Maclennan: Will the Secretary of State accept that many people would regard it as an unattractive way to respond to the VE celebrations for the Conservative party to be divided about the future of our relationship with the European Union?
    Mr. Dorrell: It is breathtaking that the hon. Gentleman should seek to make party political capital out of a VE day celebration. The argument about the future of the European Union is clearly an argument between different points of view about how the Union should develop. It has nothing to do with the act of national commemoration which will be at the heart of VE day.

    Actors and Dancers
    Mr. Luff: To ask the Secretary of State for National Heritage what steps he is taking to ensure that there are sufficient numbers of British actors and dancers to meet the needs of British theatre.
    Mr. Sproat: My Department takes a close interest in the well-being of the performing arts in this country. We are aware of concerns over the funding of training for dance and drama students. That is an issue that is currently being considered by my right hon. Friend the Secretary of State for Education, in consultation with my Department and the Arts Council of England.
    Mr. Luff: My hon. Friend will be aware of how welcome is the obvious priority that the Government are attaching to resolving the question of discretionary grants. May I urge him to press the matter with the utmost speed? I am aware of case after case in my constituency of young
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    people who cannot use their skills to train for drama and for dance schools because the local authority does not have the money.
    Mr. Sproat: I congratulate my hon. Friend on the persistence and knowledge with which he has pursued that important point. We are currently considering the findings of the Gulbenkian survey with the Department for Education, and I very much hope that we shall be able to fulfil my hon. Friend's request for a speedy answer.
    Mrs. Dunwoody: The Minister will be aware that the matter is now urgent because practically no discretionary grant is handed out to people who want to study dance or drama. This country has a high quality of representation in both those arts. If we are not to lose them, it will require rather more vigour on the Minister's part than has been shown so far.
    Mr. Sproat: That is primarily a matter for the local education authorities.

    National Cricket Academy
    Mr. Hicks: To ask the Secretary of State for National Heritage what plans he has for a national cricket academy; and if he will make a statement.
    Mr. Sproat: The establishment of a national cricket academy is essentially a matter for the cricketing authorities. If a suitable project were put forward, I see no reason why it could not be considered as a candidate for lottery funding.
    Mr. Hicks: Despite England's excellent victory in Adelaide yesterday, does my hon. Friend agree that there is a need for a cricket academy which could well be funded from the millennium fund or from national lottery funds, provided, of course, that there is the essential structural link between the existing game and any such academy?
    Mr. Sproat: My hon. Friend makes an extremely important point. The fact that we won the latest test match does not mean that we should consider the matter any less closely. However, the cricketing world is sharply divided over whether we should have a central national cricket academy or whether the matter would be better handled by the individual counties.
    Mr. Enright: I am sure that the Minister will agree that the excellent Yorkshire cricket academy, which produced Darren Gough, the great find of this tour, is a success. However, it will not continue to be a success unless the schools that feed into it have the funds to put into grounds on which they can play cricket. That is an extremely important point, and I urge the Minister to stress its importance to the Department for Education.
    Mr. Sproat: The hon. Gentleman is quite right about the great importance of having proper sports grounds. Of course, it would be open to schools and to those who wish to put forward a plan with them to apply for funds under the lottery for the acquisition of such playing fields, provided that the playing fields were open not just to schools but to the rest of the community. Just to show the hon. Gentleman that I do not merely echo glibly what he

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    says about the importance of the Yorkshire cricket academy, let me say that I shall see representatives of the Yorkshire cricket academy later this very week.
    Mr. Elletson: Does my hon. Friend agree that, if there is to be a national cricket academy, the proper location for it would be Lancashire, which continues to provide the real backbone of English cricket?
    Mr. Sproat: I had the pleasure of visiting Old Trafford recently, and I saw what was being done there by the Lancashire county authority. I certainly agree that its plan is splendid, but other counties might have different views.

  CHURCH COMMISSIONERS

    Pension Fund
    Mr. Corbyn: To ask the right hon. Member for Selby, representing the Church Commissioners, what representations he has received on the viability of the pension fund.
    Mr. Michael Alison (Second Church Estates Commissioner, representing the Church Commissioners): Clergy pensions are currently funded from the Church Commissioners' investment income rather than from a separate pension fund. Following actuarial advice, a number of options for the future funding of pensions are being discussed with the dioceses. They focus on the collection of pension contributions for future service.
    Mr. Corbyn: When does the right hon. Gentleman expect a statement to be made on the future funding of the pension fund, following the representations that he has received? What action is being taken concerning the serious losses incurred by the Church Commissioners pension fund on irresponsible investments in out-of-town shopping centres in the past? Will future pensions be increased in line with average earnings or in line with inflation, or can the right hon. Gentleman give no guarantee at all as to future pension payments both to clergy and to lay employees of the Church of England?
    Mr. Alison: The specific question of when a definitive statement is likely to emerge about future pension arrangements—I am sure that the hon. Gentleman will approve of this—will depend to some extent on when the Social Services Select Committee's report on the issue comes out and when the various diocesan consultations have taken place. There cannot in any case be a fundamental change without legislation, so I doubt whether any new arrangements will be in place before 1998.
    As for the underlying value of the assets, the hon. Gentleman will know that it is going up steadily. Assets lay at £2.1 billion in 1992, and by the end of 1993 they had increased to £2.4 billion. The so-called loss of £800 million is already being steadily recouped by the soundness of the Church Commissioners' investment.
    Future pensions will continue to be linked to clergy stipends. Clergy stipends have been linked to average earnings. That link is likely to persist.

    Historic Church Buildings
    Mr. Miller: To ask the right hon. Member for Selby, representing the Church Commissioners, what
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    representation the Commission has received regarding value added tax on repairs and maintenance of historic church buildings.
    Mr. Alison: The commissioners have no direct responsibility within the Church of England on the issue, but they have supported representations by the Churches Main Committee to the Government about the heavy VAT burden which churches currently have to bear.
    Mr. Miller: Does the right hon. Gentleman agree with the Right Rev. Michael Baughen, Bishop of Chester, that such a reduction in VAT would help to protect our historic church buildings? If the European Commission brings forward the proposals that have been suggested, should not the Government accept such proposals as a way of protecting those buildings?
    Mr. Alison: Yes, I very much hope that any changes recommended by the European Commission in this matter will be reflected by changes in the Government's approach to VAT. I endorse what Bishop Michael Baughen has said about the heavy burden represented by VAT, but it should not be overlooked that the Government have been supportive of charities in the past, not only by the long-standing exemption from income tax from their direct income, but by introducing gift aid and relaxing the regulations on charitable deeds of covenant. They have increased the ability of English Heritage to make grants to cathedrals and other places of worship in use. We should not underestimate the extent to which the Government have sought to help charities, but I agree that there is more land to be possessed.
    Sir Patrick Cormack: Is my right hon. Friend aware that the Secretary of State for National Heritage recently kindly met a deputation from the Historic Churches Preservation Trust to discuss that and other issues? Will my right hon. Friend talk to the Secretary of State about the matter and ensure that vigourous representations are made, as the measure places a crippling burden on many smaller, and particularly rural, parishes?
    Mr. Alison: My right hon. Friend the Secretary of State for National Heritage has a peculiarly attuned and sensitive ear and is capable of hearing anything which is bruited around the House. He will have taken careful note of what my hon. Friend has said, and he will reflect that I have had occasion to write to his Department on the matter. I hope that there will be a benign approach to any changes proposed by Brussels on VAT.

  LORD CHANCELLOR'S DEPARTMENT

    Legal Aid
    Mr. Brazier: To ask the Parliamentary Secretary, Lord Chancellor's Department what measures he plans to restrict the scope of legal aid.
    The Parliamentary Secretary, Lord Chancellor's Department (Mr. John M. Taylor): The Lord Chancellor does not plan to restrict the scope of legal aid. New proposals for legal aid will be the subject of a Green

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    Paper later in the year, as anticipated in the Lord Chancellor's recent speech to the Social Market Foundation.
    Mr. Brazier: Is my hon. Friend aware of how welcome are the proposals which my noble Friend the Lord Chancellor has outlined for setting up limited budgets to many hard-pressed taxpayers? Given the considerable powers which officials in area legal aid offices have, and given that those powers are likely to be extended, is there not a strong case for having some voluntary oversight?
    Mr. Taylor: The board can refuse legal aid on the grounds of merit and, if so, an applicant can appeal to an area committee, whose members are independent legal practitioners not employed by the board. In addition, complaints about the board's administration are susceptible to investigation by the ombudsman.
    Mr. William O'Brien: Does the Minister agree that it is important that people who rely on legal aid to obtain justice should have the same level of representation as the Crown Prosecution Service at any appeal to a court or to the Lord Chancellor? Will he ensure that there will be that equality of representation?
    Mr. Taylor: I want to give a serious answer to a serious question, but I should have thought that most advocates in the private sector would consider themselves to be every bit as good as the advocates in the Crown Prosecution Service.
    Mr. Stephen: Can my hon. Friend confirm press reports that the Legal Aid Board has granted legal aid to Winston Silcott to enable him to sue the police? Is my hon. Friend aware that Mr. Silcott has received £17,000 compensation from the Home Office within the past six months? How can it be that people can give money away to friends and relations, as Silcott has done, and then claim to be too poor to pay their own lawyers' fees? Does not that make a mockery of the legal aid system?
    Mr. Taylor: Although I cannot comment on the details of any individual case, I have no reason to believe that Mr. Silcott's application has been dealt with any differently from anybody else's.
    Mr. Mudie: To ask the Parliamentary Secretary, Lord Chancellor's Department what proposals he has to deal with abuses of the legal aid system; and when he will bring them forward.
    Mr. John M. Taylor: The Legal Aid Board has made a number of proposals in relation to the green form scheme, which are being taken forward now.
    Mr. Mudie: The Minister will be aware that the Lord Chancellor has suggested cash-limiting the legal aid budget on a regional basis. Is the Minister aware that where that has been tried, in the social fund, hundreds of thousands of genuine claimants have been refused aid because the money has run out? Does the Minister agree that it would be intolerable for that to happen in justice? Will he ask the Lord Chancellor to think again? If the noble Lord wishes to persist, will the Minister ensure that there are proper safeguards to protect innocent people?
    Mr. Taylor: That matter is so far only the subject of a prelude speech by the Lord Chancellor. A Green Paper will be issued. I am sure that the hon. Gentleman's
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    question will be taken into account. For the moment, raising the spectre of cash running out is scaremongering and we certainly want to ensure that that does not happen.
    Mr. Clifton-Brown: When considering changes to the legal aid system, will my hon. Friend consider those cases in which someone assisted by legal aid can pursue a civil claim against a business, which is not able to claim such aid? The case can bring the business almost to the point of bankruptcy and, even when the business eventually wins, it is unlikely to be awarded any compensation by the courts.
    Mr. Taylor: It is part of the original sin of legal aid—if that is the correct expression—that, in civil cases, one encounters disputes in which party A has legal aid and party B does not, whether the latter is a limited liability company or another citizen. As long as resources are not infinite and there has to be a cut-off point, as there does with many such welfare schemes, it is almost inevitable that one party will be legally aided while the other is not.
    Mr. Boateng: We have heard a lot from the Minister about cuts that affect the consumers of legal services. What are he and the Lord Chancellor doing to deal with the scandal of restrictive practices within the legal profession? Have they met the Bar and the Law Society to deal with how lawyers might put their own house in order, so that more consumers can benefit from legal services at a time when those are being cut?
    Mr. Taylor: That was an interesting question. I am no more in favour of restrictive practices than the hon. Gentleman, but he knows as well as I that the legal professions are self-regulating. Obviously, we view any abuses of public money with the greatest possible concern because that is what the House would want us to do. Meanwhile, I think that the hon. Gentleman will join me in welcoming the fact that the Lord Chancellor wants to widen the categories of people who dispense legal advice. It need not be solicitors and barristers only, but could include citizens advice bureaux, as supported by me, and law centres, as supported by him.
    Mr. Hawkins: To ask the Parliamentary Secretary, Lord Chancellor's Department what further changes are planned for the legal aid system.
    Mr. John M. Taylor: New proposals for legal aid will be the subject of a Green Paper later in the year.
    Mr. Hawkins: I thank my hon. Friend for that answer. Does he agree that one of the great concerns about the system has been the large number of people on modest incomes who have not been eligible for legal aid? That was one of the concerns highlighted in the excellent debate in the House last Wednesday morning, to which my hon. Friend replied. Will he reconsider the position of the so-called MINELAs—middle income, not eligible for legal aid?
    Mr. Taylor: Yes. I am probably in that category. I want to share with my hon. Friend the emergence of the regime of conditional fees—no win, no fee. Many cases, especially personal injury cases, will be susceptible to that scheme. Although the idea is in a fledgling state, there

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    is also a possibility of people obtaining legal expenses insurance, as many of us do in respect of our motor policies.
    Mrs. Roche: Given that the Lord Chancellor removed legal aid from 14 million people in 1993, is it not about time that he and his Department started to make the legal system more accessible to ordinary people and more efficient, rather than clobbering them time after time?
    Mr. Taylor: I have never understood how 14 million people could fall out of a scheme used by 3 million people. We want to widen access and some of my suggestions to the hon. Member for Brent, South (Mr. Boateng) were along those lines.
    Mr. John Marshall: To ask the Parliamentary Secretary, Lord Chancellor's Department what representations he has received about the provision of legal aid to the apparently rich.
    Mr. John M. Taylor: The Lord Chancellor and I have received a number of representations on that subject and it was for that reason that the Lord Chancellor issued the consultation paper "Legal Aid for the Apparently Wealthy" on 20 December 1994. Responses are required by 1 March.
    Mr. Marshall: Does my hon. Friend agree that there is unprecedented public anger that people such as Mr. Ernest Saunders, Mr. Roger Levitt, Mr. Gordon Foxley and Mr. Hashim should get legal aid? Does not that roll call of wealthy parasites, including Mr. Asil Nadir, underline the need to deprive the apparently wealthy of access to the taxpayer's money?
    Mr. Taylor: To his credit, my hon. Friend was successful in securing a debate on that subject on the Floor of the House last Wednesday morning. He was eloquent then and was equally robust and clear in the point that he has just made. I am grateful to him.
    Mr. Skinner: What is the answer, then?
    Madam Speaker: Does the Minister want to go further in answering that question? If so, I must allow him to do so.
    Mr. Taylor: I am grateful to you, Madam Speaker, because it was clear from sedentary interventions that certain hon. Members thought that my reply did not hit the nail on the head. The answer is, as some hon. Members know already, that we have produced a consultative paper entitled "Legal Aid for the Apparently Wealthy" which deals, among other things, with exactly the points about which my hon. Friend the Member for Hendon, South (Mr. Marshall) is concerned.
    Mr. Skinner: Is the Minister aware that not only did Asil Nadir get legal aid but it has now been proved that the money handed over by Asil Nadir to the Tory party, amounting to £440,000, had been stolen? The Tory Minister dealing with the matter at that stage said that if the money were found to be stolen, he would ensure that it went back to its rightful source. Has that been done?
    Mr. Taylor: Do you know, Madam Speaker, the extraordinary thing is that there is nothing in my file about that?

    Privity of Contract
    Mr. Thurnham: To ask the Parliamentary Secretary, Lord Chancellor's Department what representations he has received about privity of contract; and if he will make a statement.
    Mr. John M. Taylor: My hon. Friend will know the latest state of play from the meeting that I had with him last Thursday.
    Mr. Thurnham: Will my hon. Friend urge his colleagues in the Department of the Environment to complete their consultations as soon as possible with a view to the Government introducing a reform Bill without further delay?
    Mr. Taylor: I am always prepared to assist my hon. Friend by any conversations that I can usefully have with the Department of the Environment, but I should put it on record that the Government had agreed my hon. Friend's Bill when he introduced it. While I am pleased that the British Retail Consortium and the British Property Federation are agreed, they have agreed to something else, and that sets us back a bit. I am concerned, above all, about the small tenant.

    Trials (Press Coverage)
    Mr. Soley: To ask the Parliamentary Secretary, Lord Chancellor's Department if he will make a statement on the press coverage of trials.
    Mr. John M. Taylor: The administration of justice should, so far as possible, be public. Subject to certain statutory safeguards, including the law relating to contempt of court, the coverage of trials is a matter for the press itself.
    Mr. Soley: Why did not the Lord Chancellor's Department act in the case of the Taylor sisters, where the court decided, partly on the basis of press coverage, that they had been wrongly convicted? Has the Lord Chancellor considered the alternative of requiring newspapers to cover both the defence and the prosecution equally, so that prosecutions are not based on salacious claims that later turn out to be false?
    Mr. Taylor: The Lord Chancellor would not intervene in a judicial capacity—he would not act in an appellate function. I know that the hon. Gentleman has great knowledge of that subject because, some time ago, he introduced a private Member's Bill that dealt with it. I do not know whether we should consider obliging the press to cover each side equally, as they do in general elections. [Laughter.] That proposition does not seem to have found a favourable reception. I shall reflect on the matter and write to the hon. Gentleman about equality of coverage.
    Mr. Fabricant: Does my hon. Friend agree that the sub judice system in the United Kingdom is the envy of other parts of the English-speaking world? Does he further agree that the O.J. Simpson trial is making a mockery of the United States' judicial system?
    Mr. Taylor: I watched some of that on television last night. The sub judice rule has served us well and should be reconsidered only with the greatest possible care.

    Legal Aid
    Ms Lynne: To ask the Parliamentary Secretary, Lord Chancellor's Department what representations he has received from legal aid lawyers in Rochdale, in the past six months, regarding proposed changes to the legal aid system.
    Mr. John M. Taylor: I am not aware that the Lord Chancellor or I have received any such representations directly from Rochdale solicitors or via the hon. Lady. The Rochdale solicitors have been particularly helpful
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    with a non-solicitor legal aid experiment conducted with the Rochdale citizens advice bureau. I wish all parties to those arrangements every possible success.
    Ms Lynne: Is the Minister aware that many solicitors are finding it increasingly unprofitable to perform legal aid work? What assurances can he give my constituents in Rochdale and elsewhere that the services will not decline?
    Mr. Taylor: We owe it to the House to keep an eye on the levels of expenditure on legal aid, as it constitutes part of the public purse. I believe that, by and large, legal aid practitioners know how to work expeditiously and to a high standard, and many of them are acquiring franchises by so doing. I think that the best of them will work well and find standard fees extremely congenial with their skills.

Channel Tunnel (Security)
3.29 pm
Mr. Michael Meacher(by private notice) asked the Secretary of State for Transport to make a statement on security in the channel tunnel.
The Secretary of State for Transport (Dr. Brian Mawhinney): Allegations were published yesterday that on certain specified days security arrangements for the Eurostar and Eurotunnel trains were inadequate. When those allegations were brought to my attention at the beginning of the weekend, I immediately called for urgent reports from the two companies.
The Channel Tunnel (Security) Order 1994 requires the operators of the tunnel and of the trains that go through it to carry out counter-terrorist security measures. Similar measures are applied in France and Belgium as agreed between our three Governments. The operators are responsible for ensuring that the security measures are applied properly. Here, my Department's inspectors give instructions, offer advice and make both announced and unannounced inspections.
The Government's requirements have not changed since the tunnel was opened. The House will not expect me to detail the requirements. Suffice to say that security measures are closely tailored to the threat, as assessed by the Government's security advisers. Among other measures, all traffic in the tunnel, passenger and freight, is liable to be searched. There is not and never has been a requirement for all passengers or vehicles to be searched. On the other hand, permitting a passenger to get off a train prior to arrival at his destination and leaving behind an unattended bag is a potentially serious matter, and could be a breach of security requirements.
Like other right hon. and hon. Members, I take security issues seriously. I will decide what further action needs to be taken in light of the reports that I have commissioned and any further security advice that I receive.
Mr. Meacher: In the debate about the Channel Tunnel (Security) Order last year, the Minister for Public Transport wrote to members of the Committee on 3 March stating:
"John Taylor also sought reassurance that the security of channel tunnel services would be comparable with arrangements at airports, and I was happy to give him that assurance".
Is the right hon. Gentleman aware of that correspondence and will he confirm that that commitment is very far from being met? Even if that requirement were excessive, will he not accept that, given the symbolic significance of the channel tunnel, there is a balance to be struck between ensuring speed of throughput and non-intrusiveness of checks on the one hand and a reasonably high level of security on the other, and the Observer revelations yesterday suggest that that balance is being struck at too low a level of security?
How are the right hon. Gentleman's assurances today about security in the channel tunnel consistent with random checks which show that most cars are not even subject to the most cursory search, most foot passengers' baggage is not scanned electronically, and only a few lorries have been required to pass through the enhanced X-ray scanner? Is it not a breach of procedure—the Minister seemed to agree that it was—that passengers were permitted to leave the Eurostar train without any
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checks being made of their baggage? In light of what he said, what action is he taking to ensure that that does not happen again?
Since the ultimate responsibility for ensuring the implementation of agreed security procedures in the channel tunnel rests with the Department of Transport security division, will the Minister say how many inspections of the tunnel operators' procedures that division has carried out so far? When was the last inspection and to what extent did it reveal any deficiencies?
In addition to the risk of terrorist bombing, will the Minister also inform the House whether evacuation procedures have been fully tested and practised in the event of a breakdown or fire in the tunnel, taking into account fully loaded trains and a throughput at peak capacity of a train in the tunnel every three minutes—which means that there could be up to seven trains in the tunnel at any one time? Have evacuation procedures been properly tested under those conditions, including the requirement for following trains to reverse out of the tunnel? If so, will the right hon. Gentleman publish the results?
There can be no absolute guarantee of passenger or vehicle safety, but does the Secretary of State accept that the laxity in procedures that has been exposed is not acceptable, and can and must be tightened without significant intrusiveness or loss of speed of transmission?
Dr. Mawhinney: I am aware that my right hon. Friend the then Minister for Public Transport wrote to members of the Committee, referring to his remarks to the House. I noted with interest that the hon. Member for Oldham, West (Mr. Meacher) gave only a partial quotation over the weekend, as did the Observer. My right hon. Friend told the right hon. Member for Strangford (Mr. Taylor):
"security at the tunnel will be comparable to that of airlines and at airports, commensurate with the threat."—[0fficial Report, 16 February 1994; Vol. 237, c. 982.]
Those words were left out of the quotations that filled the airways and the hon. Gentleman's comments over the weekend.
I agree with the hon. Gentleman that a balance must be struck, and not in a way that deliberately or in a focused manner seeks to underestimate the importance of security. He and I are as one on that. However, I will not prejudge—and the hon. Gentleman will understand why—the reports that I have sought. Given my personal background, I take security issues particularly seriously. I will study carefully the reports that I urgently commissioned, and if I judge that further action should be taken, I will not hesitate to take that action.
As to the hon. Gentleman's point about evacuation, certificates to run trains through the tunnel require safety checks of the sort to which he referred. I hope that he finds that reassuring.
I want to end on a common note in responding to the hon. Gentleman's questions. I was pleased that he recognised that there can never be an absolute guarantee of safety—but together we share the view that all appropriate steps should be taken, for the sake of not only safety but public confidence.
Mr. Peter Viggers: Does my right hon. Friend agree that anyone who has served as a Northern Ireland Minister retains a special interest in security

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matters? Is he aware that I have had several opportunities to study the operation of the channel tunnel, the most recent being yesterday? Does my right hon. Friend agree that anyone who approaches security issues is wise to do so with discretion and balance—two qualities in short supply at the Observer, and of which the hon. Member for Oldham, West (Mr. Meacher) is devoid?
Dr. Mawhinney: I agree with my hon. Friend that he and I, and others, have special reason to take security matters seriously and that his experiences, like mine, are not lightly forgotten. I come to the issue against that background. If the newspaper in question had been concerned about security issues, one might have thought that it would raise them with the appropriate people—the operators—in a framework that gave them an opportunity to respond adequately and appropriately to the allegations. But that might not have created such a good newspaper story.
Having said that, I recognise the seriousness of the issues and of the allegations made. They must and will be investigated. If I believe that further action must be taken, I will ensure that the operators take it.
Mr. Paul Tyler: The whole House will recognise that we cannot prejudge the reports that the Secretary of State has asked for. I hope that he will accept that from the Liberal Democrat party at least.
We also welcome the right hon. Gentleman's most important remark this afternoon—that he accepts full ministerial responsibility. He has shown as much by making this statement.
Is the right hon. Gentleman aware that there is widespread concern about the mechanisms—who is watching the watchdogs? The Minister takes responsibility, but what is there to ensure that those who are responsible for surveillance, evacuation and emergency procedures are themselves under the surveillance of the Minister, or at least under his authority? If no such system is in place, the Minister must be aware that incidents of this sort will continue and will constantly be referred back to the House and to his desk at the Department.
Dr. Mawhinney: I am grateful for what the hon. Gentleman said about not prejudging the issue: I agree with him. If he was saying that security measures must be related to the threat, including the vulnerability of the system, I also agree with him on that important point.
I said in my answer to the private notice question that my Department's inspectors, independently of the operators, give security instructions, offer advice and make announced and unannounced inspections of the system. I hope that the hon. Gentleman will find some encouragement in that.
Mr. Roger Gale: Will my right hon. Friend ensure that the synthetic outrage generated by this stunt is not allowed to obscure the genuine and long-standing concern of some of us about the training of channel tunnel staff and the co-ordination of the emergency services that work with the tunnel operators? My right hon. Friend will know that the recent bi-national exercise left a number of unanswered questions; one would hope that, as a result of the lessons learned, action will have been taken.
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Will my right hon. Friend seek to ensure that a further bi-national exercise is held, so that we can establish whether the lessons of bi-nat 6 have been learned, and so that we can test the security services?
Dr. Mawhinney: As my hon. Friend will appreciate, I am not going to refer to security arrangements in any form from the Dispatch Box. I was grateful to the hon. Member for Oldham, West for his recognition of that. I certainly agree with my hon. Friend that all appropriate steps need to be taken and that they are likely to include training, which is an important and legitimate aspect of security arrangements. I should have thought that the whole House would be as keen as I am to ensure that public confidence in the system, which is high, remains high—and justifiably so.
Mr. Bruce George: I am delighted that the Minister has not responded to attempts to politicise this issue, because it is not—it should not be—remotely a party political one. The channel tunnel is the No. 1 terrorist target in the world. It would not take a major terrorist organisation to destroy it; that could be done by a tiny organisation with access to relatively unsophisticated technology.
Will the right hon. Gentleman review the idea that security must be tailored to the threat? Although that seems a smart phrase to use, and although security can be upped or lowered at the margins, the threat from a tiny organisation can be such that no amount of manipulating the response to it will result in preparedness for someone trying a long shot from 60 yards.
I am sure that the right hon. Gentleman will recognise that my point is valid. I ask him not to be beguiled by security analysts who describe the threat as greater or lesser. When the threat is thought to be low is the very time when some organisation can try it on, possibly with disastrous consequences.
Dr. Mawhinney: I am grateful for what the hon. Gentleman said about not making this into a partisan issue—although he will understand that, just occasionally, the temptation is large. [Interruption.] I am glad to note that he does not belong to the same luddite tendency as the hon. Member for Bolsover (Mr. Skinner) appears to belong to.
A security assessment is not just a beguiling figment of the imagination, but having said that, I understand the point that the hon. Gentleman is making.
Several hon. Members rose—
Madam Speaker: Order. We are tending to move into an Adjournment debate when putting questions to the Minister. Could I now have brisk and direct questions to the Minister?
Mr. Robert Key: Will my right hon. Friend confirm that, when the reports are forthcoming, he will not publish them? Does he agree that the British public have the safest transport systems in the world when it comes to security? They can have total confidence in the

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system. In particular, they can have confidence in this case in the Department's own inspectors, in the Kent constabulary and in the Gendarmerie Nationale.
Dr. Mawhinney: My hon. Friend is right in all respects. I have travelled through the channel tunnel with full confidence and expect to do so again very shortly.
Ms Glenda Jackson: As my constituents have suffered from a number of bomb outrages, will the Secretary of State, in the new review of channel tunnel security, include consideration of possible terrorist outrages at the St. Pancras terminal?
Dr. Mawhinney: The hon. Lady is getting somewhat beyond the scope of the question, and in the light of your instructions, Madam Speaker, I will not respond.
Madam Speaker: I am sure that the Minister is correct. Perhaps the hon. Lady will put a question to the appropriate Minister on the appropriate day.
Mr. Jacques Arnold: Has not the gleeful scaremongering in this case got something to do with the gleeful mudslinging in the case of Ebbsfleet station, in as much as it puts in jeopardy the future jobs of people in Kent? If there are instances, as there appear to be, of lapses in security, is not the proper response to take it privately to the competent authorities, all the way up to the Secretary of State if necessary?
Dr. Mawhinney: My hon. Friend is right; if there are concerns, suspicions or allegations, they should be properly investigated and those reports studied carefully. I will do that.
Mr. Thomas McAvoy: I am sure that the Secretary of State will accept that the issue concerns more than just the south-east of England. It concerns, of course, the other regions of England, Wales, Scotland and Northern Ireland. Bearing in minding that fact, does he accept that his resentment at the coverage that the Observer has given to the issue reflects the image of a departmental team caught on the hop? Does not the disarray of Transport Ministers show that the public are paying the price of the merry-go-round in Transport Ministers that exists under the Government? Does that not reflect his state of unreadiness?
Dr. Mawhinney: First, let me make it clear that I have no resentment about the Observer running whatever articles it wishes to run—be they true, false or somewhere in between. Secondly, there is no state of unreadiness. Thirdly, I have explained to the House exactly who is responsible and the various layers of responsibility. Fourthly, if action needs to be taken, it will be, and in a way which I hope will reassure the hon. Gentleman of the competence and readiness of this team to pursue its due responsibilities not only up to the next election but beyond.
Mr. Nick Hawkins: Will my right hon. Friend confirm that, far from the picture painted by the hon. Member for Glasgow, Rutherglen (Mr. McAvoy), his Department looked at the most sophisticated scientific
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techniques of non-invasive automated cargo inspection as far back as the beginning of 1991 and that programmes were undertaken to test that technology? Without giving the House the details of that technology, because it is a matter of security, will he confirm that the most sophisticated measures were looked at and will continue to be examined by his Department, especially the security officials within it?
Dr. Mawhinney: For reasons that I explained earlier, I will not be drawn into discussing security measures, but my hon. Friend is right to bolster public confidence in the arrangements that are in place.
Mr. Tony Worthington: There was a strange omission in the Secretary of State's response today. He said that his own inspectorate has powers to inspect and see what has been happening. On what occasions has it inspected? That was asked earlier by my hon. Friend the Member for Oldham, West (Mr. Meacher), and there was no response. Was it satisfied with its inspection? If not, did it report that to the Minister? What action was taken?
Dr. Mawhinney: As the House will understand, that question involves security. I will not be drawn on such issues.
Mr. Andrew Mackinlay: Is it not a fact that no inspectors have been appointed under the auspices of the Channel Tunnel Safety Authority, and that the inspectors referred to by the Secretary of State are mere civil servants—although, no doubt, senior bods? They have no statutory basis. When will the Government clarify the respective responsibilities of the French authorities, the British Health and Safety Executive and the Channel Tunnel Safety Authority? When will proper inspectors be appointed, and who precisely are the inspectors referred to by the Secretary of State?
Dr. Mawhinney: The House will have noted the hon. Gentleman's contempt for civil servants, security advisers and inspectors. I must tell him that that contempt is restricted to him. As for co-operation between national Governments and national security authorities, it is very good.
Mr. Bryan Davies: Has there not been legitimate concern that Eurostar's marketing strategy has downplayed the special nature of this form of transport? Has that not led to insufficient emphasis on the need to arrive on time, and hence to very rushed security measures before people board the train? Travellers have been unsure whether they are boarding a train with the same security arrangements as an aircraft, or an ordinary, conventional train. Even Members of Parliament have fallen foul of the arrangements.
Dr. Mawhinney: I do not accept that for a moment. Coincidentally, the other day someone told me that they were concerned about the amount of time for which it was apparently necessary to be present before the train's departure, precisely because of the various security arrangements that had to be made before boarding was possible.

Points of Order
3.51 pm
Mr. John Sykes: On a point of order, Madam Speaker. On Thursday, before Business Questions, I made an intemperate allegation relating to Opposition Members and the Register of Members' Interests. With your permission, Madam Speaker, I wish to withdraw the remark, which was made in the heat of the moment. I apologise to you and the House for any offence that I may have caused.
Madam Speaker: I am much obliged to the hon. Gentleman. That is precisely the way in which we should deal with such matters in the House.

Orders of the Day

  Finance Bill
  (Clauses Nos. 2, 5, 8, 15, 52, 64 and 91, Schedules Nos. 1, 4, 11, and 14, and any new Clauses first appearing on the Order Paper not later than 19th January and designed to continue the statutory effect of any of the Ways and Means Resolutions of the House of 13th December)
  Considered in Committee [Progress, 25th January].
  [MR. MICHAEL. MORRIS in the Chair]
  Ordered,
  That the order in which the remaining proceedings in Committee of the whole House on the Finance Bill are to be taken shall be Clause 52, Schedule 11, Clause 15, Schedule 4.—[Mr. Kirkhope.]

  Finance Bill
    Clause 52

      PENSIONS
      3.52 pm
      Mr.Alistair Darling: I beg to move amendment No. 13, in page 45, line 36, at end insert—
      '(2) Schedule 11 shall come into effect only if the Government has presented a report to Parliament before the passing of this Act on certain aspects of the Schedule specified in subsection (3) below.
      (3) The Government shall report to Parliament on—

      (a) the likely effects of the provisions of Schedule 11 to this Act on the costs of administering personal pension schemes;

      (b) an assessment of the risks to members of personal pension schemes of decisions taken as a result of the provisions of Schedule 11; and

      (c) considerations raised by the extension of the provisions of Schedule 11 to retirement benefit schemes and retirement annuity contracts.'.

      The subject of pensions may not often be the stuff of political cut and thrust—and, indeed, there is widespread agreement on the principle of this part of the Bill—but we have a number of questions and anxieties.
      While welcoming the principle underlying clause 52—the introduction of more flexibility in the purchase of annuities—the amendment raises concerns that have been expressed inside and outside the House about both the cost of the scheme and who will meet it, and the whole question of risk. I refer to the risk of deferment, and also to that involved in any arrangements made by those wishing to secure greater flexibility than would be available in, for example, an occupational pension scheme. The amendment also deals with certain other considerations. Its purpose is to probe the Government on their intentions, mindful as we are that what Ministers say in the House can be relied on by those outside. I hope that I shall be able to persuade Ministers to make one or two helpful explanations.
      As I have said, we welcome the flexibility introduced by clause 52, which will enable people to defer purchasing their annuities at any time between the ages of 50 and 75—a flexibility heralded by the White Paper that the Government published in June last year. We welcome that, but a number of problems remain.
      While the flexibility for personal pension schemes is welcome in that it will enable people to defer purchasing an annuity if they think that circumstances justify such deferment, there are two particular concerns that need to

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      be addressed. The first is obvious, and it is that people must be warned that there is no guarantee that rates will necessarily get better. Although there is flexibility and many people will be tempted to think that things can only get better, experience should tell them that that is not necessarily the case.
      I shall return to that because, clearly, the warnings given to people who buy pensions or who transfer from occupational schemes to private schemes have exercised Parliament and people outside for some time. If the Government or the industry propose to publicise the provision, it is important for people to be warned that deferring purchase does not necessarily guarantee better returns.
      The second matter concerning us is the cost of the scheme. I notice that the Government—as they do now with nearly all measures—published a compliance cost assessment which is available on request from the Treasury. It makes interesting reading, because it looks at the costs of introducing the measure and in particular at the businesses that might be affected and states that it would not affect small business. But that depends on how one defines costs, because many financial advisers, who for the most part constitute small businesses, will incur additional costs for the advice and the preparation of papers that need to be given to prospective purchasers of policies.
      The Committee will be aware that, under the new disclosure regime it is necessary to give far more information to prospective purchasers of pensions and that will give rise to costs for small businesses. Therefore, I am surprised that the Government can assert in their compliance cost assessment that small businesses will not be affected.
      Looking generally at the compliance costs, I note that the Revenue admits that the setting-up costs of the new scheme will be about £1.15 billion. That is a substantial cost and, of course, it will have to be met by the public. The Government do not propose to meet it, and I do not suggest for a minute that they should because, clearly, the industry must meet the costs itself. However, at the end of the day any cost incurred by the industry will be passed on to the public, and that is bound to affect people's decisions. I shall shortly return to the whole question of the regulatory regime that goes side by side with this in assessing risks and costs.
      It is important at the outset to flag up the fact that there will be a significant cost. I understand that an annual recurring cost of more than £500,000 is expected to be incurred. I mention that because an article in today's edition of the Financial Times makes disturbing reading. It suggests that more than 20 per cent. of pension policies are halted within the first year and, plainly, cost will be one reason for that halting. After that period, termination rates are also high.
      It is very much in the interests of individuals and in the interests of any Government to ensure that people make provision for themselves alongside public provision. If we are to encourage people to do that we must be mindful of the costs that will be imposed on them and of the warnings given to people who decide to buy certain policies.
      As I have said, disclosure will clearly flag up to people what they are paying for, at least if disclosure works properly, but it could have a knock-on effect in terms of reduced sales, which have already taken a knock over the past year because of loss of confidence in the regulatory
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      regime. I understand that some people in the industry think that sales may have gone down by about 10 per cent. over the past year because of that loss of confidence.
      The main point on which I would like to draw Ministers is the thinking behind the decision apparently—I emphasise apparently—not to extend the flexibility to other pension schemes. The clause affects private pensions and we have no objection to that, but it would be helpful to get a clear statement of policy from Ministers about the Government's intentions. The Financial Secretary to the Treasury made a statement through a press release, but, of course, that has no legal force whatever. Many members of the public and people who work in the industry would like to know the Government's view on extending flexibility to occupational schemes and AVCs. In one view, they might be excluded because of Inland Revenue practice. I think that they might be excluded more because of practice than because of the law.
      A number of categories are not included. Retirement annuity contracts were the forerunners of personal pensions and were largely superseded in 1988. They are apparently not affected. In a Treasury press release issued on 4 January, the Financial Secretary said that those people would benefit because
      "they all had the option to transfer funds into a personal pension on the open market."
      Indeed they have that option, but, if one considers the recent history of pension transfers, one might have thought that Ministers would have thought long and hard about casually saying to people who have retirement annuity contracts, "Don't worry. Just transfer."
      Transfer incurs costs and may be inappropriate in a number of cases, depending on individual circumstances. To suggest, as the Financial Secretary apparently did, that no difficulty was involved, but that people should simply transfer to a private personal pension was not necessarily the appropriate advice to give. It would be helpful if either the Financial Secretary or the Minister of State, who appears to be poised to answer for the Government, would comment on that matter.
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      Ministers should bear it in mind that it is only a year since the Securities and Investments Board discovered that up to 2 million pensions might have been inappropriately sold to people, who were wrongly persuaded to opt out of occupational schemes and to transfer to personal pension schemes. The Government should be wary of, as a matter of policy, encouraging people to opt out of an occupational scheme, or of any other scheme, and to transfer to a private pension, if they do not need to do so.
      I am not saying that we should discourage people from taking out private pensions, which is appropriate for a number of people. The Government seem to accept that a need for flexibility exists in relation to occupational pensions, but the House should pass no measure that forces people to opt out and to transfer to a private pension, when they would not otherwise do so.
      Mr. Nigel Forman: I am seeking to follow the hon. Gentleman's argument closely, and I have some sympathy with it. To refine his point further, will he clarify that he is talking about the unwisdom of persuading people to transfer to personal

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      pensions from occupational pensions when they are, shall we say, aged over 45 or 50? Is not he making a blanket statement about people of all ages in their working career?
      Mr. Darling: For many people, it is entirely appropriate to have a private pension—it depends on what they do, their age and their likely work pattern. Unlike in the past, many people will not reasonably expect to be in the same employment from the age of 20 to the age of 60 or 65, when the receive their gold watch. The Labour party has never said that the purchase of a private pension—never mind transfer—is a bad thing. That can be good and appropriate.
      No doubt exists, however, that, in the past few years, a number of people have been wrongly advised to come out of occupational schemes and to go into private schemes, not because it was good for them, but because it was good for the salesman and insurance companies. That is the point that has exercised people in the past year.
      I am making a general point. The Financial Secretary said that the way out of the difficulty, and the way to achieve flexibility, was for people in occupational schemes to transfer to private schemes. The Government should not force people to opt out to achieve flexibility if, through certain measures in the House or a change in Inland Revenue practice, they could achieve the same flexibility by staying where they are. Transfer should not be forced on people.
      Mr. Dennis Skinner: I agree with my hon. Friend. In the past few years, the Government and people acting on their behalf have obviously sent a signal to many workers, such as those in the mining industry, that it would be a splendid idea to opt out of the National Coal Board and British Coal pension, with the result that there are more than 100,000 casualties in the coalfields—people with redundancy money and the pensions entitlement. The net result is that there are people in every constituency in the coalfield areas who have been kidded on by salesmen acting on the signal sent by the Government. Many are now trying to fight in the courts to re-establish their entitlement to a pension although, of course, they are unable to get legal aid because the Government have chopped that, too.
      Mr. Darling: My hon. Friend makes a good point. We all remember the television advertisements depicting a man in a straitjacket being freed by the change in the law in the late 1980s, a change for which the current Secretary of State for Social Security and another Minister—now the Prime Minister—had prime responsibility. We are all aware of the difficulties subsequently caused by the mis-selling of pensions. My point is that we should not bring about another situation in which people are forced to transfer to get the flexibility that we welcome in respect of private pensions. It is on that point in particular that I want Ministers to tell the House what the Government believe the law to be and what they believe to be the Inland Revenue's practice.
      As I said, we should not as a matter of principle force people to opt out. It is bad enough that people are wrongly persuaded to do so for all sorts of extraneous reasons—because of the way in which the commission system works, or because salesmen are under pressure to sell policies in order to keep their jobs and earn enough to
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      feed their families, which I regard as a fundamental structural defect in the industry—but the House should not do the same.
      Mr. Forman: Once again I must ask the hon. Gentleman to clarify the point. I think that he is using language rather loosely. He talks about people being forced to transfer. Clearly, we all deplore the mis-selling of pensions that has happened, but nothing in the Bill requires such a transfer to be made; there are simply advantages held out for those who make such a move.
      Mr. Darling: The hon. Gentleman is also guilty of being a bit vague. No one is suggesting that there is anything in the Bill to force someone to transfer, but clearly, if there is flexibility with a personal pension and inflexibility with an occupational pension, although people are not forced to transfer in the sense that no one is holding a gun to their heads, they may be "forced" to get the necessary flexibility. If the Government are committed to flexibility—a principle that we support—I should have thought that it should be universally applied to all pensions, unless there are good reasons why not. If there are good reasons why it should not be universally applied, we shall no doubt hear them, but, as things stand at the moment, the Bill provides flexibility for private pensions.
      If he was quoted correctly—as the words appear in a Treasury press release, I have no reason to believe that they are incorrect—the Financial Secretary said that those who had retirement annuity contracts would benefit because they had the option to transfer. That means that they would have to transfer to get that option. Exactly the same thing applies to occupational pension schemes.
      The press release also reports the Financial Secretary as saying:
      "it is not clear that any legislative changes are needed. The purchase of an annuity is very often a part of the structure of these schemes, but the Inland Revenue are prepared to consider any ideas that scheme sponsors may have for introducing more flexibility in this area."
      It is my understanding that no legal change is necessary—I am sure that Ministers will tell me if my understanding is wrong—but the Financial Secretary concedes in the statement that, as a matter of practice rather than as a matter of law, the Inland Revenue can influence whether the flexibility that we are talking about can be transferred to an occupational scheme. He said that the Inland Revenue was now prepared to
      "consider any ideas that scheme sponsors may have for introducing more flexibility".
      It would be helpful if the Minister of State could tell us what rules and principles the Inland Revenue is proposing to apply when sponsors of schemes come forward. It would be interesting for those in occupational schemes and those who sponsor such schemes. It is not clear from anything that Ministers have said, by way of press release or, indeed, by any other means, what the Government think will be changed in occupational schemes. Given that, judging from the reaction, there is general agreement that flexibility is good as a matter of principle, provided that people are warned that there is no guarantee of more money at the end of the day, it must apply to all schemes.
      The Minister says that the Revenue is prepared to consider any ideas. It would be very helpful if we could find out the principles that Ministers are prepared to

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      consider. Otherwise, we may be stuck with the current position, whereby the Inland Revenue practice, which for all practicable purposes has virtually the same effect as the law, may prevent flexibility from being extended to occupational schemes.
      As I understand it, under the present practice, a scheme would be approved only if the rules of a money purchase occupational scheme require that an annuity is purchased on retirement. Consequently, there is something to be said for changing those rules so that the Revenue will allow flexibility of the sort that we are discussing with private pensions. The Government's intentions are not at all clear. Given that the industry is entitled to rely on ministerial statements, it would be very helpful if the Minister could tell us what the Government have in mind.
      Our amendment refers to two particular points, which must be emphasised. The first is the question of cost, which, if I am successful in drawing the Government on allowing increased flexibility for occupational schemes, may be less of a problem. At the moment, when people transfer to private schemes they incur a cost. Everybody knows that, when one transfers a pension, not only are there administrative charges, but, very often, the act of transfer means that other optional benefits provided by the schemes could be forgone. That leads me directly to the point made by my hon. Friend the Member for Bolsover (Mr. Skinner). Many people who transferred inappropriately in the late 1980s not only gave up their entitlement in their contract of insurance, but the optional bonuses which they never get under private schemes.
      Clearly, cost is incurred if one has to transfer, which is why I emphasise again and again that flexibility must be universally applied unless there are very good reasons for not doing so. We should not do anything in the House to force the substantial number of people in good occupational schemes out of those schemes. To please the hon. Member for Carshalton and Wallington (Mr. Forman), we should not so heavily influence people that they are driven to the conclusion that transfer is the only way out.
      As I said, the new regime of disclosure, which we very much welcome, will help because people will be able to identify their costs. However, perversely, I suspect that sales may be initially depressed when people receive their print-outs from their independent financial adviser or their insurance company and see the cost of buying a policy. The Government should be aware that substantial costs are involved.
      Secondly, and perhaps most importantly, there is the question of risk. I said at the outset that added flexibility does not necessarily mean that all is good news for those who choose to defer their purchase, because rates may not improve and people may make bad decisions. Individuals must decide that for themselves.
      Mr. John Butterfill: Will the hon. Gentleman give way?
      Mr. Darling: Yes, in one minute.
      It is no part of a Government's function to try to substitute their judgment for that of individuals. However, individuals must know of all the pros and cons before they reach a decision and only an effective regulatory system can ensure that.
      Mr. Butterfill: The hon. Gentleman will understand—indeed, it was explained to the all-party group on
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      occupational pensions only last week—that quite a number of pension funds are now offering a phased arrangement, whereby people may change to gilts on a periodic basis. So each year they put a proportion in, depending on how far they are away from retirement. That will eliminate much of the risk about which the hon. Gentleman is talking. However, they would need pretty good professional advice to make those decisions.
      Mr. Darling: The hon. Gentleman has made my case. He said that people will need pretty good professional advice. However, the ability to give pretty good professional advice has eluded many in the industry. I accept that if there is an ability to phase and to buy more gilts, that should benefit the individual.
      We all accept that the difficulty is that only a handful of people in this country understand how pensions work. If we had a private, anonymous and confidential poll in the House, we would find that only a handful of hon. Members understand how the pensions regime works. That should worry all of us as the House passes pensions legislation. Indeed, the Pensions Bill is in the other place at the moment. Every year, hundreds of thousands of people will buy pensions or take out pensions through their employers, but they do not have a clue how those pensions work.
      4.15 pm
      No doubt the hon. Member for Bournemouth, West (Mr. Butterfill) will want to make a pitch for his other interests and perhaps come to our rescue. However, if we change the regime and give people greater flexibility, we should ensure that people know what they are letting themselves in for.
      Mr. Michael Stern: Does the hon. Gentleman agree that there is a danger here? Some of the decisions that people will take in respect of this clause, or in related areas of pensions, cannot possibly be the subject of advice—except from Nostradamus—because they depend entirely on a view of the state of the market in 10 years' time. We should be wary of placing a huge reliance on advice when that advice can only be an informed guess.
      Mr. Darling: I am not sure whether Nostradamus is registered under the Financial Services Act 1986 to provide such advice. Equally, I am not sure what point I am supposed to take from the hon. Gentleman's comments.
      Mr. Stern: Will the hon. Gentleman give way?
      Mr. Darling: No. I want to progress matters a little further.
      Of course no one knows what will happen in 10 years' time. No one knows what is going to happen in five years. Unless the hon. Member for Bristol, North-West (Mr. Stern) had a different manifesto from that of his colleagues, he will recall that he made a gross error of judgment in 1992 when he told his electors that things were going to improve in 1992 and that growth would start the day after the general election. No one knows what the conditions are going to be and no one would suggest that the Government or a regulator should place themselves in the shoes of an individual and make such judgments for them.

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      However, a regulatory system can ensure that, when someone buys a pension or any other financial services product, that person should know what the risks are. People must form a judgment. The difficulty that we have had in this country for too long is that people do not know what the risks are because, as my hon. Friend the Member for Bolsover said, too many salesmen did not bother them about the risks. People were told to sign on the bottom line and to ignore the small print. They were assured that the money would be all right and that whatever they did would be better.
      Happily, the regulatory system is beginning to bite on some of those people. However, there are still occasions when reputable companies, household names and companies which should know better allow inappropriate selling methods to continue. Companies with very good training regimes and very good and efficient regulatory regimes undermine those aspects by making their work forces depend on commission. If salesmen have to sell 10 policies a week, and only five have been sold by Friday afternoon, common sense tells us that a mistake is likely to be made.
      I am not suggesting that we should attempt to substitute the judgment of Parliament or of the Government for the judgment of individuals. However, I am absolutely certain that we need a regulatory system that ensures that people are told the risks. That point has been raised many times in the House and I am afraid that it will be raised on many occasions in the future. Clause 52 and schedule 11 give a new opportunity for flexibility, and we welcome that. However, there is apparently an inflexibility with regard to occupational schemes. It would be reckless of us simply to nod the proposals through without having regard to the fact that the current regulatory regime is flawed in many respects.
      That view is not held simply by Opposition Members. Many Conservative Members accept that there are problems with the regulatory regime which need to be addressed. That view is increasingly held outside the industry. I do not argue for a minute that there is unanimity about what should be done about the problem. We believe that self-regulation should be scrapped, but many Conservative Members do not hold that view. However, we are nearly at one in the belief that the system needs to be improved.
      I mention that point because there are concerns. The Association of British Insurers, I think, has written to all members of the Finance Bill Standing Committee, stating:
      "The risks to policyholders inherent in decisions of this nature must not be overlooked. There is no guarantee that a policyholder will benefit from a decision to defer purchase of his annuity"—
      this will be a costly system to provide—
      "a factor overlooked in the compliance cost assessment"
      to which I referred. Its present view is:
      "Only those with funds at retirement in excess of £100,000 are likely to find this facility economic."
      If the ABI is right about that—it has a certain view because of what it is, but otherwise it is a respected and reputable organisation—surely the Committee needs to spend some time considering what we are doing.
      If the costs are so great that people will benefit only if they have £100,000 or more, we must reflect upon that, but we must reflect even more on the difficulties and risks
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      involved in such a transfer. As it is within his ministerial responsibility, perhaps the Minister of State will tell us whether the Government have at last accepted that the regulatory regime needs to be looked at in respect of not only its structure but the quality of regulation.
      The Personal Investment Authority is now off the ground. It is still recruiting its members, but it is becoming more and more responsible for the retail end of the market. There is concern about the quality and degree of regulation. Although the PIA has a rule and regulation for just about every eventuality, there are doubts about how effective they are. That matter needs to be looked at, especially in the light of this measure.
      The other matter of which Ministers must be aware is that the pension transfer problem, which was highlighted 13 or 14 months ago, has not yet been resolved. Indeed, although the Securities and Investments Board has now instructed the Personal Investment Authority to examine pension transfer cases, the Minister will be aware that many people in the industry are trying to block that review. Before the courts at present, which is why I cannot go into the matter in too much detail, is an action that I understand is funded by individual independent financial advisers' professional indemnity insurers.
      If that review is blocked, we will be back at square one. The Minister will then be driven to accept that legislation is necessary to try to unscramble the mess that we are in, but we should not compound the problem with pension transfers until that matter is cleared up. Although the Minister will say that the review is under way, it will be at risk if the judicial review is successful, and we will not know that for a few weeks. If the Minister has more information, no doubt he will tell us.
      I observe in passing that it is ironic that the insurance industry itself—professional indemnity insurers—is trying to block the regulators from trying to unscramble the mess and to sort out the problems of, possibly, 2 million people. Only under the Conservative Government could we have the absurd situation that self-regulation allows the interests of so many people to be in such a mess and threatened by litigation that is funded by another branch of the insurance industry. One would have thought that the Government might have accepted that they had some responsibility.
      As I have said, more and more people will want to make provision for themselves, and more and more people are doing so. If we are to encourage them to do that, they are entitled to turn to Parliament and say, "You make sure that the regulatory system works." At present, the regulatory system does not work. There are fundamental problems with pension transfers which Ministers must address. Ministers have used self-regulation to turn their backs on the problem and walk away from it. It is high time that they faced up to their responsibilities and acted on behalf of the general public and not on behalf of those who continue to espouse self-regulation.
      Mr. Butterfill: The hon. Gentleman will remember that my interest in the matter predates 1986, when I sat on the Committee which considered the Financial Services Bill, and that it also predates his sneering reference to the fact that I have advised the British Insurance and Investment Brokers Association on such issues for many years. Under the Labour party's proposals, which it put forward in 1986 and which accepted the principle of self-regulation—the

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      only difference was that it wanted a statutory SIB—how would the presence of a statutory SIB rather than the present structure have altered the present position?
      Mr. Darling: Direct regulation by the Securities and Investments Board, which is what we favour, would mean that the fiction of self-regulation by bodies such as the Financial Intermediaries, Managers and Brokers Regulatory Organisation, the Life Assurance and Unit Trust Regulatory Organisation and now the Personal Investment Authority would be done away with.
      We would not have spent millions of pounds on setting up the PIA during the past three years. There would not have been the additional costs caused by the Treasury telling the SIB what to do, and then the SIB telling the self-regulatory bodies what they must do. We would abolish the difficulties caused by the fact that the PIA had to bid for members as well as bidding for recognition as a regulator. It is very difficult to serve two masters at once. That is the short answer.
      Mr. Butterfill rose—
      Mr. Darling: No, I have not finished yet.
      The hon. Member for Bournemouth, West was unkind to accuse me of sneering. I have not mentioned one of the hon. Gentleman's many interests in the Register of Members' Interests. I am saving that for the Committee. The hon. Gentleman's entry in the Register is almost as long as some of the schedules in the Bill. He should not worry—I shall return to that subject.
      I am not sneering at the hon. Gentleman. He takes a great interest in these matters and, in between times, he makes occasional lucid remarks which have a great deal of force. That was the sneering bit. The subject is too important to indulge in the sort of exchange that the hon. Gentleman has in mind.
      I return to a point that I do not want to labour. Self-regulation does not work, because it is very difficult to serve the trade interest and the public interest. We want regulation that acts in the public interest. Of course we must have the involvement of practitioners—that is very important—but it must serve the public interest first and foremost.
      Mr. Butterfill: What the hon. Gentleman is saying is rather different from the position that the Labour party took in 1986, when it endorsed the principle of self-regulation and simply wanted a statutory SIB above it, rather than the present structure of the SIB. Is he not moving the goalposts as he speaks?
      Mr. Darling: One would be hard pressed to find anyone in the country who believes that the Financial Services Act 1986 does not need revisiting. That applies to people of all shades of opinion, both political and industrial. That was not a terribly good point.
      Having looked at what my colleagues said in 1986 and before that, I think that what I am saying—with regard to our experiences over the past eight or nine years—is a logical development of that. There needs to be a change, and one day—perhaps even in this Parliament—we may have the Second Reading debate for a new Financial Services Act, if the Government face up to the fact that changes are needed.
      Perhaps the new regime—there are a number of new faces on the Treasury Front Bench—might even see that change is needed. Perhaps the Government will continue
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      their policy of clearing the decks in advance of a general election, in the hope that nobody notices those things between now and 1996, or whenever the election is.
      It is important that we reflect that the pension transfer problem which was highlighted 14 to 16 months ago has not yet been resolved. The House is being invited today to approve something that could add to the problems, unless the regulatory regime is put on a proper footing. That is the point that I am making, and I shall continue to make it until the Government face the fact that reform is needed.
      It will be helpful to the House and to the country if the Minister tells us whether the Government accept that changes have to come to the regulatory regime, and whether the Government will contemplate even consulting on the matter or having further legislation because the present situation cannot possibly be allowed to continue. Given that it will probably take two or three years between the change being announced and anything being put in place, the sooner the Government take action, the better.
      I shall revert to the subject that has dominated our thinking this afternoon—whether people will be forced to transfer. I draw to the House's attention a letter that I received from a firm which advises nurses and others in occupational schemes. The firm makes the point that those people may be forced into a position where, in order to get flexibility, they will have to transfer their pensions. That cannot possibly be right, and I hope that Ministers will make absolutely clear what the Government believe needs to be done to provide greater flexibility.
      If there is no need to change the law, and it is simply a question of changing the Inland Revenue's practice, it would be helpful if Ministers could first announce that the Revenue is to change its practice and allow flexibility in occupational schemes. It would be helpful if the Government were to announce what their thinking is and what the goalposts are, if I might use that term. Many people outside the House want to know the position.
      Paragraph 4(4) of schedule 11, headed "Income withdrawals", deals with a technical matter—I describe it thus as it is rather obscure. It requires that the withdrawals
      "must be not less than 70 per cent. or more than 100 per cent. of the annual amount of the annuity which would have been purchasable by him"—
      the policyholder—
      "on the relevant reference date."
      I understand that the Government will publish tables of annuity rates to which people can refer to calculate whether 70 per cent. is being withdrawn. I have been told that the problem with the table rates is that they will be arrived at on the basis of a level annuity—in other words with no indexation on the basis that there will be no pension for a surviving spouse.
      I do not know whether that is true. Can the Minister tell me whether my understanding is correct? If it is, is not the 70 per cent. tariff high, as it might lead to far more disbursement than would be wise? Perhaps a 50 per cent. rate might be appropriate. I am seeking information and it would be helpful if the Minister could let us know the Government's thinking on that matter.

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      4.30 pm
      In conclusion—you will be pleased to hear, Mr. Morris—we welcome the flexibility that the measure offers. It is a good thing, provided that people know that there is a cost, what the risks are and that we can never guarantee that deferral will mean more, or even the same amount, in the end.
      Secondly, we need a clear statement on flexibility and the extension of that principle to all pension schemes. What is the Government's position, what are the rules and regulations and, if flexibility is to be allowed, what relaxation or changes do the Inland Revenue propose?
      Our amendment highlights not merely the costs, but the need for the industry to be properly regulated. I shall emphasise time and again that self-regulation does not work in the conduct of the affairs of the House, or in the regulation of the financial services industry, and the sooner the Government face up to that fact the better. In that spirit, I hope that the Government will be able to explain their thinking.
      Mr. Stern: First, I must make it clear that I have a personal interest in this matter. I was self-employed for most of my working life before I came to the House, I am still self-employed as regards my outside interests, and I inevitably took out some of the old retirement annuity policies and retained them. That fact will inform some of my later comments.
      The comments of the hon. Member for Edinburgh, Central (Mr. Darling) on flexibility were a little rich. In 1984–85, before the hon. Gentleman came to the House, I served on the Standing Committees considering two social security measures that paved the way for the introduction of personal pensions. I remember the vitriol that the hon. Gentleman's colleagues—the hon. Member for Oldham, West (Mr. Meacher) and the right hon. Member for Derby, South (Mrs. Beckett)—threw at the concept of personal pensions, purely because they thought that ordinary people could not be trusted with flexibility in pensions. They were not prepared to consider the idea of people being able to choose between a good, honest, upstanding occupational scheme and a personal scheme that might accidentally be more appropriate in certain circumstances.
      I welcome the change in outlook in the Opposition Front-Bench team, and the fact that they accept that ordinary people, as opposed to the organised masses for whom they were formerly speaking, welcome that flexibility. I urge the hon. Gentlemen to encourage some of his colleagues who have been here for longer to look at many of their entrenched attitudes towards other areas where ordinary people could benefit from the flexibility that he now lauds.
      In introducing his amendment, the hon. Gentleman rightly distinguished between personal pensions that are being given the extra flexibility of taking an annuity on a range of dates; occupational pensions; and section 226 policies. But he failed to make one crucial distinction: such flexibility already exists in many good occupational pension schemes, and can be introduced in others. In any case, flexibility is available to employers to increase a pension in payment, which many large occupational pension schemes already do.
      Such flexibility is not available to a person who has purchased either a personal pension or a retirement annuity. Many retirement annuity policies currently exist,
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      and premiums are still paid into them. I am indebted Scottish Equitable for supplying me rapidly with information on this matter and telling me that some 5 million section 226 policies are still in force, and many of those continue to grow.
      Those policyholders do not have the flexibility that is being offered to personal pension holders under the clause, nor is it suggested that they should be entitled to it, despite the fact that current thinking in pensions is towards greater flexibility in retirement. For example, many people may now leave invested a large part of their pension provision to pay for care costs when they are very elderly, need much more care than can be provided through the state system, or need care that differs from that provided through the state system, for which they must pay. Such flexibility is built into the personal pension regime now proposed by the Government, but 'is on offer to no one else.
      I hope that, both in replying to this debate and when we return to the subject later during the passage of the Bill, as I suspect we will, my hon. Friend the Minister will give better reasons for excluding retirement annuity policyholders and, to a large extent, many occupational pension scheme members, from the flexibility that is now proposed. It is not sufficient to say that it is open to a retirement annuity pensioner to transfer.
      First, as the hon. Member for Edinburgh, Central rightly said, a suitable policy may not be on offer. Secondly, costs are incurred whether those are borne by the individual or other pension holders. The estimated cost for each retirement annuity policy transferred into a personal pension policy is some £50 per policy. Why should those costs be incurred when it is of no apparent benefit to the Exchequer to exclude section 226 policyholders from the benefits in the clause?
      I hope that my hon. Friend the Minister will give a detailed explanation of why we are reintroducing a class system into pensions.
      Mr. Forman: I agree with much of what my hon. Friend the Member for Bristol, North-West (Mr. Stern) said. I, too, look forward to a clear explanation from my hon. Friend the Minister, which I am sure we shall have, about the thinking behind how the lines have been drawn in the schedule. I say "schedule" because, even though we are talking about clause 52, the thrust of the debate so far has been about the terms and the implications of schedule 11.
      In opening the debate, it is interesting that the hon. Member for Edinburgh, Central (Mr. Darling) made it clear to the House—and, through Hansard, to the country—that any future Labour Government would see a further upheaval of the financial services industry through the introduction of direct statutory regulation by the Securities and Investments Board in place of the existing measures and structure, which have taken the best part of seven years to put in place. I think that the industry must be warned about that.
      The main point I wish to make in this afternoon's fairly narrow but necessary debate is that, as I understand it, clause 52 and schedule 11 constitute a permissive and not a mandatory measure. That goes to the heart of what I said to the hon. Gentleman by way of intervention. The arrangements do not force any transfer upon pension holders, and nothing is required to be transferred by law. If the Bill becomes law, certain advantageous

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      arrangements will be offered to categories of pension holders, and they may or may not take advantage of them, depending on the quality of advice they receive and their own decisions about their plans between the age of 50 and 75 years.
      I want to ask the Minister of State some relevant questions. First, if the Bill goes ahead unamended, can he confirm that the costs of making a transfer will be of the order mentioned by my hon. Friend the Member for Bristol, North-West, or will they be more or less than that? Have some estimated categories of cost been overlooked at this stage?
      Secondly, are there any persuasive arguments against the idea of extending the principle of flexibility to the other instruments mentioned by my hon. Friend? Thirdly, can we feel confident that, when best advice is given, particularly by independent financial advisers, that best advice will include not only the advantages of transferring—all hon. Members know of cases where those advantages have proved illusory and damaging to the people concerned—but the advantages of staying with the existing arrangements?
      The hon. Member for Edinburgh, Central said, quite correctly, that most people in the country, and indeed in this House, do not fully understand their own pension arrangements, let alone those of other people. Obviously it is important that independent financial advisers argue clearly the advantages of maintaining the present position rather than making a change.
      I welcome the option of flexibility which the clause opens up for people between the age of 50 and 75. I do not think that it will clinch the decision for all people: they would be wise to look carefully at the implications of the measure for their individual circumstances.
      I urge my hon. Friend to think carefully, and preferably inform the House as fully as possible, about the assumptions which lie behind the present policy. Perhaps he could include some up-to-date figures about the size and scope of the personal pensions market today. My hon. Friend the Member for Bristol, North-West has already cited figures in relation to section 226 contracts, and it would be useful to compare them with the personal pensions market.
      I welcome this element of the Finance Bill, and wish it well. However, I think that we need to address some of the detailed points which have been raised on both sides of the Chamber.
      Mr. John Denham: The debate so far has hinged on the question not whether flexibility is desirable, but whether the regulatory system which is in place is sufficient to ensure that those who choose to exercise flexibility take the right decisions. That is where the real question marks arise, and there is little sign that the Government are addressing the weaknesses in the regulatory system.
      Obviously, anyone who considers exercising the new flexibility afforded by clause 52 will be making a critical and very difficult decision. As has already been said, that decision requires the ability to project into the future in a way that few people, including professional advisers, are able to do. Recent evidence shows that those who have sought to project into the future have fairly consistently overstated the benefits of taking a particular investment decision, which has left people very vulnerable.
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      4.45 pm
      An obvious example which comes to mind is the sale of home income bonds in the late 1980s. The pitch behind that sale—"Here is a way of making far more out of your capital than you previously thought possible"—could apply also to the holder of a personal pension. That exercise ended in disaster for many households.
      Although the costs have not yet proven to be as high, it is clear that the sale of endowment mortgages—essentially a gamble on the performance of the stock market—in the 1980s took place on the basis of results which have not been achieved. The projections for the performance of endowment mortgages which were approved at that time by the regulatory organisations have subsequently been scaled down.
      In looking at using personal pensions in a flexible manner, we must say that the regulatory system failed to ensure that people received the best advice in those circumstances. My worry about clause 52—not the principle of it, but its practical consequences—is that good advice is again not likely to be forthcoming.
      We do not know whether someone who has bought a personal pension will have much money to invest in an annuity. People who have invested two or three years' savings with a firm such as Guardian may find that they have nothing left when their policy matures after 20 or 30 years, because, according to the projections of Money Management magazine, the effects of fees and charges will exhaust their savings altogether. Many people who have entered the personal pensions market believing that money is accruing safely to provide for their future pensions will find that they have very little or no money left at the end of the day.
      Even more important than the flexibility with which people can invest in a pension fund is the return they receive on that investment. The survey by Money Management showed that some firms produce twice the rate of return on policies as others. At the moment, the regulatory system contains little to enable a personal pension purchaser to distinguish between the best and the worst performers in the industry.
      Mr. Butterfill: Does the hon. Gentleman agree, therefore, that it is even more important that independent financial advisers retain their place in the market, and that we do not move to a system where most schemes are marketed directly by financial institutions which do not offer a range of independent advice? Does he agree that the report conducted into the matter for the Securities and Investments Board showed that those who took independent financial advice fared much better than those who bought directly from financial institutions?
      Mr. Denham: I am not aware of the report which made that distinction. Some independent financial advisers offer a good service; equally, there are those who do not. The record books are full of both examples, and one could argue either way in order to prove one's case. However, I think that it is to the consumers' advantage that they can turn to independent financial advisers for advice as well as to the major companies.
      The Government's failure to regulate in that area is costing the taxpayer a great deal of money. It appears that, up to 1992, £3.5 billion was paid to private insurance companies on behalf of personal pensions by people whose incomes were so low that they would have been

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      better off remaining in state earnings-related pension schemes. That is an enormous sum of public money to pay the private insurance industry to put people in a worse situation than they would be in otherwise.
      Assuming that such people retain their pensions until they mature, they may find that the annuity in which they wish to invest under this clause will buy them a pension less than the one they would have received under SERPS—whether they purchase the annuity on the date that the policy matures, or whether they buy it some time later. There are no signs yet that the Government are using the regulatory system to clamp down on that sort of mis-selling. Pension fund opt-outs affect perhaps half a million people, but opt-outs from SERPS by people on low incomes affect perhaps 2.5 million. Numerically, it is a much greater problem than that with which the board is wrestling.
      One in five people abandon their personal pensions within the first year of sale. Almost every one will lose practically all the money that they paid, and the money paid by the taxpayer in the form of national insurance contributions and additional rebates will be entirely wasted. Although this debate naturally concentrates on policy maturity, far too little is done by the Government to make sure that someone who buys a personal pension is in a position to maintain it until its maturity.
      Mr. Forman: The hon. Gentleman makes an important point about the start of long-term schemes. Does he have further evidence that, in the majority of cases, people terminate their pensions because of a force majeure—a downturn in their personal circumstances? Is it not more usually the case that the advice that they were initially given was defective?
      Mr. Denham: There is no satisfactory answer to that question, because studies of individual cases in sufficient detail have not been completed. The question arises, what is force majeure in such circumstances? If someone discovers that they cannot continue a policy less than one year after it was sold to them, that is arguably something that a competent salesperson, properly managed, should have predicted. That will not always be so, but in many cases where policy payments lapse after a relatively short time, the reasons will include bad advice because the salesperson did not look sufficiently into the future in determining the best policy.
      That is often the case when individuals are encouraged to sign up for regular premium policies, when they would have been better advised to enter into a single premium policy. Such a policy would largely protect them from the whole of the first three years' premiums being absorbed by commissions and fees, and would provide the security of knowing that the amount invested will stay invested for a reasonable time.
      I am not against the principle of flexibility but a major investment decision by someone in their fifties, sixties or seventies requires a level of advice and expertise that the financial services industry and its regulators have not yet demonstrated. Hand-in-hand with the Government's proposed measures should be a reassurance that they will
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      continue to drive the regulatory structure, so that consumers will be better protected from bad advice than in recent years.
      Mr. Butterfill: I am the first to agree with the hon. Member for Edinburgh, Central (Mr. Darling) that the existing regulatory structure contains defects, and did so ab initio. The problem is that, following implementation of the Financial Services Act 1986, the Securities and Investments Board did not require a single retail regulator. That, above all else, caused the majority of the subsequent problems.
      Regrettably, Sir Kenneth Berrill, the board's first chairman, concentrated more on writing detailed rule books—as one might have anticipated of a former civil servant—than considering the big picture of what was to happen in the marketplace. Had he done that, and insisted on a single retail regulator, today's position would be considerably different.
      However, we have a single retail regulator now in the Personal Investment Authority. I agree with the hon. Member for Edinburgh, Central that it took a lot of cajoling to secure one. I would have preferred a modest amendment to the 1986 Act, to give the SIB power to direct the way in which practitioners were regulated and by whom. That would have made the PIA's birth much less painful. Having said that, it is up and running and likely to work satisfactorily. We ought to give it a good try before embarking on wholesale reform of the 1986 Act.
      I agree with my hon. Friend the Member for Bristol, North-West (Mr. Stern) about section 226 policyholders. Again, I must declare an interest as such a policyholder myself. Distinguishing between one group of pension holders and another is unjustifiable. I am particularly concerned about people in occupational schemes that are money purchase schemes, who will be disadvantaged relative to those in other schemes under the Government's proposals.
      I see no justification for disadvantaging some policyholders, and agree with the hon. Member for Edinburgh, Central that we ought to remedy that situation in the Bill. There is a grave danger that many people in good occupational schemes that are money-purchased will be tempted out of them and into personal pensions that may be inappropriate. Contrary to the suggestion of the hon. Member for Edinburgh, Central, the respectable part of the independent adviser profession agrees with him. He may have seen the briefing that the IFA Association sent to hon. Members.
      Mr. Darling: At no time did I suggest that independent advisers in general or particular were at fault. The hon. Gentleman must be thinking of another speaker.
      Mr. Butterfill: I will read Hansard carefully, but my clear recollection is that the hon. Gentleman said that it was likely to lead to such further mis-selling, by anybody. The IFA Association agrees with the hon. Gentleman. Its chairman wrote to me:
      "Why should the personal pension have an advantage over all other schemes? Has the Government not yet learnt the lesson from pension transfers and opt outs? … I see restriction of deferred purchase to personal pensions as yet again opening the floodgates for the unscrupulous salesman."
      The hon. Gentleman's views are endorsed by the profession itself. It is right to allow deferral, because it is wrong that someone reaching retirement at an

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      unpropitious time in the market should be forced to make an investment decision that nobody with the freedom would make at that time.
      I urge my hon. Friend the Minister to consider reducing from 70 per cent. to 50 per cent. the minimum amount taken, because although people reaching retirement age are likely to be suffering a substantial diminution in income, and they will probably need more money, if they retire at a time in the market when the yield on their annuity is unusually low, it is unreasonable to expect them to take a substantially increased risk as a result.
      I am concerned also about the taxation provisions, and seek my hon. Friend's advice. If, following a member's death, where there is deferral, his widow chooses to take the lump sum, she will be liable at that time to tax at 35 per cent. That seems to breach the general rule that transfers on death between husbands and wives will be free of taxation, and seems unnecessarily harsh.
      Of course, the wife might die shortly after her husband. For example, if the husband died immediately in a car crash in which they were both victims, but his wife died some weeks later, there could be double taxation. The estate would pay not only 35 per cent. tax but inheritance tax. I hope that my hon. Friend will consider those points when he responds.
      Mr. Geoffrey Hoon: Clause 25 and schedule 11 are clearly designed to alleviate a problem that arises in relation to personal pension schemes—the obligation placed on members to use accumulated funds in pension schemes to purchase an annuity as soon as any benefit is taken from the pension fund. That means that people may be obliged to buy their annuity at a time when market rates are less favourable than they might be. The advantage to everybody of such a rule is that it results in clarity. Everyone knows that, at the point at which a fund matures, the purchase of the annuity has to be made.
      This inflexibility, however, can cause problems for someone who has contributed large amounts of income to the fund for many years, at a time when rates may have been significantly higher than they are at the point when the fund is used for annuity purchase. In those circumstances, the Government have sensibly sought ways of avoiding the problems. Their plans were set out clearly in the DSS White Paper, "Security, Equality, Choice: The Future for Pensions".
      5pm
      Published in June 1994, the White Paper states in paragraph 3.9:
      "The Government is aware of the effect that annuity rates at the time of retirement can have on the size of the pension bought with the contents of a money purchase pension fund. The Government favours greater flexibility in this area."
      Certainly, the proposals in the Finance Bill will achieve that flexibility.
      The basic proposition will allow personal pension scheme members to purchase an annuity at any stage between the ages of 50 and 75. Secondly, it will allow retired people who have deferred annuity purchase to withdraw income broadly equivalent to the annuity that the fund would have purchased. These proposals for flexibility at least address the basic problem which I have described.
      The issue for the Opposition concerns whether the proposals will work in practice and whether they will remedy the harm that we are worried about. Of course I
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      accept that the Government's proposals will give members of personal pension schemes a greater range of choice; but in so doing, certain difficulties are likely to arise for members. It is those difficulties that amendment No. 13 is designed to deal with.
      First comes the risk problem. Although rates may have been falling for some time, there is clearly no guarantee that a policyholder will gain from any decision to defer the purchase of an annuity. There is a risk that, if rates have been falling while contributions have been paid into a fund, they may continue to fall. So deferral will merely serve to achieve the purchase of an annuity at still lower rates. That is a judgment which any holder will have to make.
      The difficulty with exercising this judgment is that it requires a fairly sophisticated understanding of markets and how they are going to operate. Thus flexibility does not necessarily bring benefits for the individual concerned.
      We should also bear in mind the more substantial consideration at stake—the costs that policyholders may have to bear in the exercise of this choice. The Inland Revenue has calculated that the one-off cost to personal pension providers of setting up the new system will be about £1.15 billion, together with annual recurring costs of as much as £600.000 a year by the third year of operation. Those figures are contained in the compliance cost assessment of 29 November 1994. The Revenue goes on to state:
      "It is expected that personal pension providers will pass on all compliance costs to their members in the form of an administration charge."
      That will significantly reduce the money available for the ultimate purchase of the annuity. The cost will fall to the pension holder, in the form of reduced benefits on retirement.
      Policyholders who are contemplating making use of the new flexibility and choice will need to understand all the risks involved. I have already mentioned one: the fact that rates may continue to fall, so the fund will purchase still less in the form on an annuity. Hence anyone taking advantage of the new flexibility will need professional advice—which tends to be rather expensive. That is necessarily so, because the advice needs to be as sophisticated as circumstances dictate.
      Mr. Butterfill: Surely the advice does not need to be terribly sophisticated? One has only to look at the long-term money rate trend in the market. If the market is discounting a higher rate for the future, it clearly expects interest rates to rise. That is about as far as anyone can predict.
      Mr. Hoon: That is right, but the problem is that many people depend on expert advice. When people have paid substantial contributions into their pension funds so as to buy an annuity, we want them to have the best possible advice. The hon. Gentleman makes light of these judgments, but they are of grave concern to people embarking on their retirements. I repeat that this sort of professional advice, especially if it is of the highest quality, can be expensive.

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      All this tends to suggest that the proposals in this years's Finance Bill are likely to benefit only the wealthier members of society. As my hon. Friend the Member for Edinburgh, Central (Mr. Darling) has already said, and as the Association of British Insurers reiterates,
      "Our present view is that only those with funds at retirement in excess of £100,000 are likely to find this facility economic."
      That is quite a large fund. Although flexibility obviously benefits people with that much to invest, we would like to ensure that the disadvantages are not so great as to render the exercise uneconomic for other people. There is also a clear risk of poor decisions and judgments about how the new rules should operate being reached.
      Our amendment seeks at least to provide further information about how the rules would operate. It suggests that the Government report to Parliament on the likely costs of administering personal pension schemes, and provide an assessment of the risks to members of such schemes. We believe that that would provide a context in which to reach a judgment on the operation of the proposals; and on whether, in practice, they benefit not just the wealthy but also the greater number of people who might expect to take advantage of them because they have a fund into which they have paid throughout their working lives. Such people will want to purchase annuities at the most favourable rates.
      Generally speaking, while we can see the benefits of the flexibility that these proposals allow for personal pension schemes, we are worried that the flexibility involved may be achieved only at some risk. Amendment No. 13 at least eliminates some of those risks.
      The Minister of State, Treasury (Mr. Anthony Nelson): There is one matter on which hon. Members on both sides of the Committee can agree—pensions are a complicated business. Most people rarely understand the full details of their own pension let alone the range of those offered on the market, the benefits that derive from them and the tax treatment of them. That is a matter for regret. In the search for equity and greater self-provision, it is probably inevitable that there will be complexities in the provision of choice and equity, but at the same time—the complexity of such schemes has been raised by a number of hon. Members—it raises the whole issue of education about financial provision. It is an issue to which I have referred on numerous occasions in the House and I do so again today.
      One does not want in any way to be too patronising, because, of course, the Government are obliged to frame the law properly and regulators are obliged to supervise the law properly, but at the end of the day there must be an obligation on the individual to look carefully at investment products—particularly long-term investment products such as pensions—before they enter into them, to seek advice from those who have expert abilities and to ensure as far as possible that the contract that they are entering into meets their needs.
      We can do the best that we can, and we can seek to refine the legislation, as I will endeavour to show later, and the regulatory system, to give as much support and backing as possible, but we must address a wider issue, perhaps through the education system, perhaps in a variety of publicity ways, by regulators and product providers, to
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      ensure that people understand much better the nature of the products that they are offered, their obligations and the benefits that they are likely to receive.
      Mr. Gerry Sutcliffe: I have listened intently to the debate as one of those persons ill-informed on pension provision. I take the point about education, but, practically, how can one provide that with changes being made to the pension provision almost daily, notwithstanding the clause before us? How will the Government be forced to do that?
      Mr. Nelson: The principal means of improving awareness about the nature of products, the obligations and benefits that arise under them, is through disclosure, the transparency and the understanding of the nature of the product itself. The disclosure regime, which came into effect from the beginning of this year—not just with regard to life insurance products but the wider application—goes to the heart of the issue and goes a long way towards answering the hon. Gentleman's question.
      I suggest that there is a wider obligation, because one can disclose; one can tell people; one can write to people; but unless one is pretty certain that people understand, they can still be mis-sold, or they can enter inadvertently into a disadvantageous contract. I have no wish to use this important debate to give a polemic on the wider issue, but it is relevant and is a matter to which the Committee may wish to return.
      A number of reasonable points were made by hon. Members and I shall do my best to comment on them and provide answers where possible.
      Clause 52 and schedule 11 will give personal pension scheme members greater choice over the timing of the annuity purchase and will enable them to continue to benefit from the further investment growth of their funds while drawing an income in retirement. The amendment proposes that the provisions of schedule 11 should come into effect only after the Government have reported on three issues: the costs to personal pension schemes of administering the new provisions; the risks to personal pension scheme members who take advantage of the provisions; and the extension of the provisions to occupational pension schemes and to retirement annuity contracts.
      I sympathise with the concerns raised by a number of hon. Members on those matters. The Government have already taken action to meet those concerns as far as they can. I must say, therefore, that I do not think that the proposed amendment to clause 52 will serve any useful purpose. I shall explain why by providing reassurance, I hope, on each of the issues covered by the amendment.
      I deal first with the likely effects of the provisions of schedule 11 on the costs of administering personal pension schemes—a point raised by the hon. Member for Edinburgh, Central (Mr. Darling). As a matter of general Government policy, all Departments are required to prepare a structured appraisal of the likely cost to businesses of complying with new or amended regulations. In that way, compliance costs can be assessed and unnecessary burdens to business identified. In the case of annuity deferral, a full compliance cost assessment—CCA—has been made and has been available, as announced in an Inland Revenue press review from its deregulation unit, since Budget day.

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      The CCA broadly examines the likely administrative costs to personal pension providers over and above the costs of administering the present regime, which requires immediate annuity purchase once benefits are taken from a personal pension scheme. Costs are divided into those that are non-recurring, such as the cost of amending computer systems, and recurring ones, such as arranging income withdrawals for people who defer annuity purchase.
      5.15 pm
      Of course, the costs are likely to rise in future years as more people retire and take advantage of the new flexibility, but we would expect all pension providers to recover those costs by means of an administration charge, such as that already levied in respect of personal pension arrangements.
      Mr. Hoon: Does the Minister expect that that administration charge will be spread evenly throughout all personal pension holders, or will it simply be paid by those who are deferring their annuity purchase?
      Mr. Nelson: That will be a matter for the individual schemes to determine. It is not a matter for regulation. The costs, in general terms, while inevitably as much a guesstimate as an estimate, are clearly set out. It will be for the industry to determine how to recover those costs. In the case of smaller businesses—a number of hon. Members, including the hon. Member for Edinburgh, Central, raised this point—independent financial advisers already have to give the best advice possible, and we do not see that that necessarily will involve additional net costs, but there will obviously be particular compliance costs for the product providers, as such, rather than the intermediaries. It will be a matter for them broadly to determine how the costs are spread.
      The second point covered in the amendment concerns the risks that people will run in deferring annuity purchase. It is an important issue. It must be apparent to all hon. Members that flexibility involves choice, and choice involves risk. It is an interesting paradox that risk can be present both with flexibility and with inflexibility. If any regime is too inflexible, and tethers people down to only one recourse, that can be highly risky and can prejudice them.
      Equally, if one introduces flexibility into any regime, as we seek further to do with the amendment and schedule, it opens up a choice, but it opens up the prospect of some risk, or relatively better performance by one who behaves in one way as opposed to another. So although there might not—I hope—be a fundamental risk in terms of the whole stream of income or the value of the security of a fund, there will be a differential result, obviously, for people who behave in different ways.
      It is inevitable in providing flexibility or choice that there will be some risk for people that they take a decision, the outcome of which will be less preferential to them than had they chosen otherwise. What I am saying is obviously a truism in one sense, but it raises the point made by hon. Members—that such risk can best be avoided by getting the best possible advice from professionals on how people should proceed, and how they should or should not take advantage of the flexibilities provided under the clause and schedule.
      Mr. Butterfill: Does my hon. Friend agree, however, that although there is undoubtedly some risk inherent in
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      the choice, the overall risk is reduced by giving that choice? Although some people will make bad choices, overall the element of risk must be reduced by giving that choice.
      Mr. Nelson: I hope and believe so. The Government would not have brought the measure forward unless we believed that to be so. Of course, without straying too much from the narrow provision of the clause and schedule, the Government's overall macro-economic policy is there to try to bring about a sustained period of low inflation and interest rates as low as can be sustained to continue to bear down on that level of inflation.
      If it were possible—an objective seriously to be desired by all hon. Members—for the country to enjoy a very long period of low inflation and low interest rates, it follows that it might not necessarily be right for people to defer for a long period the purchase of an annuity. Indeed, as the hon. Member for Ashfield (Mr. Hoon) and others pointed out, they might be disadvantaged: the market can move in both directions, and interest rates may fall. People must make their own decisions.
      Understandably, over the past couple of years—particularly a year or so ago—there was apprehension about the requirement for the removal of any money from a personal pension immediately to trigger the need to buy an annuity at what were historically low interest rates: no option was available. We hope that the introduction of further flexibility will meet people's needs, although it does not necessarily follow that it is right for them to defer without expert advice.
      Mr. Derek Enright: What advice would the Minister give people today, with the prospect of a rise in interest rates?
      Mr. Nelson: The hon. Gentleman tempts me, but I cannot advise people on such matters.
      Let me return to the risk involved in the deferral of annuity purchase. I am well aware of the concerns that have been expressed, and assure the House that the Government take them very seriously in the light of past mis-selling of personal pensions. The Securities and Investments Board has already made its recommendations for redress following cases of mis-selling, and the House will recall the statement that I made about the matter on 25 October last year.
      We should remember that the annuity deferral proposals were made in response to a flaw in the present personal pensions regime. We want above all to free people from the obligation to buy an annuity as soon as they take benefits from their pension scheme, possibly at a time when annuity rates are low. The new flexibility that we are offering has been widely welcomed, but—as my hon. Friend the Member for Carshalton and Wallington (Mr. Forman) pointed out—it is only an option: no one will be forced to defer buying an annuity if they are unhappy about the risks involved. Indeed, we do not expect that many people will wish to do so for more than a few years.
      So what are the risks that people may run if they opt for income withdrawals? The main risk is that their income may decrease at some point in the future, either because of falling interest rates which have a direct effect on annuity rates or because of an unexpectedly low investment performance by their fund in the deferral period. There is also the risk, for people with a small fund,

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      that administration charges will erode the value of the fund before the annuity is bought—a point raised by more than one hon. Member.
      Regulatory bodies such as the Personal Investment Authority will therefore have a duty to ensure that personal pension scheme members are made aware of the risks, and the disclosure regime on life products that came into effect on 1 January this year provides an excellent basis for that. Pension providers will be obliged to disclose the potential risks in deferring annuity purchase, and individual scheme members will normally consider seeking expert financial advice before reaching a decision.
      The proposed legislation itself provides a further safeguard against the too-rapid depletion of the pension fund: personal pension providers will have to review members' funds every three years to ensure that income withdrawals are in line with the value of the fund. Members will, of course, be able to convert their pension fund to an annuity at any time they choose up to the age of 75.
      Let me now deal with the third issue covered by the amendment—the possible extension of the proposals to money-purchase occupational pension schemes and retirement annuity contracts. The Government considered that very carefully when formulating the present clause and schedule. In the light of press comments following the Budget day announcement, we examined the matter yet again; and, as has been mentioned, my right hon. Friend the Financial Secretary made a statement that was reported in an Inland Revenue press release issued on 4 January.
      That statement pointed out that the present tax approval rules for occupational pension schemes did not prevent flexibility in the timing of annuity purchase, although a pension must be taken. The provision of annuities is often part of the structure of the schemes, for reasons unconnected with the tax rules. Following the Budget day announcement about the proposal to amend the personal pension schemes tax rules, we made it clear that we would be happy to discuss the issue with the promoters of occupational pension schemes. As a result, some insurance companies have approached the Inland Revenue to see what changes would be needed in the rules governing tax-approved occupational pension schemes.
      At this stage, it is not at all clear that any legislative changes are needed in relation to occupational pension schemes, but if it proves—as a result of discussion with the promoters of the schemes—that some changes are desirable, we shall consider introducing appropriate measures.
      Mr. Darling: Does that mean that the Government are agreeable to the principle of extending flexibility to occupational schemes? Have any difficulties been highlighted so far by the approaches made to them?
      Mr. Nelson: Yes and no. Yes, we are in favour of the principle of extending flexibility: that is, we believe that flexibility already reasonably exists, but if we were persuaded otherwise we would want to examine the matter carefully. No, our discussions and consultations have not flagged up any problems. Unless compelling reasons are given for us to introduce appropriate measures, we see no need to assert in legislation what is already the case.
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      The statement also pointed out that the retirement annuity legislation had been obsolescent and had remained unchanged since 1988, when personal pensions superseded retirement annuity contracts. In any case, it was not necessary to amend the retirement annuity rules, because holders of RACs can already transfer their funds to a personal pension scheme if they want to benefit from the new provisions. Inland Revenue officials have spoken to nine insurance companies, all of which said that they would make no charge for internal transfers—that is, transfers from a retirement annuity contract to a personal pension scheme with the same company. That option therefore need not involve any additional cost.
      The hon. Member for Edinburgh, Central raised the question of the principles that should be applied to administrative savings for schemes, and to any annuity changes and transfers that are made. Broadly, amendments to occupational pension schemes should ensure that changes are consistent with the purpose of pension schemes. It is a tax approval condition that the schemes should provide a pension for life. Any proposals should be consistent with that principle, based on actuarial considerations relating to life expectancy and periodic reviews of funds.
      My hon. Friend the Member for Bristol, North-West (Mr. Stern) asked whether we were reintroducing a class system into pensions. That is far from being the case; we intend to ensure, by providing greater flexibility and choice, that people are better able to take the course that they consider best for them. The provision of an opportunity that does not currently exist should only break down any class system that may be in the pensions regime.
      I hope that I have made it clear that it is easy for people with retirement annuity contracts to transfer to personal pension schemes; certainly, that was suggested by nine insurance companies that we consulted.
      Mr. Stern rose—
      Mr. Nelson: I will give way in a moment. First, let me make a further point which I think was implicit in what a number of hon. Members said. They asked why we have not in this or in other legislation referred specifically to retirement annuity contracts. I have said that that is essentially obsolescent legislation. A complicated corpus of further clauses in the Bill would be required to address what we believe is not in practice a problem.
      There would be no great advantage. It would not offer to those with retirement annuity contracts a choice or an option that is not already there. It could not be done at no or low cost, and in any case we have assurances that it can already be done. It is open to people to change to a personal pension, thereby taking full advantage of the flexibility provided by the clause and the schedule. For the reasons that I have given with regard to occupational pensions and retirement annuity contracts, we do not think that the problem arises.
      5.30 pm
      Mr. Stern: I am sorry that my hon. Friend the Minister has so clearly misunderstood, failed to comprehend, the genuine fears of people who hold retirement annuities. First, he said that retirement annuities were obsolescent but they cannot be obsolescent because many hundreds of thousands of people continue to pay premiums and will go on doing so for the next 20 to 30 years. They are not obsolescent: they are very much alive.

      717
      Secondly, my hon. Friend said that some insurance companies have agreed not to charge people who wish to transfer and take advantage of the flexibility which retirement annuity holders, and they alone according to the Minister, will be debarred from taking under the existing legislation. He is wrong. First, those costs exist, and if they are not borne by a charge on the policy holder making the change they will be borne by the general fund of policy holders. Secondly, what happens if the personal pension offered by the insurance company with which someone has a retirement annuity is not suitable for that person and he wishes to transfer? Costs will be transferred automatically.
      Mr. Nelson rose—
      The Second Deputy Chairman of Ways and Means (Dame Janet Fookes): Order. That intervention verged on a speech and I have strong views on that.
      Mr. Nelson: With that stricture in mind, I hasten to assure my hon. Friend that I do not wish my remarks about retirement annuity contracts to be taken as derogatory. Far from it. They exist, and people took them out and continue to subscribe to them. For many people they have distinct advantages and they wish to retain those contracts. However, my hon. Friend and I both know that personal pensions legislation superseded them and offers a different set of opportunities and benefits.
      In some ways RACs have certain benefits that are not provided under the personal pensions regime. I acknowledge all that and, as I say, I am not in any way being derogatory. We are discussing the issue of taking advantage of deferment flexibility. I am saying only that that can be done without necessarily introducing a whole corpus of law to provide freedom and flexibility for RACs in particular. It can be done easily by filling in a form and transferring from the RAC to a personal pension.
      As I have said, there are no direct costs to the prospective pensioner. Of course costs are involved, but how they are absorbed is a matter for the companies. I assume that the Committee is principally concerned about whether there is a cost to those people who exercise their rights for deferment and take advantage of the flexibility. All the evidence, as far as we can assess it, is that there is not.
      Mr. Butterfill: I agree with my hon. Friend the Member for Bristol, North-West (Mr. Stern). The reply by my hon. Friend the Minister will not do. He admits that it may not be appropriate for some people to transfer from RACs to personal pensions. How do we relieve their predicament if they are not offered the proposed flexibility? Secondly, the Minister may be surprised to know that what he says may not be widely disseminated outside the confines of the Chamber. I suspect that thousands, if not hundreds of thousands, of personal pension holders will be unaware that they can transfer in this way. They will continue to hold RACs and will suffer as a result. It is incumbent on the Government to amend the legislation, if not in this Finance Bill in the next one.
      Mr. Nelson: I hear what my hon. Friend says and take it seriously. I shall reflect upon any shortcomings that he feels are in the current legislation or proposals. I was simply trying to respond to concerns raised at the beginning of the debate which seemed to show that those with retirement annuity contracts did not have this option
      718
      or, if the deferment option did apply, it would involve them in costs. I have tried to show that the opportunity is there.
      RACs are different from personal pensions, and to provide the deferment regime on top of RACs would be going beyond what is currently proposed. People can exercise their right to defer and can choose to implement at a later date the purchase of their annuity through transfer. That is not unreasonable.
      My hon. Friend the Member for Carshalton and Wallington (Mr. Forman) asked about size and scope of personal pensions. The latest figures show that there are about 8 million personal pension holders. That is a considerable number and shows the choice that people have exercised since 1988 to make provision for themselves. Despite the undoubted serious problems relating to the mis-selling of personal pensions, the figures demonstrate that for many people such pensions are popular and will continue to be so for the many who wish to make flexible provision for themselves for retirement.
      My hon. Friend said that the arguments for staying put in an occupational pension scheme should be presented as clearly as the arguments for transferring to another one. I entirely agree. That is exactly the purpose of the disclosure regime and the product and advice regimes which we have tried to implement through Securities and Investments Boards rules and the Personal Investment Authority.
      It is necessary to point out to prospective investors the advantages of the status quo as well as the option for change. It would certainly be inadequate and a serious shortcoming of that advice if a comparison were not made. It is implicit in giving best advice that it is compared with the current range of available benefits. In its executive function the regulatory regime has sought seriously to improve the quality and efficiency with which such information and advice is rendered.
      The hon. Member for Southampton, Itchen (Mr. Denham) said that the flexibility in the clause requires good advice. That echoes what he said several times in the past, and I whole-heartedly agree with him. We must constantly support measures to improve the quality of advice and to crack down on bad advice. That means costs for the industry and, of course, at the end of the day for the product buyer, the investor. But if markets are to be free they must also be fair, and if people are to have more confidence in investor protection they must have impartial and good quality investment advice.
      The changes which Andrew Large, the chairman of the Securities and Investments Board has instituted, and the shake-up and changes in the self-regulatory organisations will deliver very much better standards of investment advice. Of course, that will always stop short of a guarantee that people will get perfect advice, and even the best advice may not match how events eventually turn out, but there must be a constant quest to improve the quality of advice and in that regard substantial progress has been made.
      Mr. Hoon: The Minister spoke about the benefits of extra advice and no one challenges his suggestion. But there will clearly be a cost involved. Perhaps I may use the illustration used earlier in the debate. A company providing a personal pension scheme will have to employ someone for the time that it takes to provide advice on whether it is sensible to defer the purchase of an annuity.

      719
      In those circumstances, and given the extra costs for the company, would it not be sensible to accept at least the spirit of the amendment tabled in the name of my hon. Friend the Member for Oxford, East (Mr. Smith)? There should be some consideration of the extra costs involved in administering personal pension schemes.
      Mr. Nelson: I have, of course, read the amendment and I understand its purpose. I am endeavouring to explain to the hon. Gentleman and to the House that the Government have considered these matters carefully, and that we have reported on some of them—I referred to the cost compliance assessment. Eventually, people reach the point where they must make up their minds and decide what to do. One cannot make all policies a matter of constant review. I know of the popularity of that with the Opposition. All policies seem to be put on hold while someone else decides what the outcome should be.
      With matters as important for people's provisions as pensions, however, people must not make judgments on the basis of the fact that the regime will be revised and reviewed, and that it may be imperfect. They must make long-term personal decisions on the basis of the regime that operates, and of the Government's best judgment of how it should do so. That is the purpose of law in the matter. It is important that it should be certain, even if it is not wholly inflexible. Of course, we revise and consider things with the experience of time, but we have already spent a good deal of time on considering how flexibility can be better extended.
      My hon. Friend the Member for Bournemouth, West (Mr. Butterfill) gave a broad welcome to the Personal Investment Authority. He said that it was important to give the PIA a chance, before we engaged in radical reform of the regulatory system. I agree with him. The establishment of the PIA marks a step change in the quality of investment, advice, supervision and regulation in the retail sector.
      Although, through shortcomings and inadequacies, well-advertised problems and serious consequences have arisen for many individuals in recent years, the changes that have been put into place, if only because of the controversy that has sometimes been aroused by the constituent members of the PIA, demonstrate that they are taking their responsibilities seriously. I reiterate that I give Mr. Palmer and all members of the PIA my full support in seeing through the important changes that they are bringing about and which are improving significantly the quality of the provision of investment services in the retail sector.
      My hon. Friend said that it was right to allow deferral. I am grateful for the broad support that, I take it, he was giving to the clause and schedule. He asked, as the hon. Member for Edinburgh, Central did, about the amount of income that would have to be withdrawn during the deferral period, and my hon. Friend asked whether it might be appropriate for the minimum level to be lowered even further.
      Perhaps it would be helpful if I explained that the intention is to ensure that, where someone exercises deferral, some income is taken out of the fund that has been built up. The aim is to ensure, in part, that that income, which is then taxed, goes to help refund the reliefs that have been available for contributions to the
      720
      fund during its lifetime. Otherwise, a danger would exist that such funds would become just a money-box that people could dip into from time to time.
      5.45 pm
      The essence of our personal pension policy and, indeed, our pensions law and provision is that people receive tax relief on their contributions during their working lifetimes to build up or to fund an amount, which can then provide a decent income for them in retirement, which will be subject to tax, and which will equate with the contributions made and the reliefs during the lifetime of contributions. If it were possible for no income to be withdrawn for a long period of time, it would offer a savings opportunity and a non-pensions opportunity, which was not the intention. If a case exists for providing reliefs for long-term savings, we should do that, as the Government have done through schemes such as the personal equity plan. We should consider that sector.
      On pensions, the intention broadly should not necessarily be to assist especially high-worth savers to build up a very large sum at the expense of the Inland Revenue, when they have had relief on contributions during the lifetime; it should be to ensure that a relationship exists between the taxation that is recouped and the relief that is given during the period of contributions.
      On the amount of withdrawal during the deferment period, the Government considered carefully the single annuity to ensure that some flexibility was built in for people who might have purchased different sorts of annuity—one providing benefits for a spouse and one providing for staged increases in benefit entitlement. That is why there was a difference between the minimum and maximum. However, partly as a result of some of the comments made outside the House as well as within it, we accept that a case may exist for reconsidering the matter.
      I listened carefully to what my hon. Friend the Member for Bournemouth, West said. In particular, he made a case for a reduction from 70 per cent. to 50 per cent. The Government might want to consider that further. The hon. Member for Edinburgh, Central raised that point at the end of his remarks.
      The Government's proposals for enabling annuity purchase to be deferred have been widely welcomed, but some people have said that a minimum deferral of 70 per cent. is too high. The Government now accept that, and we are discussing the right figure with interested parties. When that consultation has been completed, we will propose an appropriate amendment on Report. I hope that the House will accept that that is a sensible way to proceed.
      My hon. Friend the Member for Bournemouth, West. raised a point about taxation on death. There might be taxation on a spouse receiving the cash sum from a pension fund, and were she or he to die subsequently, they might also be liable to further tax, such as inheritance tax, if it formed part of the estate. That has always been the case.
      It is also the case with other savings funds that are built up. If the widow or spouse decided to continue with the deferment and to purchase the annuity, they would be able to do that; there would be no tax charged, other than on the income that subsequently arose under the annuity. I know, however, that comments have been made about the tax level, were the surviving spouse to take the whole of

      721
      the lump sum, instead of continuing with the deferment. I hope that that has explained the position to my hon. Friend.
      The hon. Member for Ashfield (Mr. Hoon) asked about flexibility. He said that it could work against a person if market rates declined. I understand the point, which I think I have dealt with adequately.
      The issues about the regulatory system, while perhaps going somewhat wider than the clause and schedule allow, are nevertheless relevant. The House is right to seek assurances that our legislative system, both in the statute book and in practice, delivers the sort of public confidence that people are entitled to receive. Any system or structure that one devises and implements by law does not necessarily deliver the human judgments that result in high-quality investor protection.
      Sometimes, there is a quest for reform. I make no complaint about people testing arguments, especially if they can come up with better systems, but massive and costly uncertainty and change do not necessarily result in cowboys being put out of business, or in the prevention of fraudsters. I believe that the course that we have adopted, which is to make the system work significantly better, is the right course to deliver greater confidence to investors and depositors.
      Many of the problems that have been uncovered in recent years and which are being redressed demonstrate that the system is working. We may not like some of the consequences in that some firms have gone bust or some people lose out but the fact that problems are being detected and redressed, and the fact that there is an investors' compensation scheme that provides relatively high recompense to those who have lost out and that it has worked out in practice, is an endorsement of a good success record. The fact that we have built in the many changes that Andrew Large and others have instituted means that we are not complacent—far from it—but that we are determined to ensure that the system works better.
      However, revolution in the structure of regulation of the City is no answer for those who seek more certainty. It is an answer for those who want ever more centralist control of the financial resources in our economic system but we will have no part in that. It is not our intention to embark on a blighted period of cost and uncertainty for the financial services industry. That would merely deliver more opportunity for, rather than detection of, the worst sort of practices.
      Mr. Butterfill: May I press the Minister on one other point? Talking about the position of those in occupational schemes which are money-purchase schemes, he said that he did not think that there would be any difficulty in the trustees of such schemes allowing deferral and that there was no legislative barrier to that taking place. What could he do to overcome the difficulty that might arise if individual employees wished to choose deferral but the trustees said no because it was an extra cost that they were not prepared to load on to the scheme? In the case of personal pensions, the initiative or option rests with the policy holder himself but, in the case that he has described, the decision lies with the pension trustees. Does he regard that as satisfactory?
      Mr. Nelson: I acknowledge immediately that this does not deal entirely with my hon. Friend's point, but one answer is that people can opt out of an occupational pension into a personal pension scheme. When an
      722
      individual decides to be a member of an occupational scheme, it is implicit that he understands—or at least, one hopes that he does—the implications of being part of a collective scheme, which has benefits as well as obligations. It also has risks and involves exercising a choice.
      About 90 per cent. of people in occupational pension schemes have defined benefit schemes rather than money-purchase schemes. Only a small proportion of those in occupational pension schemes decide to translate into annuity the benefits that they receive and very often do so because it is more certain and easier for them to do so. It may be only a minority but it does not make it any less important that individuals should have as much flexibility as possible. However, I repeat that we are not aware that there is a problem or that anything inhibits deferral, provided that the scheme decides to take that line and offer deferral to its beneficiaries.
      Mr. Butterfill: I accept that there are at present more defined benefit schemes than money-purchase schemes but the Minister will be aware that the trend is going the other way. There are virtually no new defined benefit schemes being set up and major companies such as BP are suggesting that they may move from defined benefit schemes to money-purchase schemes.
      Mr. Nelson: My hon. Friend, who is well informed on this and related matters, is absolutely right, and I take his point seriously. If there proves to be a problem in practice, we shall certainly reconsider the matter but we think that the flexibility for retirement annuity contracts and for occupational pensions is adequate. Therefore, though worthy, the amendment is unnecessary. For that reason, I hope that the hon. Member for Edinburgh, Central will withdraw it.
      Mr. Darling: I would not be too confident about that. I thank the Minister for his remarks about schedule 11. I accept entirely that if tax reliefs are given we should ensure that we are not subsidising saving in a way that does not apply to other savings products. However, the Government will have to explain why 70 per cent., as opposed to 65 per cent. or any other figure, is the appropriate one.
      Having said that, it is fascinating that the Minister and a number of Conservative Members—although not all of them—take as their touchstone for whether a scheme is good or bad what the industry—the product providers—have to say about it. The hon. Member for Carshalton and Wallington (Mr. Forman) and the Minister were at pains to point out that no one was forced to transfer. Indeed, no one is forced to buy a pension; it is always possible to go through life without one and then wait and see what happens when one retires. People may not be forced, but the Minister should reflect on the point made by Labour Members and one or two Conservative Members. Although people are not physically forced to transfer, many may feel that they have to because there is no flexibility in the scheme that they have, whether that is an occupational scheme or any other sort.
      It is not good enough for the Minister to say that he has spoken to nine companies which have said that people can transfer as long as they move to one of their schemes. That is precisely what we do not want; we do not want employees to be able to transfer only to one of the

      723
      schemes that a company happens to have on offer. The alternative scheme which has the flexibility may not be the best—another company may have a better one.
      The Government must sometimes ask not only what is good for business but what is good for the general public. The Government say that they have a compliance test and seek to check business costs and red tape. That is a good thing and perhaps they will apply the same principles to the rest of the evening's debate.
      Yes, let us ask the industry and the product providers but let us consider, too, the effect of such policies on people in general. Parliament is supposed to be representing the people at large, not only those in business. We must not take what the industry says as the last word on the matter. We must consider the wider interests, something that the Minister and the hon. Member for Carshalton and Wallington failed to do. However, I shall look to my new ally, the hon. Member for Bristol, North-West (Mr. Stern), for support.
      Mr. Stern: The hon. Gentleman is wise to do so. I was going to take his point a little further. Does he agree that the Government are not only looking purely to business but are going further and saying that two classes of policy holders will be entitled to a say, whereas a third class of policyholder will have the option either of not accepting the flexibility being offered or transferring willy-nilly? We are offering freedom to some but not to all.
      Mr. Darling: The hon. Gentleman makes a good point and, in so far as he is allowed to, I hope that he will return to it in Standing Committee. For the Government to say that no one is forced to transfer is not adequate.
      The fundamental issue that has been touched on repeatedly is regulation. Again, it is interesting that the Minister and one or two other Conservative Members take as their touchstone the increasingly minority view that there is nothing wrong with the Financial Services Act 1986 and that no change is needed. The Minister said that any change would mean a revolution and central control of resources but no regulatory system on this earth seeks to control resources in that way. The fact is that a growing number of people recognise that the 1986 Act will have to be amended and the sooner the Government face that, the better.
      We believe that we should build on what we have but it is nonsense to try to continue with the fiction of self-regulation. The Minister cannot say that the system is working because many problems have been identified. Indeed, many of the problems that arose with pension transfers were due to the fact that the system was not working and was driven by the industry, which knew that bad practices existed but too many of those involved chose to do nothing about it.
      Mr. Forman: The hon. Gentleman is referring to a point that I made in an earlier intervention. I was trying to tell the hon. Gentleman that it has taken the best part of nine years to perfect and improve the system of self-regulation within a statutory framework. It would be very unwise, in the interests of this country and the financial services sector, to tear that up by the roots again, as I understand that his party would seek to do were it to come into office.
      Mr. Darling: We are not proposing to tear it up by the roots but to reform and to strengthen it. I agree with the
      724
      hon. Gentleman that the regulatory system has improved dramatically, especially since Mr. Andrew Large became chairman of the Securities and Investments Board. The Minister cited Mr. Large's review as a major step change. Indeed it was, but the Minister might be candid enough to admit that poor Mr. Large had to conduct his review in the straitjacket of knowing that the Government would not introduce any new legislation.
      The Government have always made clear to anyone who cared to ask that they would not legislate. That is because they are not confident of getting a Bill that is committed to self-regulation through the House. Not only Opposition Members, but Conservative Members have doubts about the whole philosophy of self-regulation. It is expensive, it is cumbersome and it does not work.
      The debate has been extremely useful, in that I think that the Minister is now in no doubt that we are looking for flexibility to be extended universally across pension provision. The sooner that the Government do that the better. I very much welcome the fact that the Government have admitted, perhaps not in clear terms, that they would make the necessary changes if it turned out that there was some fundamental problem in allowing that flexibility. I hope that the Minister will report to the House further as and when discussions continue.
      6 pm
      The Government have nothing new to say about regulation. Yet again, they seem to be in the pockets of a minority of providers in the industry. They are not prepared to face up to the fact that the public and, increasingly, a large section of the industry, have lost confidence in our regulatory system. Until that is put right, sales will continue to fall and people will continue to lack the confidence to make provision for themselves—the sort of confidence that they ought to have—because they will have doubts about the integrity and the efficiency of the regulatory system. That must be put right. For that reason, if for no other, we shall certainly press our amendment to the vote.
      Question put, That the amendment be made:—
      The Committee divided: Ayes 215, Noes 275.

      Division No. 53]

      [6.00 pm

      AYES

      Abbott, Ms Diane

      Boateng, Paul

      Adams, Mrs Irene

      Boyes, Roland

      Ainger, Nick

      Bradley, Keith

      Ainsworth, Robert (Cov'try NE)

      Brown, Gordon (Dunfermline E)

      Allen, Graham

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

      Alton, David

      Bruce, Malcolm (Gordon)

      Anderson, Donald (Swansea E)

      Burden, Richard

      Anderson, Ms Janet (Ros'dale)

      Byers, Stephen

      Ashdown, Rt Hon Paddy

      Caborn, Richard

      Ashton, Joe

      Callaghan, Jim

      Austin-Walker, John

      Campbell, Mrs Anne (C'bridge)

      Banks, Tony (Newham NW)

      Campbell, Menzies (Fife NE)

      Barnes, Harry

      Campbell, Ronnie (Blyth V)

      Battle, John

      Campbell-Savours, D N

      Bayley, Hugh

      Canavan, Dennis

      Beckett, Rt Hon Margaret

      Cann, Jamie

      Benn, Rt Hon Tony

      Chidgey, David

      Benton, Joe

      Chisholm, Malcolm

      Bermingham, Gerald

      Church, Judith

      Berry, Roger

      Clapham, Michael

      Blair, Rt Hon Tony

      Clark, Dr David (South Shields)

      725

      Clarke, Eric (Midlothian)

      Kilfoyle, Peter

      Clarke, Tom (Monklands W)

      Lestor, Joan (Eccles)

      Clelland, David

      Lewis, Terry

      Cohen, Harry

      Liddell, Mrs Helen

      Connarty, Michael

      Livingstone, Ken

      Cook, Robin (Livingston)

      Lloyd, Tony (Stretford)

      Corbett, Robin

      Lynne, Ms Liz

      Corbyn, Jeremy

      McAvoy, Thomas

      Cousins, Jim

      McCartney, Ian

      Cunningham, Jim (Covy SE)

      Macdonald, Calum

      Cunningham, Rt Hon Dr John

      McKelvey, William

      Dalyell, Tam

      Mackinlay, Andrew

      Darling, Alistair

      MacShane, Denis

      Davidson, Ian

      Madden, Max

      Davies, Bryan (Oldham C'tral)

      Mahon, Alice

      Denham, John

      Mandelson, Peter

      Dixon, Don

      Marshall, David (Shettleston)

      Dobson, Frank

      Martlew, Eric

      Donohoe, Brian H

      Maxton, John

      Dowd, Jim

      Meacher, Michael

      Dunwoody, Mrs Gwyneth

      Meale, Alan

      Eagle, Ms Angela

      Michael, Alun

      Eastham, Ken

      Michie, Bill (Sheffield Heeley)

      Enright, Derek

      Michie, Mrs Ray (Argyll & Bute)

      Etherington, Bill

      Milburn, Alan

      Evans, John (St Helens N)

      Miller, Andrew

      Ewing, Mrs Margaret

      Mitchell, Austin (Gt Grimsby)

      Field, Frank (Brikenhead)

      Moonie, Dr Lewis

      Fisher, Mark

      Morris, Rt Hon Alfred (Wy'nshawe)

      Foster, Rt Hon Derek

      Mudie, George

      Foster, Don (Bath)

      Mullin, Chris

      Fyfe, Maria

      Oakes, Rt Hon Gordon

      Galbraith, Sam

      O'Brien, Mike (N W'kshire)

      Galloway, George

      O'Brien, William (Normanton)

      Gapes, Mike

      O'Hara, Edward

      George, Bruce

      Olner, Bill

      Gerrard, Neil

      O'Neill, Martin

      Gilbert, Rt Hon Dr John

      Orme, Rt Hon Stanley

      Godman, Dr Norman A

      Parry, Robert

      Golding, Mrs Llin

      Patchett, Terry

      Gordon, Mildred

      Pearson, Ian

      Graham, Thomas

      Pendry, Tom

      Grant, Bernie (Tottenham)

      Pickthall, Colin

      Griffiths, Nigel (Edinburgh S)

      Pike, Peter L

      Grocott, Bruce

      Pope, Greg

      Gunnell, John

      Powell, Ray (Ogmore)

      Hall, Mike

      Prentice, Bridget (Lew'm E)

      Hanson, David

      Prentice, Gordon (Pendle)

      Harman, Ms Harriet

      Prescott, Rt Hon John

      Harvey, Nick

      Primarolo, Dawn

      Heppell, John

      Purchase, Ken

      Hill, Keith (Streatham)

      Quin, Ms Joyce

      Hinchliffe, David

      Radice, Giles

      Hodge, Margaret

      Randall, Stuart

      Hoey, Kate

      Raynsford, Nick

      Home Robertson, John

      Reid, Dr John

      Hoon, Geoffrey

      Rendel, David

      Howarth, George (Knowsley North)

      Robertson, George (Hamilton)

      Howells, Dr. Kim (Pontypridd)

      Robinson, Geoffrey (Co'try NW)

      Hoyle, Doug

      Roche, Mrs Barbara

      Hughes, Kevin (Doncaster N)

      Rooker, Jeff

      Hughes, Robert (Aberdeen N)

      Rooney, Terry

      Hutton, John

      Ross, Ernie (Dundee W)

      Illsley, Eric

      Ruddock, Joan

      Ingram, Adam

      Sedgemore, Brian

      Jackson, Glenda (H'stead)

      Sheldon, Rt Hon Robert

      Jackson, Helen (Shef'ld, H)

      Shore, Rt Hon Peter

      Jamieson, David

      Short Clare

      Janner, Greville

      Skinner, Dennis

      Jones, Lynne (B'ham S O)

      Smith, Andrew (Oxford E)

      Jones, Martyn (Clwyd, SW)

      Smith, Chris (Isl'ton S & F'sbury)

      Jones, Nigel (Cheltenham)

      Smith, Llew (Blaenau Gwent)

      Kaufman, Rt Hon Gerald

      Soley, Clive

      Keen, Alan

      Spearing, Nigel

      Kennedy, Jane (Lpool Brdgn)

      Spellar, John

      Khabra, Piara S

      Squire, Rachel (Dunfermline W)

      726

      Steinberg, Gerry

      Wallace, James

      Stevenson, George

      Wareing, Robert N

      Stott, Roger

      Watson, Mike

      Strang, Dr. Gavin

      Wicks, Malcolm

      Sutcliffe, Gerry

      Williams, Rt Hon Alan (Sw'n W)

      Taylor, Matthew (Truro)

      Wilson, Brian

      Timms, Stephen

      Wise, Audrey

      Tipping, Paddy

      Worthington, Tony

      Turner, Dennis

      Wright, Dr Tony

      Tyler, Paul

      Tellers for the Ayes:

      Vaz, Keith

      Ms Tessa Jowell and

      Walker, Rt Hon Sir Harold

      Ms Estelle Morris

      NOES

      Ainsworth, Peter (East Surrey)

      Cran, James

      Aitken, Rt Hon Jonathan

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

      Alison, Rt Hon Michael (Selby)

      Curry, David (Skipton & Ripon)

      Allason, Rupert (Torbay)

      Davies, Quentin (Stamford)

      Amess, David

      Day, Stephen

      Ancram, Michael

      Deva, Nirj Joseph

      Arbuthnot James

      Delvin, Tim

      Arnold, Jacques (Gravesham)

      Dicks, Terry

      Arnold, Sir Thomas (Hazel Grv)

      Dorrell, Rt Hon Stephen

      Ashby, David

      Douglas-Hamilton, Lord James

      Atkins, Robert

      Dover, Den

      Atkinson, Peter (Hexham)

      Duncan, Alan

      Baker, Rt Hon Kenneth (Mole V)

      Duncan Smith, Iain

      Baker, Nicholas (North Dorset)

      Dunn, Bob

      Baldry, Tony

      Dykes, Hugh

      Banks, Matthew (Southport)

      Elletson, Harold

      Banks, Robert (Harrogate)

      Emery, Rt Hon Sir Peter

      Bates, Michael

      Evans, David (Welwyn Hatfield)

      Batiste, Spencer

      Evans, Jonathan (Brecon)

      Bellingham, Henry

      Evans, Nigel (Ribble Valley)

      Bendall, Vivian

      Evans, Roger (Monmouth)

      Beresford, Sir Paul

      Faber, David

      Biffen, Rt Hon John

      Fabricant, Michael

      Booth, Hartley

      Field, Barry (Isle of Wight)

      Boswell, Tim

      Fishburn, Dudley

      Bottomley, Peter (Eltham)

      Forman, Nigel

      Bottomley, Rt Hon Virginia

      Forsyth, Rt Hon Michael (Stirling)

      Bowden, Sir Andrew

      Forth, Eric

      Bowis, John

      Fox, Dr Liam (Woodspring)

      Boyson, Rt Hon Sir Rhodes

      Fox, Sir Marcus (Shipley)

      Brandreth, Gyles

      Freeman, Rt Hon Roger

      Brazier, Julian

      French, Douglas

      Bright, Sir Graham

      Gale, Roger

      Brooke, Rt Hon Peter

      Gallie, Phil

      Brown, M (Brigg & Cl'thorpes)

      Gardiner, Sir George

      Browning, Mrs Angela

      Garnier, Edward

      Budgen, Nicholas

      Gill, Christopher

      Burns, Simon

      Gillan, Cheryl

      Burt, Alistair

      Goodlad, Rt Hon Alastair

      Butcher, John

      Goodson-Wickes, Dr Charles

      Butler, Peter

      Gorst, Sir John

      Butterfill, John

      Grant, Sir A (SW Cambs)

      Carlisle, John (Luton North)

      Greenway, Harry (Ealing N)

      Carlisle, Sir Kenneth (Lincoln)

      Greenway, John (Ryedale)

      Carrington, Matthew

      Griffiths, Peter (Portsmouth, N)

      Cash, William

      Grylls, Sir Michael

      Channon, Rt Hon Paul

      Hague, William

      Churchill, Mr

      Hamilton, Neil (Tatton)

      Clappison, James

      Hampson, Dr Keith

      Clark, Dr Michael (Rochford)

      Hanley, Rt Hon Jeremy

      Clarke, Rt Hon Kenneth (Ru'clif)

      Hannam, Sir John

      Clifton-Brown, Geoffrey

      Hargreaves, Andrew

      Congdon, David

      Harris, David

      Conway, Derek

      Haselhurst, Alan

      Coombs, Anthony (Wyre For'st)

      Hawkins, Nick

      Coombs, Simon (Swindon)

      Hawksley, Warren

      Cope, Rt Hon Sir John

      Hayes, Jerry

      Cormack, Sir Patrick

      Heald, Oliver

      Couchman, James

      Heath, Rt Hon Sir Edward

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      Heathcoat-Arnory, David

      Paice, James

      Hendry, Charles

      Patten, Rt Hon John

      Hicks, Robert

      Pattie, Rt Hon Sir Geoffrey

      Higgins, Rt Hon Sir Terence

      Pawsey, James

      Hill, James (Southampton Test)

      Peacock, Mrs Elizabeth

      Hogg, Rt Hon Douglas (G'tham)

      Pickles, Eric

      Horam, John

      Porter, Barry (Wirral S)

      Hordern, Rt Hon Sir Peter

      Porter, David (Waveney)

      Howard, Rt Hon Michael

      Portillo, Rt Hon Michael

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

      Powell, William (Corby)

      Hughes, Robert G (Harrow W)

      Renton, Rt Hon Tim

      Hunt, Rt Hon David (Wirral W)

      Riddick, Graham

      Hunter, Andrew

      Robathan, Andrew

      Hurd, Rt Hon Douglas

      Robertson, Raymond (Ab'd'n S)

      Jack, Michael

      Robinson, Mark (Somerton)

      Jackson, Robert (Wantage)

      Jenkin, Bernard

      Roe, Mrs Marion (Broxbourne)

      Jessel, Toby

      Rowe, Andrew (Mid Kent)

      Jones, Robert B (W Hertfdshr)

      Rumbold, Rt Hon Dame Angela

      Kellett-Bowman, Dame Elaine

      Key, Robert

      Ryder, Rt Hon Richard

      Kilfedder, Sir James

      Sackville, Tom

      King, Rt Hon Tom

      Sainsbury, Rt Hon Sir Timothy

      Knapman, Roger

      Scott, Rt Hon Sir Nicholas

      Knight, Mrs Angela (Erewash)

      Shaw, David (Dover)

      Knight, Greg (Derby N)

      Shaw, Sir Giles (Pudsey)

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

      Shepherd, Rt Hon Gillian

      Knox, Sir David

      Shepherd, Colin (Hereford)

      Kynoch, George (Kincardine)

      Shepherd, Richard (Aldridge)

      Lait, Mrs Jacqui

      Shersby, Michael

      Lamont, Rt Hon Norman

      Sims, Roger

      Lang, Rt Hon Ian

      Skeet, Sir Trevor

      Lawrence, Sir Ivan

      Smith, Tim (Beaconsfield)

      Legg, Barry

      Soames, Nicholas

      Leigh, Edward

      Spencer, Sir Derek

      Lennox-Boyd, Sir Mark

      Spicer, Sir James (W Dorset)

      Lester, Jim (Broxtowe)

      Spicer, Michael (S Worcs)

      Lidington, David

      Spink, Dr Robert

      Lilley, Rt Hon Peter

      Spring, Richard

      Lloyd, Rt Hon Sir Peter (Fareham)

      Sproat, Iain

      Lord, Michael

      Squire, Robin (Hornchurch)

      Luff, Peter

      Stanley, Rt Hon Sir John

      Lyell, Rt Hon Sir Nicholas

      Steen, Anthony

      MacGregor, Rt Hon John

      Stephen, Michael

      MacKay, Andrew

      Stern, Michael

      Maclean, David

      Stewart, Alan

      McLoughlin, Patrick

      Streeter, Gary

      McNair-Wilson, Sir Patrick

      Sumberg, David

      Madel, Sir David

      Sykes, John

      Maitland, Lady Olga

      Tapsell, Sir Peter

      Malone, Gerald

      Taylor, Ian (Esher)

      Mans, Keith

      Taylor, John M (Solihull)

      Marland, Paul

      Temple-Morris, Peter

      Marlow, Tony

      Thomason, Roy

      Marshall, John (Hendon S)

      Thompson, Patrick (Norwich N)

      Marshal, Sir Michael (Arundel)

      Thornton, Sir Malcolm

      Martin, David (Portsmouth S)

      Thurnham, Peter

      Mellor, Rt Hon David

      Townsend, Cyril D (Bexl'yh'th)

      Merchant Piers

      Tracey, Richard

      Mills Iain

      Tredinnick, David

      Mitchell, Andrew (Gedling)

      Trend, Michael

      Mitchell, Sir David (NW Hants)

      Twinn, Dr Ian

      Moate, Sir Roger

      Vaughan, Sir Gerard

      Monro, Sir Hector

      Viggers, Peter

      Montgomery, Sir Fergus

      Waldegrave, Rt Hon William

      Needham, Rt Hon Richard

      Walden, George

      Nelson, Anthony

      Walker, Bill (N Tayside)

      Neubert, Sir Michael

      Waller, Gary

      Newton, Rt Hon Tony

      Ward, John

      Nicholls, Patrick

      Wardle, Charles (Bexhill)

      Nicholson, David (Taunton)

      Waterson, Nigel

      Nicholson, Emma (Devon West)

      Watts, John

      Norris, Steve

      Wells, Bowen

      Onslow, Rt Hon Sir Cranley

      Whitney, Ray

      Oppenheim, Phillip

      Whittingdale, John

      Page, Richard

      Widdecombe, Ann

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      Wiggin, Sir Jerry

      Yeo, Tim

      Willets, David

      Young, Rt Hon Sir George

      Wilshire, David

      Tellers for the Noes:

      Wolfson, Mark

      Mr. Sydney Chapman and

      Wood, Timothy

      Mr. Timothy Kirkhope

      Amendment accordingly negatived.
      Clause 52 ordered to stand part of the Bill.
      Schedule 11 agreed to.

    Clause 15

      VEHICLE EXCISE AND REGISTRATION: OTHER PROVISIONS
      6.15 pm
      Ms Dawn Primarolo: I beg to move amendment No. 12, in page 11, line 42, at end insert
      `only if the Government has presented a report to Parliament before the passing of this Act on certain of its implications specified in subsection (2) below.
      (2) The Government shall report to Parliament on the implications of Schedule 4 for—

      (a) public and traffic safety;

      (b) the standard of public service; and

      (c) the costs to individuals, service providers and businesses; and on the results of public consultation.'.

      The amendment requires the Government to withdraw schedule 4, which is long and complex, covers 24 pages and is cross-referenced with the Vehicle Excise and Registration Act 1994. In their haste to open up another base for indirect taxation, we believe that the Government have not taken proper account of public safety or of the cost to businesses and the likely implications for employment. In particular, I want to emphasise the full ramifications of the schedule and I want to put the case for full assessment, with public consultation with the relevant bodies, to be undertaken before the Government require the House to take a decision on these matters.
      Rather than deal with every category in the schedule, I shall use examples to make the principle points on public safety and the costs to businesses. The matter is further complicated by the fact that, in addition to schedule 4, the Government have tabled complex amendments in acknowledgement of their errors. They have tabled them in an attempt to ameliorate the worst excesses of their original proposals, but they have failed in that attempt.
      I want first to consider the categories of vehicles that are now to have vehicle excise duty applied to them. Those vehicles are chiefly—[Interruption.] It is difficult to debate an important issue while half a dozen conversations are going on. Forgive me, Dame Janet—
      The Second Deputy Chairman: Order. The hon. Member for Bristol, South (Ms Primarolo) is right. It was in my mind to draw attention to the matter, and I now do so formally. If hon. Members want to chat, they must go outside the Chamber to do so.
      Ms Primarolo: Thank you, Dame Janet. I am much obliged.
      The vehicles that are covered—snow ploughs, gritters, street cleansing vehicles, street lighting tower wagons and road construction vehicles—are mainly used by local authorities or by the private contractors which now fulfil certain obligations, as a result of the Government's

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      compulsory competitive tendering policy. I shall deal only with road safety and likely costs. Because of the complexity of the Bill, it has been difficult for private contractors or local authorities, in such a short period, to unravel the complicated relationships that are set out in the schedule.
      The Association of Metropolitan Authorities has made representations to me on the difficulties of ascertaining exactly the new rates of duty. Because of the separation of direct labour organisations and privatisation, it is difficult to see how costs can be measured. Clearly, for local authorities that are already rate-capped and have severe local authority grant settlements, any increase in cost will not just threaten the provision of services. I am sure that hon. Members can appreciate the significance of gritters or snow ploughs, particularly for authorities in the north of the country.
      For example, the Association of Metropolitan Authorities has said that about 30 vehicles in the Wigan authority's fleet will be in this class of taxation for the first time. In trying to decide the effect of the new charges, it contacted the local taxation office, which was unable to supply anything other than a range of duties that may apply. That means that the additional costs to that authority could be anything from £1,500 to £60,000 a year.
      Not only are there costs and possible implications for local authorities, private business and employment, but there are clear road safety implications. If local authorities which face severe grant restrictions are unable to find money, there could be severe consequences for the future maintenance of local authority highways and for road safety. That is at a time when there is extreme concern about the condition of roads in local authority remits, as a result of funding arrangements.
      Mr. Peter Bottomley: In addition, is there not an equity point that, if specialist vehicles spend most of their time stationary because men are up the tower or if they are used only for the few weeks of the year when salting is necessary, that goes right against the theology of vehicle excise duty, which is aimed at trying to deal with damage to our roads? Clearly, a vehicle which spends little time travelling or is used for only a few days a year should not, in equity, be asked to pay the same as a heavy goods vehicle which travels our roads for up to 24 hours a day, 365 days a year.
      Ms Primarolo: As a former Minister in the Department of Transport, the hon. Gentleman has considerable expertise. I agree with his point. Before any alterations are made to exemptions or to concessionary classes for vehicle excise duty, the Government need to undertake a rigorous assessment of the likely impact of such changes on public safety. For example, I refer to the environment, although we have not mentioned it in the amendment, costs to businesses—because of contracting out, there are now private contractors—and the likely long-term effects on the quality of our roads. We are not satisfied that the Government have undertaken any consultations or consideration before preparing schedule 4.
      Mr. Sutcliffe: Last week, in my constituency in north-west Yorkshire, there were severe weather conditions. The gritters and snow ploughs were out. Under the standard spending assessment, there was no extra allocation for increases in vehicle excise duty in
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      respect of the vehicles that my hon. Friend has mentioned. Because weather conditions have not been as severe over the past few years, the budget has been cut. Whether that is right or wrong, it has happened, and it will be the case in future. Therefore, road safety will be affected.
      Ms Primarolo: I agree with my hon. Friend. I was surprised, in the west country, to see television news reports of the dreadful weather that was occurring only a few 'hundred miles up the road and to see the different demands on the local authorities concerned. I do not want to make this into a larger point, but gritters are often dual-purpose vehicles. They might be dust carts as well.
      Our general criticism still stands: the Government have not undertaken the necessary review. Whether a local authority undertakes work directly or whether it is done by a private contractor, the costs of providing that service will increase and therefore will fall on council tax payers. As a form of indirect taxation, that is regressive in that it hits people unequally. The Association of Metropolitan Authorities has struggled to understand the implications of the measures, because it is also concerned about prospects for road safety.
      The Government proclaim themselves, first, to be concerned about the environment; secondly, to be concerned about safety, and road safety in particular; and, thirdly, to be considerate of small business and employment prospects. However, they have opened an entire taxation base without undertaking a proper assessment. The vehicle excise duties that can be imposed under schedule 4 can be increased every year, just as vehicle excise duty on private cars has been increased in the past.
      That presents an enormous dilemma in properly assessing the likely impact. The Government have not undertaken an assessment. Local authorities cannot say what the impact will be. Private contractors whom I have contacted are in the same position—they need more information and discussion before they can make a conclusive statement.
      Mr. Iain Mills: The Automobile Association, the Royal Automobile Club and all emergency organisations are with the hon. Lady on that point.
      Ms Primarolo: I was about to refer to the AA, the RAC and private vehicle recovery firms which undertake essential safety work on our roads. They not only recover stranded motorists but deal with dangerous lorry loads, oil tankers and many noxious chemicals and products that are transported on our roads.
      The proposals on road recovery vehicles offer the greatest threat to road safety. We recognise that the Government were trying to simplify the vehicle excise duty regime but schedule 4 makes for a more complex scheme. Road recovery vehicles had been taxed at a concessionary rate of £85 per year, regardless of size. Under schedule 4, that concessionary status would be removed, and there would be an increase in the taxation classes to between £135 and £5,000 a year. The Government are now proposing to amend that figure, and the Minister will no doubt put his case later in the debate.
      The pegging of the excise duty is dependent on the weight of the vehicle and the new taxation rates are linked to those for heavy goods vehicles. HGVs are on the road much more and their work is more predictable than that

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      of recovery vehicles, so the categories are not comparable. By the nature of their work, recovery vehicles are used occasionally. The work load cannot be planned, as it depends on the weather and what accidents the vehicles are called to. Consequently, they spend a great deal of time off the road on standby. Safety could be compromised if the proposals go ahead.
      Mr. Ronnie Campbell: I have been in contact with two operators of heavy recovery vehicles in my constituency, and they have said that if the vehicle licence remains high, they will have to go out of business. As my hon. Friend said, it is only on the odd occasion when the vehicles are needed, and they are usually called out to help a tanker in trouble or in an emergency. I am worried that, if those operators go out of business, nobody will take up the emergency and recovery service.
      6.30 pm
      Ms Primarolo: I shall come to that point.
      I have letters from private companies engaged in road recovery work which describe the difficulties that they will have in complying with the new rate if it is imposed, and also the implications for road safety. Large recovery vehicles may be called out only once a month to a road accident, but they are essential as they can clear any obstruction quickly. In a moment, I shall deal with the comments of the police with regard to the Government's proposals.
      If a vehicle is taken out of circulation because it is too expensive to tax, another vehicle will have to be brought in from further away. The companies which are able to deal with accidents will be spread more thinly, and therefore there could be longer delays in responding to accidents and the time that the police will have to remain at an accident while waiting for an obstruction to be cleared could increase. That will not only waste the time of the police, who should be doing other things, but will cause a great deal of obstruction and possibly distress. It could cause disruption on the roads, and it is wasteful as well as unsafe. It is clear that the police cannot leave the scene of an accident before the road is clear.
      The Association of Vehicle Recovery Operators has conducted a survey of all its regions. It says that if the proposal goes through, there will be no heavy goods vehicle recovery operators in Scotland north of Perth. In North Yorkshire, there is only one operator capable of removing heavy goods vehicles from Sutton bank, near Leeming Bar, which is a 1:3 gradient. That operator says that he will not be able to continue his service if the rate goes through, and if that happens, there will be no suitable vehicle to deal with an emergency within a 100-mile radius of that area.
      Mr. Hugh Bayley: My hon. Friend is raising the problems in my county. I have spoken to the company in question, and its 26-tonne heavy vehicle—a vehicle on which the excise duty would rise from £85 to some £5,000 under the Bill's provisions—was used on only eight occasions last year. The company was paid on only six of those occasions. Even under the Government's modified proposal of a £750 vehicle excise duty, does that not mean that the Government will be taxing the operator more than
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      £100 for every trip he makes with a vehicle that is delivering a public service in opening roads for the police and for other road users?
      Ms Primarolo: I agree with the point so ably made by my hon. Friend.
      The Paymaster General (Mr. David Heathcoat-Amory): It may assist the Committee if I invite hon. Members to look at Government amendments Nos. 44 to 47, which entirely take account of the points which have been raised.
      Ms Primarolo: The Minister will put his case carefully and adequately to the Committee this evening, but we reject what he has said. The Government amendments do not go far enough, and we wish to press our points.
      Those points are reinforced in a letter from the North Yorkshire police on the specific matter of road safety, which was addressed by my hon. Friend the Member for York (Mr. Bayley). The force makes it clear that the proposals to remove the concessionary classes will cause considerable difficulties. The North Yorkshire force currently contracts the recovery of accident and broken-down vehicles to the RAC. The actual recovery work is subject to a business agreement between the RAC and the individual private specialist recovery operators, with the recovery fees being reclaimed from the individual companies or from insurance.
      The major concern of the force is not about the commercial implications of the excise duty changes but with the knock-on effect that will occur on the availability of suitably equipped recovery vehicles to deal with accidents and safety requirements. The implications for the North Yorkshire force and for the motoring public who use the roads of the county may be quite profound. As the number of recovery trucks diminishes, the time of arrival at accident scenes will increase, the frequency of tailbacks will grow and there will be a further risk of accidents. That will create a need for the police to spend more time at accidents, which will have obvious implications for road safety.
      We think that the Government have been hasty in their rush to extend their taxation base. They have not taken proper account of the cost implications, nor of the implications for the future existence of businesses. That is shown yet again in a later schedule which affects farm goods vehicles, and increases the costs on farming businesses. Those costs are estimated to be more than £6 million for the loss of the exempt classes, and £3.8 million for loss of the concessionary classes.
      Finally, to demonstrate the folly of the schedule, a Government who claim to be interested in the environment and have used the increase in petrol duties as their fig leaf, claiming that they are sticking to the Rio targets on traffic pollution and pollution generally, are proposing to extend vehicle excise duty to electric milk floats—environmentally sound vehicles that should be encouraged, not taxed—which will cause problems for a milk industry that is already beleaguered because of the Government's policies.
      The schedule is ill thought-out and no consultation has taken place. It has implications for road recovery vehicles and businesses and for public safety, which are all at risk. We request that the Government withdraw the schedule,

      733
      undertake a full consultation, produce a review and report back to the House before they make any changes to vehicle excise duty for those vehicles.
      Mr. Heathcoat-Amory: It might assist the Committee if I set out the general background to the measures. Although we are debating clause 15, most of the detail is in schedule 4, to which the clause relates. A general explanation at this stage will help us when we debate the details of that schedule.
      The present vehicle excise duty system is needlessly complex, with 132 different classes of concession and exemption. Lawyers cannot agree on some of the interpretations, which provides endless scope for expensive litigation. The system is also extremely archaic. Many of the provisions date back to before the second world war. They were added to during the time of digging for victory, when privileges and exemptions for agriculture were easier to justify.
      Since then, technology has moved on. Some of the legislation that we are replacing refers to water being used for propulsion. It also explicitly provides for the wartime device of towing a trailer containing gas, which was used to propel the vehicle in question. That system is certainly no longer with us.
      Some of the existing classes are empty. There is no relevant vehicle in them—perhaps there never was. New types have arisen, such as all-terrain vehicles, which have to fall into the general tax class because the concessionary tax classes have not caught up with their existence. I think that all hon. Members agree that the need for reform is plain and that it is overdue. The legislation is also anomalous.
      Mr. Mills: When were the concessions for emergency relief vehicles on motorways discussed and agreed? I thought that it was about five years ago, so my hon. Friend's explanation hardly applies.
      Mr. Heathcoat-Amory: If my hon. Friend will forgive me, another section of my speech deals with those matters. My general argument is that the system which we have inherited is anomalous and inconsistent.
      I regret the fact that many of the amendments tabled by the official Opposition appear to cling to those anomalies. The hon. Member for Bristol, South (Ms Primarolo) referred to street-cleaning vehicles, snow clearing and so forth, and I shall touch on those in detail later.
      Under existing law, if a street-cleaning vehicle uses its hose to clear a gully, it is exempt from vehicle excise duty, but if it extends its hose a little more under the street to flush out a sewer, it is supposed to pay the full vehicle excise duty. A tower wagon—an hydraulic platform on wheels—is exempt when it is used for mending street lighting, but it must pay the full duty if it is mending a telegraph pole or a power line. The anomalies are indefensible and they invite tax evasion. We cannot expect policemen to check how far under the street the hose pipe from one of those cleansing vehicles goes, so the legislation is practically tailor-made for cheating and exemptions.
      Many of the concessions are granted on the basis of nothing more than an operator's declaration that he or she qualifies and are thus almost impossible to police. When the Driver and Vehicle Licensing Agency carried out a
      734
      detailed check on one class—restricted goods vehicles—it found that 90 per cent. of claimants for special treatment seemed to be claiming the concession wrongly.
      6.45 pm
      The legislation is extremely bureaucratic. For example, let us consider the exemption for vehicles travelling six road miles a week. We shall debate it later, so I shall not go into great detail, but claimants must fill in a form every year and swear that they will not depart from the road routes that they use between their fields. If they want to make a detour during the year, because of a blocked road or some such thing, they are supposed to inform the DVLA in writing.
      None of that makes for good taxation. In fact, the present system breaks every rule of good taxation; it is inconsistent, out of date, unclear, and difficult to enforce. We have aimed, first, to simplify the system so that it is easier for users to understand and cheap for the Government to operate. Secondly, we want to bring it up to date and to concentrate special treatment on those that most warrant it. Thirdly, we aim to grant consistent treatment for similar types of vehicles, thus removing anomalies. Fourthly, we insist that we can easily check that claimants for special treatment are genuine, so removing the opportunity to evade.
      In place of the 132 classes, we have concentrated on four basic classes of vehicle, leaving unchanged the few add-ons for motor cycles, vintage cars and the like. First, vehicle excise duty exemption is granted to the most deserving cases, such as 999 emergency vehicles and those for the severely disabled. Secondly, very low rates of VED—only £35—are applied to those with a good case, such as snow ploughs, gritters, electric vehicles, tractors, other agricultural machines and mowing machines. Thirdly, a special low rate of £150 is applied to specialised vehicles that are based mostly on heavy lorries and have a specialised use; examples include mobile cranes, road rollers, digging machines, work trucks and showmen's lorries.
      All other classes must pay the full vehicle excise duty. The presumption must be that, without good reason otherwise, a vehicle should be in that class. Most vehicles in the £35 and £150 classes will also continue to benefit from very low rates of duty on their diesel.
      With any comprehensive reform, there are some winners and some losers—that is inevitable. The measures as a whole, however, increase the revenue from VED by less than 1 per cent. I believe that members of the Committee will join me in thinking that this is an overdue reform.
      In her introductory remarks, the hon. Member for Bristol, South mentioned recovery vehicles.
      Mr. Bayley: Will the Minister give way?
      Mr. Heathcoat-Amory: Will the hon. Gentleman forgive me if I do not give way? I know that he intervened, and I hope that I can assist him and my hon. Friend the Member for Meriden (Mr. Mills).
      I appreciate that the hon. Member for Bristol, South probably wrote her speech before the Government tabled amendments Nos. 44 to 47, but even after that was pointed out she ploughed on with unnecessary remarks about the additional taxation of recovery vehicles, with which we have already dealt.

      735
      It is reasonable to put light breakdown vehicles, which are commercial high-mileage vehicles, into the £135 per annum class. We have met the concerns raised by a number of hon. Members and the trade that to tax very large vehicles, which may be infrequently used, at the full heavy goods vehicle rate would be wrong. That is why we put the heavier vehicles into three bands, the highest of which will tax them at £750 per annum.
      Mr. Bayley: When the Minister intervened on my hon. Friend the Member for Bristol, South (Ms Primarolo), he might have been under the misapprehension that I was talking about the vehicle excise duty rates for 26-tonne recovery vehicles, as originally proposed. I was not. The original proposal was for £5,000 excise duty. I gave the new figure of £750, which the Minister proposes in his amendment.
      The point is that, in the past 12 months, that operator in my county, the only operator who can clear Sutton Bank road, made just eight trips with his 26-tonne vehicle. As it happens, he was paid on only six of those occasions. Under the Minister's new proposal, the duty on that vehicle will rise from £85 to £750—a tax increase of more than £100 for each occasion on which the vehicle was used and paid for.
      The Minister may say that his tax proposal amounts to only a 1 per cent. increase in the total vehicle excise bill, but for that operator—
      The Second Deputy Chairman: Order. As I told another hon. Member earlier, interventions should be short. The hon. Gentleman's intervention has been quite long enough.
      Mr. Heathcoat-Amory: I fully understood the hon. Gentleman's point. It was put to me by the Retail Motor Industry Federation, which represents the Association of Recovery Vehicle Operators, when its representatives came to see me. I listened carefully to, and met, the federation's concerns. I have before me a letter from the federation saying that it is happy with the compromise that we have reached. If it is happy—after all, it represents the industry and the operator mentioned by the hon. Gentleman—that should be good enough for the hon. Gentleman.
      We shall return to the issue in a later group of amendments.
      Mr. Bayley rose—
      Mr. Heathcoat-Amory: I am sorry, but I answered the hon. Gentleman's point. I said that the trade was happy with the new limit on very heavy recovery vehicles of not £5,000, but £750, a year.
      The hon. Member for Bristol, South mentioned snow-clearing and street-cleaning vehicles. I want to say a little more about that matter, because it encapsulates the problems with which we are dealing and the necessity for the reforms that we are introducing. We have recognised the special nature of snow-clearing and ice-gritting vehicles by putting them in the category that charges only £35 a year VED and allowing them to retain their right to use rebated fuel—so called "red diesel". Were those vehicles in the heavy goods vehicle class, they would pay not £35 a year but between £150 and £5,000 a year, as well as full duty on the diesel that they use.
      736
      Street-cleaning and street-lighting vehicles will face normal VED rates. After all, those are commercial operations and, today, few such vehicles are owned by local authorities. Most are owned by private sector operators, often under contract to local authorities. Many local service vehicles such as refuse lorries already pay full VED. Why should street-cleaning vehicles be exempt when almost identical vehicles that clean sewers are taxed?
      The Labour party needs to come up to date on that matter and realise what has been happening. Instead of single-use machines all owned by local authorities, we now have multi-use machines operated under contract by the private sector. It makes no sense to impose full annual VED on a vehicle when it is doing a job such as cleaning sewers, and exempt it when it is doing a slightly different job such as street cleaning, possibly on the very next day.
      Ms Primarolo: The Minister said that the changes in VED are to simplify the system. He then explained that the Government needed to make the system a little more complex because it did not take account of recovery vehicles, which now need to be put in a different regime. He then referred to red diesel, which was previously linked to vehicle excise duty exemptions and concessions, which must now have an entire schedule to itself to override the vehicle excise duty schedules because the system does not satisfy demand. Is that not a more complex rather than a simpler system?
      Mr. Heathcoat-Amory: I am glad that the hon. Lady has given me an opportunity to point out that we shall have a chance tomorrow, when the Bill goes upstairs to Committee, to debate the precise issue of the use of rebated fuel. Far from adding complexity to the system, we shall simplify that matter as well and put that provision into statute law.
      I urge the Labour party to take on board the fact that the world has changed from one of municipally owned vehicles simply doing one job. Frequently, vehicles change operations from one day to another. Vehicles can change their configuration from one season to the next by using swap bodies; for example, a snow plough used in winter can be used for an entirely different operation in summer. The Labour amendment refuses to recognise that and puts back all the difficulties we seek to get away from.
      The trade recognises the need for change, even if the Labour party does not. The police and the licensing agency know that the current system is becoming impossible to enforce. I only wish that we could persuade the Opposition, particularly the Labour party, to drop their ideological baggage just long enough to withdraw the amendment, which would take us back in time rather than forward.
      The amendment would hinder and delay the very reforms that I have outlined. There are no adverse road or safety implications in the provision. We have given careful thought to the reforms, and the overwhelming need for them is recognised by outside bodies. We have delayed implementation of the VED system until 1 July 1995 both to give those affected an opportunity to adapt to the changes and to enable them to draw attention to any specific and special difficulties. I have already explained how we have responded to well-thought-out arguments presented to us in the context of recovery vehicles.

      737
      We are not convinced, however, by the arguments against the need for overall change, which is why I ask the Committee to accept the clause and to reject the Opposition amendment.
      Mr. Paul Tyler: I wish to follow the Minister, as he has rightly put before the Committee the rationale of the whole of schedule 4. We are not just dealing with the Labour party amendment; it is right and proper that we look at the principles behind the proposed changes.
      I am delighted to see the Under-Secretary of State for Transport, the hon. Member for Epping Forrest (Mr. Norris) in the Chamber to listen to the debate. His Department must have been actively consulted about the rationale for the changes, as I hope that the Department of Trade and Industry was consulted about their important energy implications.
      There are a number of amendments standing in the names of my right hon. and hon. Friends. They relate to agricultural vehicles, vehicle usage as opposed to vehicle ownership—that is the key energy conservation issue with which we should be concerned—the impact that lorries have on the economy and, finally, the special circumstances relating to commercial traffic on islands. My hon. Friend the Member for Argyll and Bute (Mrs. Michie) will speak about that matter a little later.
      I shall illustrate the extent to which the Government's apparent attempt to simplify vehicle excise duty not only will make the situation more complicated but is clearly not worth the candle. The Minister said that the total take in a full financial year will amount to only a 1 per cent. increase in VED, yet he is blundering into a series of mini-calamities—each one may not be important to everybody, but they add up to a snowstorm of calamities.
      As the hon. Member for Eltham (Mr. Bottomley) said earlier, the only logical way to approach the tax is to relate it either to use of the highway or to the use of scarce resources. The Government's proposals do not relate directly to either use.
      Perhaps the panic stations in rural constituencies have persuaded the Minister and his Treasury colleagues to re-examine the proposals for agricultural vehicles that use the roads for only a limited period. All U-turns are welcome, even if they are conducted on a motorway at such a slow speed that they cause a major hold-up. By trying to buy off his colleagues in rural constituencies, there is a danger that the Minister will end up with a situation that is as bad as the one he started with. It certainly will not be any less complex.
      I will illustrate how the proposals will affect the individual farmer. A farmer from my constituency gave me at the weekend a careful assessment of the precise implications of the Bill—as it then stood; I acknowledge the Minister's comments in that regard. He estimated that he faced an additional cost of £1,080 a year under the Bill as it then stood. No doubt the amendments will improve the situation somewhat, but it will not improve dramatically.
      My constituent is a hill livestock farmer with 265 acres of land which is bisected by a major road proposal—the A30 on Bodmin moor. As a result, he has great difficulty in reaching some parts of his land. He says that he has
      "no alternative other than to travel short distances on the public highway with agricultural vehicles and machinery to carry out essential day to day tasks such as inspecting livestock during the summer and transporting fodder in the winter."
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      I am sorry that the hon. Gentleman has now left his position on the Front Bench.
      The farmer continued:
      "Bearing in mind the fact that this government has also axed Farm Waste Pollution Control and Farm Conservation Grants in this same budget, reduced the Hill Livestock Compensatory Allowances by 2.5 per cent. in the past year, I feel it is outrageous to expect me to find a further £1080 per year to run my business and also to threaten extra costs for fuel when the Customs & Excise review their policy on red diesel."
      I know that the Minister intends to address that matter in Committee, but I think that he will acknowledge that the industry is correct to be concerned about that point.
      The National Farmers Union has also briefed a number of hon. Members on the subject and has said:
      "Many agricultural holdings have parcels of land which are geographically close but not integrated within a "ring fence", and many more have contiguous parcels of land which are bisected by public roads necessitating the crossing of the road to take a vehicle from one field to another".
      The NFU and individual farmers are saying that there is no specific rationale for the change which the Government currently propose. Their usage of the highway is very limited, but the legislation will impact greatly on the industry and on individual farmers. The NFU said:
      "The revenue benefit of forcing all these agricultural vehicles which are used for short local journeys into the VED system is out of all proportion to the additional administrative burden and cost which it would place on farmers".
      The Minister makes great play of simplifying administration and removing burdens, but I suspect that he is taking administrative burdens away from the Treasury and loading them onto individual businesses.
      Mr. Peter Bottomley: I apologise for intervening for a second time. The Department of Transport organised an exemption for Dotto trains which allows small trains at seaside resorts to travel for a few hundred yards on the public highway. Does the hon. Gentleman agree that we are not looking for an exemption for a farmer who takes a tractor into a market town on a regular basis; we are talking about journeys of 20 or 200 yd on the public highway? Many people in agriculture do not understand why their vehicles, which will otherwise be used on their own land, should be taxed for such small, infrequent journeys.
      Mr. Tyler: Not for the first time, I am grateful to the hon. Gentleman for his intervention. I noticed with great pleasure the pained expression on the face of his hon. Friend the Minister. who has either not represented that view to the Treasury or failed to represent the views of the farming industry—and, for all I know, those of the Ministry of Agriculture, Fisheries and Food as well.
      Many people believe that schedule 4 should be re-examined, because there has been inadequate consultation about the principles of the changes, let alone their practical implications and the economic effects on certain industries. We will return to that point later, so I will not labour it now.
      There are a number of other "apparent anomalies"—to use the Minister's phrase—in the legislation. It has been suggested several times that the changes in the Budget, in the Finance Bill and in schedule 4 are intended to develop environmental objectives in some way. It is simply humbug. There is no environmental reason for increasing

      739
      vehicle excise duty. We should make sure that future tax burdens are applied according to usage of the highway and of scarce resources. Usage, not ownership, is the issue.
      It is therefore absurd to increase the vehicle excise duty this year. We should reduce the vehicle excise duty on those vehicles which are modest in their consumption of fossil fuels. It should be possible to reduce the excise duty on the smallest vehicles to £10—just an administrative charge—while at the same time allowing the full weight of the Budget increase to fall on those who use the most fuel.
      Mr. Peter Atkinson: I am trying to follow the hon. Gentleman's logic. Is he saying that heavy recovery vehicles should pay more excise duty because they use considerable amounts of diesel, and that smaller recovery vehicles which travel many more miles should pay less?
      Mr. Tyler: In a normal winter—who knows, we may be experiencing an abnormal one—many of the very large vehicles are on the road for only a short time, and therefore use an insignificant amount of fuel. I know that the hon. Gentleman represents a rural constituency, and I will show how a change of taxation emphasis from ownership to usage could assist his constituents.
      The average private motorist in the hon. Gentleman's constituency, as in mine—even taking into account the difficulty of finding alternative public transport—travels only 8,000 or 8,500 miles per year. If that motorist does that sort of mileage in a comparatively modest car of between 1,200 and 1,500 cc and pays only £10 in VED but pays the full increase in petrol and diesel tax, that motorist will save a considerable amount of money. If the Government want to do something effective about the usage of fossil fuels and usage of the highways, they should encourage people to trade down and use modest vehicles more modestly. We will return to that issue at a later stage, but if there is to be any logic in schedule 4, the Government must do something more effective to persuade us.
      The Royal Commission on the Environment reported a few months ago to the Department of Transport that the weight of responsibility for cost in terms of maintenance equations, the environment, and so on, is almost twice as much in the case of lorries as is paid in lorry vehicle excise duty. This morning, The Times reported, that despite the industry's claim that it is paying much more than it can afford, truck registrations in 1994 rose an astonishing 23 per cent. over 1993—the highest year-on-year increase on record, in stark contrast to the ailing car market.
      That increase scarcely suggests that lorries are over-taxed and will be taxed out of business, even in the recession that is still afflicting so much of our country. Lorries are making less of a contribution to overall road costs, the economy and consequent environmental costs than they should.
      740
      Schedule 4, at best, portrays muddled thinking about transport and energy policy. At worst, it looks like yet another indiscriminate, ill-thought-out and illogical attack on not just particular sectors such as agriculture but the private motorist.
      Mr. Bayley: Although the overall increase in vehicle excise duty may be modest in the context of the industry's total bill—a figure of 1 per cent. was suggested—the individual operator of a vehicle recovery service will find the rise staggering. Even under the modified proposal that the Minister considers acceptable, the firm that I mentioned earlier will have to confront a VED increase of more than 200 per cent.—from £1,020 to £3,300.
      That will be less of a burden than the original proposal, which would have raised that firm's vehicle duty bill to nearly £20,000, but how does the Minister justify to that small business a 200 per cent. tax increase; and how does he respond to the case made by that firm and by North Yorkshire police, that such firms will reduce the number of their heavy recovery vehicles, which will extend the time that road users will be kept waiting when a heavy goods vehicle breaks down or is involved in an accident?
      Earlier this month, the assistant chief constable of North Yorkshire police wrote to me about that matter.
      Mr. Peter Atkinson: Did he know about the changes?
      Mr. Bayley: Of course not, because they were announced only last Friday as a panic measure by the Government when they realised that they had got it wrong with their initial proposal.
      If the hon. Gentleman will listen, he will learn that assistant chief constable's comment was relevant before the change and after it. He stated that the duty increase for smaller vehicles weighing under 7.5 tonnes could be recovered by operators because such vehicles are used frequently. However, he added:
      "The category over 7.5 tonnes will create a particular difficulty for recovery operators. Throughout the County there are approximately 16 recovery vehicles in this category and their work is extremely limited. They are primarily used for the recovery of broken down and accident damaged heavy goods vehicles, and I am aware that one operator has only used his vehicle on 12 occasions during the past 12 months. Despite this limited use it is imperative that North Yorkshire Police are able to call on this type of recovery vehicle."
      Nevertheless, the Government are proposing for large vehicles an 800 per cent. rise, from £85 to £750. That represents a substantial increase in the tax burden on operators of large vehicles used only occasionally.
      7.15 pm
      The Minister recognised that the initial proposal was a mistake. His compromise is a step in the right direction, but not a big enough step. The revenue implications of going the whole hog in my county, which is geographically the largest in England, should be considered. There are only 16 such vehicles in my county, but there will be fewer as a result of the proposal.
      Mr. Michael Lord: The vehicles to which the hon. Gentleman refers must be expensive. I do not know the depreciation involved, but can the hon.

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      Gentleman say how much the vehicle owner charged in each of the 12 instances mentioned by the assistant chief constable?
      Mr. Bayley: The hon. Gentleman makes a reasonable point, in terms of the cost to the individual owner of a recovered vehicle of the extra £670. I cannot recall whether the hon. Gentleman was in his seat when I spoke earlier, but not all owners of recovered vehicles pay their bills. I said that one recovery vehicle was used only eight times during the course of a year, and its owner received payment on only six of those occasions. In that instance, the proposed increase would, if it had been passed on, have added £100 to the charge for each rescue.
      Recovery vehicles provide a service to the public in removing an obstruction and opening the road to other users. Surely that is worth something in the Government's terms.
      Mr. Lord: I heard the hon. Gentleman's earlier speech, but it strikes me that any business that uses such a vehicle so infrequently must build into its cost structure substantial fees per trip. Otherwise, the business is unlikely to be viable. Therefore, the proposed increase may represent a much smaller percentage of the firm's overheads than the hon. Gentleman suggests.
      Mr. Bayley: When the hon. Gentleman intervened earlier, I acknowledged that he made a valid point when he said that the lower rate increase would not represent a huge extra cost, given the overall charges made for vehicle recovery. Is that not all the more reason for the Government to examine its costings in the round?
      In the case of the vehicle used eight times a year, for which its operator was paid on six occasions, the tax would add £100 per use. Why do the Government not set against that the increased cost of police time spent waiting at the scene of an accident, if the time taken to effect recovery is lengthened because perhaps only eight suitable vehicles will operate in North Yorkshire instead of the 16 that operate at present?
      The Government's initial proposal prompted the company in question to cancel the purchase of a new vehicle, which would have cost £100,000. That obviously led to an immediate reduction in the quality of the service to the public and the county. The second consequence was that the company decided not to go ahead with appointing someone to a job that it had advertised and had planned to fill. The company has 26 employees, so, proportionately speaking, this had a significant impact. Thirdly, the company decided to call a halt to its efforts to get BS 5750 accreditation, because it realised that it had to make savings.
      I hope that, as a result of the reduced increases in VED, the company will be able to reconsider some of these decisions. As the Government have admitted that they were wrong in the first place to propose these excise increases, and as the Government, when bringing in the new lower rate for these vehicles, have failed in their objective of simplicity—putting all the heavy goods vehicles on the same rate of taxation, why do they not accept that these vehicles are infrequently used but perform a valuable public service? If there are fewer of them, there will be greater costs to the Exchequer in terms of police time and road blockages.
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      The Government's argument is really not worth the candle. For vehicles over 7.5 tonnes, the Government have gone halfway; they should now go the whole way and abandon this increase. The revenue implications will be minuscule. The benefits for an industry on which the Government and the police rely will be considerable. There will also be the benefits of BS 5750 accreditation and of more employment, which the Government say they want. More investment will also go into the industry. All that could be lost if the Government go ahead with this tax increase.
      Mr. William Ross: This is one of those debates that go beyond the usual political point scoring with which we are so familiar. The Government should pay careful attention to what is said, with the intention of looking again at the proposals.
      The Minister drew attention to the fact that most snow clearance, gritting, and street lighting and cleaning vehicles in Great Britain are owned by councils. Not so in Northern Ireland. He will be well aware that all those functions are still under the control of the Department of the Environment. One begins to wonder why the Government should impose a tax which they themselves will eventually have to pay. That does not seem the wisest way of proceeding to raise revenue.
      The Minister talked about multi-use machines, but did not spell out what he meant by that. In my experience, many machines of the class that he described are single-use machines, used for gritting or for snow clearance—or sometimes for both but for nothing else—
      Mr. Heathcoat-Amory: I gave a specific example of how a street cleaning vehicle could be exempt from VED when cleaning gutters with its hosepipe but, with a small adaptation—not uncommon with such vehicles—it could put its hose further down under the street and do the same job for the sewer. In the latter case, it would pay full VED. So it could switch in and out of exemption from one day to the next. That is a recipe for evasion, and it would create a bureaucratic nightmare.
      Mr. Ross: I can see the problem with that case, but I wonder whether the Government's is the right way of dealing with it. I think they should look for a different solution. In any case, in Northern Ireland, these are all DOE vehicles. Thank God, the Department still owns the sewers—no doubt many in this House and elsewhere wish the same were true throughout the United Kingdom. The fact remains that, in the nation from which I come, these are essentially Government vehicles; now they are being asked to pay tax.
      Even when the service is privatised, as it has been over here, the cost will eventually be paid by local government taxpayers. Who pays for snow clearance? The road authorities do. Eventually, therefore, local government taxpayers will foot the bill. This is thus a rather sneaky way of placing an unjustified burden on those taxpayers. As we know, it can be snowing in the north of England while the sun is shining in London, at the same time as the south-west is being washed away.

      743
      Had the Minister been with me in the plane today, he would have seen a great deal of England under water—
      Ms Primarolo: Would a boat count as a recovery vehicle?
      Mr. Ross: Certainly a boat would have been more suitable had the journey been made on the ground.
      This measure has not been properly thought through, and the Government should go away and reconsider.
      As the House will know, I have long been associated with agriculture, about which the hon. Member for North Cornwall (Mr. Tyler) spoke earlier. The difficulty is that many farm vehicles, especially tractors, are used only rarely and for short journeys. A farmer in the summer does not take his tractor down the road to look over the gate at the sheep or cattle: he drives a car. The car is taxed. He takes it because it saves him time and is cheaper.
      In winter, he will transport fodder to his livestock, which may be only 20 yd away or up to a mile away, two or three times a week—although it may be less often because the cattle may have been moved closer to the farm or even indoors. His farm vehicle thus makes the journey to and from the cattle extremely rarely.
      Many farms have more than one tractor. One may be used on longer journeys, and thus be taxed in the usual way, while another is kept to do runabout jobs on the farm. That saves the farmer money, and is quite justified in the circumstances. It all depends on whether a farm is traversed by public roads or by a private road or lane. In the latter case, the need to pay tax is practically non-existent. The Government should bear that in mind, too.
      The final problem is that, whereas privatised road cleaning services may be able to recover their extra costs by putting up their prices, farmers cannot just say, "I've got to pay higher tax, so I'll need another pound for this lamb, friend." They can only make what the market will pay them—a fact that the Government appear to ignore.
      I was astonished to hear the Minister say, in the context of recovery vehicles, that there was no implication for road safety. There is always a road safety implication when a broken-down vehicle is on the road, especially at night.
      Last Friday, I tried to cross the Glenshane pass, which reminded me of the road to Basra at the end of the Gulf war. There had been two hours of wet snow, and the road was in an horrendous condition. I spent an hour admiring the surrounding hills—I could well have done without that—before we got through. The snow cleared up after a couple of hours, but at least two vehicles were off the road by then, and they were not going to be lifted out by a light recovery vehicle. It was clear that a heavy one would be needed.
      The hon. Member for Bristol, South (Ms Primarolo) described the difficulties very well. These vehicles are very much needed—sometimes only rarely—and are essential to our road system.
      The economics of the operation was raised. I believe that whether an operator of heavy recovery vehicles will spend £100,000 or go out and buy a second-hand or
      744
      third-hand vehicle for a fraction of that cost depends on the amount of use that he expects to make of it. Those people are business men. They can count.
      We all know that, in one part of the country, such a vehicle may be needed every day—certainly every week—but in others it may be needed half a dozen times a year and no more than that. In those circumstances, it will be an extremely heavy burden on the individual concerned. If the tax goes up to several times its present rate, there will be a knock-on effect on insurance costs. It may be small for an individual vehicle, but there will inevitably be a rise in insurance costs to cover increased costs, and, of course, there will also be the VAT, which I assume will be added, for the service of taking out the recovery vehicle and using it.
      7.30 pm
      The Minister said that it would raise only 1 per cent. The implication is that 1 per cent. is an absolutely tiny sum, scarcely worth thinking or bothering about. If so, why does he bother about it? Why does not he go away and forget about the tax for a year? He should listen to what is said this evening and no doubt to what will be said in Standing Committee. After that, he could come back with a regime that is more easily defendable than what is before us this evening.
      The reality is that a number of completely obsolete vehicles are mentioned in the proposed legislation. The Minister does not have to worry about them. Nobody is breaking the law. The vehicles do not exist, so by definition the law cannot be broken. He could wipe them out at any time, and nobody would be too concerned. The mere fact that the present legislation has lasted so long says an awful lot for those who framed it. It would seem that they got it very nearly right.
      I suspect that, if the Minister goes ahead with the proposed legislation, not only will he be unpopular but he will be back here again in a year or two trying to dress up the mistakes that the Government are currently making.
      Mr. John Hutton: I support the amendment proposed by my hon. Friend the Member for Bristol, South (Ms Primarolo), for two simple reasons: first, clause 15 and schedule 4 raise a question mark about the extent to which the Government have seriously taken on board some of the road safety and road traffic issues that Opposition Members have raised; and, secondly, there is a genuine case for reviewing the parts of the Bill that relate to changing vehicle excise duty on heavy recovery vehicles, because of the burden that the duty changes will place on many small businesses.
      I was intrigued by some of the Minister's earlier remarks. He said two things that particularly caught my attention: first, that this part of the Bill is necessary. The hon. Member for Londonderry, East (Mr. Ross) made it clear that the amounts being raised by the Government are very small, and some people might conclude, as he did, that therefore it is an argument that is not worth having at all. Secondly, he tried to make the case that the changes were necessary because the existing legislation was in a mess—it was confusing and complex and few people understood it.
      Anyone involved in law making and applying the law wants to see Parliament make law that is comprehensible and sensible. That is not what the Government propose. That is particularly true of some of the changes being

      745
      made for vehicle excise duty on road recovery vehicles. At the moment, there is a simple provision in legislation in the Vehicle Excise and Registration Act 1994, which specifies the rate of duty that those vehicles are to be charged. That will be replaced by a considerably more complex range of provisions, which is unlikely to see an end to the complex litigation and expensive law actions that have pursued that area of the law in the past.
      I shall comment not only on road recovery vehicles but on the proposed exemption for emergency vehicles, or 999 vehicles, as the Minister described them.
      Paragraph 3A of schedule 4 is to be inserted into schedule 2 of the 1994 Act, to create a new category of exempt vehicles. Many hon. Members, on both sides of the Committee, will be quite surprised to learn that police vehicles are not already exempt from vehicle excise duty. I support the extension of the category of exempt vehicles in section 5 of the 1994 Act to include that category. That is long overdue and sensible. The Government's intentions are clear from paragraph 3A—it is clearly designed to exempt police vehicles from paying vehicle excise duty. But there must be a question mark over whether the amendments proposed to schedule 2 of the 1994 Act will achieve the Government's objectives.
      Schedule 2 is to be amended by the insertion of a new paragraph 3A, which says:
      "A vehicle is an exempt vehicle when it is being used for police purposes."
      The Minister said that that was designed to include 999 emergency vehicles to the concept on an exempt vehicle not liable to vehicle excise duty. I do not think that is what the Government have achieved.
      I bring to the Minister's attention two problems with paragraph 3A. He may not be able to respond to these points tonight, but I hope that he is listening. First, there is no definition of "police purposes" for the purposes of the new paragraph. Secondly, there is no definition of what is a police vehicle. I should have thought that both problems were fundamental. If the Government simply propose an exemption for 999 emergency vehicles, is that what they have achieved? What about a range of police vehicles that are not used in 999 emergency situations, for example, vehicles that are used to transport prisoners to and from a magistrates court to prison? Will they be covered by the new paragraph 3A?
      I used that example, because from the existing legislation that relates to the definition of police purposes—we could use section 25 of the Road Traffic Act 1960 and section 79 of the Road Traffic Regulation Act 1967—it is clear that both of them relate to emergency situations: when a police vehicle is attending the scene of a crime or an accident and must exceed the speed limit for that area. Clearly, not all police vehicles are designed or used for those emergency scenarios, so where does that leave us? If we look at existing case law that relates to both statutory provisions, we are unlikely to have much assistance. Therefore, no definition in existing case law appears to be of any great assistance to us.
      Perhaps a more fundamental problem for the Government is that there is no definition of what is a police vehicle. That is strange. Other emergency vehicles, for example, fire engines and ambulances, which are already exempt under schedule 2 of the 1994 Act, are pretty comprehensively defined in schedule 2 of the 1994 Act. The Minister may not be aware of those definitions,
      746
      but if he cares to look at schedule 2 of the Act, he will see in paragraphs 4, 5, 6 and 7 a pretty comprehensive and impressive definition of what those emergency vehicles are.
      Why is there not a similar definition of a police vehicle for the purposes of the new exempted category of vehicles? Surely a paragraph such as paragraph 5 is capable of being used without any great intellectual effort to apply to the concept of a police vehicle. I wonder whether the Minister might consider at some point having another look at the new schedule and including in it some reference to the fact that the vehicle exempted from excise duty should not be a vehicle that is kept or operated by a police authority. Surely that is what the Minister intends this part of the Bill to achieve. Sadly, it is not what the Bill does.
      I shall give the Minister three examples of where there might be a problem with police vehicles. First, what will happen if a police authority wishes to hire or rent a vehicle to enable business to be done by the police authority? It is not uncommon to see police stickers on the sides of vehicles that are, in fact, used to transport stores. Under the Bill as it stands, will such vehicles be exempt from vehicle excise duty? Are they being used for police purposes? They are not actually owned by the police authority.
      Presumably, the company that owns such a vehicle—Hertz, for instance, or Eurodollar—will be able to ask for a rebate from the Inland Revenue or Customs and Excise, saying that the vehicle has been on contract hire to a police authority and that paragraph 3A of the new schedule to the 1994 Act should apply.
      Secondly, what about the use of private vehicles commandeered by constables—or police officers of other rank—to respond to emergencies? Although we hope that such vehicles would be used for only a short time, in theory an owner could claim that his vehicle was being used for police purposes during that time. Do the Government want owners of private vehicles to be able to claim exemptions from vehicle excise duty? Probably not; in which case, why does not the Bill make it clear that only vehicles kept or operated by police authorities will be so exempted?
      Schedule 4 is a complex provision, but it does not refer to earlier legislation dealing with police authorities, police vehicles and police purposes. That is not good enough. The Minister rightly described the law as complicated, and said that the Government wanted to simplify it; that is fine, but I fear that this part of the Bill will represent three cherries on the fruit machine for lawyers. I do not think that Members of Parliament are in the business of handing the prospect of expensive litigation to well-paid lawyers, when we can get our legislation right and make it simple.
      The third problem involves prison escort vehicles. The Government have emphasised the need to privatise some of the escort services transferring people between prisons and courts. I do not wish to become involved in the merits or otherwise of their policy now; but could it not be argued that vehicles carrying remand or convicted prisoners between prison and court are acting for a police purpose, in the context of new paragraph 3A? Could not a private operator such as Group 4, which has won contracts in Humberside and the east midlands, argue that because police authorities are currently using its services, those services are being used for a police purpose?

      747
      Opposition Members do not wish to cause difficulties for the Government on this issue, at least; but let us be certain about the vehicles that we are exempting. The Government could tighten the drafting of the Bill with very little effort. The definition of police purposes could be refined if we inserted a provision to the effect that the vehicles involved need to be operated or kept by police authorities: that would limit exemptions to the category that the Government probably had in mind.
      Amendment No. 12 also raises road safety and traffic issues. The Government have clearly had a change of heart, seeing the force of the arguments against them, which have been deployed again tonight: it seems probable that the duty will now be substantially less, and we welcome that. The proposed changes will, however, have an impact on heavy road recovery vehicles in my constituency in south Cumbria.
      It has often been said that my constituency lies at the end of the longest cul de sac in Europe. I think that that is something of an exaggeration, but it gives a flavour of the sense of geographical isolation felt by many of my constituents. The bulk of the incoming traffic comes down the A590, which is an awful road; however, there are not many garages or other small companies running heavy vehicle recovery services in the area. I believe that there is a risk that the Government's proposed changes to vehicle excise duty legislation will jeopardise the provision of any such services. I put it no higher than that, but the Government must take the risk into account.
      The Minister said that the Retail Motor Industry Federation was happy with the changes, but I should be interested to know how many small companies and garage operators have been consulted, even about these particular changes. Certainly, many small employers in my constituency are still extremely concerned about the impact of the measure on their businesses.
      7.45 pm
      In a very articulate letter, one of those small employers urges me to vote against the Government tonight. It will surprise no one when I disclose that that is exactly what I intend to do. My constituent, Mr. Bob Grieve, makes his case against the Government's proposals very clearly, writing:
      "the new rates would force some operators out of business with others opting out of HGV recovery altogether;
      many parts of the country would end up with only limited capacity for removing broken down or accident damaged heavy lorries horn our roads, leading to longer delays in road clearance and raising the question of public safety."
      That, I feel, is very pertinent to the interests and needs of my constituents.
      My constituency is remote, and is served by only one major road. It is 40 miles from the M6, and even further from larger centres where there are other garage service providers. We are heavily dependent on local providers of HGV recovery services. I see no reasonable justification even for the modest changes that the Government propose. The law as it stands is very simple, and .given what my hon. Friend the Member for York (Mr. Bayley) said about the few occasions on which heavy vehicles are used, I feel that there is obvious justice in keeping that law in place until we have had an opportunity to examine some of the wider issues raised by the proposed change.
      748
      I hope that the Government will re-examine the provision in schedule 4 that exempts police vehicles from vehicle excise duty, and ask whether there is scope for improvement in the drafting to specify the exempted vehicles more accurately.
      Mr. Mike O'Brien: I congratulate my hon. Friend the Member for Barrow and Furness (Mr. Hutton) on a fascinating speech, anti particularly on what he said about police vehicles.
      I should first declare that I am a parliamentary adviser to the Police Federation, although I have no particular brief from the federation tonight. While listening to my hon. Friend, I thought of two more issues that might arise, in regard to police vehicles unless the Government. provide the clarification that he rightly demanded: given all-party interest in the matter, the Government should, accept the need for such clarification.
      I refer to conditions affecting unmarked surveillance vehicles. Such vehicles raise all sorts of questions in relation to when they are used. Some of them are quite old and, for obvious reasons, their dilapidated state is intended to make them less conspicuous. Some police officers, especially those in rural areas, drive home at night in police vehicles and return to work in them the following day. Obviously, when an officer is driving home he is not using the vehicle for a police purpose for which it is normally used. There is an obvious need for clarification.
      My main objective in the debate is to raise the concerns of constituents who came to see me in my surgery. Harvey and Madeleine Wasson own Harvey's Recovery and Repairs of Exhall in Bedworth. Mrs. Wasson recently came to see me because she was concerned about the Government's proposals on vehicle excise duty. The company owns seven vehicles and has three employees. The husband and wife also work in the business. They were appalled by the proposals because they had just bought a four-axled vehicle of the type which is to be taxed at the highest rate. It was obtained at considerable sacrifice and they anticipated that the vehicle excise duty would be £85. They have suddenly found that it will be about £5,000.
      I accept that, to some extent, the Minister has listened to representations from the industry and from hon. Members, including me, in all parts of the House because there is an alternative proposal considerably to reduce the tax on these vehicles.
      Mr. and Mrs. Wasson have a good business but it is by no means making them millionaires, and the Minister should consider what he is doing to that couple. He is proposing to raise VED on their vehicle by about 800 per cent. That is a massive and unacceptable rise and the Minister should think seriously before going ahead with it.
      Large recovery vehicles perform a public service. Without them, or with a reduction in their number, there would be increased congestion on our motorways and an increase in the cost of police and other time in dealing with accidents. If the only benefit to the Exchequer is a 1 per cent. increase in the take from VED it will be far outweighed by the extra expense of traffic congestion and more police inconvenience. The Minister should consult further.
      I agree that the Minister has made considerable concessions, but why at the last minute has he had to amend his proposals? The reason is that he had not

      749
      consulted properly. His civil servants do not seem to have given him the detailed advice on which Ministers have to rely about the market in which heavy recovery vehicles operate. He did not seem to understand that the market would be damaged and he had to amend his original proposals.
      My hon. Friend the Member for Barrow and Furness (Mr. Hutton) outlined other inadequacies in the Bill. The Minister should accept, as he has already accepted to some extent because of his climbdown on VED, that he has not properly consulted or has inadequately considered some of the effects of the proposed changes. He should consult properly with industry and councils that will be affected, look in detail at the impact of his proposals, and consider the reality of the market. If he does that, he will find that his proposals will reduce the availability of heavy recovery vehicles and he will change his mind on some of the detail. We ask only for consultation. The Minister got into a mess by not consulting and his proposals are the result.
      Mr. George Stevenson: I should like to hear more from my hon. Friend about the use of the word "concessions". There is a danger of us falling into a trap. The Government set outrageous objectives and in a state of sheer panic they reduced them and claimed that they had made concessions. The Minister said that the trade welcomes these concessions. Of course it does, but that is because of the outrageous figure that was first proposed.
      Mr. O'Brien: I entirely agree with my hon. Friend. I was about to come to that issue. The Minister said that the trade associations have accepted the "concessions". That is not surprising, because, matters could have been far worse. However, my constituents will not welcome the damage that will be caused to the small business which they struggled to establish by an 800 per cent. increase in VED. That is unacceptable. Such vehicles are rarely used and any extra burden placed on small businesses is damaging. The Minister should think carefully before imposing it.
      The Wassons have told me that they will not go out of business if the changes are imposed, but they think that they will have to lay off staff and will probably get rid of the biggest vehicle. The Government should try to prevent them from doing that by changing the proposals. Our amendment asks merely for consultation. It is accepted that the various exemptions have many deficiencies, but people do not accept that the Government have found the correct way to deal with difficulties that have been around for a long time.
      The proposals will be costly and are potentially damaging not only to the police and businesses but to everyone who uses our roads. The Minister should accept that the Opposition have made sensible suggestions on various issues and he should agree to consultation. That would be reasonable and it would mean that we would not have to press the matter to a vote.
      Ms Primarolo: In opening the debate the Minister explained why there was a need to restructure vehicle excise duty. He said that there were anomalies, that the system was complex, and that we needed to make arrangements to simplify and ease understanding of the duty. As we have heard, the Government proposals do
      750
      anything but that. They replace one nightmare of anomalies with a series of other anomalies. That point was ably made by my hon. Friends.
      The Government claim that their proposals are good taxation and that they need to press ahead with them. They are doing that for the sake of, initially, a 1 per cent. increase in revenue. He fails to understand, however, that he started with a bad proposal, that he has amended it slightly so that it is not as bad as it was, but that it is still based on premises that are incorrect. It is hardly surprising that the Road Rescue Recovery Association is prepared to accept a reduction as a concession, when it was threatened with such a massive increase.
      Companies are still faced with a massive increase in taxation and draw on resources, even as a result of the concessionary rates that the Minister has announced this evening. For instance, Link Assistance in North Yorkshire, which is paying an excise bill of £1,020 a year, and which is looking at a possible bill of £19,740 on the originally proposed rates, will find, even with the concession, that its taxation will be increased by £9,000.
      In the debate, Labour Members have repeatedly said that the Government scheme is ill thought out. The increased costs will be transferred from the Government to either the private motorist or car user. They will be absorbed by companies or passed on to the consumer. It is simply not acceptable that the Government should behave in that way. My hon. Friends have made that case.
      In echoing the points about road safety, the hon. Member for Londonderry, East (Mr. Ross) made clear the particular variations in Northern Ireland. He asked why we cannot if the scheme is so badly thought out, pause, undertake the review and bring back the proposals next year. It would be worth forgoing the 1 per cent. increase in revenue if the scheme were in place and operating correctly.
      8 pm
      In a detailed and knowledgeable speech, my hon. Friend the Member for Barrow and Furness (Mr. Hutton), who has obviously, in his bedtime reading, compared the Vehicle Excise and Registration Act 1994 with schedule 4 of the Bill, made clear the definitions of a police vehicle, its purposes and the varying purposes that would count under the definition. Again, he raised the point about the prison escort service. If those points have not created further anomalies in this so-called clear and simplified system, I do not know what will, or how the Government will understand the mess that they are getting themselves into.
      My hon. Friend the Member for Warwickshire, North (Mr. O'Brien) echoed the points about road recovery difficulties. The Minister has not said whether the arrangements that he has announced tonight will be permanent, or whether they will stand simply for the next 12 months. He has not said that, in next year's Finance Bill, we will not face another debate on an incremental increase on the vehicle excise duties of all the vehicles that we have discussed this evening. Why not stop? Why not undertake the review? Why not undertake proper consultation instead of last-minute, knee-jerk reaction, and come up with a decent scheme for vehicle excise duty which deals with anomalies and which gives us a firm foundation to tax? That is a good taxation policy.
      Mr. Heathcoat-Amory: In this evening's debate, no hon. Member on either side of the House has disputed that

      751
      the existing system is riddled with anomalies, that it is out of date, and that it has great difficulty in coping with new vehicles that arrive on the scene and with technological changes. I have described some examples that give rise to those difficulties. My proposals are major, simplifying measures. They will make it a great deal easier for the trade, for users of the vehicles and for the Vehicle Certification Agency. They will reduce the classes of vehicles by more than 90 per cent.
      Of course, no reform is painless and any group of users of vehicles affected by any increases are bound to argue against them, but I answered those points in my introductory remarks. The additional points raised in the debate cover a specific group of amendments which will arise later in the debate, so they will be covered.
      I am disappointed that the Labour party is persisting, apparently, with a number of amendments that continue and take forward local authority privileges. I have already shown that, under its proposals, some of the vehicles that it wants to be exempt will face full duty if used in a mode on a Monday, but complete exemption if used with a slight adaptation on a Tuesday. That cannot be right. It invites evasion and, administratively, it is unworkable.
      I will, however, answer the points raised by the hon. Member for Barrow and Furness (Mr. Hutton) because the police vehicle issue may not arise again. I assure him that the definition used for police purposes is common in transport legislation—it is used, for instance, in the Severn Bridge Tolls Act 1965. It will not give rise to litigation or ambiguity of the sort that he fears.
      I confirm to the hon. Gentleman that leased vehicles will be covered if they are leased for more than a month, but commandeered vehicles will not be covered and the owner will not be able to claim exemption, unless the vehicles are commandeered for whole months at a time. In answer to the point about unmarked police surveillance vehicles, they will benefit from the exemption, but, for obvious reasons, they will display a tax disc, as if vehicle excise duty had been paid. As we are taking forward a definition that is used in other legislation, I hope that the hon. Gentleman will agree that the clause, as drafted, is sound.
      Question put, That the amendment be made:—
      The Committee divided: Ayes 208, Noes 297.

      Division No. 54]

      [8.07 pm

      AYES

      Abbott, Ms Diane

      Blunkett, David

      Adams, Mrs Irene

      Boateng, Paul

      Ainger, Nick

      Boyes, Roland

      Ainsworth, Robert (Cov'try NE)

      Bradley, Keith

      Allen, Graham

      Brown, Gordon (Dunfermline E)

      Anderson, Donald (Swansea E)

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

      Armstrong, Hilary

      Burden, Richard

      Ashton, Joe

      Byers, Stephen

      Austin-Walker, John

      Caborn, Richard

      Banks, Tony

      Callaghan, Jim

      Barnes, Harry

      Campbell, Mrs Anne (C'bridge)

      Battle, John

      Campbell, Ronnie (Blyth V)

      Bayley, Hugh

      Campbell-Savours, D N

      Beckett, Rt Hon Margaret

      Canavan, Dennis

      Benn, Rt Hon Tony

      Cann, Jamie

      Benton, Joe

      Chisholm, Malcolm

      Bermingham, Gerald

      Church, Judith

      Berry, Roger

      Clapham, Michael

      752

      Clark, Dr David (South Shields)

      Llwyd, Elfyn

      Clarke, Tom (Monklands W)

      Loyden, Eddie

      Clelland, David

      McAllion, John

      Clwyd, Mrs Ann

      McAvoy, Thomas

      Coffey, Ann

      McCartney, Ian

      Cohen, Harry

      McCrea, The Reverend William

      Connarty, Michael

      Macdonald, Calum

      Cook, Robin (Livingston)

      McKelvey, William

      Corbett, Robin

      Mackinlay, Andrew

      Cousins, Jim

      MacShane, Denis

      Cunningham, Jim (Covy SE)

      Madden, Max

      Cunningham, Rt Hon Dr John

      Mahon, Alice

      Dalyell, Tam

      Marek, Dr John

      Darling, Alistair

      Marshall, David (Shettleston)

      Davidson, Ian

      Martin, Michael J (Springburn)

      Davies, Bryan (Oldham C'tral)

      Martlew, Eric

      Davies, Rt Hon Denzil (Llanelli)

      Maxton, John

      Denham, John

      Meacher, Michael

      Dixon, Don

      Meale, Alan

      Donohoe, Brian H

      Michie, Bill (Sheffield Heeley)

      Dunwoody, Mrs Gwyneth

      Milburn, Alan

      Eagle, Ms Angela

      Miller, Andrew

      Eastham, Ken

      Mitchell, Austin (Gt Grimsby)

      Enright, Derek

      Molyneaux, Rt Hon James

      Etherington, Bill

      Moonie, Dr Lewis

      Evans, John (St Helens N)

      Morgan, Rhodri

      Ewing, Mrs Margaret

      Morley, Elliot

      Field, Frank (Birkenhead)

      Morris, Rt Hon Alfred (Wy'nshawe)

      Fisher, Mark

      Morris, Estelle (B'ham Yardley)

      Foster, Rt Hon Derek

      Morris, Rt Hon John (Aberavon)

      Foulkes, George

      Mudie, George

      Fyfe, Maria

      Mullin, Chris

      Galbraith, Sam

      Oakes, Rt Hon Gordon

      Galloway, George

      O'Brien, Mike (N W'kshire)

      Gapes, Mike

      O'Brien, William (Normanton)

      George, Bruce

      O'Hara, Edward

      Gerrard, Neil

      Olner, Bill

      Gilbert, Rt Hon Dr John

      O'Neill, Martin

      Godman, Dr Norman A

      Orme, Rt Hon Stanley

      Golding, Mrs Llin

      Paisley, The Reverend Ian

      Graham, Thomas

      Parry, Robert

      Griffiths, Nigel (Edinburgh S)

      Patchett, Terry

      Grocott, Bruce

      Pearson, Ian

      Gunnell, John

      Pendry, Tom

      Hall, Mike

      Pickthall, Colin

      Hanson, David

      Pike, Peter L

      Harman, Ms Harriet

      Powell, Ray (Ogmore)

      Heppell, John

      Prentice, Gordon (Pendle)

      Hill, Keith (Streatham)

      Prescott, Rt Hon John

      Hinchliffe, David

      Primarolo, Dawn

      Hoey, Kate

      Purchase, Ken

      Home Robertson, John

      Quin, Ms Joyce

      Hoon, Geoffrey

      Radice, Giles

      Hoyle, Doug

      Randall, Stuart

      Hughes, Kevin (Doncaster N)

      Reid, Dr John

      Hughes, Robert (Aberdeen N)

      Robertson, George (Hamilton)

      Hutton, John

      Robinson, Geoffrey (Co'try NW)

      Illsley, Eric

      Rogers, Allan

      Ingram, Adam

      Rooker, Jeff

      Jackson, Helen (Shef'ld, H)

      Rooney, Terry

      Jamieson, David

      Ross, Ernie (Dundee W)

      Janner, Greville

      Ross, William (E Londonderry)

      Jones, Barry (Alyn and D'side)

      Ruddock, Joan

      Jones, Jon Owen (Cardiff C)

      Sedgemore, Brian

      Jones, Lynne (B'ham S O)

      Sheldon, Rt Hon Robert

      Jones, Martyn (Clwyd, SW)

      Shore, Rt Hon Peter

      Kaufman, Rt Hon Gerald

      Short, Clare

      Keen, Alan

      Skinner, Dennis

      Kennedy, Jane (Lpool Brdgn)

      Smith, Andrew (Oxford E)

      Khabra, Piara S

      Smith, Chris (Isl'ton S & F'sbury)

      Kilfoyle, Peter

      Smith, Llew (Blaenau Gwent)

      Lestor, Joan (Eccles)

      Snape, Peter

      Lewis, Terry

      Soley, Clive

      Liddell, Mrs Helen

      Spearing, Nigel

      Livingstone, Ken

      Spellar, John

      Lloyd, Tony (Stretford)

      Squire, Rachel (Dunfermline W)

      753

      Steinberg, Gerry

      Wicks, Malcolm

      Stevenson, George

      Wigley, Dafydd

      Stott, Roger

      Williams, Rt Hon Alan (Sw'n W)

      Strang, Dr. Gavin

      Williams, Alan W (Carmarthen)

      Sutcliffe, Gerry

      Wilson, Brian

      Tipping, Paddy

      Wise, Audrey

      Turner, Dennis

      Worthington, Tony

      Vaz, Keith

      Wright, Dr Tony

      Walker, Rt Hon Sir Harold

      Wardell,Gareth (Gower)

      Tellers for the Ayes:

      Wareing, Robert N

      Mr. Eric Clarke and

      Watson, Mike

      Mr. Peter Mandelson

      NOES

      Ainsworth, Peter (East Surry)

      Cran, James

      Aitken, Rt Hon Jonathan

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

      Alison,Rt Hon Michael (Selby)

      Curry, David (Skipton & Ripon)

      Amess, David

      Davies, Quentiin (Stamford)

      Ancram, Michael

      Day, Stephen

      Arbuthnot, James

      Deva, Nirj Joseph

      Arnold, Jacques (Gravesham)

      Delvin,Tim

      Arnold, Sir Thomas (Hazel Grv)

      Dicks, Terry

      Ashby, David

      Dorrell, Rt Hon Stephen

      Ashdown, Rt Hon Paddy

      Douglas-Harnilton, Lord James

      Atkins, Robert

      Dover, Den

      Atkinson, Peter (Hexham)

      Duncan, Alan

      Baker, Nicholas (North Dorset)

      Duncan Smith, Iain

      Baldry, Tony

      Dunn, Bob

      Banks, Matthew (Southport)

      Dykes, Hugh

      Banks, Robert (Harrogate)

      Elletson, Harold

      Bates, Michael

      Emery, Rt Hon Sir Peter

      Batiste, Spencer

      Evans, David (Welwyn Hatfield)

      Beith,Rt Hon A J

      Evans, Jonathan (Brecon)

      Bellingham, Henry

      Evans, Nigel (Ribble Valley)

      Bendall, Vivian

      Evans, Roger (Monmouth)

      Beresford, Sir Paul

      Evennett, David

      Biffen, Rt Hon John

      Faber, David

      Booth, Hartley

      Fabricant, Michael

      Boswell, Tim

      Field, Barry (Isle of Wight)

      Bottomley, Peter (Eltham)

      Fishburn, Dudley

      Bottomley.Rt Hon Virginia

      Forman, Nigel

      Bowden, Sir Andrew

      Forsyth, Rt Hon Michael (Stirling)

      Bowis, John

      Forth, Eric

      Boyson, Rt Hon Sir Rhodes

      Foster, Don (Bath)

      Brandreth, Gyles

      Fowler, Rt Hon Sir Norman

      Brazier, Julian

      Fox, Sir Marcus (Shipley)

      Bright, Sir Graham

      Freeman, Rt Hon Roger

      Brooke, Rt Hon Peter

      French, Douglas

      Brown, M (Brigg & Cl'thorpes)

      Gale, Roger

      Browning, Mrs Angela

      Gallie, Phil

      Bruce, Ian (Dorset)

      Gardiner, Sir George

      Bruce, Malcolm (Gordon)

      Garnier, Edward

      Budgen, Nicholas

      Gill, Christopher

      Burns, Simon

      Gillan, Cheryl

      Butcher, John

      Goodlad, Rt Hon Alastair

      Butter, Peter

      Goodson-Wickes, Dr Charles

      Butterfill, John

      Gorst, Sir John

      Campbell, Menzies (Fife NE)

      Grant, Sir A (SW Cambs)

      Carlisle, John (Luton North)

      Greenway, Harry (Ealing N)

      Carlisle, Sir Kenneth (Lincoln)

      Greenway, John (Ryedale)

      Carrington, Matthew

      Griffiths, Peter (Portsmouth, N)

      Cash, William

      Grylls, Sir Michael

      Channon, Rt Hon Paul

      Hague, William

      Chapman, Sydney

      Hamilton, Neil (Tatton)

      Chidgey, David

      Hampson, Dr Keith

      Clappison, James

      Hanley, Rt Hon Jeremy

      Clark, Dr Michael (Rochford)

      Hannam, Sir John

      Clarke, Rt Hon Kenneth (Ru'clif)

      Hargreaves, Andrew

      Clifton-Brown, Geoffrey

      Harris, David

      Congdon, David

      Harvey, Nick

      Conway, Derek

      Haselhurst, Alan

      Coombs, Anthony (Wyre For'st)

      Hawkins, Nick

      Coombs, Simon (Swindon)

      Hawksley, Warren

      Cope, Rt Hon Sir John

      Hayes, Jerry

      Cormack, Sir Patrick

      Heald, Oliver

      Couchman, James

      Heath, Rt Hon Sir Edward

      754

      Heathcoat-Amory, David

      Neubert, Sir Michael

      Hendry, Charles

      Newton, Rt Hon Tony

      Hicks, Robert

      Nicholls, Patrick

      Higgins, Rt Hon Sir Terence

      Nicholson, David (Taunton)

      Hill, James (Southampton Test)

      Nicholson, Emma (Devon West)

      Hogg, Rt Hon Douglas (G'tham)

      Norris, Steve

      Horam, John

      Onslow, Rt Hon Sir Cranley

      Hordern, Rt Hon Sir Peter

      Oppenheim, Phillip

      Howard, Rt Hon Michael

      Page, Richard

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

      Paice, James

      Howell, Rt Hon David (G'dford)

      Patten, Rt Hon John

      Hughes, Robert G (Harrow-West)

      Pattie, Rt Hon Sir Geoffrey

      Hunt, Rt Hon David (Wirral W)

      Pawsey, James

      Hunter, Andrew

      Peacock, Mrs Elizabeth

      Hurd, Rt Hon Douglas

      Pickles, Eric

      Jack, Michael

      Porter, Barry (Wirral S)

      Jackson, Robert (Wantage)

      Porter, David (Waveney)

      Jenkin, Bernard

      Portillo, Rt Hon Michael

      Jessel, Toby

      Powell, William (Corby)

      Jones, Gwilym (Cardiff N)

      Redwood, Rt Hon John

      Jones, Nigel (Cheltenham)

      Rendel, David

      Jones, Robert B (W Hertfdshr)

      Richards, Rod

      Kellett-Bowman, Dame Elaine

      Riddick, Graham

      Key, Robert

      Robathan, Andrew

      King, Rt Hon Tom

      Roberts, Rt Hon Sir Wyn

      Kirkhope, Timothy

      Robertson, Raymond (Ab'd'n S)

      Kirkwood, Archy

      Robinson, Mark (Somerton)

      Knapman, Roger

      Roe, Mrs Marion (Broxbourne)

      Knight, Mrs Angela (Erewash)

      Rowe, Andrew (Mid Kent)

      Knight, Greg (Derby N)

      Rumbold, Rt Hon Dame Angela

      Knox, Sir David

      Ryder, Rt Hon Richard

      Kynoch, George (Kincardine)

      Sackville, Tom

      Lait, Mrs Jacqui

      Sainsbury, Rt Hon Sir Timothy

      Lang, Rt Hon Ian

      Scott, Rt Hon Sir Nicholas

      Lawrence, Sir Ivan

      Shaw, David (Dover)

      Legg, Barry

      Shaw, Sir Giles (Pudsey)

      Leigh, Edward

      Shephard, Rt Hon Gillian

      Lennox-Boyd, Sir Mark

      Shepherd, Colin (Hereford)

      Lester, Jim (Broxtowe)

      Shepherd, Richard (Aldridge)

      Lidington, David

      Shersby, Michael

      Lightbown, David

      Sims, Roger

      Lilley, Rt Hon Peter

      Skeet, Sir Trevor

      Lloyd, Rt Hon Sir Peter (Fareham)

      Smith, Tim (Beaconsfield)

      Lord, Michael

      Soames, Nicholas

      Luff, Peter

      Spencer, Sir Derek

      Lyell, Rt Hon Sir Nicholas

      Spicer, Sir James (W Dorset)

      Lynne, Ms Liz

      Spicer, Michael (S Worcs)

      MacGregor, Rt Hon John

      Spink, Dr Robert

      MacKay, Andrew

      Spring, Richard

      Maclean, David

      Sproat, Iain

      Maclennan, Robert

      Squire, Robin (Hornchurch)

      McLoughlin, Patrick

      Stanley, Rt Hon Sir John

      McNair-Wilson, Sir Patrick

      Steel, Rt Hon Sir David

      Maddock, Diana

      Stephen, Michael

      Madel, Sir David

      Stern, Michael

      Maitland, Lady Olga

      Stewart, Allan

      Malone, Gerald

      Streeter, Gary

      Mans, Keith

      Sumberg, David

      Marland, Paul

      Sykes,John

      Marlow,.Tony

      Tapsell, Sir Peter

      Marshall, John (Hendon S)

      Taylor, Ian (Esher)

      Marshall, Sir Michael (Arundel)

      Taylor, John M (Solihull)

      Martin, David (Portsmouth S)

      Taylor, Matthew (Truro)

      Mates, Michael

      Taylor, Sir Teddy (Southend, E)

      Mellor, Rt Hon David

      Temple-Morris, Peter

      Merchant, Piers

      Thomason, Roy

      Michie, Mrs Ray (Argyll & Bute)

      Thompson, Patrick (Norwich N)

      Mills, Iain

      Thornton, Sir Malcolm

      Mitchell, Andrew (Gedling)

      Thurnham, Peter

      Mitchell, Sir David (NW Hants)

      Townsend, Cyril D (Bexl'yh'th)

      Moate, Sir Roger

      Tracey, Richard

      Monro, Sir Hector

      Tredinnick, David

      Montgomery, Sir Fergus

      Trend, Michael

      Moss, Malcolm

      Twinn, Dr Ian

      Needham, Rt Hon Richard

      Vaughan, Sir Gerard

      Nelson, Anthony

      Viggers, Peter

      755

      Waldegrave, Rt Hon William

      Widdecombe, Ann

      Walden, George

      Wiggin, Sir Jerry

      Walker,Bill (N Tayside)

      Willetts, David

      Wallace, James

      Wilshire, David

      Waller, Gary

      Winterton, Mrs Ann (Congleton)

      Ward, John

      Wolfson, Mark

      Wardle, Charles (Bexhill)

      Yeo,Tim

      Waterson, Nigel

      Young, Rt Hon Sir George

      Watts, John

      Wells, Bowen

      Tellers for the Noes:

      Whitney, Ray

      Dr. Liam Fox and

      Whittingdale, John

      Mr. Timothy Wood

      Question accordingly negatived.
      Clause 15 ordered to stand part of the Bill.

    Schedule 4

      VEHICLE EXCISE AND REGISTRATION
      Ms Primarolo: I beg to move amendment No. 27, in page 164, leave out line 23.
      The First Deputy Chairman of Ways and Means (Mr. Geoffrey Lofthouse): With this, it will be convenient to discuss also the following amendments: No. 22, leave out line 26.

      No. 23, leave out line 27.

      No. 24, leave out line 28.

      No. 25, leave out lines 29 and 30.

      Ms Primarolo: The amendments cover similar ground to the previous debate. I do not intend to delay the Committee by referring to each amendment, but I shall make special reference to amendment No. 27, which would maintain the status quo for electrically propelled vehicles. All the amendments would maintain the status quo of vehicle excise duty, as plan B in persuading the Government to undertake the review for which we argued in the past debate but, so far, have failed to secure.
      There are no precise figures on the number of electric milk floats in use, but it is estimated that there are 25,000 milk rounds in England and Wales alone and on at least two thirds of those, electric vehicles are used. The imposition of even a reduced rate of £35 vehicle excise duty represents a considerable annual increase in costs to the industry. Any increase in cost targeted directly at doorstep delivery is a further threat to the viability of the milk round. The Government have maintained their support for the delivery of milk to people's doorsteps and we are sure that, on reflection, they will wish to reconsider the imposition.
      A statement that the use of electric vehicles should not be penalised would be a positive contribution to the Government's professed claim to reduce carbon dioxide emissions. Because of their very nature, the use of electric vehicles should be encouraged, not penalised by the imposition of vehicle excise duty. Since taxation is used by the Government as a method of encouraging environmentally friendly use of vehicles, it is absolutely absurd that they now propose to extend to all vehicles of this class an initial vehicle excise duty which, no doubt in subsequent years, they will seek to increase.
      Ministerial responses to representations made so far have been inconsistent, to put it politely. The Secretary of State for Transport has stated that the imposition of a £35 rate of duty on electric milk floats will
      756
      "reduce evasion and be easier to understand and administer."
      What gobbledegook; what rubbish. How can there be any evasion if there is no tax in the first place? Perhaps the Government will explain why we need to propose a tax to prevent evasion in a category in which there can be no evasion because there is no tax.
      The Minister of Agriculture, Fisheries and Food has said that it is a matter for the Treasury and that the imposition
      "will make fraud more difficult and increase efficiency of administration."
      What utter rubbish. The whole purpose of introducing this taxation is to open up a new area of indirect taxes—a rich vein into which the Government hope to tap, in their efforts to establish for themselves a war chest of booty from the electorate that the Government can try to give back in electoral bribes by reducing direct taxes just before the general election.
      The Minister added insult to injury by calculating the additional tax on a cost per pint of milk in an attempt to hide the reality that the industry will face enormous difficulties. The imposition of costs which in the first year may be as much as £500,000 will undermine the milk rounds' ability to continue to exist.
      We stand by the speeches made by Opposition Members in previous debates. We urge the Minister to withdraw the imposition of vehicle excise duty on (he vehicle classes listed in schedule 4 and to consider bringing before the Committee a more rational, sensible and logically argued case for a new regime of vehicle excise duty.
      Mr. Heathcoat-Amory: We recognise that electric vehicles have certain environmental advantages. That is why they will be taxed at such an advantages. That is why they will be taxed at such an advantageous rate. Some would say that the enviornmental advantages are not overwhelming because an electrically powered vehicle has to use power generated elsewhere; in a sense, one is therefore simply shifting the pollution from the vehicle to the generating plant.
      I recognise that such vehicles have certain advantages, especially because they produce less noise, which is why they will be placed in a concessionary class and charged £35 per annum only. However, it is right that they should be removed from the totally exempt category, which we are reserving for emergency vehicles and those used by the severely disabled.
      Electric vehicles have an additional advantage in that there is no excise duty payable on the fuel that they use—electrical power.
      Ms Primarolo: VAT is paid on it.
      Mr. Heathcoat-Amory: The hon. Lady suggests from a sedentary position that VAT is payable on the electricity. That is, of course, not the case. If she were to think more carefully, she would realise that the electricity is supplied commercially and, therefore, the VAT payable on the electricity supply is recoverable as input tax.
      The other amendments in the group cover snow-clearing, ice-gritting, street-cleansing vehicles, and so on. We covered the point in relation to those vehicles fairly comprehensively. However, the hon. Lady must face up to something that she persistently avoids: she wants street-cleansing vehicles to be exempt from excise duty even though it has been explained to her that when

      757
      the same type of vehicle is used for marginally different activities—for example, cleaning out an underground drain or sewer—it will bear, according to the Opposition amendments, or lack of them, a full rate of vehicle excise duty.
      How can Labour Members tolerate the continuance of a glaring anomaly when their whole Budget strategy was apparently based—or so we were told at the time—on ending anomalies and loopholes? Until they clear up that confusion in their own thinking, I do not think that the Committee will take the amendment seriously.
      Question put, That the amendment be made:—
      The Committee divided: Ayes 222, Noes 276.

      Division No. 55]

      [8.30 pm

      AYES

      Abbott, Ms Diane

      Dalyell, Tam

      Adams, Mrs Irene

      Darling, Alistair

      Ainger, Nick

      Davidson, Ian

      Ainsworth, Robert (Cov'try NE)

      Davies, Bryan (Oldham C'tral)

      Allen, Graham

      Davies, Rt Hon Denzil (Llanelli)

      Anderson, Donald (Swansea E)

      Denham, John

      Armstrong, Hilary

      Dixon,Don

      Ashdown, Rt Hon Paddy

      Donohoe, Brian H

      Ashton, Joe

      Dunwoody, Mrs Gwyneth

      Austin-Walker, John

      Eagle, Ms Angela

      Banks, Tony (Newham NW)

      Eastham, Ken

      Barnes, Harry

      Enright, Derek

      Battle, John

      Etherington, Bill

      Bayley, Hugh

      Evans, John (St Helens N)

      Beckett, Rt Hon Margaret

      Ewing, Mrs Margaret

      Beith, Rt Hon A J

      Field, Frank (Birkenhead)

      Bell, Stuart

      Fisher, Mark

      Benn, Rt Hon Tony

      Foster, Rt Hon Derek

      Benton, Joe

      Foster, Don (Bath)

      Bermingham, Gerald

      Foulkes, George

      Berry, Roger

      Fyfe, Maria

      Blunkett, David

      Galbraith, Sam

      Boateng, Paul

      Galloway, George

      Boyes, Roland

      Gapes, Mike

      Bradley, Keith

      George, Bruce

      Bray, Dr Jeremy

      Gerrard, Neil

      Brown, Gordon (Dunfermline E)

      Gilbert, Rt Hon Dr John

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

      Godman, Dr Norman A

      Bruce, Malcolm

      Golding, Mrs Llin

      Burden, Richard

      Graham, Thomas

      Caborn, Richard

      Griffiths, Nigel (Edinburgh S)

      Callaghan, Jim

      Grocott, Bruce

      Campbell-Savours, D N

      Harman, Ms Harriet

      Canavan, Dennis

      Harvey, Nick

      Cann, Jamie

      Heppell, John

      Chidgey, David

      Hill, Keith (Streatham)

      Chisholm, Malcolm

      Hinchliffe, David

      Church, Judith

      Hoon, Geoffrey

      Clapham, Michael

      Hoyle, Doug

      Clark, Dr David (South Shields)

      Hughes, Kevin (Doncaster N)

      Clarke, Eric (Midlothian)

      Hughes, Robert (Aberdeen N)

      Clarke, Tom (Monklands W)

      Hutton,John

      Clelland, David

      Illsley, Eric

      Clwyd,Mrs Ann

      Ingram, Adam

      Coffey, Ann

      Jackson, Helen (Shef'ld, H)

      Cohen, Harry

      Jamieson, David

      Connarty, Michael

      Janner, Greville

      Cook, Robin (Livingston)

      Jones, Barry (Alyn and D'side)

      Corbett, Robin

      Jones, Lynne (B'ham S O)

      Corbyn, Jeremy

      Jones, Martyn (Clwyd, SW)

      Cousins, Jim

      Jones, Nigel (Cheltenham)

      Cunningham, Jim (Covy SE)

      Kaufman, Rt Hon Gerald

      Cunningham, Rt Hon Dr John

      Keen, Alan

      758

      Kennedy, Charles (Ross,C&S)

      Pope, Greg

      Kennedy, Jane (Lpool Brdgn)

      Powell, Ray (Ogmore)

      Khabra, Piara S

      Prentice, Gordon (Pendle)

      Kilfoyle, Peter

      Prescott, Rt Hon John

      Kirkwood, Archy

      Primarolo, Dawn

      Lestor, Joan (Eccles)

      Purchase, Ken

      Lewis, Terry

      Quin, Ms Joyce

      Liddell, Mrs Helen

      Radice, Giles

      Livingstone, Ken

      Randall, Stuart

      Lloyd, Tony (Stretford)

      Reid, Dr John

      Llwyd, Elfyn

      Rendel, David

      Loyden, Eddie

      Robertson, George (Hamilton)

      Lynne, Ms Liz

      Robinson, Geoffrey (Co'try NW)

      McAllion, John

      Rogers, Allan

      McAvoy, Thomas

      Rooney, Terry

      McCartney, Ian

      Ross, Ernie (Dundee W)

      McCrea, The Reverend William

      Ross, William (E Londonderry)

      Macdonald, Calum

      Ruddock, Joan

      McKelvey, William

      Sedgemore, Brian

      Mackinlay, Andrew

      Sheldon, Rt Hon Robert

      Maclennan, Robert

      Shore, Rt Hon Peter

      MacShane, Denis

      Short, Clare

      Madden, Max

      Skinner, Dennis

      Maddock, Diana

      Smith, Andrew (Oxford E)

      Mahon, Alice

      Smith, Chris (Isl'ton S & F'sbury)

      Marek, Dr John

      Smith, Llew (Blaenau Gwent)

      Marshall, David (Shettleston)

      Snape, Peter

      Martin, Michael J (Springburn)

      Soley, Clive

      Martlew, Eric

      Spearing, Nigel

      Maxton, John

      Spellar, John

      Meacher, Michael

      Squire, Rachel (Dunfermline W)

      Meale, Alan

      Steel, Rt Hon Sir David

      Michie, Bill (Sheffield Heeley)

      Steinberg, Gerry

      Michie, Mrs Ray (Argyll & Bute)

      Stevenson, George

      Milburn, Alan

      Stott, Roger

      Miller, Andrew

      Strang, Dr. Gavin

      Molyneaux, Rt Hon James

      Sutcliffe, Gerry

      Moonie, Dr Lewis

      Taylor, Matthew (Truro)

      Morgan, Rhodri

      Tipping, Paddy

      Morley Elliot

      Turner, Dennis

      Morris, Rt Hon Alfred (Wy'nshawe)

      Vaz, Keith

      Morris, Estelle (B'ham Yardley)

      Walker, Rt Hon Sir Harold

      Morris, Rt Hon John (Aberavon)

      Wallace, James

      Mudie, George

      Wardell, Gareth (Gower)

      Mullin, Chris

      Wareing, Robert N

      Oakes, Rt Hon Gordon

      Watson, Mike

      O'Brien, William (Normanton)

      Wicks, Malcolm

      O'Hara, Edward

      Wigley, Dafydd

      Olner, Bill

      Williams, Rt Hon Alan (Sw'n W)

      O'Neill, Martin

      Williams, Alan W (Carmarthen)

      Paisley, The Reverend Ian

      Wise, Audrey

      Parry, Robert

      Worthington, Tony

      Patchett, Terry

      Wright, Dr Tony

      Pearson, Ian

      Pendry, Tom

      Tellers for the Ayes:

      Pickthall, Colin

      Mr. Peter Mandelson and

      Pike, Peter L

      Mr. Jon Owen Jones

      NOES

      Ainsworth, Peter (East Surrey)

      Bellingham, Henry

      Aitken, Rt Hon Jonathan

      Bendall, Vivian

      Alison, Rt Hon Michael (Selby)

      Beresford, Sir Paul

      Amess, David

      Biffen, Rt Hon John

      Ancram, Michael

      Booth, Hartley

      Arbuthnot, James

      Boswell, Tim

      Arnold, Jacques (Gravesham)

      Bottomley, Peter (Eltham)

      Arnold, Sir Thomas (Hazel Grv)

      Bottomley, Rt Hon Virginia

      Ashby, David

      Bowden, Sir Andrew

      Atkins, Robert

      Bowis, John

      Atkinson, Peter (Hexham)

      Boyson, Rt Hon Sir Rhodes

      Baker, Nicholas (North Dorset)

      Brandreth, Gyles

      Baldry, Tony

      Brazier, Julian

      Banks, Matthew (Southport)

      Bright, Sir Graham

      Banks, Robert (Harrogate)

      Brooke, Rt Hon Peter

      Bates, Michael

      Brown, M (Brigg & Cl'thorpes)

      Batiste, Spencer

      Browning, Mrs Angela

      759

      Bruce, Ian (Dorset)

      Hargreaves, Andrew

      Budgen, Nicholas

      Harris, David

      Burns, Simon

      Haselhurst, Alan

      Butcher, John

      Hawkins, Nick

      Butler, Peter

      Hawksley, Warren

      Butterfill, John

      Hayes, Jerry

      Carlisle, John (Luton North)

      Heald, Oliver

      Carlisle, Sir Kenneth (Lincoln)

      Heath, Rt Hon Sir Edward

      Carrington, Matthew

      Heathcoat-Amory, David

      Carttiss, Michael

      Hendry, Charles

      Cash, William

      Higgins, Rt Hon Sir Terence

      Channon,Rt Hon Paul

      Hill, James (Southampton Test)

      Chapman, Sydney

      Hogg, Rt Hon Douglas (G'tham)

      Clappison, James

      Horam, John

      Clark, Dr Michael (Rochford)

      Hordern, Rt Hon Sir Peter

      Clarke, Rt Hon Kenneth (Ru'clif)

      Howard, Rt Hon Michael

      Clifton-Brown, Geoffrey

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

      Congdon, David

      Howell, Rt Hon David (G'dford)

      Conway, Derek

      Hughes, Robert G (Harrow W)

      Coombs, Anthony (Wyre For'st)

      Hunt, Rt Hon David (Wirral W)

      Coombs, Simon (Swindon)

      Hunter, Andrew

      Cope, Rt Hon Sir John

      Hurd, Rt Hon Douglas

      Cormack, Sir Patrick

      Jack, Michael

      Couchman, James

      Jackson, Robert (Wantage)

      Cran, James

      Jenkin, Bernard

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

      Jessel,Toby

      Curry, David (Skipton & Ripon)

      Jones, Gwilym (Cardiff N)

      Davies, Quentin (Stamford)

      Jones, Robert B (W Hertfdshr)

      Day, Stephen

      Kellett-Bowman, Dame Elaine

      Deva, Nirj Joseph

      Key, Robert

      Devlin, Tim

      King, Rt Hon Tom

      Dicks, Terry

      Kirkhope, Timothy

      Dorrell, Rt Hon Stephen

      Knapman, Roger

      Douglas-Hamilton, Lord James

      Knight, Mrs Angela (Erewash)

      Dover, Den

      Knight, Greg (Derby N)

      Duncan, Alan

      Knox, Sir David

      Duncan Smith, Iain

      Kynoch, George (Kincardine)

      Dunn, Bob

      Lait, Mrs Jacqui

      Dykes, Hugh

      Lang, Rt Hon Ian

      Elletson, Harold

      Lawrence, Sir Ivan

      Emery, Rt Hon Sir Peter

      Legg, Barry

      Evans, David (Welwyn Hatfield)

      Leigh, Edward

      Evans, Jonathan (Brecon)

      Lennox-Boyd, Sir Mark

      Evans, Nigel (Ribble Valley)

      Lester, Jim (Broxtowe)

      Evans, Roger (Monmouth)

      Lidington, David

      Evennett, David

      Lightbown, David

      Faber, David

      Lilley, Rt Hon Peter

      Fabricant, Michael

      Lloyd, Rt Hon Sir Peter (Fareham)

      Field, Barry (Isle of Wight)

      Lord, Michael

      Fishburn, Dudley

      Luff, Peter

      Forman, Nigel

      Lyell, Rt Hon Sir Nicholas

      Forsyth, Rt Hon Michael (Stirling)

      MacGregor, Rt Hon John

      Forth, Eric

      MacKay, Andrew

      Fowler, Rt Hon Sir Norman

      Maclean, David

      Fox, Dr Liam (Woodspring)

      McLoughlin, Patrick

      Fox, Sir Marcus (Shipley)

      McNair-Wilson, Sir Patrick

      Freeman, Rt Hon Roger

      Madel, Sir David

      French, Douglas

      Maitland, Lady Olga

      Gale, Roger

      Malone, Gerald

      Gallie, Phil

      Mans, Keith

      Gardiner, Sir George

      Marland, Paul

      Garnier, Edward

      Marlow, Tony

      Gill, Christopher

      Marshall, John (Hendon S)

      Gillan, Cheryl

      Marshall, Sir Michael (Arundel)

      Goodson-Wickes, Dr Charles

      Martin, David (Portsmouth S)

      Gorman, Mrs Teresa

      Mates, Michael

      Gorst, Sir John

      Mellor, Rt Hon David

      Grant, Sir A (SW Cambs)

      Merchant, Piers

      Greenway, Harry (Ealing N)

      Mills, Iain

      Greenway, John (Ryedale)

      Mitchell, Andrew (Gedling)

      Griffiths, Peter (Portsmouth, N)

      Mitchell, Sir David (NW Hants)

      Grylls, Sir Michael

      Moate, Sir Roger

      Hague, William

      Monro, Sir Hector

      Hampson, Dr Keith

      Montgomery, Sir Fergus

      Hanley, Rt Hon Jeremy

      Moss, Malcolm

      Hannam, Sir John

      Needham, Rt Hon Richard

      760

      Nelson, Anthony

      Spring, Richard

      Neubert, Sir Michael

      Sproat, Iain

      Newton, Rt Hon Tony

      Squire, Robin (Hornchurch)

      Nicholls, Patrick

      Stanley, Rt Hon Sir John

      Nicholson, David (Taunton)

      Stephen, Michael

      Nicholson, Emma (Devon West)

      Stern, Michael

      Norris, Steve

      Stewart, Allan

      Onslow, Rt Hon Sir Cranley

      Streeter, Gary

      Oppenheim, Phillip

      Sumberg, David

      Page, Richard

      Sykes, John

      Paice, James

      Tapsell, Sir Peter

      Patten, Rt Hon John

      Taylor, Ian (Esher)

      Pattie, Rt Hon Sir Geoffrey

      Taylor, John M (Solihull)

      Peacock, Mrs Elizabeth

      Taylor, Sir Teddy (Southend, E)

      Pickles, Eric

      Temple-Morris, Peter

      Porter, Barry (Wirral S)

      Thomason, Roy

      Porter, David (Waveney)

      Thompson, Patrick (Norwich N)

      Portillo, Rt Hon Michael

      Thornton, Sir Malcolm

      Powell, William (Corby)

      Thurnham, Peter

      Redwood, Rt Hon John

      Townsend, Cyril D (Bexl'yh'th)

      Richards, Rod

      Tracey, Richard

      Riddick, Graham

      Tredinnick, David

      Robathan, Andrew

      Trend, Michael

      Roberts, Rt Hon Sir Wyn

      Twinn, Dr Ian

      Robertson, Raymond (Ab'd'n S)

      Vaughan, Sir Gerard

      Robinson, Mark (Somerton)

      Viggers, Peter

      Roe, Mrs Marion (Broxbourne)

      Waldegrave, Rt Hon William

      Rowe, Andrew (Mid Kent)

      Walden, George

      Rumbold, Rt Hon Dame Angela

      Walker, Bill (N Tayside)

      Ryder, Rt Hon Richard

      Waller, Gary

      Sackville, Tom

      Ward, John

      Sainsbury, Rt Hon Sir Timothy

      Wardle, Charles (Bexhill)

      Scott, Rt Hon Sir Nicholas

      Waterson, Nigel

      Shaw, David (Dover)

      Watts, John

      Shaw, Sir Giles (Pudsey)

      Whitney, Ray

      Shephard, Rt Hon Gillian

      Whittingdale, John

      Shepherd, Colin (Hereford)

      Widdecombe, Ann

      Shepherd, Richard (Aldridge)

      Wiggin, Sir Jerry

      Shersby, Michael

      Willetts, David

      Sims, Roger

      Winterton, Mrs Ann (Congleton)

      Skeet, Sir Trevor

      Wolfson, Mark

      Smith, Tim (Beaconsfield)

      Yeo,Tim

      Soames, Nicholas

      Young, Rt Hon Sir George

      Spencer, Sir Derek

      Spicer, Sir James (W Dorset)

      Tellers for the Noes:

      Spicer, Michael (S Worcs)

      Mr. Bowen Wells and

      Spink, Dr Robert

      Mr. Timothy Wood

      Question accordingly negatived.
      Mr. Malcolm Bruce: I beg to move amendment No. 28, in page 164, leave out lines 31 and 32.
      The First Deputy Chairman: With this, it will be convenient to discuss the following amendments: No. 32, in page 164, line 38, at end insert—
      '3A. In paragraph 21 of Schedule 2 to the 1994 Act the following shall be inserted after sub-paragraph (b)—"and,
      (c) for the purposes of agriculture, horticulture, and forestry.".'.
      Government amendments Nos. 42 and 43.
      No. 35, in page 172, leave out lines 44 and 45.
      No. 36, in page 173, leave out lines 14 to 19.
      Mr. Bruce: This is an innocuous little amendment in terms of its place on the amendment paper and its length, but it is very important. It is astonishing that the Government should have thought that it would be possible to put into the Finance Bill the provisions which are enshrined in the lines that we wish to take out without accepting that that would create considerable concern in

      761
      the farming community. The exemption of farm vehicles from vehicle excise duty dates back to the 1920s. No Government have seriously considered changing that. Suddenly, without notice, farmers find that they are faced with having to pay vehicle excise duty on all farm vehicles. At least that was the situation until a couple of days ago, and I will refer to that matter in a minute.
      I am sure that hon. Members who have connections with farming or agricultural interests will know of a number of matters which are relevant to farm vehicles and which are the reason for exemptions having been granted for so many years. A significant number of agricultural vehicles are used for only a few weeks of the year. Some combine harvesters might be used for only a few days a year. The Government now propose that farmers must pay the full rate of vehicle excise duty on them, which seems to be unreasonable and unfair. The previous ruling was that the exemption was restricted to vehicles that travelled no more than six miles from their point of registration.
      Given the changes in agricultural holdings in recent years, there are fewer farms where there is no reason to take agricultural vehicles on to a public road simply to carry out the basic business of running a farm, because a farm straddles a public road, because fields can be reached only by going along a public road, or, increasingly, because holdings are physically detached and might be a mile or two apart.
      In such circumstances, a very modest farmer might be expected to find vehicle excise duty for three, four or five vehicles for which he has never previously had to consider such a payment and for which there has been no warning, no discussion, no consultation and no sign that the Government were considering it. There has been no opportunity for farmers or their representatives in the National Farmers Union to make representations about the implications or to seek exemption or modification. That is reprehensible.
      I represent a constituency in Scotland. Of course there are prosperous Scottish farmers. There are farmers for whom paying vehicle excise duty on three, four or five vehicles is a relatively small charge to their businesses, but there are an awful lot more farmers for whom that is a significant burden on top of other matters with which they must cope. In Scotland, 95 per cent. of agricultural land is in less-favoured areas. By definition, therefore, such farms require subsidy. The Government are providing a subsidy with one hand and clawing it back in additional taxes with the other hand. That does not seem to be fair, reasonable or even sensible.
      8.45 pm
      In the past few weeks, Scottish farmers have had a problem with sheep annual premiums that have not been paid, even though they have been paid throughout England and Wales. Scottish farmers were promised them in October-November. Two thousand farmers are due £8 million, but they have received no payment whatever, and they are told that the Scottish Office is unable to tell them when they might be paid, and that it could be some time after Easter.
      On average, that sum works out at £4,000 per head. It relates only to partnerships, but a partnership business is often a husband and wife or, possibly, a son or a daughter. Such businesses are being deprived of £12,000 of basic salary. Farm support income has been cut, hill livestock compensation allowances have been cut, and farmers now
      762
      have to pay additional taxes. That is unreasonable and unfair, especially without adequate consultation or consideration.
      I welcome one matter. It is clear that, after we tabled our amendment, vibrations got through to the Treasury that perhaps there was a potential problem and that there was some resistance and resentment. The National Farmers Union has been busy, no doubt, contacting hon. Members with agricultural interests to point out the implications of the clause and schedule.
      When we tabled our amendment, at least two Conservative Members put their names to it, as well as tabling their own amendment. Surprise, surprise, a couple of days later, the Paymaster General, apart from writing notes to several hon. Members, tabled his own amendment, which provides exemptions for all-terrain vehicles—no doubt he will tell us more about his proposals—and light farm vehicles. That is welcome. It is a recognition that the Government have overstretched the point, that they have not considered the matter, and that there is a need to respond. However, welcome as that response is, it means that all the arguments that I have put will still apply to the majority of farm vehicles affecting the majority of farms and farmers.
      In those circumstances, our amendment is justified and desirable. That remains the view of the National Farmers Union, which also welcomes the pressure that has been brought to bear by hon. Members and which has generated a response from the Government. I always welcome evidence that action in the House is observed, acknowledged and responded to, and I give due credit to it.
      Conservative Members who take the view that the Government amendment is adequate will find that the NFU does not agree, and many of their local farmers will tell them that the amendment neither affects nor benefits them. Farmers are faced with additional charges which have been introduced without warning or consultation at a time when Government support for many farmers is being withdrawn.
      It is a little mischievous of the Government to cut subsidies while trying to claw back additional taxes from farmers. Why has a measure which has been accepted for 70 years suddenly been brought into the net? It does not seem reasonable or fair. The Government may have acknowledged that their proposal as it stands is unreasonable and needs qualification. It would be helpful if the Minister undertook to take the measure away, to consult farmers and their interests, and to bring it back in a form which takes account of those consultations.
      I understand that one of the Government's arguments is that the administration of the scheme is somewhat bureaucratic. For 70 years, farmers have been perfectly happy to handle that bureaucracy and I have had no complaints about it from any farmer. It is funny that people in general think that bureaucracy is not a bad thing when they get a tax rebate, and that they are only opposed to it when they face a tax imposition. The serious point is that, if there is a bureaucratic problem, it can be addressed.
      The NFU has suggested that a possible solution is a one-off registration with a requirement to notify changes. Nevertheless, the subject of bureaucracy was raised by the Minister after the Finance Bill was published, and no doubt there was justification. The matter has not, I

      763
      understand, been raised by farmers' representatives complaining about the existing system. The NFU has simply responded to the Minister's assertion.
      A significant change has been introduced after 70 years of unchallenged and accepted practice, without warning or consultation. The Government could simply say that they still want the measure—if that is their position—but that they accept that it has implications which they had not fully considered. The measure is clearly resented within the farming community, and it is felt to be a burden for which the Government have not made a case to justify the change.
      The Government should take the measure away, reconsider it and possibly bring it back in a revised form after consultation. I would rather that they did not bring it back at all, but consultation has not taken place and I hope that the Minister accepts that it should now take place. Whether we press the amendment to a vote tonight will depend to a significant extent on the Minister's response, but I hope that he accepts that farmers are extremely unhappy about the way in which the measure is being introduced.
      Mr. Heathcoat-Amory: Government amendment No. 42 is, I think, entirely uncontroversial and removes an anomaly which might otherwise mean that a local authority which used tractors simply for the maintenance of roadside verges, hedges and trees would have to license them as haulage vehicles, and thus pay vehicle excise duty. They would also lose their entitlement to rebated diesel. As a result of the amendment, they will continue to enjoy their existing concessions to license them as agricultural tractors, and they will therefore pay £35 tax and use rebated diesel.
      Government amendment No. 43 concerns the all-terrain vehicles which are familiar to any hon. Member with an agricultural constituency. The vehicles have increased in use, and are now a common sight on hills where sheep are rounded up or hay is delivered. This is a clear example of where the old concessionary classes have simply not anticipated the development of such vehicles. If the legislation were being laid down today, those vehicles would undoubtedly be considered a form of small lightweight tractor. Under the amendment, we propose to recognise that farmers do use ATVs like tractors and, accordingly, we define them as light agricultural vehicles. That means that they will be taxed in the £35 a year class and, although most of them are petrol-powered, a number which are diesel-powered will be able to use rebated fuel because of the amendment.
      The other issue touched on by the hon. Member for Gordon (Mr. Bruce) concerns the low-mileage vehicles which are often used by farmers between fields on a single farm. The legislation as drafted required farmers to pay vehicle excise duty for the first time. Most of the vehicles, of course, are tractors and therefore the duty was only £35. I must make it clear to the Committee that the proposals are not in this case driven by the need for extra revenue, but to end anomalies and to find a system which is administratively workable.
      I must make clear at the outset that the current system for the vehicles—whereby exemption is based supposedly on the vehicles doing fewer than six miles a week on public roads—cannot continue. It is self-evidently
      764
      impossible to police the scheme. It may be possible for a police officer to stop a vehicle and check its distance, but it is certainly impossible when the criteria for evasion is not just distance, but time and how many miles have been covered by that vehicle during the week. It will not surprise the Committee to know that prosecutions are unknown.
      The scheme is bureaucratic in the extreme. I have with me one of the forms which must be filled out each year by people claiming the concession. Of course, they do not complain about it. As the hon. Member for Gordon fairly said, who would complain about filling in a form if it means that one does not have to pay tax? However, it cannot be good taxation if every year, a person claiming the concession must fill in a detailed description of the route to be travelled, and any divergence or detour from that route—because of a temporarily blocked road, for example—must be sent in writing to the authority before that concession can continue.
      Hon. Members with agricultural constituencies will know what I mean when I say that, in private, farmers often concede that there is a certain amount of abuse of that concession. It is difficult for the authorities and bureaucratic for the users.
      I am not wedded to the concept of taxing genuine cases, however, when vehicles necessarily have to cross main roads in the course of business. If trade organisations—the National Farmers Union, Country Landowners Association and other trade groups—or hon. Members can come up with a system that involves none of the form filling, is workable and administratively simple and prevents evasion, I will willingly consider it in time to table an amendment on Report.
      Mr. David Harris: Before my hon. Friend sits down—
      The First Deputy Chairman: Order. The Minister has sat down.
      Sir David Mitchell: First, I warmly welcome what the Minister said about all-terrain vehicles, as those were causing some anxiety in the fanning community and his words will be widely welcomed.
      On exemptions from normal vehicle excise duty for certain agricultural vehicles, I have much sympathy with the Chancellor's wish to tighten the rules and to lessen abuse of former concessions that allowed six miles per week and were misused, especially as regards livestock. One could say that farmers have brought the problems on themselves because of the widespread abuse of the system, but the change means that the majority of law-abiding farmers are being penalised because of an unscrupulous minority.
      9 pm
      I must draw two genuine problems to the Minister's attention. The first concerns the substantial vehicle excise duty and the second, the subsequent need to MOT a vehicle to motorway standards, when it will be used merely for crossing a farm road or up a narrow lane to get to another part of the farm. Technically, the first change in vehicle excise duty would result in a further change in the MOT requirements. Those should not apply to harvest vehicles and others of that type.

      765
      I have here a letter from a farmer in my constituency, who says that I should be aware that
      "many farm harvest lorries have been un-MOT'd within the exempt ruling law, but will in future have to pay licence duty but also be liable to MOT to motorway standards. There must be many farmers with harvest grain transport trucks who will not MOT their vehicles to MOT motorway standard. We run two lorries for harvest work—that is all. Should the law change we would have to purchase two 14 ton trailers and hire two tractors—a considerable cost"
      to their farming enterprise.
      I also want to draw the Minister's attention to the views of the Country Landowners Association on "agricultural off-road vehicles", which is how it wants them to be described. I was glad to hear my hon. Friend say that he was open to suggestions. It suggests:
      "The licence will only be valid within, say, x miles of the owner's place of business (the exact amount of miles to be determined by the distance from the postal address of the business to the furthest outlying field in the farm". The licence disc should be a special colour and include the address of the place of business so that if the vehicle is stopped on the public highway it should be immediately obvious to any policeman whether or not the licence is valid."
      The inclusion of the business address would avoid the policing difficulties that have been encountered and which the Minister mentioned.
      I should have thought that that change from X miles per week to a specific distance from a farmhouse or tractor store to the boundaries of the farm plus two miles would eliminate the major problem to which my hon. Friend the Minister drew our attention. Will he consider that suggestion and consult the NFU, the CLA and other interests, as he said he would? I hope that he will be able to table an amendment at a later stage as a result of his consultations.
      Mr. Geoffrey Clifton-Brown: I must place it on record that I am grateful to my hon. Friend the Minister for the courteous way in which he received me last week to make representations on vehicle excise duty exemption for agricultural vehicles.
      I am also grateful for his announcement that he will consider further representations from the Country Landowners Association, the National Farmers Union and colleagues. Perhaps I should declare an interest, as I am a member of the NFU and the CLA.
      I endorse some of the arguments by my hon. Friend the Member for Hampshire, North-West (Sir D. Mitchell). The Bill removes schedule 2, paragraph 21 of the Vehicle and Excise Registration Act 1994. It is worth dwelling for a minute or two on what we are doing and what we are abolishing. As the hon. Member for Gordon (Mr. Bruce) said, the provisions have been in place for 70 years. Paragraph 21 of schedule 2 to the 1994 Act states:
      "Where an applicant for a vehicle licence for a vehicle satisfies the Secretary of State that the vehicle is intended to be used on public roads—

      (a) only in passing from land in his occupation to other land in his occupation, and

      (b) for distances not exceeding an aggregate of six miles in any calendar week,

      the Secretary of State may, with the consent of the Treasury, declare that the vehicle is an exempt vehicle when it is being used on public roads as mentioned in paragraphs (a) and (b)."
      So we are abolishing a concise and precise exemption, which has been in operation for 70 years for a good reason. The reason is that the agricultural business
      766
      involves travelling from one piece of land to another. It therefore seems onerous that farmers should suddenly be brought into the licensing net.
      I understand the Minister's explanation that, by abolishing the exemption, he is making the law easier to enforce and police. It is generally acknowledged that the current concessions are widely abused, so we must come up with a better system, but I hope that he will listen carefully to suggestions made by the agricultural industry because, in some cases, the abolition of the concession will cause hardship.
      The schedule shows that proposals with respect to some restricted HGV lorries, which may be used only on odd occasions in a year, such as during the harvest period or to transport a few sheep from one piece of land to another, could mean that a farmer who currently pays nothing may pay up to several thousand pounds under the new system. I accept that most tractors and agricultural vehicles, such as combines, will, under the concessions granted in the Bill, pay only £35. Under those circumstances, the obligation for farmers is not too onerous, but small farmers who must pay substantially more than £35 for HGVs which are used only on the odd occasion each year and which may only cross a road, may suffer hardship.
      My hon. Friend the Minister already mentioned some of the ways in which the exemption could be kept. The Bill provides a new definition for "tractors" and makes it clear that we are dealing with vehicles that can travel at only up to 25 miles an hour, except the concession for ATVs, which I warmly welcome. As it is therefore unlikely that anyone in his right mind will drive those tractors or combine harvesters far on a public road, it must be possible to come up with a system whereby farmers apply for a normal licence but answer a question on the licence form about why they should be entitled to the exemption.
      The exemption would specify the address from which the vehicle operated, and it would be reasonable to have a different colour licence that specified up to what range the vehicle could go. I urge my hon. Friend the Minister to give that idea serious consideration. If a vehicle crosses a road only once or twice a year, it is unnecessary to go through the rigmarole of paying a considerable extra amount.
      Sir David Mitchell: Does my hon. Friend accept that it is not just a case of crossing a road through a farm, but it may be a case of going a short distance along a road to enter another field?
      Mr. Clifton-Brown: I entirely accept that.
      My suggestion about how the matter could be implemented and enforced by the police so that it would not be abused as at present would be less bureaucratic and easier to enforce than the present arrangement.
      May I make a final plea to the Minister? I understand that the Department of Transport is carrying out an investigation into which agricultural vehicles should be subject to the MOT and what provisions should apply to them. It is ludicrous to suggest that combine harvesters should jam up MOT testing stations which are not big enough to cope with them in any case. I hope that my right hon. Friend will make representations to his colleagues in the Department of Transport to ensure that those types of agricultural vehicles will not be subject to the same testing and plating regulations that currently apply to commercial vehicles.
      Mr. Nick Ainger: I support amendment No. 28. I represent a farming constituency in west Wales and the representations that I have received from my constituents about vehicle excise duty have led me to believe that the Government have made a big mistake in not accepting the opposing arguments that have been advanced. Following tonight's debate, I hope that they will begin to listen both to their own Back Benchers and to the Opposition.
      Farmers throughout the country are saying, "What has the Tory party got against the farming industry?" At the end of last year, the Government announced that hill livestock compensatory allowances would not be increased, even though hill farming incomes had declined by more than 20 per cent., and they also cut grant aid for pollution measures. That shows that, for some reason, farmers are not particularly popular with the Government.
      As several hon. Members have said, the Government should have consulted widely before introducing the proposal to remove farm vehicles from the exemption from duty. We are not talking just about tractors or heavy goods vehicles; Britain has a successful, specialised farm sector and the farm engineering industry has produced an enormous range of vehicles to service it. One has only to visit agricultural shows every summer to see the enormous range of specialist vehicles that are now available to farmers.
      Most of the vehicles are designed to perform a specific function and cannot be used for any other task. Recent developments with large bales of hay and silage require the use of extremely specialised vehicles and there is no question but that such vehicles can be used only on the farm to perform legitimate farm business.
      In order to run a successful enterprise, farmers must own a great variety of farm vehicles—these are usually well maintained, although sometimes, sadly, they are not. Because of the Government's move, the introduction of MOT and the licensing of farm vehicles as HGVs may impose enormous costs on farmers.
      The Paymaster General has said that the measure was introduced not to raise revenue but to address certain anomalies in the system. As I said earlier, I am sure that he could have addressed those anomalies by consulting with the farm unions and the Country Landowners Association and coming up with some more favourable, concrete proposals.
      Several Government Members have made very sensible suggestions about how those anomalies could be addressed and, at the same time, how the Government could reduce the size of the bureaucracy and solve enforcement problems. I urge the Paymaster General to listen not just to what the Opposition are saying but to his own Back Benchers and to bring forward a sensible amendment to solve all our problems.
      Dame Elaine Kellett-Bowman: I agree with my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Clifton-Brown). I must declare an interest in the debate as I am a farmer and I have to cross a road in order to get to part of my land. It is outrageous to suggest that I should have to license my farm vehicles in order to do so; and many of my farming constituents are in a similar position.
      I do not wish to annoy my hon. Friend unduly, but I must point out that small farmers such as those I represent often do not buy new machinery—we rely on wealthy
      768
      farmers like him to sell us their second-hand machinery. Therefore, we are the ones who will be clobbered by the MOT; his vehicles are new.
      Mr. Clifton-Brown rose—
      Dame Elaine Kellett-Bowman: I cannot give way to my hon. Friend. I have been told that I must be brief.
      Such an imposition would be disastrous. Some farmers use combine harvesters that are 20 years old. That machinery could not be expected to pass the MOT test, yet it does a perfectly good job of bringing in the harvest. The same applies to silage-making machinery—it may not be new, but it works. To insist on MOT testing would be outrageous. I ask my hon. Friend the Paymaster General to temper the wind to the shorn sheep. It would be difficult for some farmers to go through all that rigmarole, and I hope that my hon. Friend will think again.
      9.15 pm
      Mr. Alan Haselhurst: I emphasise the comments of my right hon. and hon. Friends, and welcome the indication by my hon. Friend the Paymaster General that he is prepared to re-examine the issue. He did so in sufficiently open terms to satisfy the hon. Member for Gordon (Mr. Bruce).
      Mr. Malcolm Bruce indicated dissent.
      Mr. Haselhurst: The hon. Gentleman is not as reasonable as he presents himself to the Committee. My hon. Friend said that he is prepared to consult. I find that satisfactory, and I am sure that that is true of the farmers in my constituency.
      As my hon. Friend said, it is not primarily a revenue-raising matter. I wonder whether it is such a burning issue that it must be resolved for the purpose of removing an anomaly. In so far as there has been an increase in diesel and petrol duties, any extra mileage covered by such vehicles will cost farmers more in any case—so additional revenue will be raised if there is the supposed abuse of the present system.
      The point has been made well that certain vehicles are used so little that it would be unreasonable to impose on them the panoply of taxation and regulation. I hope that a common-sense solution can be found. We should be attempting not to remove anomalies but to find a sensible answer relevant to the needs of the industry.
      Mr. Heathcoat-Amory: I am fully persuaded by the Committee that there is a good, strong case for trying to, find a way of responding to the case for agricultural vehicles that occasionally cross public roads or travel short distances along them. The present system is administratively too complex, and more or less impossible to enforce. In the pursuit of good government and administration, we must find a better way of granting exemptions, and one that is easy to understand and possible to enforce. Together with the industry and other hon. Members, I shall seek a way forward over the next few weeks.
      My hon. Friend the Member for Hampshire, North-West (Sir D. Mitchell) and others raised the question of MOT testing. It is my understanding that no requirement exists for tractors or harvesters, but vehicles such as lorries that are used on public roads even for short distances must meet MOT test basic safety requirements. My hon. Friend's former Department, the Department of

      769
      Transport, is examining the whole question of vehicle testing. It may even be that he started that review, given that the good that Ministers do is generally harvested by those who succeed them. I undertake to draw to the Department's attention the remarks made by members of the Committee this evening.
      Mr. Malcolm Bruce: The Minister seems a little confused. He accepts that the matter should be reconsidered but places the onus for devising alternative options on hon. Members and farmers' representatives rather than on the Government and civil servants, who have the resources and responsibility for doing that. When a Minister says, "I accept that this matter needs to be reconsidered," he usually accepts also the amendment to remove the measure in question, so that he can return with revised proposals after consulting. The Minister has introduced a measure granting exemption across the board to all-terrain vehicles. They are precisely the kind of vehicles whose owners can abuse the system—yet they are to be entirely exempt.
      A farmer who keeps a combine harvester, however, will in future have to pay tax, as will farmers who keep balers or hayrollers on their farms. The Minister has acknowledged that that is unreasonable. His hon. Friends have said that they are unhappy with the idea, but they have more confidence than I do that the Minister will come up with an answer.
      Dame Elaine Kellett-Bowman: I am puzzled by the hon. Gentleman's reference to haybalers. Usually they are towed vehicles, not self-propelled.
      Mr. Bruce: The hon. Lady knows perfectly well that all sorts of farm machines never leave the farm but will now be taxed. She herself has said that this is an unreasonable proposal—
      Mr. Heathcoat-Amory: The hon. Gentleman seems confused. If vehicles never travel on public roads, there is no question of catching them—that is certainly not our proposal.
      Mr. Bruce: As I said earlier, farms are increasingly divided by public roads, or farmers need to use roads to gain access to other fields, separate from the farm. It is extraordinary that a rule which has worked perfectly satisfactorily for 70 years should suddenly be abolished without notice or consultation.
      Mr. A. J. Beith: I hope that my hon. Friend will bear in mind the fact that some farmers, such as those with farms along the A1, have chunks of public roads through their farms, and thus find that they have to move combine harvesters from one field to another along busy dual carriageways, as well as bearing a tax burden for doing so. If the Government think that farm vehicles can be moved about the farm without going on public roads, they do not know much about farming.
      Mr. Bruce: I agree. A number of farms in my constituency, for instance, are divided up by a railway line. Until the Government decided to privatise the railways, the farmers were allowed free access across the line, but British Rail now refuses to grant that access. Farmers are thus forced to go many miles around to get to fields on the other side of the line—and the Government now insist that the vehicles used for such journeys pay VED.
      770
      My main point is a simple one: the Government and the Minister have said that they accept that there is a problem. The Minister has admitted that wide consultation has not taken place. He has said that he is willing to hear alternative proposals. I suggest that he accept the amendment, consult and then consider the position. If he is not prepared to rise to his feet now and do that, we shall have no hesitation in pressing the matter to a vote.
      Question put, That the amendment be made:—
      The Committee divided: Ayes 229, Noes 277.

      Division No. 56

      [9.22 pm

      AYES

      Adams, Mrs Irene

      Dobson, Frank

      Ainger, Nick

      Donohoe, Brian H

      Ainsworth, Robert (Cov'try NE)

      Dowd, Jim

      Allen, Graham

      Dunwoody, Mrs Gwyneth

      Alton, David

      Eagle, Ms Angela

      Anderson, Donald (Swansea E)

      Eastham, Ken

      Armstrong, Hilary

      Enright, Derek

      Ashdown, Rt Hon Paddy

      Etherington, Bill

      Ashton, Joe

      Evans, John (St Helens N)

      Austin-Walker, John

      Ewing, Mrs Margaret

      Banks, Tony (Newham NW)

      Field, Frank (Birkenhead)

      Barnes, Harry

      Fisher, Mark

      Battle, John

      Flynn, Paul

      Bayley, Hugh

      Foster, Rt Hon Derek

      Beckett, Rt Hon Margaret

      Foulkes, George

      Beith.Rt Hon A J

      Fyfe, Maria

      Bell, Stuart

      Galbraith, Sam

      Benn, Rt Hon Tony

      Galloway, George

      Benton, Joe

      Gapes, Mike

      Bermingham, Gerald

      George, Bruce

      Berry, Roger

      Gerrard, Neil

      Boyes, Roland

      Gilbert, Rt Hon Dr John

      Bradley, Keith

      Godman, Dr Norman A

      Bray, Dr Jeremy

      Godsiff, Roger

      Brown, Gordon (Dunfermline E)

      Golding, Mrs Llin

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

      Graham, Thomas

      Bruce, Malcolm (Gordon)

      Grant, Bernie (Tottenham)

      Burden, Richard

      Griffiths, Nigel (Edinburgh S)

      Byers, Stephen

      Grocott, Bruce

      Caborn, Richard

      Gunnell, John

      Callaghan.Jim

      Hall, Mike

      Campbell, Mrs Anne (C'bridge)

      Hanson, David

      Campbell, Menzies (Fife NE)

      Harman, Ms Harriet

      Campbell, Ronnie (Blyth V)

      Harvey, Nick

      Campbell-Savours, D N

      Heppell, John

      Canavan, Dennis

      Hill, Keith (Streatham)

      Cann, Jamie

      Hinchliffe, David

      Chidgey, David

      Hodge, Margaret

      Chisholm, Malcolm

      Hoey, Kate

      Clapham, Michael

      Hoon, Geoffrey

      Clark, Dr David (South Shields)

      Hoyle, Doug

      Clarke, Eric (Midlothian)

      Hughes, Kevin (Doncaster N)

      Clarke, Tom (Monklands W)

      Hughes, Robert (Aberdeen N)

      Clelland, David

      Hutton,John

      Clwyd, Mrs Ann

      Illsley, Eric

      Coffey, Ann

      Ingram, Adam

      Cohen, Harry

      Jackson, Glenda (H'stead)

      Connarty, Michael

      Jackson, Helen (Shef'ld, H)

      Cook, Robin (Livingston)

      Jamieson, David

      Corbett, Robin

      Janner, Greville

      Corbyn, Jeremy

      Jones, Barry (Alyn and D'side)

      Cousins, Jim

      Jones, Jon Owen (Cardiff C)

      Cunningham, Jim (Covy SE)

      Jones, Martyn (Clwyd, SW)

      Dalyell, Tam

      Jones, Nigel (Cheltenham)

      Darling, Alistair

      Jowell, Tessa

      Davidson, Ian

      Kaufman, Rt Hon Gerald

      Davies, Bryan (Oldham C'tral)

      Keen, Alan

      Davies, Rt Hon Denzil (Llanelli)

      Kennedy, Charles (Ross,C&S)

      Denham, John

      Kennedy, Jane (Lpool Brdgn)

      Dixon, Don

      Khabra, Piara S

      771

      Kilfoyle, Peter

      Prentice, Bridget (Lew'm E)

      Kirkwood, Archy

      Prescott, Rt Hon John

      Lestor, Joan (Eccles)

      Primarolo, Dawn

      Lewis, Terry

      Purchase, Ken

      Liddell, Mrs Helen

      Quin, Ms Joyce

      Lloyd, Tony (Stretford)

      Radice, Giles

      Llwyd, Elfyn

      Randall, Stuart

      Loyden, Eddie

      Raynsford, Nick

      Lynne, Ms Liz

      Reid, Dr John

      McAllion, John

      Rendel, David

      McAvoy, Thomas

      Robertson, George (Hamilton)

      McCartney, Ian

      Robinson, Geoffrey (Co'try NW)

      McCrea, The Reverend William

      Rooker, Jeff

      Macdonald, Calum

      Rooney, Terry

      McKelvey, William

      Ross, Ernie (Dundee W)

      Mackinlay, Andrew

      Ross, William (E Londonderry)

      Maclennan, Robert

      Ruddock, Joan

      MacShane, Denis

      Salmond, Alex

      Madden, Max

      Sedgemore, Brian

      Mahon, Alice

      Sheldon, Rt Hon Robert

      Mandelson, Peter

      Shore, Rt Hon Peter

      Marek, Dr John

      Short, Clare

      Marshall, David (Shettleston)

      Skinner, Dennis

      Martin, Michael J (Springburn)

      Smith, Andrew (Oxford E)

      Martlew, Eric

      Smith, Chris (Isl'ton S & F'sbury)

      Maxtor, John

      Smith, Llew (Blaenau Gwent)

      Meacher, Michael

      Snape, Peter

      Meale, Alan

      Soley, Clive

      Michie, Bill (Sheffield Heeley)

      Spearing, Nigel

      Michie, Mrs Ray (Argyll & Bute)

      Spellar, john

      Milburn, Alan

      Squire, Rachel (Dunfermline W)

      Miller, Andrew

      Steel, Rt Hon Sir David

      Steinberg, Gerry

      Mitchell, Austin (Gt Grimsby)

      Stevenson, George

      Molyneaux, Rt Hon James

      Strang, Dr. Gavin

      Moonie, Dr Lewis

      Sutcliffe, Gerry

      Morgan, Rhodri

      Taylor, Matthew (Truro)

      Morley, Elliot

      Timms, Stephen

      Morris, Rt Hon Alfred (Wy'nshawe)

      Tipping, Paddy

      Morris, Rt Hon John (Aberavon)

      Turner, Dennis

      Mudie, George

      Vaz, Keith

      Mullin, Chris

      Walker, Rt Hon Sir Harold

      Oakes, Rt Hon Gordon

      Wallace, James

      O'Brien, William (Narmanton)

      Wardell, Gareth (Gower)

      O'Hara, Edward

      Wareing, Robert N

      Olner, Bill

      Watson, Mike

      O'Neill, Martin

      Wigley, Dafydd

      Orme, Rt Hon Stanley

      Willams, Rt Hon Alan (SW'n W)

      Paisley, The Reverend Ian

      Wiliams, Alan W (Carmarthen)

      Parry, Robert

      Wilson, Brian

      Patchett, Terry

      Wise, Audrey

      Pearson, Ian

      Worthington, Tony

      Pendry, Tom

      Wright, Dr Tony

      Pickthall, Colin

      Pike, Peter L

      Tellers for the Ayes:

      Pope, Greg

      Mrs. Diana Maddock and

      Powell, Ray (Ogmore)

      Mr. Don Foster

      NOES

      Ainsworth, Peter (East Surrey)

      Bellingham, Henry

      Aitken, Rt Hon Jonathan

      Bendall, Vivian

      Alison, Rt Hon Michael

      Beresford, Sir Paul

      Amess, David

      Biffen, Rt Hon John

      Ancram, Michael

      Booth, Hartley

      Arbuthnot, James

      Boswell, Tim

      Arnold, Jacques (Gravesham)

      Bottomley, Peter (Eltham)

      Arnold, Sir Thomas (Hazel Grv)

      Bottomley, Rt Hon Virginia

      Ashby, David

      Bowden, Sir Andrew

      Atkins, Robert

      Bowis, John

      Atkinson, Peter (Hexham)

      Boyson, Rt Hon Sir Rhodes

      Baker, Nicholas (North Dorset)

      Brandreth, Gyles

      Baldry, Tony

      Brazier, Julian

      Banks, Matthew (Southport)

      Bright, Sir Graham

      Banks, Robert (Harrogate)

      Brooke, Rt Hon Peter

      Bates, Michael

      Brown, M (Brigg & Cl'thorpes)

      Batiste, Spencer

      Browning, Mrs Angela

      772

      Bruce, Ian (Dorset)

      Hargreaves, Andrew

      Budgen, Nicholas

      Harris, David

      Burns, Simon

      Haselhurst, Alan

      Butcher, John

      Hawkins, Nick

      Butler, Peter

      Hawksley, Warren

      Butterfill, John

      Hayes, Jerry

      Carlisle, John (Luton North)

      Heald,Oliver

      Carlisle, Sir Kenneth (Lincoln)

      Heath, Rt Hon Sir Edward

      Carrington, Matthew

      Heathcoat-Amory, David

      Carttiss, Michael

      Hendry, Charles

      Cash,William

      Higgins, Rt Hon Sir Terence

      Channon, Rt Hon Paul

      Hill, James (Southampton Test)

      Chapman, Sydney

      Hogg, Rt Hon Douglas (G'tham)

      Churchill, Mr

      Horam, John

      Clappison, James

      Hordern, Rt Hon Sir Peter

      Clark, Dr Michael (Rochford)

      Howard, Rt Hon Michael

      Clarke, Rt Hon Kenneth (Ru'clif)

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

      Clifton-Brown, Geoffrey

      Howell, Rt Hon David (G'dford)

      Congdon, David

      Hughes, Robert G (Harrow W)

      Conway, Derek

      Hunt, Rt Hon David (Wirral W)

      Coombs, Anthony (Wyre For'st)

      Hunter, Andrew

      Coombs, Simon (Swindon)

      Hurd, Rt Hon Douglas

      Cope, Rt Hon Sir John

      Jack, Michael

      Cormack, Sir Patrick

      Jackson, Robert (Wantage)

      Couchman, James

      Jenkin, Bernard

      Cran, James

      Jessel, Toby

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

      Jones, Gwilym (Cardiff N)

      Curry, David (Skipton & Ripon)

      Jones, Robert B (W Hertfdshr)

      Davies, Quentin (Stamford)

      Kellett-Bowman, Dame Elaine

      Day, Stephen

      Key, Robert

      Dicks, Terry

      King, Rt Hon Tom

      Dorrell, Rt Hon Stephen

      Kirkhope, Timothy

      Douglas-Hamilton, Lord James

      Knapman, Roger

      Dover, Den

      Knight, Mrs Angela (Erewash)

      Duncan, Alan

      Knight Greg (Derby N)

      Duncan Smith, Iain

      Knox, Sir David

      Dunn, Bob

      Kynoch, George (Kincardine)

      Dykes, Hugh

      Lait, Mrs Jacqui

      Elletson, Harold

      Lang, Rt Hon Ian

      Emery, Rt Hon Sir Peter

      Lawrence, Sir Ivan

      Evans, David (Welwyn Hatfield)

      Legg, Barry

      Evans, Jonathan (Brecon)

      Leigh, Edward

      Evans, Nigel (Ribble Valley)

      Lennox-Boyd, Sir Mark

      Evans, Roger (Monmouth)

      Lester, Jim (Broxtowe)

      Evennett, David

      Lidngton, David

      Faber, David

      Lightbown, David

      Fabricant Michael

      Lilley, Rt Hon Peter

      Field, Barry (Isle of Wight)

      Lloyd, Rt Hon Sir Peter (Fareham)

      Fishburn, Dudley

      Lord, Michael

      Forman, Nigel

      Luff, Peter

      Forsyth, Rt Hon Michael (Stirling)

      Lyell, Rt Hon Sir Nicholas

      Forth, Eric

      MacGregor, Rt Hon John

      Fowler, Rt Hon Sir Norman

      MacKay, Andrew

      Fox, Dr Liam (Woodspring)

      Maclean, David

      Fox, Sir Marcus (Shipley)

      McLoughlin, Patrick

      Freeman, Rt Hon Roger

      McNair-Wilson, Sir Patrick

      French, Douglas

      Madel, Sir David

      Gale, Roger

      Maitland, Lady Olga

      Gallie, Phil

      Malone, Gerald

      Gardiner, Sir George

      Mans, Keith

      Garnier, Edward

      Marland, Paul

      Gill, Christopher

      Marlow, Tony

      Gillan, Cheryl

      Marshall, John (Hendon S)

      Goodson-Wickes, Dr Charles

      Marshall, Sir Michael (Arundel)

      Gorman, Mrs Teresa

      Martin, David (Portsmouth S)

      Gorst, Sir John

      Mates, Michael

      Grant, Sir A (SW Cambs)

      Mellor, Rt Hon David

      Greenway, Harry (Ealing N)

      Merchant, Piers

      Greenway, John (Ryedale)

      Mils, Iain

      Griffiths, Peter (Portsmouth, N)

      Mitchell, Andrew (Gedling)

      Grylls, Sir Michael

      Mitchell, Sir David (NW Hants)

      Hague, William

      Moate, Sir Roger

      Hamilton, Neil (Tatton)

      Monro, Sir Hector

      Hampson.Dr Keith

      Montgomery, Sir Fergus

      Hanley, Rt Hon Jeremy

      Moss, Malcolm

      Hannam, Sir John

      Needham. Rt Hon Richard

      773

      Nelson, Anthony

      Spring, Richard

      Neubert, Sir Michael

      Sproat Iain

      Newton, Rt Hon Tony

      Squire, Robin (Hornchurch)

      Nicholls, Patrick

      Stanley, Rt Hon Sir John

      Nicholson, David (Taunton)

      Steen, Anthony

      Nicholson, Emma (Devon West)

      Stephen, Michael

      Norris, Steve

      Stern, Michael

      Onslow, Rt Hon Sir Cranley

      Stewart, Allan

      Opponheim, Phillip

      Streeter, Gary

      Page, Richard

      Sumberg, David

      Paice, James

      Sweeney, Walter

      Patten, Rt Hon John

      Sykes,John

      Pattie, Rt Hon Sir Geoffrey

      Tapsell, Sir Peter

      Peacock, Mrs Elizabeth

      Taylor, Ian (Esher)

      Pickles, Eric

      Taylor, John M (Solihull)

      Porter, Barry (Wirral S)

      Temple-Morris, Peter

      Porter, David (Waveney)

      Thomason, Roy

      Portillo, Rt Hon Michael

      Thompson, Patrick (Norwich N)

      Powell, William (Corby)

      Thornton, Sir Malcolm

      Redwood, Rt Hon John

      Thurnham, Peter

      Richards, Rod

      Townsend, Cyril D (Bexl'yh'th)

      Riddick, Graham

      Tracey, Richard

      Robathan, Andrew

      Tredinnick, David

      Roberts, Rt Hon Sir Wyn

      Trend, Michael

      Robertson, Raymond (Ab'd'n S)

      Twinn, Dr Ian

      Robinson, Mark (Somerton)

      Vaughan, Sir Gerard

      Roe, Mrs Marion (Broxbourne)

      Viggers, Peter

      Rowe, Andrew (Mid Kent)

      Waldegrave, Rt Hon William

      Rumbold, Rt Hon Dame Angela

      Walden, George

      Ryder, Rt Hon Richard

      Walker, Bill (N Tayside)

      Sackville, Tom

      Waller, Gary

      Sainsbury, Rt Hon Sir Timothy

      Ward, John

      Scott, Rt Hon Sir Nicholas

      Wardle, Charles (Bexhill)

      Shaw, David (Dover)

      Waterson, Nigel

      Shaw, Sir Giles (Pudsey)

      Watts, John

      Shephard, Rt Hon Gillian

      Whitney, Ray

      Shepherd, Colin (Hereford)

      Whittingdale, John

      Shepherd, Richard (Aldridge)

      Widdecombe, Ann

      Shersby, Michael

      Wiggin, Sir Jerry

      Sims, Roger

      Winterton, Mrs Ann (Congleton)

      Skeet, Sir Trevor

      Wolfson, Mark

      Smith, Tim (Beaconsfield)

      Wood, Timothy

      Soames, Nicholas

      Yeo,Tim

      Spencer, Sir Derek

      Young, Rt Hon Sir George

      Spicer, Sir James (W Dorset)

      Tellers for the Noes:

      Spicer, Michael (S Worcs)

      Mr. Bowen Wells and

      Spink, Dr Robert

      Mr. David Willetts

      Question accordingly negatived.
      Mr. Matthew Taylor: I beg to move amendment No. 29, in page 165, line 10, at end insert—
      '(c) if it is a vehicle with engine size under 1,200 cc, the fuel efficient rate.'.
      The Chairman of Ways and Means (Mr. Michael Morris): With this, it will be convenient to discuss amendment No. 8, in line 12, at end insert—
      '(3A) The fuel-efficient rate is 60 per cent. of the general rate.'.
      Mr. Taylor: The amendment has two aims. First, it would help those who have been hard hit by rapid increases in petrol prices, a policy that the Government have pursued since the last general election. Secondly, it aims to reinforce the environmental benefits which the Government claim will flow from such changes.
      It is ironic that so many Conservative Members attacked the Liberal Democrats during the general election campaign for proposing fuel duty increases because, since the 1992 general election, petrol duty has gone up from 27.79p to 36.14p per litre. That is a 30 per cent. hike and an average increase of 9.1 per cent. a year. When VAT is
      774
      added to the duty, it means that people are paying nearly 10p a litre, or 44p a gallon, more at the pumps. That is double the rate of increase that we proposed, and those hon. Members—there are some in their places—who attacked us for that policy ought to reflect on their position if there is a vote on the amendment.
      The Government claim that their policy is intended to have a material impact on emissions and is part of their drive to tackle our environmental problems, not the least of which are air pollution and global warming; but such increases are a very rough tool with which to seek to achieve those aims. It is calculated that a 10 per cent. increase makes a difference of 1 per cent. or less in the amount of fuel consumed. The tool is relatively ineffective and falls hard on people in rural areas and those who depend on car ownership to get about.
      The alternative strategy is to use increases in petrol duty to cut vehicle excise duty. That has clear material benefits. First, it is vastly more effective in terms of the environmental aim. It gives people a direct incentive to invest in cars that are more fuel economic in the band that attracts lower vehicle excise duty. That means that the Government's emission targets can be achieved more effectively. People will have a direct financial incentive to downsize their vehicles.
      Ultimately, despite catalytic converters and other efforts to achieve greater fuel efficiency and lower emissions, the best way to cut vehicle emissions is to burn less fuel and only two options would achieve that: we can either directly dissuade people from driving, which is the hard option given the modern society in which we live, or persuade them to drive vehicles that burn less fuel. That is relatively easy with financial incentives.
      Everybody knows that a fuel-efficient vehicle will cost less to run, and we can add to that incentive by using revenues from petrol price increases to cut vehicle excise duty. Such cuts have another benefit in that they compensate those who are hardest hit by the Government's policy of increases in fuel duty; the money is put back in their pockets because they do not have to pay so much vehicle excise duty.
      Moreover, it is an affordable policy for those on low incomes for example, rural pensioners who need a vehicle to get to the shops and get on with their lives. Such people find it hard to keep a vehicle on the road because of the highs and lows of the expenses of doing so. If VED is cut to a notional level, they will find it easier to afford a vehicle, because at the moment ownership is taxed.
      However, those who cover an excessive mileage will pay more, because the use of the vehicle will be taxed. After all, it is the use and not the ownership of the vehicle that is a disbenefit to the wider community, whether it be through congestion or fuel emissions.
      The amendment takes a moderate approach to the matter. It accepts that money is tight for the Government. The proposal is for the smallest-engined vehicles only. It suggests only a relatively moderate cut. I should have preferred it if the Government had taken a stronger line on the matter. I should have liked the vehicle excise duty for smaller-engined, more fuel-efficient vehicles to be cut to a notional level—possibly no duty at all, with the policing of vehicle insurance and MOTs transferring to an MOT certificate on the window.
      If we considered cutting the duty to a notional level for smaller-engined vehicles, the vast majority of private motorists could easily be substantially better off. Some

      775
      people find that relatively hard to believe, but let me give an example. If we cut vehicle excise duty to a notional level on vehicles with engines of up to 1300 cc, but put an extra 10p duty on each litre of petrol, as the Government have done in the past few years, running an economical 1300 cc car with an overall fuel consumption of 40 miles per gallon—a real figure that is taken from an actual vehicle—would mean consuming 225 gallons of petrol a year. The extra 10p duty would therefore cost the average rural motorist, who does 9,000 miles a year, £98 a year. He would, however, be a net beneficiary by £37 a year if vehicle excise duty were reduced to a notional level.
      Most cars are not as economical as the one in the first example. Imagine a family car owner driving a 2,000 cc estate for 9,000 miles a year, at an average of 30 miles per gallon. On current figures, he pays £132 extra as a result of Government fuel price increases. The high-mileage car owner pays a whopping extra £366 per annum, but, under our policies, half the Tory fuel tax hike would bring in enough revenue to reduce VED to a nominal sum for cars up to 1,500 cc. People driving cars with 2 litre engines and above would not be entitled to any VED reduction, but they would have a substantial incentive to downsize their vehicles, again making substantial cost savings.
      The Government need to tackle emissions and to deal with the costs of motoring to the nation. There has been an increase in air pollution and in asthma levels. Increasing numbers of young school children suffer asthma. There is congestion in the cities and even in many rural areas. The Government's policy, however, has almost no impact on those problems, although it takes substantial amounts of money out of pockets, including the pockets of many of the poorest people in society.
      There is an alternative. I refuse to believe that Ministers' officials in the Treasury have not argued that abolishing VED and transferring the tax to petrol, so that it is a tax on the use rather than the ownership of a vehicle, makes sense. It makes sense to the people with whom we are most concerned—rural motorists, private motorists and the poorest motorists in particular. Poor motorists in rural areas do an average 7,000 miles a year. They would be clear net beneficiaries from the policies that we advocate.
      Mr. Alex Salmond: I am listening with great care to the hon. Gentleman and I have some sympathy with his remarks, but would not his policy benefit, as he put it, low-mileage motorists at the expense of high-mileage motorists? Would not that therefore tend to benefit urban motorists at the expense of rural motorists? The hon. Gentleman has many statistics. Will he assure me on that point?
      9.45 pm
      Mr. Taylor: First, let us bear in mind the fact that, if one is prepared to drive a smaller-engined vehicle, which we all want to encourage in order to reduce pollution, one could still be better off doing up to 20,000 miles a year, a substantial mileage. Secondly, we have argued for road-pricing schemes to tackle urban congestion and to encourage and finance the use of public transport, a policy that the Government are now considering. In those
      776
      circumstances, the rural motorist would be a beneficiary and the urban motorist might well find that he was paying extra, unless he opted to use public transport.
      The motorists who would be penalised by such a policy are a rather more specific breed, which may explain why the Government have decided not to pursue it—perhaps they feel that such people are their natural supporters. I refer, of course, to people driving very large-engined vehieles, by themselves, between cities and on a regular basis—in other words, people financed by large companies.
      It is not something that we want to encourage, and I suspect that it is not something of which the hon. Member for Banff and Buchan (Mr. Salmond) sees a great deal in his constituency, so I do not think that he need worry. It may, of course, be something in which Members of Parliament have a particular interest, but I generally travel by train between London and my constituency.
      Mr. David Nicholson: Has the hon. Gentleman worked out how he would distinguish, in Cornwall or Somerset for example, between urban motorists—people in suburbs or villages perhaps two or three miles from a town—and rural motorists? Where would he draw the line? Would not his suggestion create a new tier of bureaucracy?
      Mr. Taylor: The hon. Gentleman has misunderstood. Some people have advocated specific compensation schemes for rural areas, which I do not believe could be made to work. We have argued for urban road pricing in areas of congestion, as the Government are increasingly doing. That is how the particular cost of driving in urban areas would be reflected. For other motorists, we would merely transfer the cost from VED to petrol.
      One of the basic principles of environmental protection involves not taxing something that is essentially good. I do not think that anyone would wish to prevent vehicle ownership; we seek to tax the bad, or the excessive, use of a vehicle—excessive in terms either of mileage or of a vehicle's fuel consumption. That matter should not divide the Committee. Given that the Government have pursued a policy of high petrol price increases and taxation, I am surprised that they have not adopted our policy. As I said, I do not believe that Treasury officials have not investigated it as a possible option.
      I hope that, while specifically offering the opportunity to compensate those in rural areas who have been penalised by the Government's policy, the amendment will also provide the Minister with an opportunity to explain why he has not accepted such an obvious way of tackling environmental problems without penalising those in rural areas, those on low incomes or those dependent on a car.
      Mr. Heathcoat-Amory: The hon. Member says that the amendment is modest because money is tight, but it would cost £242 million a year to implement. As the Liberal Democrats have criticised other Opposition parties for their financial irresponsibility in recent years, I think that it is up to them to apply the same criticism to the amendment. They did not say how else the money was to be raised. As usual, they were extremely good at arguing for tax cuts and public expenditure increases, but that is not a responsible position to adopt.

      777
      Another reason why we oppose the amendment is that it would not deliver the desired environmental objectives efficiently. Higher fuel prices have a part to play in reducing harmful emissions because they encourage people to reduce fuel consumption in a variety of ways. They encourage people to purchase smaller cars, drive less and more efficiently, make shorter journeys and switch to other modes of transport, whereas the technique advocated by the hon. Member for Truro (Mr. Taylor) would not cover fuel consumption and would not penalise those who clock up high mileage or allow their vehicle's engine to fall into disrepair. Older cars, even if they are smaller, pollute more than newer cars, which have a larger capacity and are often fitted with catalytic convertors.
      The hon. Gentleman got into a bit of a muddle over the effect on the rural motorist. The effect of increasing petrol prices but cutting vehicle excise duties on some cars would not help those in rural areas. It would help those in urban areas who have a low mileage. I refuse to accept not only the hon. Gentleman's amendment but his logic.
      One other point—
      Mr. Matthew Taylor rose—
      Mr. Heathcoat-Amory: I am responding to the hon. Gentleman's speech.
      If we were to relieve smaller cars of part of their VED, it would invite manufacturers to reclassify their engines at 1199 cc, which would have very little benefit for the environment and highly distort the automobile market. For all those reasons, I invite my hon. Friends to reject the amendment.
      Mr. Taylor: I do not think that the Minister's arguments are terribly coherent. First, manufacturers already have various incentives, mainly because of markets overseas, to classify vehicles under the various capacities and, in this country, under the level of company taxation. Government policy, indeed, even in this country, already anticipitates that. It would be extremely difficult, however, for a company to reclassify a 2 litre, a 2.5 litre, or a 2.8 litre engine as a 1.199 litre engine. Simply, that is not practical.
      Although it is true that particulate emissions and various other emissions from older vehicles are relatively high, the main aim of Government policy, as I understand it, is to reduce global warming gases, especially the emission of carbon dioxide. Whichever fuel is burned, carbon dioxide is burnt off and carbon dioxide levels are directly related to the amount of fuel used. Vehicles with smaller engines use less fuel.
      Mr. Ian Bruce: That is not true.
      Mr. Taylor: It is a fact. It is also a fact that, because people are relatively affluent and can afford faster and more powerful vehicles, the fuel-efficiency savings available with modern, small-engined vehicles have been used up in achieving higher acceleration rates and higher power rather than higher fuel efficiency. Vehicles bought in the 1950s and 1960s, when petrol prices were relatively high, had 650 cc, 850 cc and 1 litre engines, whereas now
      778
      they have 1.3 litre, 1.4 litre and 1.5 litre engines. There are no disincentives to buying larger-engined vehicles. We see a clear trend in—
      Mr. Ian Bruce rose—
      Mr. Taylor: I shall give way in just a moment.
      The Minister argued that there was no advantage for rural motorists. The figures that I quoted came from the Automobile Association. The average rural motorist does 9,000 miles a year. The poorer rural motorist does an average of 7,000 miles a year. They are not the high-mileage drivers; they are beneficiaries of the policies that we advocate. The amendment is directly beneficial to them.
      Even if we took the more extreme examples of policy that I gave earlier, rural motorists would benefit; indeed, all motorists in smaller cars would benefit up to 20,000 miles a year. That is a simple fact. I do not understand why the Government have not followed that path. It seems popular, effective in tackling environmental problems and far fairer than the policies that the Government have pursued. The only assumption to make is that the Government's proposals are a fund-raising measure rather than one to tackle the environment—in which case, the Minister should be more blunt in saying so, rather than dressing up the proposal in green language.
      Mr. Bruce: I wanted to intervene only on the basis that the hon. Gentleman was making an assumption that vehicle manufacturers had increased engine sizes, as they did in many smaller cars, which made them more expensive to run. In fact, the very opposite happened. Many vehicles that have a larger engine for the same weight of vehicle use less fuel. One cannot assume that the size of the engine means that it uses more fuel. Often, the opposite is true.
      Mr. Taylor: The hon. Gentleman is talking nonsense. The only people who benefit in financial terms from larger-engined vehicles, as far as I know, are Members of Parliament. In the real world, people know that, broadly speaking, smaller-engined vehicles burn less fuel. That is a simple fact. To understand my point, the hon. Member for South Dorset (Mr. Bruce) need only consider the fuel efficiency statistics and the rated fuel bands, as we did in working out this policy using figures from the Automobile Association and the Royal Automobile Club and from motor manufacturers. If, at some stage, he loses his job in this place and decides to sell cars in a garage, if he argues with the customers who walk through the door that the bigger the engine size, the less fuel the car will use, he may experience a reaction similar to the one that he may receive at the next general election.
      Question put, That the amendment be made:—
      The Committee divided: Ayes 246, Noes 277.

      Division No. 57

      9.55 pm

      AYES

      Abbott, Ms Diane

      Ashdown, Rt Hon Paddy

      Adams, Mrs Irene

      Ashton, Joe

      Ainger, Nick

      Austin-Walker, John

      Ainsworth, Robert (Cov'try NE)

      Banks, Tony (Newham NW)

      Allen, Graham

      Barnes, Harry

      Alton, David

      Battle, John

      Anderson, Donald (Swansea E)

      Bayley, Hugh

      Anderson, Ms Janet (Ros'dale)

      Beckett, Rt Hon Margaret

      Armstrong, Hilary

      Beith, Rt Hon A J

      779

      Bell, Stuart

      Grocott, Bruce

      Benn, Rt Hon Tony

      Gunnell, John

      Benton, Joe

      Hall, Mike

      Bermingham, Gerald

      Hanson, David

      Berry, Roger

      Harman, MS Harriet

      Blunkett, David

      Harvey, Nick

      Boateng, Paul

      Heppell, John

      Boyes, Roland

      Hill, Keith (Streatham)

      Bradley, Keith

      Hinchliffe, David

      Bray, Dr Jeremy

      Hodge, Margaret

      Brown, Gordon (Dunfermline E)

      Hoey.Kate

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

      Home Robertson, John

      Bruce, Malcolm (Gordon)

      Hoon, Geoffrey

      Burden, Richard

      Howells, Dr. Kim (Pontypridd)

      Byers, Stephen

      Hoyle, Doug

      Caborn, Richard

      Hughes, Kevin (Doncaster N)

      Callaghan.Jim

      Hughes, Robert (Aberdeen N)

      Campbell, Mrs Anne (C'bridge)

      Hutton,John

      Campbell, Menzies (Fife NE)

      Illsley, Eric

      Campbell, Ronnie (Blyth V)

      Ingram, Adam

      Campbell-Savours, D N

      Jackson, Glenda (H'stead)

      Canavan, Dennis

      Jackson, Helen (Shef'ld, H)

      Cann, Jamie

      Jamieson, David

      Chidgey, David

      Jones, Barry (Alyn and D'side)

      Chisholm, Malcolm

      Jones, Jon Owen (Cardiff C)

      Church, Judith

      Jones, Lynne (B'ham S O)

      Clapham, Michael

      Jones, Martyn (Clwyd, SW)

      Clark, Dr David (South Shields)

      Jones, Nigel (Cheltenham)

      Clarke, Eric (Midlothian)

      Jowell, Tessa

      Clarke, Tom (Monklands W)

      Kaufman, Rt Hon Gerald

      Clelland, David

      Keen, Alan

      Clwyd, Mrs Ann

      Kennedy, Charles (Ross,C&S)

      Coffey, Ann

      Kennedy, Jane (Lpool Brdgn)

      Cohen, Harry

      Khabra, Piare S

      Connarty, Michael

      Kilfoyle, Peter

      Cook, Robin (Livingston)

      Kirkwood, Archy

      Corbett, Robin

      Lestor, Joan (Eccles)

      Corbyn, Jeremy

      Lewis, Terry

      Cousins, Jim

      Liddell, Mrs Helen

      Cunningham, Jim (Covy SE)

      Livingstone, Ken

      Dalyell, Tam

      Lloyd, Tony (Stretford)

      Darling, Alistair

      Llwyd,Elfyn

      Davidson, Ian

      Loyden, Eddie

      Davies, Bryan (Oldham C'tral)

      Lynne, Ms Liz

      Davies, Rt Hon Denzil (Llanelli)

      McAllion, John

      Denham, John

      McAvoy, Thomas

      Dixon, Don

      McCartney, Ian

      Dobson, Frank

      McCrea, The Reverend William

      Donohoe, Brian H

      Macdonald, Calum

      Dowd, Jim

      McKelvey, William

      Dunwoody, Mrs Gwyneth

      Mackinlay, Andrew

      Eagle, Ms Angela

      Maclennan, Robert

      Eastham, Ken

      MacShane, Denis

      Enright, Derek

      Madden, Max

      Etherington, Bill

      Maddock, Diana

      Evans, John (St Helens N)

      Mahon,Alice

      Ewing, Mrs Margaret

      Marek, Dr John

      Field, Frank (Birkenhead)

      Marshall, David (Shettleston)

      Fisher, Mark

      Martin, Michael J (Springburn)

      Flynn, Paul

      Martlew.Eric

      Foster, Rt Hon Derek

      Maxton, John

      Foulkes, George

      Meacher, Michael

      Fyfe, Maria

      Meale, Alan

      Galbraith, Sam

      Michael, Alun

      Galloway, George

      Michie, Bill (Sheffield Heeley)

      Gapes, Mike

      Michie, Mrs Ray (Argyll & Bute)

      George, Bruce

      Milburn,Alan

      Gerrard, Neil

      Miller, Andrew

      Gilbert, Rt Hon Dr John

      Mitchell, Austin (Gt Grimsby)

      Godman, Dr Norman A

      Molyneaux, Rt Hon James

      Godsiff, Roger

      Moonie.Dr Lewis

      Golding, Mrs Llin

      Morgan, Rhodri

      Gordon, Mildred

      Morley, Elliot

      Graham, Thomas

      Morris, Rt Hon Alfred (Wy'nshawe)

      Grant, Bernie (Tottenham)

      Morris, Estelle (B'ham Yardley)

      Griffiths, Nigel (Edinburgh S)

      Morris, Rt Hon John (Aberavon)

      780

      Mudie, George

      Shore, Rt Hon Peter

      Mullin, Chris

      Short, Clare

      Oakes, Rt Hon Gordon

      Skinner, Dennis

      O'Brien, William (Normanton)

      Smith, Andrew (Oxford E)

      O'Hara, Edward

      Smith, Chris (Isl'ton S & F'sbury)

      Olner, Bill

      Smith, Llew (Blaenau Gwent)

      O'Neill, Martin

      Snape, Peter

      Orme, Rt Hon Stanley

      Soley, Clive

      Paisley, The Reverend Ian

      Spearing, Nigel

      Parry, Robert

      Spellar, John

      Patchett, Terry

      Squire, Rachel (Dunfermline W)

      Pearson, Ian

      Steel, Rt Hon Sir David

      Pendry, Tom

      Steinberg, Gerry

      Pickthall, Colin

      Stevenson, George

      Pike, Peter L

      Strang, Dr. Gavin

      Pope, Greg

      Straw, Jack

      Powell, Ray (Ogmore)

      Sutcliffe, Gerry

      Prentice, Bridget (Lew'm E)

      Taylor, Rt Hon John D (Strgfd)

      Prentice, Gordon (Pendle)

      Taylor, Matthew (Truro)

      Prescott, Rt Hon John

      Timms, Stephen

      Primarolo, Dawn

      Tipping, Paddy

      Purchase, Ken

      Turner, Dennis

      Quin, Ms Joyce

      Vaz, Keith

      Radice, Giles

      Walker, Rt Hon Sir Harold

      Randall, Stuart

      Wallace, James

      Raynsford, Nick

      Wardell, Gareth (Gower)

      Reid, Dr John

      Wareing, Robert N

      Rendel, David

      Watson, Mike

      Robertson, George (Hamilton)

      Wicks, Malcolm

      Robinson, Geoffrey (Co'try NW)

      Wigley, Dafydd

      Roche, Mrs Barbara

      Williams, Rt Hon Alan (Sw'n W)

      Rogers, Allan

      Williams, Alan W (Carmarthen)

      Rooker, Jeff

      Wilson, Brian

      Rooney, Terry

      Wise, Audrey

      Ross, Ernie (Dundee W)

      Worthington, Tony

      Ross, William (E Londonderry)

      Wright, Dr Tony

      Ruddock, Joan

      Salmond.Alex

      Tellers for the Ayes:

      Sedgemore, Brian

      Mr. Simon Hughes and

      Sheldon, Rt Hon Robert

      Mr. Don Foster

      NOES

      Ainsworth, Peter (East Surrey)

      Budgen, Nicholas

      Aitken, Rt Hon Jonathan

      Burns, Simon

      Alison, Rt Hon Michael (Selby)

      Butcher, John

      Amess, David

      Butler, Peter

      Ancram, Michael

      Butterfill, John

      Arbuthnot James

      Carlisle, John (Luton North)

      Arnold, Jacques (Gravesham)

      Carlisle, Sir Kenneth (Lincoln)

      Arnold, Sir Thomas (Hazel Grv)

      Carrington, Matthew

      Ashby, David

      Carttiss, Michael

      Atkins, Robert

      Cash, William

      Atkinson, Peter (Hexham)

      Channon, Rt Hon Paul

      Baker, Nicholas (North Dorset)

      Churchill, Mr

      Baldry, Tony

      Clappison, James

      Banks, Matthew (Southport)

      Clark, Dr Michael (Rochford)

      Banks, Robert (Harrogate)

      Clarke, Rt Hon Kenneth (Ru'clif)

      Batiste, Spencer

      Clifton-Brown, Geoffrey

      Bellingham, Henry

      Congdon, David

      Bendall, Vivian

      Conway, Derek

      Beresford, Sir Paul

      Coombs, Anthony (Wyre Fo'st)

      Biffen, Rt Hon John

      Coombs, Simon (Swindon)

      Booth, Hartley

      Cope, Rt Hon Sir John

      Boswell, Tim

      Cormack, Sir Patrick

      Bottomley, Peter (Eltham)

      Couchman, James

      Bottomley, Rt Hon Virginia

      Cran, James

      Bowden, Sir Andrew

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

      Bowis, John

      Curry, David (Skipton & Ripon)

      Boyson, Rt Hon Sir Rhodes

      Davies, Quentin (Stamford)

      Brandreth, Gyles

      Day, Stephen

      Brazier, Julian

      Delvin, Tim

      Bright, Sir Graham

      Dicks, Terry

      Brooke, Rt Hon Peter

      Dorrell, Rt Hon Stephen

      Brown, M (Brigg & Cl'thorpes)

      Douglas-Hamilton, Lord James

      Browning, Mrs Angela

      Dover, Den

      Bruce, Ian (Dorset)

      Duncan, Alan

      781

      Duncan Smith, Iain

      Knight, Gregg (Derby N)

      Dunn, Bob

      Knox, Sir David

      Dykes, Hugh

      Kynoch, George (Kincardine)

      Elletson, Harold

      Lait, Mrs Jacqui

      Emery, Rt Hon Sir Peter

      Lang, Rt Hon Ian

      Evans, David (Welwyn Hatfield)

      Lawrence, Sir Ivan

      Evans, Jonathan (Brecon)

      Legg, Barry

      Evans, Nigel (Ribble Hatfield)

      Leigh, Edward

      Evans, Roger (Monmouth)

      Lennox-Boyd, Sir Mark

      Evennett, David

      Lester, Jim (Broxtowe)

      Faber, David

      Lidington, David

      Fabricant Michael

      Lightbown, David

      Field, Barry (Isle of Wight)

      Lilley, Rt Hon Peter

      Fishburn, Dudley

      Lloyd, Rt Hon Sir Peter (Fareham)

      Forman, Nigel

      Lord.Michael

      Forsyth, Rt Hon Michael (Stirling)

      Luff, Peter

      Forth, Eric

      Lyell, Rt Hon Sir Nicholas

      Fowler, Rt Hon Sir Norman

      MacGregor, Rt Hon John

      Fox, Dr Liam (Woodspring)

      MacKay, Andrew

      Fox, Sir Marcus (Shipley)

      Maclean, David

      Freeman, Rt Hon Roger

      McLoughlin, Patrick

      French, Douglas

      McNair-Wilson, Sir Patrick

      Gallie, Roger

      Maitland, Lady Olga

      Gallie, Phil

      Malone, Gerald

      Gardiner, Sir George

      Mans, Keith

      Garnier, Edward

      Marland, Paul

      Gill, Christopher

      Marshall, John (Hendon S)

      Gillan, Cheryl

      Marshall, Sir Michael (Arundel)

      Goodson-Wickes, Dr Charles

      Martin, David (Portsmouth S)

      Gorman, Mrs Teresa

      Mates, Michael

      Gorst Sir John

      Mellor, Rt Hon David

      Grant, Sir A (SW Cambs)

      Merchant, Piers

      Greenway, Harry (Ealing N)

      Mills, Iain

      Greenway, John (Ryedale)

      Mitchell, Andrew (Gedling)

      Griffiths, Peter (Portsmouth, N)

      Mitchell, Sir David (NW Hants)

      Grylls, Sir Michael

      Moate, Sir Roger

      Hague, William

      Monro, Sir Hector

      Hamilton, Neil (Tatton)

      Montgomery, Sir Fergus

      Hampson.Dr Keith

      Moss, Malcolm

      Hanley, Rt Hon Jeremy

      Needham, Rt Hon Richard

      Hannam, Sir John

      Nelson, Anthony

      Hargreaves, Andrew

      Neubert, Sir Michael

      Harris, David

      Newton, Rt Hon Tony

      Haselhurst, Alan

      Nicholls, Patrick

      Hawkins, Nick

      Nicholson, David (Taunton)

      Hawksley, Warren

      Nicholson, Emma (Devon West)

      Hayes, Jerry

      Norris, Steve

      Heald,Oliver

      Onslow, Rt Hon Sir Cranley

      Heath, Rt Hon Sir Edward

      Oppenheim, Phillip

      Heathcoat-Amory, David

      Page, Richard

      Hendry, Charles

      Paice, James

      Higgins, Rt Hon Sir Terence

      Patten, Rt Hon John

      Hill, James (Southampton Test)

      Pattie, Rt Hon Sir Geoffrey

      Hogg, Rt Hon Douglas (G'tham)

      Peacock, Mrs Elzabeth

      Horam, John

      Pickles, Eric

      Hordem, Rt Hon Sir Peter

      Porter, Barry (Wirral S)

      Howard, Rt Hon Michael

      Porter, David (Waveney)

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

      Portillo, Rt Hon Michael

      Howell, Rt Hon David (G'dford)

      Powell, William (Corby)

      Hughes, Robert G (Harrow W)

      Redwood, Rt Hon John

      Hurt, Rt Hon David (Wirral W)

      Richards, Rod

      Hunter, Andrew

      Riddick, Graham

      Hurd, Rt Hon Douglas

      Robathan, Andrew

      Jack, Michael

      Roberts, Rt Hon Sir Wyn

      Jackson, Robert (Wantage)

      Robertson, Raymond (Ab'd'n S)

      Jenkin, Bernard

      Robinson, Mark (Somerton)

      Jessel,Toby

      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

      Kiffedder, Sir James

      Sainsbury, Rt Hon Sir Timothy

      King, Rt Hon Tom

      Scott, Rt Hon Sir Nicholas

      Kirkhope, Timothy

      Shaw, David (Dover)

      Knapman, Roger

      Shaw, Sir Giles (Pudsey)

      Knight, Mrs Angela (Erewash)

      Shephard, Rt Hon Gillian

      782

      Shepherd, Colin (Hereford)

      Townsend, Cyril D (Bexl'yh'th)

      Shersby, Michael

      Tracey, Richard

      Sims, Roger

      Tredinnick, David

      Skeet, Sir Trevor

      Trend, Michael

      Smith, Tim (Beaconsfield)

      Twinn, Dr Ian

      Soames, Nicholas

      Vaughan, Sir Gerard

      Spencer, Sir Derek

      Viggers, Peter

      Spicer, Sir James (W Dorset)

      Waldegrave, Rt Hon William

      Spicer, Michael (S Worcs)

      Walden, George

      Spink Dr Robert

      Walker.Bill (N Tayside)

      Spring, Richard

      Waller, Gary

      Sproat Iain

      Ward, John

      Squire, Robin (Hornchurch)

      Wardle, Charles (Bexhill)

      Stanley, Rt Hon Sir John

      Wateraon, Nigel

      Steen, Anthony

      Watts, John

      Stephen, Michael

      Wells,Bowen

      Stern, Michael

      Whitney, Ray

      Stewart, Allan

      Whittingdale, John

      Streeter, Gary

      Widdecombe, Ann

      Sumberg, David

      Wiggin, Sir Jerry

      Sweeney, Walter

      Willetts, David

      Sykes, John

      Wilshire, David

      Tapsell, Sir Peter

      Winterton, Mrs Ann (Congleton)

      Taylor, Ian (Esher)

      Wolfson, Mark

      Taylor, John M (Solihull)

      Wood, Timothy

      Temple-Morris, Peter

      Yeo,Tim

      Thompson, Roy

      Young, Rt Hon Sir George

      Thompson, Patrick (Norwich N)

      Tellers for the Noes:

      Thornton, Sir Malcolm

      Mr. Sidney Chapman and

      Thurnham, Peter

      Mr. Michael Bates

      Question accordingly negatived.
      Amendments made: No. 42, in page 168, line 14, leave out 'or forestry' and insert
      ',forestry or activities falling within sub-paragraph (2A).
      (2A) The activities falling within this sub-paragraph are—

      (a) cutting verges bordering public roads;

      (b) cutting hedges or trees bordering public roads or bordering verges which border public roads.'.

      No. 43, in page 168, line 22, at end insert—
      '413B.—(1) A vehicle is a special concessionary vehicle if it is a light agricultural vehicle.
      (2) In sub-paragraph (1) "light agricultural vehicle" means a vehicle which—

      (a) has a revenue weight not exceeding 1,000 kilograms,

      (b) is designed and constructed so as to seat only the driver,

      (c) is designed and constructed primarily for use otherwise than on roads, and

      (d) is used solely for purposes relating to agriculture, horticulture or forestry.'.—[Dr. Fox.]

      Ms Primarolo: I beg to move amendment No. 33, in page 168, line 22, at end insert—
      `4BA. A vehicle is a special concessionary vehicle if it is constructed or adapted to be used primarily for towing a disabled vehicle in such a manner (whether or not involving superimposition) as to cause a substantial part of the weight of the disabled vehicles to be borne by the vehicle in question.'.
      The First Deputy Chairman of Ways and Means (Dame Janet Fookes): With this, it will be convenient to discuss also the following: Amendment No. 30, in page 168, leave out lines 42 and 43.
      Government amendments Nos. 44 to 47.
      Ms Primarolo: I do not wish unduly to detain the House. These are important matters which we discussed earlier this evening. The amendment seeks to delete the new proposals which the Government have introduced in vehicle excise duty for road recovery vehicles and to

      783
      maintain the status quo. These specialised vehicles are restricted by law as to the work which they can carry out, so the points made by the Minister earlier about multiple use do not apply.
      The amendment is particularly important because the majority of those vehicles are partial-lift vehicles which are not used extensively, and for long periods are waiting for calls and emergency requests from the police. The Minister told us that he needed to deal with anomalies, but, as this evening has demonstrated, he is creating more than he is closing. The Minister told us that the measures will bring in only another 1 per cent. of extra revenue to the Government, an amount they could easily forgo pending the important review of services. It is a commonsense answer to a practical set of problems and it totally beggars belief that the Government are prepared to make every concession possible to farmers, to keep their Back Benchers and the farming industry happy, yet they will not take vital steps to safeguard public safety and safety on our roads. The costs are minimal, but the principle is important.
      The Government have failed to respond to those arguments. While providing some concessions, their amendments do not go far enough. Some companies will still be adversely affected and a decline in the service will follow. We intend, therefore, to press our amendments to the vote at the conclusion of this brief debate.
      Mr. Edward O'Hara: Unlike the lighter vehicles used to recover cars and roadside rescue vehicles, heavy recovery vehicles are highly specialised, as my hon. Friend the Member for Bristol, South (Ms Primarolo) pointed out. They are used to recover fully laden heavy goods vehicles and have a very low annual mileage. There are few jobs over which to spread the costs. They represent a long-term investment, with a long-term payback period and an annual income per vehicle that is extremely sensitive to the cost of overheads.
      As my hon. Friend the Member for Bristol, South said, the Government amendment makes some concessions, but operators will still have to pay a nine or 10-fold increase in excise duty from the present standard £85, instead of the proposed fiftyfold increase. That will force some operators out of business and lead others to opt out of heavy vehicle recovery, which could mean that many parts of the country will end up with only a limited capacity for removing broken-down or accident-damaged vehicles. That will lead to longer delays in clearing roads and poses questions for public safety.
      The proposals should be put aside, pending a review of the implications, and the standard flat rate should be retained meanwhile. Otherwise, heavy recovery vehicles will simply not be available to assist at emergencies when required.
      I am thinking of a heavy vehicle recovery operation in my constituency adjacent to my home. It is at the junction of the M57 and M62 motorways. The junction of the M57 and M58 is 10 miles up the road, as well as access.to the container depot at Liverpool docks. Believe it or not, just as much tonnage goes through the docks as it did in Liverpool's heyday, but nowadays it is in containers on heavily laden vehicles. The bottleneck of the Runcorn suspension bridge is 10 miles further away, leading to the
      784
      heavy chemical industrial area of Runcorn and onwards, via the M56, to the bottleneck access to north Wales. The junction of the M62 with the M6 and the notorious Thelwall viaduct are 15 miles away and the junction with the notorious M61 and M63 is about 10 miles further away, in Greater Manchester.
      The Government should take away their recommendation, or, when emergencies happen, no heavy recovery vehicles will be available for specialised roadside rescue, there will be inordinate delays and possibly life-threatening accidents.
      10.15 pm
      Mr. Heathcoat-Amory: I do not know whether the hon. Member for Knowsley, South (Mr. O'Hara) was here earlier today when we debated those matters extensively, but I made it clear then that the Government's amendments meet the concerns that he raises.
      The heavier recovery vehicles will now be taxed at a much more favourable rate than if they were heavy goods vehicles. For instance, middle-weight recovery vehicles will pay only £450 duty and very heavy vehicles that may be used only occasionally will pay £750, compared with up to £5,000 a year for heavy goods vehicles.
      The trade says that it is satisfied with that structure. The Retail Motor Industry Federation, which is important because it includes recovery vehicle operators, has written to me saying that it is satisfied with the proposals. If we have satisfied the trade, we should have satisfied the Committee.
      Question put, That the amendment be made:—
      The Committee divided: Ayes 245, Noes 275.

      Division No. 58

      10.15 pm

      AYES

      Abbott, Ms Diane

      Byers, Stephen

      Adams, Mrs Irene

      Caborn, Richard

      Ainger, Nick

      Callaghan,Jim

      Ainsworth, Robert (Cov'try NE)

      Campbell, Mrs Anne (C'bridge)

      Allen, Graham

      Campbell, Menzies (Fife NE)

      Alton, David

      Campbell, Ronnie (Blyth V)

      Anderson, Donald (Swansea E)

      Campbell-Savours, D N

      Anderson, Ms Janet (Ros'dale)

      Canavan, Dennis

      Armstrong, Hilary

      Cann, Jamie

      Ashdown, Rt Hon Paddy

      Chidgey, David

      Ashton, Joe

      Chisholm, Malcolm

      Austin-Walker, John

      Church, Judith

      Banks, Tony (Newham NW)

      Clapham, Michael

      Barnes, Harry

      Clark, Dr David (South Shields)

      Battle, John

      Clarke, Eric (Midlothian)

      Bayley, Hugh

      Clarke, Tom (Monklands W)

      Beckett, Rt Hon Margaret

      Clelland, David

      Beith, Rt Hon A J

      Clwyd, Mrs Ann

      Bell, Stuart

      Coffey, Ann

      Benn, Rt Hon Tony

      Cohen, Harry

      Benton, Joe

      Connarty, Michael

      Bermingham, Gerald

      Cook, Robin (Livingston)

      Berry, Roger

      Corbett, Robin

      Blunkett, David

      Corbyn, Jeremy

      Boateng, Paul

      Cousins, Jim

      Boyes, Roland

      Cunningham, Jim (Covy SE)

      Bradley, Keith

      Dalyell, Tam

      Bray, Dr Jeremy

      Darling, Alistair

      Brown, Gordon (Dunfermline E)

      Davidson, Ian

      Brown, Nicholas

      Davies, Bryan (Oldham C'tral)

      Bruce, Malcolm (Gordon)

      Davies, Rt Hon Denzil (Llanelli)

      Burden, Richard

      Denham, John

      785

      Dixon,Don

      McAvoy, Thomas

      Dobson, Frank

      McCartney, Ian

      Donohoe, Brian H

      McCrea, The Reverend William

      Dowd, Jim

      Macdonald, Calum

      Dunwoody, Mrs Gwyneth

      McKelvey.William

      Eagle, Ms Angela

      Mackinlay, Andrew

      Eastham, Ken

      Maclennan, Robert

      Enright, Derek

      MacShane, Denis

      Etherington, Bill

      Madden, Max

      Evans, John (St Helens N)

      Maddock, Diana

      Ewing, Mrs Margaret

      Mahon, Alice

      Field, Frank (Birkenhead)

      Marek, Dr John

      Fisher, Mark

      Marshall, David (Shettleston)

      Flynn, Paul

      Martin, Michael J (Springburn)

      Foster, Rt Hon Derek

      Martlew, Eric

      Foster, Don (Bath)

      Maxton, John

      Foulkes, George

      Meacher, Michael

      Fyfe, Maria

      Meale, Alan

      Galbraith, Sam

      Michael, Alun

      Galloway, George

      Michie, Bill (Sheffield Heeley)

      Gapes, Mike

      Michie, Mrs Ray (Argyll & Bute)

      George, Bruce

      Milburn, Alan

      Gerrard, Neil

      Miller, Andrew

      Gilbert, Rt Hon Dr John

      Mitchell, Austin (Gt Grimsby)

      Godman, Dr Norman A

      Molyneaux, Rt Hon James

      Godsiff, Roger

      Moonie, Dr Lewis

      Golding, Mrs Llin

      Morgan, Rhodri

      Gordon, Mildred

      Morley, Elliot

      Graham, Thomas

      Morris, Rt Hon Alfred (Wy'nshawe)

      Grant, Bernie (Tottenham)

      Morris, Rt Hon John (Aberavon)

      Griffiths, Nigel (Edinburgh S)

      Mudie, George

      Grocott, Bruce

      Mullin, Chris

      Gunnell, John

      Oakes, Rt Hon Gordon

      Hall, Mike

      O'Brien, William (Normanton)

      Hanson, David

      O'Hara, Edward

      Harman, Ms Harriet

      Olner, Bill

      Harvey, Nick

      O'Neill, Martin

      Heppell, John

      Orme, Rt Hon Stanley

      Hill, Keith (Streatham)

      Paisley, The Reverend Ian

      Hinchliffe, David

      Parry, Robert

      Hodge, Margaret

      Patchett, Terry

      Hoey, Kate

      Pearson, Ian

      Home Robertson, John

      Pendry, Tom

      Hoon, Geoffrey

      Pickthall, Colin

      Howells, Dr. Kim (Pontypridd)

      Pike, Peter L

      Hoyle, Doug

      Pope, Greg

      Hughes, Kevin (Doncaster N)

      Powell, Ray (Ogmore)

      Hughes, Robert (Aberdeen N)

      Prentice, Bridget (Lew'm E)

      Hughes, Simon (Southwark)

      Prentice, Gordon (Pendle)

      Hutton, John

      Prescott, Rt Hon John

      Illsley, Eric

      Primarolo, Dawn

      Ingram, Adam

      Purchase, Ken

      Jackson, Glenda (H'stead)

      Quin, Ms Joyce

      Jackson, Helen (Shef'ld, H)

      Radice, Giles

      Jamieson, David

      Randall, Stuart

      Jones, Barry (Alyn and D'side)

      Rathbone, Tim

      Jones, Jon Owen (Cardiff C)

      Raynsford, Nick

      Jones, Lynne (B'ham S O)

      Reid, Dr John

      Jones, Martyn (Clwyd, SW)

      Rendel, David

      Jones, Nigel (Cheltenham)

      Robertson, George (Hamilton)

      Kaufman, Rt Hon Gerald

      Robinson, Geoffrey (Co'try NW)

      Keen, Alan

      Roche, Mrs Barbara

      Kennedy, Charles (Ross, C&S)

      Rogers, Allan

      Kennedy, Jane (Lpool Brdgn)

      Rooker, Jeff

      Khabra, Piara S

      Rooney, Terry

      Kifoyle, Peter

      Ross, Ernie (Dundee W)

      Kirkwood, Archy

      Ross, William (E Londonderry)

      Lestor, Joan (Eccles)

      Ruddock, Joan

      Lewis, Terry

      Salmond, Alex

      Liddell, Mrs Helen

      Sedgemore, Brian

      Livingstone, Ken

      Sheldon, Rt Hon Robert

      Lloyd, Tony (Stretford)

      Shore, Rt Hon Peter

      Llwyd, Elfyn

      Short, Clare

      Loyden, Eddie

      Skinner, Dennis

      Lynne, Ms Liz

      Smith, Andrew (Oxford E)

      McAllion, John

      Smith, Chris (Isl'ton S & F'sbury)

      786

      Smith, Llew (Blaenau Gwent)

      Vaz, Keith

      Snape, Peter

      Walker, Rt Hon Sir Harold

      Soley, Clive

      Wardell, Gareth (Gomer)

      Spearing, Nigel

      Wareing, Robert N

      Spellar, John

      Watson, Mike

      Squire, Rachel (Dunfermline W)

      Wicks, Malcolm

      Steel, Rt Hon Sir David

      Wigley, Dafydd

      Steinberg, Gerry

      Williams, Rt Hon Alan (Sw'n W)

      Stevenson, George

      Williams, Alan W (Carmarthen)

      Strang, Dr. Gavin

      Wilson, Brian

      Straw, Jack

      Wise, Audrey

      Sutcliffle, Gerry

      Worthington, Tony

      Taylor, Rt Hon John D (Strgfd)

      Wright, Dr Tony

      Taylor, Matthew (Truro)

      Timms, Stephen

      Tellers for the Ayes:

      Tipping, Paddy

      Mrs. Estelle Morris and

      Turner, Dennis

      Ms Tessa Jowell

      NOES

      Ainsworth, Peter (East Surrey)

      Cope, Rt Hon Sir John

      Aitken, Rt Hon Jonathan

      Cormack, Sir Patrick

      Alison, Rt Hon Michael (Selby)

      Couchman, James

      Amess, David

      Cran, James

      Ancram, Michael

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

      Arbuthnot, James

      Curry, David (Skipton & Ripon)

      Arnold, Jacques (Gravesham)

      Davies, Quentin (Stamford)

      Arnold, Sir Thomas (Hazel Grv)

      Day, Stephen

      Ashby, David

      Delvin,Tim

      Atkins, Robert

      Dicks, Terry

      Atkinson, Peter (Hexham)

      Dorrell, Rt Hon Stephen

      Baker, Nicholas (North Dorset)

      Douglas-Hamilton, Lord James

      Baldry, Tony

      Dover, Den

      Banks, Matthew (Southport)

      Duncan, Alan

      Banks, Robert (Harrogate)

      Duncan Smith, Iain

      Batiste, Spencer

      Dunn, Bob

      Bellingham, Henry

      Dykes, Hugh

      Bendall, Vivian

      Elletson, Harold

      Beresford, Sir Paul

      Emery, Rt Hon Sir Peter

      Biffen, Rt Hon John

      Evans, David (Welwyn Hatfield)

      Booth, Hartley

      Evans, Jonathan (Brecon)

      Boswell,Tim

      Evans, Nigel (Ribble Valley)

      Bottomley, Peter (Eltham)

      Evans, Roger (Monmouth)

      Bottomley, Rt Hon Virginia

      Evennett, David

      Bowden, Sir Andrew

      Faber, David

      Bowis, John

      Fabricant, Michael

      Boyson, Rt Hon Sir Rhodes

      Field, Barry (Isle of Wight)

      Brandreth, Gyles

      Fishburn, Dudley

      Brazier, Julian

      Forman, Nigel

      Bright Sir Graham

      Forsyth, Rt Hon Michael (Stirling)

      Brooke, Rt Hon Peter

      Forth, Eric

      Brown, M (Brigg & Cl'thorpes)

      Fowler, Rt Hon Sir Norman

      Browning, Mrs Angela

      Fox, Dr Liam (Woodspring)

      Bruce, Ian (Dorset)

      Fox, Sir Marcus (Shipley)

      Budgen, Nicholas

      Freeman, Rt Hon Roger

      Burt, Alistair

      French, Douglas

      Butcher, John

      Gale, Roger

      Butler, Peter

      Gallie, Phil

      Butterfill, John

      Gardiner, Sir George

      Carlisle, John (Luton North)

      Garnier, Edward

      Carlisle, Sir Kenneth (Lincoln)

      Gill, Christopher

      Carrington, Matthew

      Gillan, Cheryl

      Carttiss, Michael

      Goodson-Wickes, Dr Charles

      Cash, William

      Gorman, Mrs Teresa

      Channon, Rt Hon Paul

      Gorst, Sir John

      Chapman, Sydney

      Grant, Sir A (SW Cambs)

      Churchill, Mr

      Greenway, Harry (Ealing N)

      Clappison, James

      Greenway, John (Ryedale)

      Clark, Dr Michael (Rochford)

      Griffiths, Peter (Portsmouth, N)

      Clarke, Rt Hon Kenneth (Ru'clif)

      Grylls, Sir Michael

      Clifton-Brown, Geoffrey

      Hague, William

      Congdon, David

      Hampson, Dr Keith

      Conway, Derek

      Hanley, Rt Hon Jeremy

      Coombs, Anthony (Wyre For'st)

      Hannam, Sir John

      Coombs, Simon (Swindon)

      Hargreaves, Andrew

      787

      Harris, David

      Newton, Rt Hon Tony

      Haselhurst,Alan

      Nicholls, Patrick

      Hawkins, Nick

      Nicholson, David (Taunton)

      Hawksley, Warren

      Nicholson, Emma (Devon West)

      Hayes, Jerry

      Norris, Steve

      Heald,Oliver

      Onslow, Rt Hon Sir Cranley

      Heath, Rt Hon Sir Edward

      Oppenheim, Phillip

      Heathcoat-Amory, David

      Page, Richard

      Hendry, Charles

      Paice, James

      Hicks, Robert

      Patten, Rt Hon John

      Higgins, Rt Hon Sir Terence

      Pattie.Rt Hon Sir Geoffrey

      Hill, James (Southampton Test)

      Peacock, Mrs Elizabeth

      Hogg, Rt Hon Douglas (G'tham)

      Pickles, Eric

      Horam, John

      Porter, Barry (Wirral S)

      Hordern, Rt Hon Sir Peter

      Porter, David (Waveney)

      Howard, Rt Hon Michael

      Portillo, Rt Hon Michael

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

      Powell, William (Corby)

      Howell, Rt Hon David (G'dford)

      Redwood, Rt Hon John

      Hughes, Robert G (Harrow W)

      Richards, Rod

      Hunt, Rt Hon David (Wrral W)

      Riddck, Graham

      Hunter, Andrew

      Robathan, Andrew

      Hurd, Rt Hon Douglas

      Roberts, Rt Hon Sir Wyn

      Jack, Michael

      Robertson, Raymond (Ab'd'n S)

      Jackson, Robert (Wantage)

      Robinson, Mark (Somerten)

      Jenkin, Bernard

      Roe, Mrs Marion (Broxbourne)

      Jessel, Toby

      Rowe, Andrew (Mid Kent)

      Jones, Gwilym (Cardiff N)

      Rumbold, Rt Hon Dame Angela

      Jones, Robert B (W Hertfdshr)

      Ryder, Rt Hon Richard

      Kellett-Bowman, Dame Elaine

      Sackville,Tom

      Key, Robert

      Sainsbury, Rt Hon Sir Timothy

      Kilfedder, Sir James

      Scott, Rt Hon Sir Nicholas

      King, Rt Hon Tom

      Shaw, David (Dover)

      Kirkhope, Timothy

      Shaw, Sir Giles (Pudsey)

      Knapman, Roger

      Shephard, Rt Hon Gillian

      Knight, Mrs Angela (Erewash)

      Shepherd, Colin (Hereford)

      Knight, Greg (Derby N)

      Shersby, Michael

      Knox, Sir David

      Sims, Roger

      Kynoch, George (Kincardine)

      Skeet, Sir Trevor

      Lait, Mrs Jacqui

      Smith, Tim (Beaconsfield)

      Lang, Rt Hon Ian

      Soames, Nicholas

      Lawrence, Sir Ivan

      Spencer, Sir Derek

      Legg, Barry

      Spicer, Sir James (W Dorset)

      Leigh, Edward

      Spicer, Michael (S Worcs)

      Lennox-Boyd, Sir Mark

      Spink,Dr Robert

      Lester, Jim (Broxtowe)

      Spring, Richard

      Lidington, David

      Sproat, Iain

      Lightbown, David

      Squire, Robin (Hornchurch)

      Lilley, Rt Hon Peter

      Stanley, Rt Hon Sir John

      Lloyd, Rt Hon Sir Peter (Fareham)

      Steen, Anthony

      Lord, Michael

      Stephen, Michael

      Luff, Peter

      Stern, Michael

      Lyell, Rt Hon Sir Nicholas

      Stewart, Allan

      MacGregor, Rt Hon John

      Streeter, Gary

      MacKay, Andrew

      Sumberg, David

      Maclean, David

      Sweeney, Walter

      McLoughlin, Patrick

      Sykes,John

      McNair-Wilson, Sir Patrick

      Tapsell, Sir Peter

      Maitland, Lady Olga

      Taylor, Ian (Esher)

      Malone, Gerald

      Taylor, John M(Solihull)

      Mans, Keith

      Temple-Morris, Peter

      Marland, Paul

      Thomason, Roy

      Marshall, Sir Michael (Arundel)

      Thompson, Patrick (Norwich N)

      Martin, David (Portsmouth S)

      Thornton, Sir Malcolm

      Mates, Michael

      Thurnham, Peter

      Mellor, Rt Hon David

      Townsend, Cyril D (Bexl'yh'th)

      Merchant, Piers

      Tracey, Richard

      Mills, Iain

      Tredinnick, David

      Mitchell, Andrew (Gedling)

      Trend, Michael

      Mitchell, Sir David (NW Hants)

      Twinn, Dr Ian

      Moate, Sir Roger

      Vaughan, Sir Gerard

      Monro, Sir Hector

      Viggers, Peter

      Montgomery, Sir Fergus

      Walden, George

      Moss, Malcolm

      Walker,Bill(N Tayside)

      Needham, Rt Hon Richard

      Waller, Gary

      Nelson, Anthony

      Ward, John

      Neubert Sir Michael

      Wardle, Charles (Bexhill)

      788

      Waterson, Nigel

      Wilshire, David

      Watts, John

      Winterton, Mrs Ann (Congleton)

      Wells, Bowen

      Wolfson, Mark

      Whitney, Ray

      Wood, Timothy

      Whittingdale, John

      Yeo,Tim

      Widdecombe, Ann

      Tellers for the Noes:

      Wiggin, Sir Jerry

      Mr. Simon Burns and

      Willetts,David

      Mr. Michael Bates

      Question accordingly negatived.
      Amendments made: No. 44, in page 168, leave out line 43 and insert—
      '10.—(1) Paragraph 5 of Schedule 1 to the 1994 Act (recovery vehicles) shall be amended as follows.
      (2) In sub-paragraph (1)(annual rate of duty of £85) for the words "is £85" there shall be substituted "is—

      (a) if it has a revenue weight exceeding 3,500 kilograms and not exceeding 12,000 kilograms, the same as the basic goods vehicle rate;

      (b) if it has a revenue weight exceeding 12,000 kilograms and not exceeding 25,000 kilograms, 300 per cent. of the basic goods vehicle rate;

      (c) if it has a revenue weight exceeding 25,000 kilograms, 500 per cent. of the basic goods vehicle rate."

      (3) The following sub-paragraphs shall be inserted after sub-paragraph (5)—
      "(6) In sub-paragraph (1) references to the basic goods vehicle rate are to the rate applicable, by virtue of sub-paragraph (1) of paragraph 9, to a rigid goods vehicle which falls within column (3) of the table in that sub-paragraph and has a revenue weight exceeding 3,500 kilograms and not exceeding 7,500 kilograms.
      (7) Where an amount arrived at in accordance with sub-paragraph (1)(b) or (c) is an amount—

      (a) which is not a multiple of £10, and

      (b) which on division by ten does not produce a remainder of £5,

      the rate is the amount arrived at rounded (either up or down) to the nearest amount which is a multiple of £10.
      (8) Where an amount arrived at in accordance with sub-paragraph (1)(b) or (c) is an amount which on division by ten produces a remainder of £5, the rate is the amount arrived at increased by £5.".'.
      No. 45, in page 169, line 19, leave out from beginning to end of line 24.
      No. 46, in page 172, line 51, leave out from beginning to end of line 6 on page 173.—[Dr. Liam Fox.]
      Mrs. Ray. Michie: I beg to move amendment No. 41, in page 173, line 13, at end insert—
      `(13A) Notwithstanding the above provisions within this, schedule, the rate of vehicle excise duty for vehicles in the Restricted Heavy Goods Vehicle tax class which are operating primarily within a region in which there has been previous exemption from plating and testing shall be £150 per year.'.
      This amendment was tabled because I want the Government to think again about the enormous burden that they are about to impose on small businesses and contractors operating on islands off the west and north coasts of Scotland [Interruption.]
      The Chairman of Ways and Means (Mr. Michael Morris): Order. I would be most grateful if hon. Members in the vicinity of the Bar would go further beyond it to continue their discussions.
      Mrs. Michie: I make particular mention of the northern islands because my hon. Friend the Member for Orkney and Shetland (Mr. Wallace) shares my concern.

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      I first raised this matter with the Department of Transport. I am sorry to see that there is no Minister from that Department in the House tonight. Formerly, island-based heavy goods vehicles paid a concessionary rate of £150 a year, because they are exempted from plating and testing. That is because there are no plating or testing stations on the islands.
      But the Government now want them to pay according to the manufacturers' plated weight for each vehicle. As a result, island-based hauliers will have to pay between £1,280 and £4,250 a year per vehicle. As well as adding to the islanders' transport costs, that is likely to force many smaller firms out of business, with a consequent reduction in employment on the islands.
      A concessionary rate should certainly be retained for the HGVs used only on the islands. The annual mileage is much lower than that of mainland HGVs, and the maximum payload is often limited by road restrictions. For example, a constituent of mine who runs a tanker to refuel fishing boats on the island of Mull does only 500 miles a year, yet he is threatened with an annual vehicle excise duty of £2,160. He will have to pass that on to the fishermen, and they cannot bear that sort of extra burden.
      Some lorries never leave the island, and other contractors are based on, and operate from and to, the island. Arguably, a concessionary rate should also apply to HGVs used solely for deliveries to and from the islands, on condition that they do not ply for mainland business between island runs. That is a reasonable suggestion, because ferry timetables effectively impose restrictions on the use of such lorries. Their total annual mileage is less than 50 per cent. of the national average.
      One of the busiest lorries on Mull does about 16,000 miles a year, compared with the national average of 47,000.
      There is another category of vehicle that will be caught, with devastating consequences for the economy of the islands. They are known as shunt units. One of the main hauliers of goods to the islands in my constituency uses elderly cab units to marshal trailers on board Caledonian MacBrayne ferries and terminals. They are currently exempt from VED, but from 1 July of this year they will have to pay according to the manufacturers' plated weight. That will cost £3,150 per vehicle per year.
      Although the contractor has been told that the increase will be phased in, with each vehicle paying £1,000 in the first year, I believe that the concession will last for only one year. Apart from travelling to and from the depot for occasional maintenance, shunt units do not use public roads; so why should they pay vehicle excise duty?
      This haulier therefore faces a total extra cost of £15,750, which he will have no option but to pass on to his customers, thus adding to the cost of living on the islands. And he has already had to face increases in the ferry fares.
      Mr. William Ross: The hon. Lady makes a powerful case for concessions to lorries that operate on islands—presumably she means islands that do not have a road bridge. Would she extend that same concession to the Isle of Wight? What will happen to Skye and Anglesey?
      10.30 pm
      Mrs. Michie: The Isle of Wight is quite a wealthy island, and many wealthy tourists go there. I am particularly concerned with the islands off the coast of
      790
      Scotland, which struggle to survive with their farming and crofting communities. It is they who must be given help—indeed, they are given help in terms of ferry subsidies, so it seems ludicrous that the Government should give subsidies on the one hand and tax them on the other.
      I contacted the Department of Transport, which last year started to tell owners of HGVs that it was removing the concessionary rates for road tax on certain islands, and that would mean that island-based operators would be faced with the sums about which I have already spoken. I am sure that the Minister can understand and imagine the shock and dismay.
      The Minister responsible, at the time, however, the hon. Member for Salisbury (Mr. Key), responded in a worthwhile manner. He ended his letter by saying—[Interruption.]
      The Second Deputy Chairman of Ways and Means (Dame Janet Fookes): Order. I am sorry to interrupt the hon. Lady, but there is a general hum of conversation. That is not polite to the hon. Member who has the Floor, and I must ask the Committee to be very much quieter so that I can hear, without straining my ears, what the hon. Lady is saying.
      Mrs. Michie: Thank you, Dame Janet.
      The Minister said:
      "I am afraid that in some cases this will have significant cost implications, particularly for the heavier vehicles."
      He continued:
      "Because of the effects this might have on hauliers whose vehicles never leave the islands, I have asked my officials to review the position and will write to you in due course to let you know the result of the review."
      I then had a letter in September 1994 from the Under-Secretary of State at the Department of Transport. He said:
      "the law in this area is not as clear as it might be, and I have therefore decided that we will return to the criteria for qualifying for the basic rate VED for HGV's that applied before last April."
      In fact, the licensing people in Swansea had already started to increase the licensing fees to the lorry drivers. Fortunately, the Minister interfered; told it to stop and asked it to pay back—indeed it did—the lorry drivers who had paid the cheques that it had requested.
      The Under-Secretary of State went on the say—this is important—
      "This is an interim measure while we carry out a review … We are continuing to examine the position of off-shore islands in this wider review, which I expect to be complete in the Autumn. We will of course make sure that we consider the views of all interested parties."
      Perhaps the Minister can ask the Department of Transport if he does not know the answer. What was the outcome of the review? Whom did the Department of Transport consult?
      I wrote again to him on 30 December 1994, but to date have had no reply. Then I found all this being slipped, as it were, into the Finance Bill. If the Government go ahead with these massive increases and penalise the islanders in that way, the consequences for the economy and for the people will be very detrimental, for it will put not just the small contractors out of business—the man with one lorry, which never leaves the island—but people out of jobs. It will increase the cost of living for everyone.

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      Anyone who had heard tonight's speeches would think that the lorries were operating on mainland trunk roads. I wonder whether the Minister knows whether the roads involved are like: most are single-track, and some islands have only a few miles of roads—if they can be called roads.
      Replying to a debate on an earlier amendment, the Minister said that he wanted to give special treatment to those who most needed it—those with a very good case. I believe that the island businesses qualify on both counts. The Minister also said that inevitably there would be winners and losers; I thought from the tone of last year's ministerial letters that the islanders would be winners, but if these measures are passed, their impact will be severe and out of all proportion to the return to the Treasury.
      I feel badly let down, and my constituents will feel even more so. They believed what I told them, because I believed the Minister. [Interruption.] Some may say that that was a mistake, but I think that it is a shame. I genuinely believed the Minister, and I was sure that my constituents would understand the problem. On behalf of the islanders, I therefore ask the Ministers involved to reconsider the matter.
      Mr. Brian Wilson: I support the amendment. I must say that it is encouraging—and very unusual—to see such a large demonstration of interest in Hebridean affairs on the Conservative Benches.
      As the Minister to whom the hon. Member for Argyll and Bute (Mrs. Michie) has referred is present, I shall pay a small tribute to him. Unfortunately, he is in fact an ex-Minister. The then Minister who wrote to me in similar terms is the hon. Member for Salisbury (Mr. Key).
      It was an unusual case, in which there was a specific constituency point for me—and for the hon. Member for Argyll and Bute, my hon. Friend the Member for Western Isles (Mr. Macdonald) and one or two others. We argued a fine intellectual case; we got through to the Minister and his civil servants personally, made the case and defined its peculiarities, and we made progress. We received a very good response from the hon. Member for Salisbury: he was sensitive, he was intelligent and he was sacked. If I may say so, in other contexts what has taken his place is certainly no improvement in terms of the criteria that I have defined.
      Fragile island communities are heavily penalised by the current level of ferry charges. In those islands—including islands in my constituency—a concession on VED has historically been granted because its fairness has been recognised. I do not know what goes on in the minds of civil servants on cold grey winter mornings when they feel that they have to take it out on someone; perhaps, on the 6.30 am train from Chipping Norton, they decide that they are going to cancel an anomaly whereby island haulage operators benefit in comparison to others, and that in a vast Finance Bill they will incorporate a clause that, in financial terms, is probably not worth the time that has been devoted to it tonight.
      But it is absurd that they should go to such lengths to cancel out a tiny anomaly for the sake of financial gain to the Treasury—an action that will have an entirely disproportionate effect on the small number of communities that we are discussing.
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      That is the curiosity of it. Of all the matters on which we can legislate and of all the sources of revenue, we adopt the absurd idea of going for a small number of island contractors. That is why I make no apology for detaining the Committee and arguing that case. If Conservative Members intend to vote for such legislation they might as well pay for it by spending a little of their time hearing just how absurd it is.
      10.45 pm
      There are three categories of island hauliers, and I am sure that hon. Members will be interested to hear each of them described in detail. As the hon. Member for Argyll and Bute said, the first consists of those who have lorries that never leave the island. I know that the hon. Member for Salisbury will confirm that it would be incredible anti totally at odds with the representations and responses for those hauliers to be brought within the ambit of the clause.
      There is a clear distinction to be made. The vehicles of those hauliers can travel only within their own island communities. On the island of Barra, which is represented by my hon. Friend the Member for Western Isles there is one circular road. Cumbrae in my constituency is exactly the same, and in terms of road distance, Arran is not much greater. I see someone to whom I am not allowed to refer who is familiar with the island of Coll.
      The idea that such hauliers should pay the same taxation for road use as those whose vehicles thunder up and down the M1 and the M6 every day is such a patent absurdity that I hope it impacts upon some Conservative Members. There is a clear distinction to be drawn in terms of vehicles which never leave the islands.
      There is also an important distinction to be drawn for the second category of vehicles—those which legitimately ply between the islands and the mainland providing an island and not a mainland service. In providing that service, it is necessary for them to travel to the mainland to deliver and bring back goods. During that process, they attract charges which are not imposed on other haulage operators because they pay substantial ferry costs, which the hon. Member for Argyll and Bute has mentioned. Those charges are reflected in the costs that the hauliers pass to their customers. There is a separate case to he argued for them.
      The third category was not mentioned by the hon. Member for Argyll and Bute, and it is at the root of why the legislation has been produced. The hon. Member for St. Ives (Mr. Harris) is in his place and will recognise from another context the term quota hoppers. Such people recognise that they can gain advantages by registering on an island which has a certain privilege.
      The hon. Member for Argyll and Bute and every Opposition Member as well as every Conservative Member, I hope, would say that such an abuse should be stamped out. That is the abuse against which the measure is directed, and it is practised by people who are not island operators but who can evade taxation by registering their businesses on islands.
      Is it not possible for Conservative Members to stamp out an abuse, which we all agree should be stamped out, without penalising that tiny section of the community which operates legitimately and which should be the beneficiary of the status quo? With the might of the civil service behind them, Ministers should be able to find a way of striking against those who abuse the system, while protecting those who legitimately use it.

      793
      The Scottish Road Haulage Association feels that its members, who operate on the mainland, are at an unfair disadvantage with those pirate operators who use the islands as a kind of flag of convenience. That is the abuse that Ministers, in so far as they know anything about the matter, should strike against. In doing so, they should not discriminate against legitimate island operators. That is a fair argument that should transcend party boundaries.
      I do not think that many of the operators I am arguing on behalf of tonight are my voters. I do not care or ask about that, but I suspect that they might not be Labour voters—employers in that industry do not traditionally vote Labour. I am arguing not from that point of view, but from that of fairness and of the legitimate interests of fragile island communities.
      Make no mistake: if the measure goes through, some small haulage businesses will go bust. They will have to take lorries off the road, make people redundant and pass on costs to users, so for heaven's sake, let us in Committee have a common-sense solution and retain the advantage for small island operators and for people who legitimately ply between island and mainland. Let us unite and stamp out the abuse of using islands as a flag of convenience to avoid taxation.
      Mr. James Wallace: My hon. Friend the Member for Argyll and Bute (Mrs. Michie) and the hon. Member for Cunninghame, North (Mr. Wilson) have deployed powerful arguments as to why the Government should rethink their decision to impose a substantial amount of vehicle excise duty on islands-based hauliers. I add my endorsement to their arguments.
      As has already been said, we are dealing with islands that often have poor roads that add up to small amounts of mileage. They are being asked to pay the same amount as hauliers who are based, for example, in Birmingham, and who have immediate access to hundreds of miles of motorway. That in itself is an anomaly.
      The Government have several times said that they are in favour of lifting the burden on small businesses. That does not square with the decision to impose on those businesses the financial burden that my hon. Friend the Member for Argyll and Bute illustrated. If the measure goes through, in the first year the increase for small islands-based hauliers has been limited to £1,000. Even that is a significant increase. In subsequent years, it could be even more.
      I do not necessarily subscribe to the comment of hon. Member for Cunninghame, North that this is some conspiracy hatched by civil servants because they got out of the wrong side of bed or because the morning train from Chipping Norton did not arrive. I think that I am right in saying that there have been a considerable number of exemptions to the vehicle excise duty. That allows the basic rate of £150 to be paid. I suspect that the islands' case has been swept up along with the rest of the cases.
      I hope that the Paymaster General has heard enough arguments to persuade him to think again. By imposing the burden on many islands-based hauliers, he proposes a financial burden that many of them will not be able to accommodate in their businesses. If they do, it will mean considerable extra costs for their customers. We are talking about people who serve islands of only a few hundred people. The position is not the same as that referred to by the hon. Member for Londonderry, East (Mr. Ross).
      794
      In my constituency, the exemption is applied only to the smaller islands. It is not applied to the main islands of Orkney and Shetland, which, it is recognised, have historically had plating and testing stations. Therefore, they did not qualify. Equally, no pressure has been exerted for the exemption to apply.
      People would be horrified to discover, however, that additional costs will be imposed in the smaller islands. I hope, that the Minister will show some of the sensitivity and intelligence that was attributed to his hon. Friend the Member for Salisbury (Mr. Key), and that he will be prepared to reconsider the proposal and introduce a fair solution for islands-based hauliers.
      Mr. Harris rose—
      Mr. Barry Porter: There are more of them.
      Mr. Harris: Yes, there are more of them, and I am one of them. I also represent a group of islands—the Isles of Scilly—and I am horrified by what I have heard tonight. I thought that the issue had been settled by my hon. Friend the Member for Salisbury (Mr. Key). Like others, I had correspondence with him, and I thought that we had come to a completely satisfactory and sensible solution. If that is not the case—it is news to me that, apparently, it has all been upset—I shall be after my hon. Friend tonight. I do not say that as a threat, but I look to the Minister to reassure me.
      Hauliers operating on the Isles of Scilly come into the first category. There are only a few hauliers there, and their vehicles never leave. Unlike the Scottish isles, the Isles of Scilly do not have a roll on/roll off ferry, and certainly do not have a subsidised ferry service to the mainland. It is a matter of great regret to my constituents, who look with envy at what their Scottish counterparts have.
      In those circumstances, it would surely be extremely unfair if the three or four haulage firms that operate lorries on the small island of St. Mary's—the only island on which there are hauliers—were penalised as has been suggested. I look to the Minister for reassurance and await his comments with interest. I am sure that there has been a mistake, but if not, I suggest that my hon. Friend had better think again.
      Mr. Calum Macdonald: I shall not go into great detail, as the arguments have already been well made by the hon. Member for Argyll and Bute (Mrs. Michie), whom I congratulate on moving the amendment, and my hon. Friend the hon. Member for Cunninghame, North (Mr. Wilson), who I think was the first to support the move by the Department of Transport and pursue it with the Minister involved.
      I shall make three points. The first is self-evident: islands, especially the Scottish islands, are a special case. A mark of good-quality legislation would be that it took into account the special needs and distinctive nature of the Scottish and other island communities.
      It is ridiculous to think that one law and one regulation can properly cover all communities in the United Kingdom, from Tunbridge Wells to the Western Isles. There are clearly vast differences in the nature of the communities and the circumstances they face. We should be mindful of that fact and careful to reflect it in our legislation. That is why the exemption has existed for so

      795
      long. It is absurd to suggest that we should attempt to apply the same regulation uniformly the length and breadth of the British Isles.
      Secondly, having emphasised that islands are a special case, we need to emphasise that our communications are almost by definition of crucial importance to island communities, not only communications between them and the mainland but communications among the islands themselves. Anything that strikes a blow at the viability of our communications strikes a blow at the viability of the island communities.
      The third point is just as important as the first two. All of us who were in correspondence with the former Minister, the hon. Member for Salisbury (Mr. Key), received an assurance that the matter under discussion was to be reviewed. We then assumed that we would in due course receive a letter telling us the outcome of the review. It is outrageous that the Government have instead apparently reached a conclusion without having had the courtesy to inform us of what they intend to do.
      Will the Minister not only reflect on the points that have been made and—hopefully—respond positively to them, but also explain why none of the hon. Members who raised the issue with the Government and who were assured by the Government were approached before this matter was introduced in the Finance Bill?
      11 pm
      Dr. John Marek: I support the amendment moved by the hon. Member for Argyll and Bute (Mrs. Michie). I think that I understand why the Government have proposed this extra tax. It does not affect the constituency of any Conservative Member—until tonight. The hon. Member for St. Ives (Mr. Harris) is an extremely valuable Member. If the matter were to affect his constituency, the Government would begin to worry.
      At the moment, the Government do not worry about those constituencies that they cannot win. They are concerned only with getting money for the Treasury. The Government get that money through vehicle excise duties in a haphazard way every year. I will not accept the Minister's view that we have an imperfect system and that this year they are looking at it and that they may get it right next year or the year after that.
      I want to bring to the Minister's attention a principle on which vehicle excise duty ought to be levied. It ought to be levied with some regard to track costs—the costs of road repairs that vehicles cause. The hon. Member for Argyll and Bute said that many vehicles covered by the amendment do not travel on roads. Therefore, presumably the track costs would be very light.
      I refer the Minister to "The Allocation of Road Track Costs", a statistics bulletin issued by the Department of Transport. The 1995–96 edition is ready, and I have it. It says:
      "Tracks costs for vehicles of over 3.5 tonnes GVW are covered by the ratio of 1.4:1."
      Another category of vehicles consists of crown, disabled, other vehicles exempt from vehicle excise duty, haulage, machines, three-wheeled motor vehicles, special types, recovery vehicles and non-plateable vehicles. As I understand it, that category will catch all the vehicles which are the subject of the amendment.
      796
      Would we expect those track costs not to be covered? Would we expect them to be covered by a ratio of,perhaps, 0.7:1 or even of 1:1? That is not the case. The ratio is not even 1.4:1. Those vehicles are not covering their track costs by 1.4:1, they are already covering their track costs by 2.3:1. If they are already doing that, what on earth are the Government doing raising vehicle excise duty on those classes of vehicle? Is there any fairness in what they are doing? I do not believe there is. Is there any equity or justice in it? No. At best it is a muddle, and at worst it is mendacious.
      The Government realise that there are no votes in the issue; there are no seats to be won. Therefore, they are trying to get money out of people they will never represent, who can least afford to pay. Even though the Government are collecting a very small amount, they are prepared to implement this proposal.
      Instead of this proposal, if they had any integrity, they would put these extra charges on goods vehicles over 3.5 tonnes, which are covering costs on a ratio of 1.4:1, because those vehicles use the motorways and the roads on the mainland.
      Mr. Salmond: I shall speak not to irritate Conservative Members, but to make two quick points. First, I endorse the comments of the hon. Members who represent island communities about the substantial injustice of this proposal. Secondly, I want to ask the Minister a specific question. The Minister heard the definition of the hon. Member for Cunninghame, North (Mr. Wilson) of the three categories of vehicles involved. I want to make absolutely sure that, when the Minister replies, he will estimate the cost of the change on the first two categories, and not give us the overall cost of stamping out the abuse in respect of the third category.
      Very precisely, when the Minister replies, will he give the Treasury estimate of the cost of imposing this unfair tax on the first two categories mentioned by the hon. Member for Cunninghame, North—the vehicles that stay within the islands and the vehicles that ply an island trade—and not fob us off with the overall Treasury estimate of the cost of the third measure?
      Mr. Barry Porter: On a point of order, Mr. Morris. Some little time ago, the House voted more or less with enthusiasm for something that I understand was called the Jopling reforms. What has happened?
      The Chairman of Ways and Means (Mr. Michael Morris): The Jopling recommendations do not apply to Committee stages.
      Rev. Ian Paisley: I, too, represent an inhabited island—the island of Rathlin. When I was appointed to represent that island in this House, there were no roads on the island, no running water and no lighting system. No public housing had been built for years, and the harbour did not exist.
      After 25 years, I am glad to tell the Committee that a good harbour exists now. We have public lighting, public water and public housing. At last we have roads. However, if I have to go back to Rathlin island and tell the people there that, with regard to the new ferry, they are going to pay through the nose for the little track of

      797
      road to allow them to get their vehicles across to Ballycastle to have them reloaded to bring back their goods, they will cry out and say,
      "Oh, that we had been left alone, for our estate now is worse than it was at the first."
      Mr. Morris, in case you were not aware, that was a quotation from scripture.
      The case has been made for people in the quandary about which we are speaking. It is not very late: I have sat in the House until 3, 4 and 5 am. Surely we should have enough sense tonight, and the Minister instead, of sleeping, should have enough sense, to be wide awake and say, "Yes. There is an anomaly here, and I must face up to it and see that justice is done." I make that plea.
      Mr. Heathcoat-Amory: The Committee has heard that vehicle excise duty at a concessionary rate of £150 is payable on some islands, irrespective of the weight of the lorry concerned. The only requirement is that the operators concerned are registered on those islands. There is no legal provision for that concession under existing law. The Driver and Vehicle Licensing Agency has granted and continued that concession because of the absence on those islands of a plating and testing station. That point was made by the hon. Member for Argyll and Bute (Mrs. Michie).
      However, the introduction of revenue weight as the criterion for setting vehicle excise duty means that that consideration is irrelevant, as plating and testing are no longer going to be used for establishing the eligibility for vehicle excise duty or its concessions.
      In addition, in practice there is no limit to the use that can be made of the vehicles elsewhere in the United Kingdom, because a vehicle that is validly licensed in one part of the UK can be used elsewhere. There is nothing to prevent them from competing directly with hauliers for services—
      Mr. Harris: Will my hon. Friend give way?
      Mr. Heathcoat-Amory: If my hon. Friend will forgive me, I will finish the point that I am making.
      There is nothing to prevent those vehicles from competing for services between the islands and the mainland. Indeed, there is nothing to stop them working wholly on the mainland. That might have been the issue of abuse which was raised. We have seen the ridiculous situation of a vehicle being advertised for sale "with the benefit of Scottish island registration". That is clearly unfair.
      Mr. Harris: The Committee appreciates the point, but the Minister says that there is nothing to stop a lorry moving from one island to the mainland. My hon. Friend knows the isles of Scilly. There is everything to prevent a lorry from moving from the isles of Scilly to the mainland, because there is no roll on/roll off ferry. Does my hon. Friend therefore accept that the isles of Scilly at least should be treated as a special case in that regard?
      Mr. Heathcoat-Amory: My hon. Friend is not quite right. A vehicle does not even need to be transported from the island to the mainland. It can be registered in the island, but bought and used entirely on the mainland. That is clearly unacceptable.
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      For both legal and practical reasons, I invite—
      Sir Patrick Cormack: Will my hon. Friend give way?
      Mr. Wallace: Will the Minister give way?
      Mr. Heathcoat-Amory: I am not giving way.
      For legal and practical reasons, I invite the Committee to regard the United Kingdom, for taxation purposes, as a single unit, and to reject the amendment.
      Mrs. Ray Michie: I thank hon. Members, not least the hon. Members for St. Ives (Mr. Harris) and for Antrim, North (Rev. Ian Paisley), for their support. I know all about Rathlin island, and that we want a ferry to come from Ballycastle to Campbeltown in my constituency.
      Mr. Wilson: And Ardrossan.
      Mrs. Michie: As the hon. Member for Cunninghame, North (Mr. Wilson) says, and Ardrossan.
      I am seriously disappointed by the Minister's reply. I hoped that he would say that he would discuss the matter with the Department of Transport, and would come back to the Committee with something worth while.
      Sir Patrick Cormack: I had hoped to ask this question of my hon. Friend the Minister, but has she ever put to him the fact that the vehicles that are not causing the abuse should have a special registration number?
      Mrs. Michie: That is a valid point. Perhaps the Minister will answer it. As for such vehicles being able to operate somewhere else, that is absolutely ridiculous. Many of those lorries are kept by farmers or builders. They work only on the island. They do not go off the island looking for work elsewhere. Like the hon. Member for St. Ives, I think that there has been a terrible mistake.
      Mr. Wallace: My hon. Friend will have heard the Minister give as part of his main reason—indeed, it was almost the centrepiece of his resistance to the amendment—that there is no legal basis to distinguish between hauliers who are genuine and those who are causing abuse. Has it occurred to my hon. Friend that the Minister has been a Member of Parliament for eleven and a half years, and that it might not yet have dawned on him that part of our reason for being here is to make laws? That is what I thought we were doing. Therefore, the Minister's excuse is entirely fatuous.
      Mrs. Michie: I am grateful to my hon. Friend. We all know that, if the Minister and his Department want to do something, they have the political will to do it, and they can change things if they need to be changed. I am asking the Minister to change something on behalf of the islanders of Scotland.
      Mr. Salmond: The hon. Lady will know that I made a brief intervention to ask only one question of the Minister, which he totally failed to answer. Does the hon. Lady

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      agree that it is a sign of weakness that a Minister sits down because his speech is so ridiculous that he is inciting the anger of Conservative Members behind him?
      Mrs. Michie: The hon. Gentleman makes his point in no uncertain terms. I hope that we will be able to press—
      Mr. Anthony Steen: Will the hon. Lady give way?
      Mrs. Michie: I do not want to detain the Committee. [Interruption.] I am happy; I thought that Conservative Members wanted to go to bed.
      Mr. Steen: Will the hon. Lady give the House some idea of how many vehicles she is talking about? I have an island in my constituency which lies half a mile off the coast. It does not have a haulage contracting business but—from what the hon. Lady has said—I am quite sure that the last thing anybody would do would be to start a haulage contracting business on that island.
      Mrs. Michie: One of the bigger contractors about which I told the House and which operates shunt units carries perhaps eight vehicles in a day's passage of ferries. Those shunt units are now to be subject to vehicle excise duty.
      On the island of Islay, there are probably eight or 10 lorries used in the building of houses or by farmers for carrying hay and that sort of thing. If one includes all the islands of the Western Isles and Orkney and Shetland, there are plenty of contractors and small lorry operators.
      We will put the amendment to a vote, because many Conservative Members have spent lots of happy holidays on the islands of my constituency. They know lots of people on the islands and the people know them, and they will be very interested to see who will vote against the islanders of Argyll and Bute.
      11.15 pm
      Mr. Macdonald: It is unfortunate that the Minister is detaining the House because of the inadequacy of his reply. The reasons that he gave in reply to hon. Members were shallow indeed. The notion that there is currently no way of distinguishing between those vehicles which remain within the islands and vehicles which abuse the system by being used on the mainland is no excuse.
      I pointed out in my initial remarks that the Department of Transport had said to a number of hon. Members on both sides of the House that it was conducting a review to discover a legal basis for distinguishing between vehicles which are abusing the system and genuine vehicles. That review must have happened, because the Minister at the Department of Transport said that it would be happening. We need to know what conclusions were reached and what options were considered and discarded.
      The Minister cannot simply stand up and say that there is no legal basis for distinguishing between vehicles, because the Government have said that they are looking at the matter. It is wholly inadequate for the Minister to sit on his haunches and leave it at that. Even if he does not answer tonight—he may not have the papers from the Department of Transport with him—the Minister ought at least to have the courtesy to say that he will reconsider the matter. Unless he can provide an answer to the questions—I shall be happy to give way if he wishes to
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      do so—the Minister should ask his colleagues at the Department of Transport what the result of the review was, and then inform the Committee.
      Most especially, the Minister should have the courtesy to inform those hon. Members who were promised by a former Minister at the Department of Transport that there would be a review. As hon. Members were given that promise, the Minister cannot simply wash his hands of the whole matter. It is a simple matter of courtesy, if nothing else.
      Dr. Marek: I shall be brief. I listened carefully to the Minister, and he did not provide answers to any of the different questions which were put to him. I have searched my memory and, in the 11 years I have been a Member of Parliament, I have never heard such a wooden and stilted response from a Minister who saw common sense staring him in the face, and turned away. The Minister does not do the House, the people in general or the people on the islands a service by behaving in that wooden and disinterested manner.
      Can the Minister consult his officials and the Department of Transport? He can see what the will of the House is. If he has any respect for it, instead of dragooning his hon. Friends, by inviting them to vote for a measure in which they do not believe, he should promise at the Dispatch Box to reconsider the matter and table amended proposals on Report.
      Sir Patrick Cormack: I have considerable respect for my hon. Friend the Paymaster General. Can he answer one question? I had hoped to ask him while he was speaking, but he would not give way and I also mentioned the matter to the hon. Member for Argyll and Bute (Mrs. Michie). Why cannot those vehicles that are restricted to the islands and never allowed to go anywhere else have a special registration number and a coloured plate, as my hon. Friend the Member for South Hams (Mr. Steen) suggested? Why cannot they alone be exempt and given favourable treatment? It would cost very little, it would satisfy my hon. Friend the Member for St. Ives (Mr. Harris) and most of the other hon. Members who have spoken, and it would show that my hon. Friend had listened to the arguments.
      Mr. Wilson: I am speaking again not merely because of the inadequacy of the Minister's reply, but because of the bogus point of order raised by the hon. Member for Wirral, South (Mr. Porter). The House should understand one thing. We have heard hon. Members on both sides of the House state a rational case in defence of a small number of people and of fragile communities that do not have much representation in this House. It is completely unacceptable for an hon. Member to chastise us for making that case on the ground of the Jopling report and it is even more unacceptable for him to stagger out of the Chamber as soon as he has made that point. If anyone thinks that the Jopling report will be used as a device to stop the weak being heard late at night, they should relieve themselves of that view now. I hope that every hon. Member in every part of the House will agree with that.
      The Minister's reply was grossly inadequate. The hon. Member for South Hams asked for numbers. He should not have had to do so because the Minister should have given them in his reply. If he had done so, the small number of hon. Members on both sides of the House who

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      are affected could almost have done the arithmetic on their hands and feet, and told the Government how many genuine operators are affected in each of our constituencies. We could guess how many operators are using the islands as flags of convenience and could say that the problem is, for example, 10:1—one is legitimate and 10 are illegitimate, or whatever the figure might be.
      The Minister's incredibly inadequate answer revealed the fact that hon. Members on both sides of the House have argued a reasonable case and that he has no answer. Will the Minister tell me what part of Tory philosophy it is to penalise a small number of legitimate business men—small businesses in island communities—because the Government have not the courage, vision or skill to clamp down on abuse? Why should the people who engage in abuse win? They will do so, in the sense that the Government believe that the only way to deal with that abuse is to clamp down on the people who are not guilty.
      Why should the big operator, who has never even had a lorry on the island in which he or she is registered according to the Minister's statement, be able to ensure that operators in the Isles of Scilly, in a marginal Tory seat, pay the full, whack? Why should someone who runs their lorries out of Birmingham be able to discriminate against my constituents on Arran or Cumbrae because Ministers do not have sufficient interest to clamp down on abuse and would rather clamp down on the legitimate operator?
      If the Minister can answer any of those questions, he should get to his feet. If he cannot answer them, he should withdraw the proposal for the time being, seek further advice from the people who have given him bum advice and bring back the issue later.
      Rev. William McCrea: Earlier in this debate, the hon. Member for Argyll and Bute (Mrs. Michie) made a carefully presented and thoughtful speech. Powerful arguments were put and questions were posed which have not been answered. The Minister does the House a great discourtesy and his reputation a disservice by failing to answer those specific questions.
      If the House is being asked to decide and vote, questions should be answered honourably. The Minister should therefore come to the Dispatch Box and answer the questions before a Division is called.
      Mr. Harris: I make an earnest and sincere appeal to my hon. Friend the Minister. He has shown great flexibility in handling the Bill and I am grateful for the changes that he has made. I went to see him with colleagues last week. I am sure that he appreciates the fact that there is real feeling on this matter. I plead with him to take it away and look at it again, otherwise he will put me in a difficult position.
      Mr. Heathcoat-Amory: The House and the Government have many ways of helping various parts of the United Kingdom, including the islands, which are the subject of this amendment. But it is not right to use the taxation system for vehicles as the amendment requires.
      We have an opportunity to remove not just an anomaly but an abuse. Hon. Members who have spoken in the debate have described how and agreed that such an abuse takes place. It is right that island communities around the United Kingdom should receive differing amounts of help through various systems. Vehicle excise duty is a United Kingdom tax and, in answer to my hon. Friend the
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      Member for Staffordshire, South (Sir P. Cormack), I am not prepared to see various licence plates for different parts of the United Kingdom solely on the basis of concessions granted in those other parts of the United Kingdom.
      We assert the unity of the United Kingdom for taxation purposes, which is why I invite the Committee to reject the amendment.
      Mr. Macdonald: The Minister's response is as inadequate as the previous one, because it ignores the fact that several hon. Members were assured that the Department of Transport was looking at the matter.
      The Minister said that he has ruled on principle that the exception is to close, yet that is not what the Department of Transport told us. It specifically said that it understood the point being made and would actively seek ways to deal with it. We have had no response from the Department of Transport or any other Department on that issue, so it is wrong for the Minister now to say that the matter cannot be considered in principle
      The Department of Transport has already conceded the value of the exception and said that it would look at the mechanics of trying to achieve a solution. For the Minister now to turn round and simply say that the review should not have taken place is wholly inadequate. We were promised a review and still need to know what the review discovered.
      I do not see the Minister's problem. The wheels of Government will not grind to a halt, nor will their revenues dry up if he takes this opportunity to consult the Department of Transport and return with full information on Report.
      Ms Primarolo: Will the Minister reconsider his statement to the House? He conceded that certain island communities will experience difficulties because of the Government's decision to standardise vehicle excise duty. He also admitted that those communities require additional help because of their vulnerabilities and unique position.
      So that the Committee can make progress, I suggest that we proceed with the Minister's proposals for vehicle excise duty, but I ask him to give an undertaking that we will deal with the question of concessions to the islanders—whose case has been put this evening—on Report. If he fails to give that assurance, the Committee will be deadlocked and I am sure that he does not want that to occur this evening. We must find a way of drafting solutions to meet the islanders' demands.
      11.30 pm
      Mr. Salmond: The Minister has been asked on several occasions to quantify the cost of exempting the proper cases which were outlined by the hon. Member for Cunninghame, North (Mr. Wilson). I have listened to the Minister reply to questions about many Opposition amendments during the Committee stage of the Finance Bill and every time he has begun by saying that the amendment will cost the Revenue and the Treasury so much money that he cannot concede it.
      Although he has been asked about the cost several times tonight, he has chosen not to reply to that question. That leads me to two conclusions: first, that the Minister does not know the cost of retaining the concession for those deserving cases, which means that the matter has

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      not been considered properly and the Minister should withdraw it; or, secondly, he knows how much it will cost but he is not prepared to tell the Committee because the sum is so embarrassingly small that it will expose the Government as doing island communities a grave injustice for the sake of perhaps a few million pounds.
      For the third time, I ask the Minister to quantify now the cost of retaining the concession in the category 1 and 2 cases that were outlined earlier by the hon. Member for Cunninghame, North.
      Mr. John Home Robertson: There are no inhabited islands off the coast of my constituency, but I have been following the debate with great interest. It is one of the most extraordinary debates that I have witnessed during my career in the House of Commons.
      My hon. Friends the Members for Western Isles (Mr. Macdonald) and for Cunninghame, North (Mr. Wilson), the hon. Members for St. Ives (Mr. Harris), for Antrim, North (Rev. Ian Paisley), for Argyll and Bute (Mrs. Michie) and for Orkney and Shetland (Mr. Wallace) explained that they corresponded and had meetings with the former Minister for Transport, the hon. Member for Salisbury (Mr. Key), who has been in his place during the debate. He assured them, as a Minister of the Crown and on behalf of the Government, that ways would be found to ensure that island hauliers were provided for appropriately in any future framework.
      However, in responding to the debate a Treasury Minister has discounted all of those assurances and has tried to give the Committee the impression that the discussions never took place. That is a most intolerable position for hon. Members to be in and I do not think that the Committee should accept a reply like that from any Minister in any Government.
      I hope that the Minister will return to the Dispatch Box tonight and demonstrate that he is speaking on behalf of a united Government, instead of the Department of Transport saying one thing and the Treasury saying something else. That is no way to run a Government and it is certainly no way to manage fragile island communities in the Western Isles or anywhere else. It will be to his eternal discredit if the hon. Gentleman does not reply to the debate sensibly.
      Mr. Wallace: I endorse the proposal put by the Member for Bristol, South (Ms Primarolo); it is a sensible way to proceed. The Minister should give such an undertaking and we can then return to the matter on Report.
      Judging from the way that he replied to the Committee this evening, it appears that the Minister was given a brief to deal with an amendment at the fag-end of a sitting which failed totally to address many of the substantive issues that were put to him from both sides of the Committee. No hon. Members on either side of the Committee have attempted to defend the abuse which has taken place; that point was conceded. We ask the Government to devise a means to stamp on abuse so that people who genuinely want to proceed with their businesses—and who do not have a basis for increasing their revenue or the turnover to withstand the amounts in question—can do so. I am not sure what would happen if, a year down the track, some businesses go under and valuable haulage services are lost.
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      It is no use the Paymaster General repeating the mantra of a united taxation system. That principle has already been breached by what has gone before. We heard that the Department of Transport is already reviewing the system and is prepared to countenance a different situation.
      Mr. William Ross: The same taxation system has not always applied. I ask the Committee to consider what happened in respect of the community charge.
      Mr. Wallace: The hon. Gentleman makes a pertinent and obvious point. Some of us well remember that we had to pay the community charge long before other parts of the United Kingdom.
      Mr. William Ross: Northern Ireland never paid it.
      Mr. Wallace: As the hon. Gentleman says, Northern Ireland never paid the community charge. The Government's weak arguments have not addressed the substantive issues. It would be helpful and consistent with the mood of the Committee if the Minister would say that we can return to this matter after it has been given proper consideration and we know the outcome of the review promised by the Department of Transport to me and to many other hon. Members.
      Dr. Marek: The Paymaster General said that he was responsible for United Kingdom taxation, and the implication was that if duty for a vehicle in central London is to be £500, the same duty would be payable for a vehicle in Canna or any of the other Scottish islands. That cannot be right. Taxation should be fair and seen to be fair. How can a comparison be made between a vehicle on a small Scottish island that can travel only in a circle, for a distance of 12 miles—
      Mr. Home Robertson: Or less.
      Dr. Marek: Or less, as my hon. Friend says—with a vehicle in London that might travel 10,000 or 12,000 miles a month? It cannot be right for both vehicles to be taxed the same amount.
      The Paymaster General says that he is responsible for taxation as a Minister of the United Kingdom Parliament, but he is not weighing all the considerations properly. He must take into account equity and fairness, and appreciate that the public must be satisfied that his proposals are fair. I cannot imagine any member of the public in the British Isles arguing that because a vehicle on a small island in Scotland is to be taxed at £500, the same amount must apply to a vehicle registered in central London. That arrangement would be blatantly unfair.
      We are not asking the right hon. Gentleman to make up legislation on the spot, at the Dispatch Box. Hon. Members on both sides of the Committee implored hire to think about the points that have been made. Most importantly, the excellent point put by the hon. Member for Staffordshire, South (Sir P. Cormack) deserves consideration in the quiet solitude of the Minister's room, rather than in Committee.
      It is clear that both sides of the Committee believe that a gross unfairness will be perpetrated unless the Minister does something. Unless we can be sure that the Minister will take cognisance of that, hon. Members in all parts of the Committee will be most disgruntled. I urge the Minister, as a matter of common sense, to think again.
      Mr. Heathcoat-Amory: Of course the House can return to this issue on another occasion—certainly on Report. But I ask the Committee to reject the amendment in the full knowledge that the procedures of the House allow the House to return to it another time.
      Mr. Wilson: I make no apology for keeping the debate going. Why on earth should people legislate when they have not the slightest idea of the consequences of what they are legislating for? The moment the Minister rises to give us some information in response to the points that we have been making, I shall sit down. That will be the end of it.
      How many vehicles are affected by the provision? How many of them never leave the islands? How many of them have never been on the islands in question?
      Mr. Heathcoat-Amory: The hon. Gentleman is asking me a question that is impossible to answer. How can anyone know whether a vehicle has left an island? We do not run a police state in which vehicles are followed from the islands to the mainland. It is self-evidently absurd to ask me for information that does not and cannot exist, either in my Department or in the public domain.
      The hon. Member for Banff and Buchan (Mr. Salmond) asked me about three categories of expenditure on which no information exists. Indeed, they are not possible to identify. If they were, I would be the first to give the hon. Member the information that he requires—
      Several hon. Members rose—
      The Second Deputy Chairman of Ways and Means (Dame Janet Fookes): Order. The Minister is already intervening. We cannot have interventions in interventions.
      Mr. Harris: On a point of order, Madam Deputy Speaker. Can the House return on Report to a matter dealt with by the Committee, unless the Government move an amendment dealing with it?
      The Second Deputy Chairman: It is a matter for Madam Speaker whether to select amendments or new clauses on Report.
      Rev. Ian Paisley: On a point of order, Madam Deputy Speaker. How can we make up our minds when the Minister has told us that he cannot possibly give us the information? He says that there is abuse, but he cannot have it both ways. If he cannot give the numbers to the Committee, how does he know how many people are abusing the system?
      The Second Deputy Chairman: The Chair is not responsible for the content of speeches.
      Mr. Wilson: This is a rare parliamentary occasion. Every time the Minister rises to his feet, he exposes just how little he knows about what he is trying to put into statute. Is he talking about hundreds or thousands; about millions of pounds or tens of thousands of pounds? He can give us no inkling, because he does not know.
      Even worse, the Minister does not know how many vehicles are involved, or how many of their owners abuse the system. The hon. Member for Salisbury (Mr. Key) promised to explore the point when we contacted him. Surely the Driver and Vehicle Licensing Agency knows the answer to this problem. Let us say that 500 legitimate
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      companies benefit from the islands allowance and 10,000 abuse the system—but the Minister does not know. He would then be under the impression that the number of firms affected by the provision was the total. The Minister has had no briefing on the substance of our point, which is that only a tiny number of firms is involved.
      What the Minister is hoping for here is to brass-neck it through to a vote, to push it through, and then that would be the end of the matter. Opposition Members who represent island communities are not disposed to let him do that. He is being humiliated by his own ignorance and he should accept that.
      He should withdraw the proposal. He should accept the fact that he has no idea about the amount of revenue or the amount of abuse that is involved, and therefore he does not know what he is legislating for. Afterwards, he can take it up with the people who failed to advise him, who told him that this was a little thing that would slip through late at night because of the Jopling report, who said that only a handful of yokels in the furthest periphery were affected.
      I hope that the Minister has learnt a lesson tonight, because when he starts messing about with people on that basis, he will not get away with it. When he starts messing about with islands, the interests of which some of us work very hard to defend, he will not get away with it. He cannot tell us anything that he is trying to do tonight in any detail. Until he does, we shall make him talk. We shall make him explain. We shall continue to ask him for the statistics on which the proposed legislation is based. So the Minister had better bring some statistics to the Dispatch Box, or else recognise that he is in for a long night.
      11.45 pm
      Sir David Steel: I have been listening to the entire debate. I do not represent any islands, and came to the subject completely new. I do not think that the Minister has treated the Committee fairly. Having listened to the strength of the debate—hon. Members from six different political parties have spoken—I know that it is not a party issue. It is clearly an issue on behalf of a geographical minority.
      When the Minister invites the Committee to reject the amendment and says that the matter can be raised at some later stage, he is not correct. He knows perfectly well that, if it is rejected, the chance of this issue being selected on Report is remote. We all know that. What he should do is invite my hon. Friend the Member for Argyll and Bute (Mrs. Michie) to withdraw the amendment, on the assurance not that he can solve the problem but that he will discuss it with his colleagues in the Department of Transport and come back to the House on Report with a more lucid explanation and, if possible, a solution. If he did that, we could make real progress.
      Mr. Heathcoat-Amory: In saying that the matter could be raised on Report, I meant that if it is the wish of the House to discuss the issue further on Report—you said, Dame Janet, that it is a matter for Madam Speaker—I shall certainly do what I can to ensure that the House has an opportunity to discuss it. I have no reason or motive to prevent fair discussion on a matter that is clearly of interest to hon. Members and their constituents. I am certain that I gave a reason for rejecting the amendment, which is based on studies of the existing situation—an anomaly that is not founded in law and that invites abuse.

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      I gave examples earlier of people advertising that abuse of the system in newspapers. The precise number of people abusing the system is, by definition, unknown. It is rather like fraud. One cannot quantify it precisely because it is unmeasurable. I am very happy to give the assurance that, if the House wishes to discuss the matter later on Report, I will do what I can to ensure that it is given that opportunity.
      Sir David Steel: The Minister has a deserved reputation for intelligence and courtesy. I think that he should go a little further and invite my hon. Friend to withdraw the amendment so that it could be raised again on Report. Having listened to the debate, he is under an obligation to discuss with his colleagues in the Department of Transport what happened to the review and to the assurances that were given in letters to various hon. Members. That is the least that the Committee is entitled to expect of him. If he would just go that far, I am sure that we could make progress and return to the matter again.
      Mr. Macdonald: We are making a little progress, but we still need some clarification. The Minister said that the House could return to the matter on Report, but he knows as well as anybody that the procedure—the proper way to ensure that the matter is discussed on Report—is for him to invite the mover of the amendment to withdraw it. The Committee will then read that as an understanding, a commitment, that the Minister will genuinely look at the matter to try to find out what happened to the reports that were drawn up by the Department of Transport.
      I hope that he will use the time between now and Report to meet hon. Members who raised the matter with the Department of Transport, to talk it through with us and to make available to us the reports that the Department drew up—or was thinking of drawing up at one stage—plus any additional material that he thinks germane to the discussion.
      It is not right to leave the matter hanging by simply saying that the House can return to it at a later stage. If the Minister invited the hon. Member for Argyll and Bute (Mrs. Michie) to withdraw her amendment, we should all know where we stood. The Minister knows the forms and courtesies of the House as well as anyone; if he genuinely meant the offer that he appeared to be making—the offer to deal with the issue at a later stage—he would follow it through by inviting the hon. Lady to withdraw the amendment.
      If the Minister proves not to have made such an invitation, however, we must conclude that he did not really mean what he said about the House being able to consider the matter on Report. He has left confusion in the minds of hon. Members, and I think that it is incumbent on him to clear it up.
      Mr. Heathcoat-Amory: Whether the hon. Member for Argyll and Bute (Mrs. Michie) presses her amendment must be a matter for her. I have said that, if she does so, I must invite my hon. Friends to reject it; but I have also said that the House is fully entitled to debate further issues on which it feels strongly, and I assert its right to debate issues of public importance.
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      I go further than that, and say that the proper procedure is for the matter to be returned to on Report. I shall certainly endeavour to ensure that that is done, if the desired result cannot be achieved simply by the hon. Lady tabling her own amendments. That would enable the House to take a further look at the issue by using its regular and proper procedures.
      Mr. Macdonald: Another inch of progress has been made, in that the Minister has suggested that the proper procedure is for us to discuss the matter further on Report, thus implying that the hon. Member for Argyll and Bute should withdraw her amendment. He would clarify matters further, however, if he assured us that, if she does so, he will, before Report, meet all hon. Members on both sides of the House who have raised the matter. We have had letters from the Department of Transport saying that the matter would be considered; it would be only courteous of the Minister—the courtesy that I would expect of him—to agree to meet us before Report.
      Mr. Home Robertson: Responding to an intervention from the right hon. Member for Tweeddale, Ettrick and Lauderdale (Sir D. Steel), the Minister referred to the existence of studies of the detailed implications of the concession and the amendment. It might be helpful to my hon. Friend and other hon. Members representing island constituencies if copies of those studies were made available: perhaps they could be placed in the Library of the House, in anticipation of further discussions of the subject.
      Mr. Macdonald: My hon. Friend is absolutely right. Before meeting the Minister, we would have to have whatever information he considers relevant.
      The Minister seemed to suggest that he would not be willing to meet his hon. Friends, along with Opposition Members, to discuss the matter before Report, even after the hon. Member for Argyll and Bute had withdrawn her amendment. That is a startling and even shocking thing to say.
      Mr. Heathcoat-Amory: I have never refused to meet hon. Members on matters within my public responsibilities. If the hon. Lady or any other hon. Member wishes to discuss the matter with me, I shall naturally accede to that request.
      Mr. Macdonald: We are making progress bit by bit. My understanding is that the Minister is saying that the proper way to proceed would be to discuss the matter on Report. If the hon. Lady withdraws her amendment, all interested Members would have an opportunity to meet the Minister to discuss the matter in a more measured way and, hopefully, at a better hour. That is one way of proceeding with the matter. The Committee is disturbed that an issue, which in one sense is small but is nevertheless vital, is being dealt with in a way that does not do it adequate justice. I think that hon. Members in all parts of the Committee have recognised that simply to reject the issue out of hand would not be justice.
      Sir Patrick Cormack: On my own behalf and that of my hon. Friend the Member for St. Ives (Mr. Harris) may I appeal to the Minister and the hon. Member for Argyll and Bute (Mrs. Michie)? The Minister need only recognise that it is virtually unprecedented for an issue that has been voted upon to be brought back on Report. He should show that he has some of the sympathy for

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      islanders that the House unitedly demonstrated in 1982. We need the hon. Lady to recognise that perhaps she may not have enough troops at her command and the only chance of the matter being debated again is if she recognises that she has many allies in all parts of the Committee and begs leave to withdraw the amendment.
      Mrs. Ray Michie: If the Minister will tell me and the Committee that he will discuss the matter with his Department of Transport colleagues and will agree to meet me and other hon. Members from all parts of the House to discuss the issue further, and if he will present proposals, I shall be happy to withdraw the amendment. All that we ask him to do is to consult colleagues and meet us.
      Mr. Heathcoat-Amory: I do not propose to repeat myself. I have already offered to discus this matter or any other within my responsibility with the hon. Lady or any other hon. Member. I am happy to give that assurance again. If the matter borders on the responsibility of another Department, I shall endeavour to obtain from the Minister concerned the authority to discuss on his behalf the matter being debated.
      Mrs. Michie: I beg to ask leave to withdraw the amendment.
      Hon. Members: No.
      Amendment negatived.
      Mr. Macdonald: On a point of order, Dame Janet. Hon. Members who are trying to represent their constituents have been treated twice this evening to a grave discourtesy. First, we received from the Minister with responsibility for transport letters saying that the matter would be considered. We never had any follow-up to that and the undertaking was not kept to. Secondly, we appeared to have an understanding from the Paymaster General that, if we withdrew the amendment, it would be considered at the third stage, and we would have a meeting.
      Clearly, an orchestrated manoeuvre by the Government Whips pushed the Question on the amendment to be put. Therefore, when he appeared to make the offer, the Minister was either unaware of what his Whips were doing, or, if he was aware, he was misleading hon. Members, who understood him to be offering to reconsider the matter at the third stage. That is a grave matter.
      12 midnight
      The Second Deputy Chairman: That is not a matter for the Chair. I can operate only the rules that exist and a single dissenting voice is sufficient not to permit an amendment to be withdrawn.
      Mr. Salmond: On a point of order, Dame Janet. In view of what we have just seen, within the orders of the House, is it possible to emblazon on the Standing Orders the words, "Never trust a Tory Minister"?
      The Second Deputy Chairman: That is not a point of order for the Chair. Mr. Brian Wilson. [Interruption.]
      Mr. Wilson: I am happy to give way.
      Mr. Beith: On point of order, Dame Janet. Recently, within the hearing of the Committee, you advised the
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      Committee that it was for Madam Speaker to decide what could be selected on Report. It was in the light of what you said that an exchange took place, involving hon. Members of all parties, my hon. Friend the Member for Argyll and Bute and the Minister, in which, after some considerable persuasion, the Minister agreed that it would be possible for Madam Speaker to exercise her discretion, so that the matter could be raised again.
      Then it clearly happened—not within your sight, but within your hearing—that the Government Deputy Chief Whip called a vote to prevent the amendment from being withdrawn, with the obvious intention of defeating the understanding that the Minister had reached in the light of what you had said. Therefore, I ask you to consider whether that action should be deprecated by you because it sought to set at naught the advice you had given the Committee.
      The Second Deputy Chairman: Let me make it quite clear. I do not have the discretion, but Madam Speaker has full and total discretion in selecting amendments or new clauses on Report. I have no doubt that she will take all matters into consideration.
      Mr. Wilson: On a point of order, Dame Janet. Can we have your assurance that you will give a full report to Madam Speaker of what has just transpired? Tonight, we have seen the excreta of political life in the person of the hon. Member for Derby, North (Mr. Knight), who has cheated the House—
      The Second Deputy Chairman: Order. I know that the evening is late and that feelings have been running high, but we can conduct this debate in a civilised way? May I make the point again to all hon. Members: Madam Speaker has complete discretion. She is not bound by anything that may be said or done and, of course, she, as all other hon. Members, will be able to read a full account of the matter in Hansard.
      Mr. Wilson: The Committee, which has listened in large numbers to the debate, heard the agreement that was reached between the hon. Member for Argyll and Bute and the Minister. Within minutes, one hon. Member cheated on that agreement. That is why we are still discussing the matter. If the Minister had a shred of honour in him, he would do what is within his power to rescue the situation, by saying now that the Government will table their own amendment on the subject to ensure that it is debated further. If what the hon. Member for Derby, North has done in the name of Government is followed to its logical conclusion, not only this small issue, but the whole arrangement for late-night proceedings of the House will be affected, because no one will ever trust those people again.
      The Second Deputy Chairman: I have already made clear what the position is from the point of view of the Chair, and I have nothing to add to that.
      Rev. Ian Paisley: On a point of order, Dame Janet. The Committee has listened tonight to the debate. The needs of a special proportion of our community, which stretches from Northern Ireland to Scotland, England and Wales, were put and, after much exchange, the Minister gave a clear undertaking. We accepted in good will that an arrangement would be made, that the hon. Member for Argyll and Bute (Mrs. Michie) would withdraw her amendment, and that, at another time, we would have the

      811
      opportunity to come back. We all thought that the hon. Lady would be permitted to withdraw the amendment. After 25 years in this place, I am staggered to see something that has taken us all this time to get established being destroyed in a matter of seconds. If there is no trust in the House, how can we represent the people who send us here?
      The Second Deputy Chairman: I repeat that Madam Speaker retains full discretion as to how she may handle any amendment or new clause that hon. Members seek to table on Report—nothing alters that.
      Mr. Malcolm Bruce: Further to that point of order, Dame Janet. You will be reporting to Madam Speaker on the conduct of business under your chairmanship tonight. As the hon. Member for Antrim, North (Rev. Ian Paisley) has said, what is causing the Committee considerable concern is that we have this evening witnessed an unusual but proper use of this place, which is to draw assurances from the Government. The Government were not willing but we were making progress.
      What concerns me is whether the Minister—reluctant as he was—knew in the very process of giving the undertaking that he would support the matter being discussed again on Report that the Government Whip was going to prevent the amendment being withdrawn. It is important that you find out, Dame Janet, and ensure that Madam Speaker knows exactly what happened.
      The Second Deputy Chairman: I have nothing to add to what I have already said on that point.
      Mr. Robert Maclennan: In reaching her decision—[Interruption.] I have listened to all the debate and I represent a constituency containing an island with three inhabitants.
      If Madam Speaker is to judge fairly what happened and take everything into account, she will no doubt be extremely interested to know the attitude of the Minister in charge of the debate whose words induced my hon. Friend the Member for Argyll and Bute (Mrs. Michie) to seek to withdraw the amendment. It would be fair to the Committee if the Minister gave a sign at this stage, which Madam Speaker could read and which would help her to make up her mind, as to his intention.
      The Minister will know that a motion voted against in the way that happened tonight is unlikely to reappear in the usual course of events unless he explains what the Government were seeking to do and that what the Deputy Chief Whip did was in the nature of a distraction, perhaps due to a lack of communication between the Minister and his colleagues further along the Bench. I therefore ask the Minister to tell us his intention; that is only fair to Madam Speaker and to the Committee.
      The Second Deputy Chairman: The hon. Gentleman is repeating points that have already been made. It is very clear: Madam Speaker will have a full account of what has happened in Hansard, supplemented by answers to any questions that she may ask of me.
      Rev. William McCrea: Hon. Members who have listened carefully to the debate heard the Minister promise that he would do all in his power to ensure that the matter could be raised again on Report. Does that promise still
      812
      stand? If the Minister does not intervene to reassure the House that it does still stand, will you, Dame Janet, ensure that Madam Speaker will has that fact passed on to her?
      Mr. Heathcoat-Amory: My words will have been recorded in the Official Report and I do not retreat one inch from what I said. I am certainly content, as I hope is the hon. Member for Argyll and Bute (Mrs. Michie), to let the matter rest with Madam Speaker.
      Amendment made: No. 47, in schedule 4, page 189, leave out line 6.— [Mr. Wood.]
      Question proposed, That the schedule be the Fourth schedule to the Bill.
      Mr. Wilson: Dame Janet, I am delighted to be informed, as I trust that you will confirm, that the schedule is debatable. That, of course, gives us an opportunity to return to the question of vehicle excise duty affecting island communities.
      I think that I can reasonably lay claim to a fairly comprehensive knowledge of the islands affected by the amendment in the schedule. I shall, of course, be anxious to take hon. Members through each of the islands affected. I am sure that Conservative Members will be very willing and interested to listen to the precise implications of their proposed legislation.
      The terms of the schedule are especially important as they affect islands in my constituency and, therefore, I shall start with them. As you would expect, I shall move on to talk about islands in the constituency of my hon. Friend the Member for Western Isles (Mr. Macdonald), in which I have a certain journalistic interest, islands in the constituency of the hon. Member for Argyll and Bute (Mrs. Michie)—
      Mr. Michael Carttiss: Name all the islands.
      Mr. Wilson: No, not yet. I feel that it is far too early in my speech. I had the privilege of being born and growing up in the constituency of the hon. Member for Argyll and Bute. Indeed, I am a frequent visitor to the islands in the constituencies of other Opposition Members.
      Unfortunately, I have not yet had the opportunity to visit the islands in the constituency of the hon. Member for St. Ives (Mr. Harris), who spoke so eloquently in support of amendment No. 41. I am sure that he feels every bit as cheated by the hon. Member for Derby, North (Mr. Knight) as I do. I am sure that the hon. Member for St. Ives will understand that the Conservative interest will read at least as badly in his local press as it will in the local press in the areas represented by the rest of us. That is something with which he will have to learn to live. I hope that he will manage to secure a meeting with the Minister in which the hon. Gentleman will understand that treating little people in this way is not very clever. To paraphrase words that could be used by hon. Members behind the Minister, "Even as you do unto the least of our children, so you do unto me."
      That is the basis on which we set out to discuss the schedule and the impact on island communities of what is being proposed. Nobody should be in any doubt about the economic impact of the proposal. To talk about £4,000 vehicle excise duty on a vehicle which runs up and down the motorways—I could mention many roads along which vehicles run—is, of course, a reasonable charge over a

      813
      year. When one applies—I think that every hon. Member in the House will understand this—that same principle to vehicles which operate in very small island communities, it is easy to see the absurdity of such a proposal.
      If any Conservative Member, including the shamed Minister, cares to come to the Dispatch Box and tell me that it is right for a vehicle which circulates round an island which may have 10, 12, or 20 miles of road to pay the same as a vehicle which operates throughout the length and breadth of Britain, I shall be willing to give way. I suspect that they would have some difficulty in saying so. There is no logic in such a case. The reason that is coming forward is nothing to do with the islands which are being punished by the proposal and everything to do with the rigid bureaucracy of the Treasury and of the people who have advised Ministers.
      At this stage, I want to stress how badly let down Opposition Members feel about the way in which we have been treated—not, I should stress, by the hon. Member for Salisbury (Mr. Key), who acted honourably. He listened to the case which we put on behalf of the island communities and he responded reasonably. Then this great hiatus appeared. The hon. Member for Salisbury lost his job and we heard no more about it. The promise that the Government would come back to us to discuss the reasoned case that we had put forward was ignored.
      It was a source of astonishment to me, as it was to Conservative Members and other Opposition Members, when out of nowhere I received a letter from a haulier in my constituency, Mr. Bannatyre of Arran Haulage, in which he said that he had heard on the grapevine that the proposal was coming back through the Finance Bill.
      Hon Members who had dealt with the matter received no notice. The promised review had not been carried through. We heard nothing about the proposal until it appeared in this form in the Bill.
      12.15 am
      Mr. Nigel Griffiths: On a point of order, Dame Janet. The annunciator system in the Chamber seems to have gone down. I am concerned that hon Members who may wish to come in and listen to my hon. Friend the Member for Cunninghame, North (Mr. Wilson) and many of my colleagues who wish to take part in the debate may not know that the Committee is still sitting and is likely to sit for some time yet. Although I see that the time—12.15 am—now appears on the monitor, the name of the hon. Member speaking is not revealed. It is important that the annunciator system should be functioning and I am glad to say that it is functioning once more. I am grateful to you, Dame Janet.
      The Second Deputy Chairman of Ways and Means (Dame Janet Fookes): It is obviously more convenient if the system is working, but it is not beyond the capacity of any hon. Member to walk to the Chamber to discover who is speaking.
      Mr. Wilson: I am grateful for the fact that the annunciator is working, because it will allow me to keep an eye on the time as the hours go by.
      I have not yet begun my tour of the islands. I am pleased to see my hon. Friend the Member for Hamilton (Mr. Robertson) in the Chamber. Not only was he born on the island of Islay, his middle name is Islay. It is not often that I regret the departure from the House of a Tory
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      Member, but instead of the present pretty ghastly hon. Member for City of Chester (Mr. Brandreth), it would have been helpful to have the former Member for City of Chester here because he owned half of Islay—
      The Second Deputy Chairman: Order. Although the hour is late, I deprecate adjectives of that kind. I ask the hon. Member for Cunninghame, North (Mr. Wilson) to guard against such language as he deploys his case.
      Mr. Wilson: I apologise for my crude Celtic tongue. If the former Members for Devizes and for City of Chester were here, we would have a pair of Morrisons and between them they would own most of Islay. No doubt they would have argued with us this evening.
      I do not want to intrude on the territory of the hon. Member for Argyll and Bute, but Islay is one of the most beautiful Hebridean islands. It is quite significantly different in terrain from the others, but it is economically very similar. It depends on its agriculture. Hon Members on both sides of the House will appreciate that the economic prospects of the distillery industry on Islay depend on the freight industry.
      If I have time tonight, I will break Islay down into nine separate entities and talk about them in terms of the distilleries.
      Mr. Thomas Graham: My hon. Friend will be aware that Strathclyde regional council carried out a poverty survey in the islands some years ago which showed that folk in that area desperately needed help and support. The welfare rights scheme showed that people were entitled to claim millions of pounds worth of unclaimed benefit. The terrible poverty was clear. The Government's proposals will create further poverty and the people on the islands will have to pay through the nose to buy food, groceries and all the rest because of the dramatic increase. As my hon. Friend will know, that increase will probably cause a repeat of the clearing of the highlands under the Tory landlords.
      Mr. Wilson: I am grateful to my hon. Friend. He rightly highlights the reality of rural poverty in island communities. It is too often perceived that poverty is an urban phenomenon, whereas hon. Members who are familiar with island communities know that there is great poverty there, not least because of the disgracefully low wages paid by the estates and the people who subscribe to that philosophy.
      The major factor—this point takes us back to the schedule—in conditioning the economy of the islands is freight costs and freight charges. That is why the issue is so important. To many hon. Members who live in large urban communities, the idea that £4,000, £10,000 or £20,000 in vehicle excise duty is a major economic factor within a community might seem absurd, but if one is running a fragile business within such a community and one is incurring extra costs, it is a major factor.
      In terms of Islay, I remember the campaign by Strathclyde region. My hon. Friend the Member for Renfrew, West and Inverclyde (Mr. Graham) is absolutely right. However, I return to the point about the distilleries. In the old days, everything which came into Islay—the supplies for the distilleries—and everything that went out again in terms of the finished product went by puffer or by small cargo ships—namely, Caledonian MacBrayne cargo

      815
      ships. I was saddened recently to receive a letter which told me that, because of a cut in Government subsidy, the very last puffer has disappeared from the whole of the western isles. The decline of the puffers, which is an interesting subject in itself, could—
      Mr. Sam Galbraith: Before my hon. Friend thinks about leaving Islay, he will realise that the island beside it is Jura, which one gets to by going through the roads of Islay and then taking a small ferry, which, incidentally, is not a MacBrayne ferry. How will the tax affect the people on Jura? My hon. Friend knows that there is a small section of road. That produces particular problems, my hon. Friend will agree, for those on Jura. The economy depends on tourism and people climbing to the top of Jura, and so on. If they have to face a terrific charge, what will that do for an island as beautiful as Jura, which is threatened by the tax?
      Mr. Wilson: I am some way from Jura yet, despite its being very close to Islay. Indeed, many times from Islay I have looked across to Antrim. I have a family connection with Rathlin isle, which I might discuss some time with the hon. Members for Antrim, North (Rev. Ian Paisley) and for Mid-Ulster (Rev. William McCrea), who have been very supportive tonight.
      It will be interesting to have the views of the distillery industry on Islay, because the tax will significantly increase costs of incoming grain and everything else that has to be brought in, and also outgoing products. With the decline of the puffers and MacBrayne's cargo fleet, everything has moved on to roll on/roll off ferries. They are primarily affected by the measure.
      I bow to the hon. Member for Argyll and Bute, because I did not know until she said so tonight that the little shunting vehicles which take trailers on and off ferries are also to be covered. I can think of nothing more absurd. Where does anyone go with a shunting vehicle? Would a Conservative Member like to tell me where those little vehicles which are used on piers at ports operated by Caledonian MacBrayne go? They never go outside the marshalling area, never mind on an exotic journey down the M1. I see that we have now been joined by the Chief Secretary—
      Mr. Andrew Mackinlay: The next Prime Minister.
      Mr. Wilson: I will not go down that road. In view of Dame Janet's strictures, I had better not say too much about that, even to prolong the debate—not that that is my purpose. I mean enrich the debate.
      The Second Deputy Chairman: Order. The hon. Gentleman will enrich the debate by sticking closely to the schedule.
      Mr. Wilson rose—
      Mr. Salmond: I am puzzled by the narrowness of the speech of the hon. Member for Cunninghame, North (Mr. Wilson). Is he aware that the schedule includes paragraphs on electrically propelled vehicles, road construction vehicles, roadrollers, snow clearing vehicles, street cleansing vehicles, power wagons used solely in
      816
      connection with street lighting and vehicles used for short journeys between different parts of a person's land? When will the hon. Gentleman deal with those important topics?
      Mr. Wilson: I do not want to be selfish and deal with them all myself. By the time I have dealt with the islands issue comprehensively, someone else may feel the muse upon them. My hon. Friend the Member for Strathkelvin and Bearsden (Mr. Galbraith) invited me to refer to Jura, and there is no more appropriate place to move to than Jura.
      At every isle we mention, I regret the passing of Conservative Members. Is there no longer an Astor in the House? If there were, surely he would be putting the case for Jura because that family owns half the island.
      The Minister of State for the Armed Forces (Mr. Nicholas Soames): He is in the Lords.
      Mr. Wilson: The hon. Gentleman speaks for them all—the entire British aristocracy is epitomised in his beatific form. If the hon. Gentleman cares to intervene about Jura and its requirements, I shall certainly give way.
      The metaphor that springs to mind regarding Jura is that what we are dealing with tonight is positively Orwellian. Orwell lived in Jura and wrote some of his greatest works there. The House is debating a taxation measure for which the Minister responsible cannot give the remotest estimate of the amount of money involved. The entire might of this great institution is devoted to an issue where the Minister cannot tell us how many vehicles are involved or what proportion of them are believed to be operating fraudulently.
      If the Chief Secretary cares to intervene where his colleagues signally failed, I would be pleased to hear from him. There is plenty of time. The right hon. Gentleman can send out for the information which is somewhere in the files of his Department. I am shocked and astonished that the Chief Secretary has not been provided with the information, and that he has not been made aware of the previous correspondence of hon. Members with the hon. Member for Salisbury (Mr. Key). It is an Orwellian situation, in which the little people are supposed to accept what is happening to them because some mighty machine has told them.
      Mr. Malcolm Bruce: Is the hon. Gentleman aware that it is not just the hon. Member for Salisbury who has given an undertaking? My hon. Friend the Member for Argyll and Bute (Mrs. Michie) has said that she has had a similar undertaking from the present Under-Secretary at the Department of Transport. It appears that the Department of Transport has been wholly persuaded by the argument and recognises the case, but it has not communicated with, the Treasury. The Department of Transport seems unwilling even to ask the Treasury while the issue is still being dealt with. Is not the position even worse than the hon. Gentleman describes?
      Mr. Wilson: I am genuinely grateful to the hon. Member for Gordon (Mr. Bruce), because I did not know that. To be honest, I have not corresponded on the issue with the present Under-Secretary. I was asked about the matter recently, and I told my constituents—I thought in good faith—that the matter was pending, because I had an assurance from the hon. Member for Salisbury that it was under review.

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      I wrote to the Secretary of State for Transport two or three weeks ago and I passed on the renewed concern of my constituents. I congratulate the hon. Member for Argyll and Bute if, in the interim, she has been in touch with the present Under-Secretary. It is obvious either that none of the information has been communicated to Treasury Ministers, or that they have just brushed it aside, saying that it is all nonsense and that nobody cares about promises given in the House any more.
      Dr. Norman A. Godman: Surely my hon. Friend is not surprised at the Government's indifference to those highland communities. About eight or nine months ago, he and I met the Minister of State at the Scottish Office to discuss the real fears surrounding the Glenlight shipping company, which has now ceased to trade largely because of the Government's failure to provide the subsidies that it needed.
      Mr. Wilson: My hon. Friend is absolutely right and the problem is compounded. Not only did the Glenlight shipping company—a privately operated company—go out of business because that arrangement was ended, but at least two of the other coaster companies that operated at that time and whose existence Ministers used as a justification for not supporting Glenlight, have also gone out of business since. The Easdale Island company was the most recent. It operated the last puffers in the western isles and it too has gone out of business. The relevance of that, Mr. Deputy Speaker, is that, as coastal shipping declines, everything else is piled on to the roads and on to the car ferry system, and vehicle excise duty becomes crucial to all trade between the islands and the mainland.
      12.30 am
      Mr. Graham: My hon. Friend will be aware that the headquarters of Caledonian MacBrayne, which services most of the isles, is in my constituency. Tonight's announcement will create terrible stress and problems for my constituents who service the islands. They will be wondering whether the change in duty will mean a reduction in jobs because there will not be enough money to go around. Does that mean that, once again, my constituents will have to suffer further unemployment? Does it mean that the islands will suffer further unemployment because there will not be enough money to invest?
      Mr. Wilson: My hon. Friend's concern for the employees of CalMac is well known. Indeed, we and my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman) once jointly fought quite a successful campaign to keep CalMac's headquarters in Gourock. More recently, we fought a successful campaign to keep the company in the private sector.
      I do not want to disturb the Minister responsible for cricket, who is nodding off—
      Mrs. Helen Liddell: I am impressed by my hon. Friend's comments about the effect of the coastal trade in Scotland. Our Scottish heritage has a great impact on our tourist trade. Is it not ironic that many hon. Members on both sides of the House have been very attracted by the stories of the Vital Spark and the history of Scotland that is connected with the puffers? When we study the background to our coastal trade and the effect that this schedule could have on it, we realise that we are
      818
      losing a vital part of our community, of our heritage and of what makes Scotland different—a vital part of our vital spark.
      The Chairman: Order. This debate is about vehicle excise duty, which is not part of Scotland's heritage, or indeed that of any part of the United Kingdom.
      Mr. Wilson: Mr. Deputy Speaker—
      The Chairman: Order. I am the Chairman this evening.
      Mr. Wilson: My hon. Friend the Member for Monklands, East (Mrs. Liddell) makes a vital point, Mr. Morris. Our national heritage has many dimensions. I contend that the economic well-being of island communities is a very important part.
      The Chairman: Order. I am not denouncing that, but we are dealing with schedule 4 of the Finance Bill and heritage is not a part of that.
      Mr. Wilson: I accept the fine distinction, Mr. Morris, but if there are no people on the islands, there is very little heritage. Dead communities are—
      Hon. Members: "Dead?"
      The Chairman: May I help the hon. Gentleman? He obviously has important matters to raise on schedule 4 concerning vehicle excise duty. Perhaps he will deal with those rather than worrying too much about the dead.
      Mr. Wilson: One of the major conditioning factors of the economic well-being of island communities is freight and transport costs, which is why we are talking about island communities.
      Mr. Macdonald: Will my hon. Friend reflect on the principle which the Minister announced to us tonight, that taxation must be absolutely uniform throughout the length and breadth of the United Kingdom, and must apply to Lewis in the Hebrides as it does to Lewes in Sussex? Where does my hon. Friend think that that law—if it is a law—comes from? Does he agree that it is absurd to apply it to the Scottish islands?
      Mr. Wilson: I agree entirely. It is not a law. If we were here long enough, and if you, Mr. Morris, allowed us to deviate far enough, we could give several examples of exceptions and anomalies that are allowed in recognition of geographical circumstances. I do not blame the Minister for what he said on the ground that he did not know what he was talking about. It was an ad hoc response.
      Mr. Heathcoat-Amory: It was not ad hoc at all. I referred to vehicle taxation. If the hon. Member for Western Isles (Mr. MacDonald) wishes to quote me, he should get that correct.
      Mr. Wilson: The Minister should do his homework even on that narrow point. He will then find that he is not right about that, either.
      Mr. Salmond: The hon. Gentleman will be aware that a number of exemptions apply even to vehicle taxation. For example, police vehicles are exempt from vehicle taxation. [Interruption.] The hon. Member for East Lothian (Mr. Home Robertson) says that the lorries on the islands could be fitted with blue flashing lights, which

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      would enable them to be exempt. Alternatively, they could be reclassified in some way. There is no uniform vehicle excise duty for police vehicles.
      Mr. Wilson: There is no need to go as far as fitting vehicles with blue flashing lights.
      My hon. Friend the Member for Renfrew, West and Inverclyde mentioned Caledonian MacBrayne. It is a dreadful confession from the Minister that he has no idea which vehicles commute between islands and mainland and which are fraudulently based on the mainland. It would not be difficult to check the returns of the ferry operators to find the activity pattern of each of those vehicles.
      The Minister has consistently failed to say why he refuses to distinguish between fraudulent and legitimate operators. [Interruption.] Now he does not even have the courtesy to listen to the debate. Will he make some effort tonight to distinguish between those who operate fraudulently and those who operate legitimately, or are they all part of the same picture in the Tory book?
      Mr. Skinner: My hon. Friend mentioned fact that the Minister had not the decency to listen to what he was saying. I suggest that he was not listening to my hon. Friend because the Tory Whips were in a huddle proposing that, despite the fact that my hon. Friend has been speaking for a relatively few minutes, they try to move a closure on this specific debate. The plan is that the Tory Whip will ask the Chair, Mr. Morris, to have a closure. It will be argued on the basis that, as there has been an important debate on the amendment beforehand, that time and this should be added together in order to gag my hon. Friend or anybody who follows him. That is the plan.
      Mr. Wilson: I am always grateful for my hon. Friend's parliamentary insights. If that is the Government's ploy, I had better hurry on.
      I wish to return to a serious point which the Government must answer. This debate has now been going on in correspondence with Ministers for about nine months. Why have they never sought to identify vehicles that are genuinely island-based? Why is the Tory party the party of legitimate fraud? Why have the Government allowed people to act fraudulently and advertise island licences when they know perfectly well that they are not island operators? Why have the Government done nothing about that? Why is their only solution based on a refusal to draw a distinction and therefore discriminate unfairly against the island operators?
      The Minister has not made the slightest effort to answer any of those questions. I think that that is a discourtesy to the Committee—more than that, it is a disgrace—although
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      it is a very minor discourtesy compared with the sleazebag activities of the hon. Member for Derby, North (Mr. Knight).
      The Chairman: Order. I think that the hon. Gentleman might like to rephrase his earlier statement.
      Mr. Skinner: He said "sleazebag activities"; he did not call him a "sleazebag".
      The Chairman: Order. Will the hon. Member for Cunninghame, North rephrase his statement?
      Mr. Wilson: I will use the phrase "grossly disreputable", Mr. Morris.
      Mr. Graham: My hon. Friend will be aware that the vehicle excise duty will affect snow ploughs. There were blizzards in Scotland the other day and if snow ploughs are taxed to the hilt it will affect the lifeline to the islands. Will the roads be cleared or will Scotland suffer once again because the Government have not seen fit to recognise the difficulties of island living? Snow ploughs are essential to living on the islands and we must ensure that the roads are clear and free of snow. I ask my hon. Friend to consider that point in his deliberations on the schedule.
      Mr. Wilson: I am grateful to my hon. Friend, although I do not want to get on to the subject of snow ploughs. Many hon. Members wish to speak in the debate tonight, and in light of the strictures of my hon. Friend the Member for Bolsover (Mr. Skinner), I will bring my remarks to a close.
      Mr. Matthew Banks: No.
      Mr. Wilson: I know that the hon. Gentleman wants to hear a bit more about the islands. I was going to ask him if there is any particular island that he would like me to dwell upon, but that might be a dangerous invitation.
      Mr. Home Robertson: I am grateful to my hon. Friend for giving way. There is a lot of meat in the schedule. I think that paragraph 23, which refers to "false or misleading information", is particularly relevant to the position tonight. Sub-paragraph (3A) states:
      "A person who, in supplying information or producing documents for the purposes of any regulations made under section 61A—
      (a)makes a statement which to his knowledge is false or in any material respect misleading or recklessly makes a statement which is false or in any material respect misleading … is guilty of an offence".
      Does it occur to my hon. Friend that the Minister, and more specifically the Government Whips, were "recklessly misleading" in their conduct in relation to an earlier amendment to the schedule? If people will be guilty in future of an offence under the terms of the schedule and subject to legal sanctions, why are Ministers not prepared to live up to those same standards?
      Mr. Wilson: My hon. Friend makes his own point. I believe that the little things which happen in the Chamber have much greater reverberations outside it. The story of what happened earlier this evening will be told for months and years to come. In one fell swoop, the hon. Member for Derby, North wrote off any chance that the Tories had of winning back the marginal seat of Argyll and Bute. He has also made a significant contribution to doing in the

      821
      hon. Member for St. Ives (Mr. Harris), and there may be an effect on other seats because many people who do not live on the islands are interested in them.
      The Tories will pay for their actions earlier tonight in one way or another. They do not have the wit to realise it when the events are taking place—they think that everything can be stitched up in here. If they can cheat and deceive and use those sorts of tactics—
      The Chairman: Order. Firstly, the hon. Gentleman is not talking to the schedule; and, secondly, I would be grateful if he would again rephrase the word that he used. Does he know which word I am referring to? The hon. Gentleman used the word "cheat", which is not appropriate.
      Dr. Godman: How about "sleekit"?
      Mr. Wilson: That is a very seasonal word. Would "sleekit" be all right, Mr. Morris? It is used in a well-known poem by Robert Burns as an adjective to describe vermin, so I will halfway compromise on it and we will bear in mind Bevan's famous maxim.
      Rev. William McCrea: Does the hon. Gentleman agree that a strange philosophy is being advanced tonight? The Government, instead of taking action against people who act fraudulently, intend to put legitimate island operators out of business to solve the problem.
      Mr. Wilson: I agree. That is something for which the Paymaster General should answer, but he refuses. The Government's philosophy is that it is easier to use a sledgehammer than to make sensible adjustments, to separate the wheat of legitimate island operators from the chaff of fraudulent operators who are abusing the system.
      12.45 am
      Dr. Godman: Does my hon. Friend agree that the sleekit behaviour of Ministers tonight may damage the interests of people who are attempting to bring some prosperity to remote communities? I refer to the importance of transport costs to fish farms in remote island communities. The measure could damage not just hauliers but fish farms and the employment that they offer.
      Mr. Wilson: I could talk at length about fish farms but will not do so. The same argument applies to distilleries. Island economies are dependent on transport and transport costs. The Government are gratuitously heaping an additional cost on transport, which will affect the cost of everything else.
      Mr. Home Robertson rose—
      Mr. Wilson: I will not accept any further interventions because I do not want to prolong my speech, and I do not want this debate to descend into farce. It is not a farcical matter, but a serious one. This speech is not a ploy. I am making it because I care passionately about the well-being of the islands and particularly of those in my constituency.
      Even after seven years in the House, I was naive enough to believe that, if one argued a good non-political case—which in this instance concerns communities in my constituency that generally do not vote for me—one could win it, because virtually nothing is at stake. I was
      822
      encouraged by the hon. Member for Salisbury (Mr. Key), who encouraged a good dialogue—but out of the blue, the whole thing was dashed in a most insulting way.
      I am not sure whether the Minister acted alone or in a conspiracy with the hon. Member for Derby, North. They dealt with the matter in a way that I am not allowed by you, Mr. Morris, to describe. The judgment will out, and this debate will have its reverberations. Hell mend those responsible.
      Mr. Macdonald: My hon. Friend said that Tory Members will pay for their activities this evening. They are already beginning to pay, because they could have been home a long time ago if their Whips had not scored an extraordinary own goal, trying to scupper the possibility of returning to this debate on a future occasion. They did not succeed in that either, because—
      The Chairman: Order. I remind the hon. Gentleman that the Committee is debating schedule 4 stand part, not something that occurred earlier this evening.
      Mr. Macdonald: I was reflecting, Sir Michael—
      The Chairman: Order. I am not yet Sir Michael.
      Mr. Macdonald: After this evening's activities, Mr. Morris, you deserve a knighthood.
      I will not confine myself to the topic touched on earlier, because schedule 4 concerns many other relevant matters.
      I cannot refrain from mentioning what the Minister described as the principle involved in not allowing the exemption for island vehicles. The schedule itself offers a simple way of resolving the problem, which is how to identify vehicles used only on the islands and not misused by being taken to the mainland. The Minister said that this could not be done because the Treasury does not make geographical or regional exceptions in the matter of vehicle taxation.
      Part II of the schedule, paragraph 2(h), mentions
      "vehicles used for short journeys between different parts of a person's land".
      Why not rephrase that to read "vehicles used for short journeys between different parts of an island"? That would offer a good definition of the sort of vehicles for which we are seeking an exemption. It does not refer to the Scottish islands, so it does not pose the regional problem that the Minister says goes against the Treasury grain.
      Vehicles used for short journeys within islands could then be marked to ensure that they could not be taken to the mainland, thus putting an end to the abuses that the Minister is so keen to stamp out.
      The Minister has been unable to give us a single statistic to show the extent of a problem with which he is clearly obsessed. He is willing to deal this heavy blow to fragile island communities in order to get rid of the problem, yet he has told us that he has no idea of how great the problem really is. That is quite extraordinary.
      The Minister thought that the abuse was so considerable that he had to take action against island communities and ignore the work being done by the Department of Transport. We might have expected him to make an effort to ascertain the scale of the problem first: how many operators are abusing the exemption? How much money is being lost to the Treasury—thousands or tens of thousands of pounds?

      823
      The Minister has no answer to these questions, yet he is willing to detain us all here—
      Mr. Home Robertson: My hon. Friend is being unfair to the Minister. Surely the Treasury must know how many vehicles are covered by the current exemption. By the simple process of calculating the difference between the discounted rate and the top rate, and multiplying by the number of vehicles covered by the exemption, even this Minister should be able to work out the answer. Is my hon. Friend telling us that the Minister and the Government do not even know that?
      Mr. Macdonald: The Minister told us all earlier that he had no idea of the total number of vehicles claiming the exemption, or of the total revenue lost to the Treasury thereby. He could not even hazard a guess as to what proportion constitutes abuse. If he had an idea of the total number, he could have simply given us some kind of ceiling, above which the abuse could not be said to take place. He could say that the amount being lost because of the abuse was a certain figure below that amount, because there would be a total amount involved in terms of vehicles claiming the exemption.
      I do not want to press that particular point with the Minister, but he must go back tomorrow morning and ask those who advise him in the Treasury how we came to be discussing the matter at this hour of the morning, when it could all have been settled and resolved with a little foresight and thought, a little consideration, a little bit of communication between his Department and the Department of Transport, which is currently considering the issue. Does he believe that the principle of uniform vehicle taxation throughout the United Kingdom is so important that it cannot be deviated from in this specific instance, which has the support of both sides of the Committee? Is it threatened at all as a principle by the exemptions that we propose?
      I suggest that, if the Minister asked the civil servants to exercise a little bit of ingenuity and brain power, they would soon come up with a form of words that would achieve the purpose that hon. Members on both sides of the Committee wish to achieve, but which would also not break the principle that he so cherishes.
      I would like to move away from that specific topic in case hon. Members believe that it is becoming exhausted, bearing in mind the strictures of the hon. Member for Bolsover about the two debates potentially being added together.
      Mr. Home Robertson: Before my hon. Friend moves on from the Minister's cherished principle, I would like to clarify one point, because I studied very carefully the manifesto issued by the Conservative candidate in East Lothian at the last general election and I can assure my hon. Friend that nothing was in it about an undertaking to get to the root of the vicious problem of islanders freeloading on the mainlanders because of the exemption. Did the Conservative candidate in Western Isles promise in his manifesto to do away with the exemption?
      The Chairman: Order. That has very little to do with schedule 4.
      Mr. Macdonald: What my hon. Friend said is hardly surprising given that we could not believe what the
      824
      Minister was apparently telling us a few seconds before the conclusion of the debate, and given the actions of his hon. Friends the Whips in undermining the commitment that he had apparently made to hon. Members about being able to return to the matter on Report.
      Mr. Heathcoat-Amory: No undertaking has been undermined. I stand by the remarks that I made, which were that the House clearly wishes to return to the issue. It is most appropriately done later on Report. If there was any procedural difficulty about the matter being raised by the hon. Member for Argyll and Bute (Mrs. Michie), I would use the Government Benches to ensure that the matter was raised on Report. I gave that undertaking, but I also indicated, in response to a question, that I would be happy to meet the hon. Lady or other hon. Members to discuss it, because I have never refused to meet an hon. Member about an issue of public concern.
      I am very happy to repeat those points for the benefit of the Committee. At this late hour, I do not think that it is very fruitful for me to continue to debate the issue with the hon. Gentleman, but in the light of the assurances that I have given, I hope that he will agree that it is my full intention—as it has always been—to return to the issue in due course.
      Mr. Macdonald: That is a welcome announcement, which makes it all the more extraordinary that the Whips should have forced a Division in the first place. They have saved themselves no time tonight, nor have they precluded a subsequent return to the issue. This is the most self-defeating action that I have ever witnessed on the part of a Whip.
      Mr. Skinner: I think that the Minister now appreciates the political significance of what the Government Whips have done tonight. The consequences could be very severe.
      Does my hon. Friend agree that double standards are operating here? A Tory Minister says that it is wrong to have variation in relation to taxes for the islands, yet the Government are prepared to attack the Labour party when it talks about devolution because they say that it will put up taxes for Scotland. They cannot have it both ways; this really is hypocritical.
      1 am
      Mr. Macdonald: I thank my hon. Friend for reminding the Committee of that, but I should like to return to the Minister's offer. He said that the matter could—indeed, I think he said "would"—be returned to on Report following a meeting between the hon. Member for Argyll and Bute (Mrs. Michie) and other hon. Members.
      Dr. Godman: In the light of the Minister's offer, may I ask my hon. Friend whether he believes that schedule 4, suitably amended, would meet the needs voiced by him and the hon. Member for Argyll and Bute?
      Mr. Macdonald: I have not been a Member of Parliament as long as the Minister, but one thing that puzzles me is how the matter can be returned to on Report when a vote has already taken place.
      The Chairman: Order. Let me make it clear that that decision rests entirely with Madam Speaker: there is no point in debating it now.
      Mr. Macdonald: I am grateful for your clarification, Mr. Morris. It would be helpful to all hon. Members if

      825
      the Minister suggested that, if a proposal emerges as a result of meetings that he held with the hon. Lady and others, the Government might be willing to consider tabling such an amendment on Report. I must consider the impact of schedule 4 on certain operators in my consituency: it is likely to drive them out of business. If the Minister suggested that the Government might table amendments as a result of meetings with hon. Members, that would relieve my constituents and, I am sure, many of his hon. Friends who are present tonight.
      I remember a parallel case—almost—in last year's Finance Bill, involving the passenger tax. A similar principle was invoked then. It might have been more applicable then because some people were seeking regional exceptions. However, I do not see how the principle applies in this instance. It should be easy to find a simple way to define the matter in a manner that does not breach Treasury guidelines.
      The matter is hugely important to my constituents because transport communications are crucial to the livelihood of people in the Scottish islands. Communities there are fragile and average incomes are considerably below the United Kingdom average. Car ownership is proportionately high precisely because communications in remote rural areas are impossible by any normal means of public transport and car ownership is a necessity. Any measure that increases the costs of transport to my consistituents and other island inhabitants strikes at the very root of those communities and their ability to survive.
      I hope that when the Minister meets the hon. Lady and other hon. Members he will be open-minded, will look at the issues afresh, and will have requested a report from the Department of Transport. I hope that he will ask his Treasury officials to look as hard as they can for a means to achieve this exception.
      Rev. Ian Paisley: I am glad that I waited until the end of this debate, because if what the Minister said had been said a little earlier, we would not have reached such an impasse. I am critical of what the Whips did but I shall look carefully at what the Minister does. He has said that he will use the Government's power to return the issue to the Floor of the House. Time will tell, but I accept that assurance. As I have said, if it had been given sooner and more fully we would not have reached the impasse.
      Question put and agreed to.
      Schedule 4, as amended, agreed to.
      Bill (Clauses 2, 5, 8, 15, 52, 64 and 91, Schedules 1, 4, 11 and 14, and any new clauses first appearing on the Order Paper not later than 19 January and designed to continue the statutory effect of the Ways and Means Resolutions of the House of 13 December) as amended, to be reported.
      To lie upon the Table.

Statutory Instruments, &c.

  COUNTY COURTS
  Motion made, and Question put forthwith pursuant to Standing Order No. 101(5) (Standing Committees on Statutory Instruments, &c.),
  That the draft High Court and County Courts Jurisdiction (Amendment) Order 1994, which was laid before this House on 29th November, be approved.
  That the draft County Court Remedies (Amendment) Regulations 1994, which were laid before this House on 29th November, be approved.—[Mr. Andrew Mitchell.]
  Question agreed to.

  INDUSTRIAL ORGANISATION AND DEVELOPMENT
  Motion made, and Question put forthwith pursuant to Standing Order No. 101(5) (Standing Committees on Statutory Instruments, &c.),
  That the draft Milk Development Council Order 1994, which was laid before this House on 30th November, be approved.—[Mr. Andrew Mitchell.]
  Question agreed to.

  INTERNATIONAL IMMUNITIES AND PRIVILEGES
  Motion made, and Question put forthwith pursuant to Standing Order No. 101(5) (Standing Committees on Statutory Instruments, &c.),
  That the draft World Trade Organisation (Immunities and Privileges) Order 1994, which was laid before this House on 1st December, be approved.—[Mr. Andrew Mitchell.]
  Question agreed to.

  EUROPEAN COMMUNITIES
  Motion made, and Question put forthwith pursuant to Standing Order No. 101(5) (Standing Committees on Statutory Instruments, &c.),
  That the draft European Communities (Definition of Treaties) (Agreement Establishing the World Trade Organisation) Order 1994, which was laid before this House on 1st December, be approved.—[Mr. Andrew Mitchell.]
  Question agreed to.

  EUROPEAN DOCUMENTS
  Motion made, and Question put forthwith pursuant to Standing Order No. 101(5) (Standing Committees on Statutory Instruments, &c.),
  EUROPEAN DOCUMENTS

    SUGAR REGIME
    That this House takes note of European Community Document No. 11141/94, relating to the Common Agricultural Policy sugar regime; and supports the Government's policy to press for reductions in sugar prices to bring them into line with those for other arable crops, to defend the United Kingdom beet sugar quota and to support measures which ensure the viability of cane sugar refineries and provide additional access opportunities for developing country suppliers.—[Mr. Andrew Mitchell.]
    Question agreed to.

Association Football
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Andrew Mitchell.]
1.8 am
Ms Kate Hoey: It gives me no pleasure whatever to initiate this debate. Everyone who really cares about the good name of football and about its future must be distressed about the variety of allegations, scandals and corrupt practices which have surrounded the game in recent years.
In the past few days, the newspapers have been full of one incident—the attack on a Crystal Palace supporter by the Manchester United player Cantona. Shocking as that incident was—and I congratulate the Football Association on taking immediate action—it is less significant than what has been happening off the field. At least the Cantona incident was in full view of the public via television.
I want to talk tonight about the many allegations that have yet to be proved or disproved. It is commonly agreed that a great deal of evidence exists. I have seen some of it, and the Minister should have as well. I want to raise with the Minister with responsibility for sport a demand for more action to get to the bottom of these matters.
Some people, both within and outside football, have stated that football has nothing to do with Parliament, and that politicians should not be sticking their noses into "private business". I heard that some people in football have a view, which I hope and believe the Minister does not share, that it is especially shocking that a mere woman Member of Parliament is getting involved in what is clearly an industry run by men, for men. I make no apology for that involvement.
Football is our national game. It gives pleasure to millions of men and women, and its future is much too important to be seen as the private preserve of a few. Crucially, it is an industry that receives millions of pounds, both directly and indirectly, from Government. In the past year, it received £23 million via the Football Trust from a specially reduced betting tax on the pools industry. That special reduction was granted in 1990, and was recently extended for another five years to the year 2000. A sum of £14 million comes into the Football Trust from the pools companies' special deal on the spotting the ball competition each year.
Privileged loans are approved by the Department of the Environment from local authorities. There is money to help with the young trainee footballers scheme. Money will be going to help with the staging of the European Championships in 1996. The Government have rightly given the football industry special privileges, unlike any other leisure activity. Special privileges using taxpayers' money mean special responsibilities, which the Minister must ensure are carried out.
In response to my letter before Christmas asking for an independent inquiry, the Minister shared my concerns about recent allegations of financial irregularities in professional football. I welcome that. He also said that the issue of transfer irregularities was primarily one for the governing body of the sport to pursue. He said:
"The FA Premier League has set up a Commission of Inquiry and I await the outcome with interest."
He continued:
"So far as there are any tax implications, the Inland Revenue will and are taking close interest."
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He ended:
"My officials are in touch with the FA Premier League and will continue to monitor the situation."
Fifteen months ago, on 4 November 1994, the Premier League Commission was set up to inquire into allegations of undercover payments during "transfer deals" and into the role of agents in an attempt to restore the public's faith in the propriety of football. Members were Steve Coppell, the former Crystal Palace manager and England international, and secretary of the newly formed Managers Association, Rick Parry, chief executive of the Premier League, and Robert Reid QC. At the time, Mr. Parry said that his aim was to have a short, sharp exercise. So far, they have failed to report.
The inquiry, however, is entirely concerned with the laws and regulation of football. The Government should be considering the whole tax evasion scam that is taking place in football. The Inland Revenue involvement is limited both by scope and time—the limits is two years in time, one year to be chosen by clubs and one by the Inland Revenue, and only six players. Customs and Excise, the collector of VAT, is taking no specific steps and is conducting no specific investigation of the transfer turnover of some £70 million a year.
From the information that I have had from Customs and Excise, it was, to put it in football parlance, "shown the yellow card". In other words, it was warned off, not just from delving too deeply, but from delving at all. Why is the Inland Revenue not passing information on to the VAT commissioner, to the financial reporting review panel or to the Director General of Fair Trading?
Perhaps the Minister can tell the House why the Government are stopping a full inquiry into the evasion of taxation by some football clubs. We know that 15 premier division clubs have, under the Government's formula, already paid £16 million in back tax and penalties. That is for only a two-year period—what would be owed if the process were extended to cover all clubs for perhaps 10 years?
Will the Minister confirm that there is an under-the-counter deal being done, and that guilty clubs are being told unofficially, "Co-operate, pay up and we will not pass on any information, not to other tax bodies or, where there is criminality, to the police or, crucially, to the football authorities for their further action"?
The important thing for the House and the Minister to understand is that, not only is the taxpayer being ripped off, but the supporter is being forced to pay more as a result of the dirty deals which cause money that should be in the game to be siphoned off in back-handers, bungs and fixes. Indeed, it has been suggested that the figure could be as much as £1 a ticket.
The particular problems of player transfers and illegal payments are not confined to deals done within this country. In the past few years, increasing numbers of players have been imported to play here. They originate from Scandinavia, eastern Europe, Spain, Africa and Australia. One of these transfers—that of Jensen from the Danish club Brondby to Arsenal—is currently under investigation.
It is alleged that the Danish club took only £900,000, and that the rest of the total price of £1.57 million paid by Arsenal went to the Guernsey company Interclub, run by the Norwegian agent Rune Hauge. Therefore, some £600,00 was paid needlessly by Arsenal, and George

829
Graham has not denied that he admitted to the Inland Revenue that he received an unsolicited cheque—a gift—for £285,000, which he subsequently handed back to Arsenal. Other clubs are involved with the same agent and all of them bought Scandinavian players. Those clubs include Liverpool, Manchester United and Oldham. More than 60 foreign players were being investigated before the even bigger influx of players last summer.
In Spain, using a British agent, two players were transferred back to Aston Villa from Real Sociedad. That transfer—a £2 million deal in total—is subject to Inland Revenue and other inquiries. The manager at the time of the deal was Ron Atkinson. Two east German players transferred from German clubs and played fewer than 30 games before returning to their home country. I understand that the Inland Revenue is investigating.
It is to Australia, from where the Minister has just returned, that I wish to draw his particular attention. An internal inquiry by the football authorities, which took some time and found very little evidence, was superseded by a Parliament Senate Committee of inquiry which, using its judicial powers, is conducting a wide-ranging investigation into, among other things, the transfer of football players to England. So far, the inquiry, which is currently meeting, is concerned with two English clubs—Blackburn Rovers and Brighton and Hove Albion—which used the services of an English agent, Mr. Tom Lawrence.
Commenting on the Brighton FC transfer of David Clerkson, who has returned to Australia, the report said:
"the English FA became involved, but does not seem to have clarified anything."
As for Blackburn Rovers and the transfer of goalkeeper Frank Talia, the inquiry reports that the Talia transfer is an example of what happens when an agent acting for the transferee is involved, and that the Australian club Sunshine George Cross does not believe that it received the full moneys due to it. Blackburn paid £115,000, whereas the Australian club received only £8,500, which means that more than £100,000 has gone walkabout. It is interesting that the Australian Parliament seems to know more than the Minister about what is happening in respect of transfers of footballers to England.
As for internal transfers, the original reason for setting up the Premier League commission of inquiry was to investigate an allegation of wrongdoing and bribes involving the transfer of Teddy Sheringham from Nottingham Forest to Tottenham. That involves the England team manager Terry Venables and the former Nottingham Forest manager Brian Clough. Does the Minister know whether any evidence of financial fraud has been passed on to the police authorities in this case—or, indeed, any other? Is it not only fair to everyone, especially Brian Clough, for someone, somewhere to say whether he is guilty or not guilty?
The Commission has already in front of it much information, including an invoice regarding the transfer of Paul Gascoigne to Lazio for £200,000, and an invoice from First Wave Management for £58,000. Those should be dealt with by the Department of Trade and Industry under the Companies Acts 1985 and 1989.
The problem of money and its misuse is far too big, far too difficult and far too close to home for the football authorities to cope with by themselves. Can we expect club chairman to find themselves guilty? Can we expect club managers to judge themselves objectively, especially in a culture which has turned a blind eye to wrongdoing?
830
It must be remembered that all the allegations and investigations now being discussed come from outside the game, or from newcomers to the game. Particular credit must be paid to the consistent investigative reporting of Harry Harris of the Daily Mirror, to Patrick Barclay of the Observer, and to The Mail on Sunday, among others.
The evidence in front of the Commission relating to Terry Venables is, I believe, damning. Leaving aside his business dealings, the evidence present in the order 14 application in the case when the agent Eric Hall sued Tottenham for £23,500 for
"public relations and commercial activities on the Club's behalf",
raises grave questions at the least about Mr. Venables's judgment. Indeed, it is possible that he could have contravened the Prevention of Corruption Act 1906. There is certainly clear evidence of the breach of Football Association regulations, in that Venables knew that Eric Hall was acting for him, while at the same time acting for the players.
In simpler terms, the Prevention of Corruption Act means that a football agent cannot take money from a club which at the time is in negotiation with that agent's clients. Eric Hall was an agent for three Tottenham players: Justin Edinburgh, Paul Moran and John Hendry. Tottenham's lawyers discovered that Hall took money from those players while acting as their agent for new contract negotiations. Unbeknown to those players, he also took money from Tottenham for the same reason.
Section 1(1) of the Act contains similar provisions regarding persons who agree to give any such gift or agree to pay a fee. Terry Venables swore an affidavit to help Eric Hall in his fight against Tottenham. In that affidavit, he fully admits that he asked Hall to convince the players to sign contracts. Venables knew that Hall was the agent for those players, because players always have to notify their club in writing of their agent. To me, the evidence speaks for itself; no wonder the Minister awaits the commission's report with interest.
The Premier League commission of inquiry has already been overtaken by evidence and new allegations. The commission has narrow terms of reference. It is not looking into things such as the free use of credit cards valued at £2,000 a month, subsidising the purchase of houses with unreported capital sums, and cash payments to parents when signing on school-age footballers.
The reality is that most sensible suggestions to monitor financial dealings of clubs have been rejected by the Premier League chairmen. The Professional Footballers Association suggested a compliance unit. Why does the Football Association not insist on that? Indeed, Graham Kelly of the Football Association has said that that is a difficult area.
We cannot wait for them to sort themselves out. The situation is too important. But let us not forget that there are many decent, dedicated men and women involved in the football industry. They also want to clean up professional football. As a long-time Arsenal supporter, I know the pain it has caused, not only to me but to other supporters, when we hear of wrongdoing in our favourite clubs.
The Minister for Sport will not need reminding that this is the game we gave the world. Hosting the European championships in 1996 is a special honour. With it goes the responsibility of the Government, the FA and all those in football to ensure that the financial aspects of the game are seen to be perfectly honest.

831
There is a real danger that what is being discovered is so widespread that any admission of guilt or breach of the rules would bring the whole edifice of the football establishment down. No one wants to be the first person to pull his finger out of the dyke.
It is important that the football authorities do not pick on one person as the official scapegoat. The only way to counter that is for the Government to set up an inquiry along the lines of the Taylor report or other reports into football, independent of the cosy relationships in football and with the power to subpoena evidence, to examine accounts and to make a full and impartial report. That is what the country wants and that is what is needed if we are going to get back that confidence in football—the national game.
1.25 am
The Parliamentary Under-Secretary of State for National Heritage (Mr. Iain Sproat): I must begin by congratulating the hon. Member for Vauxhall (Ms Hoey) on securing this debate, and on her persistence in pursuing allegations of improper payments and behaviour in the sport.
I welcome this debate entitled "Government Policy on Association Football", and the opportunity it affords to discuss a number of important questions which have been raised as a result of recent speculation about the conduct of certain clubs and individuals. Those are issues which worry a lot of football supporters, and the hon. Lady has set out her concerns very thoroughly.
Although football is, of course, privately run and administered by independent governing bodies, there is a legitimate public interest involved, and for that reason, both my Department and the Inland Revenue have been monitoring those issues very carefully, and I will respond to the hon. Lady's specific points about financial irregularities in a moment.
Given the title of the debate, let me begin by explaining that the Government's role in football, as in other sports generally, is to encourage the development of, and participation in, the game through appropriate policies and expenditure programmes.
The Government do not, and indeed should not, attempt to run football itself. That is the responsibility of the properly constituted governing bodies, such as the Football Association, the FA Premier League and the Football League, and my Department does not have any jurisdiction over their day-to-day affairs. That is not to say, however, that the Government do not take firm action when that is appropriate.
The title of the hon. Lady's debate is "Government Policy on Association Football", so, although I will come to the issue of financial irregularities in a moment, I must start by looking at our policy in the round. Following the terrible tragedies at Bradford and Hillsborough, the Government passed the Football Spectators Act 1989 and stipulated that all clubs in the Premier League, and the First Division of the Football League, must convert to all-seated accommodation.
In addition, the Government established the Football Licensing Authority and funded the Football Trust through a 2.5 per cent. reduction in pool betting duty. Government funding of the Football Trust, which began in 1990, was
832
originally due to end this year, but, as hon. Members will know, it was decided in August 1993 to extend the arrangement for a further five years.
As a result of those actions, football grounds have been transformed. From old, dangerous and uncomfortable grounds, often with inadequate facilities, and uncovered terraces, we have moved to a position where our stadiums are among the finest in the world.
Also, £387 million has been spent so far on major ground redevelopment projects, of which £121 million has been contributed by the Football Trust, which assesses all grant applications to take into account the club's own resources. Together with smaller ground improvement schemes, that represents a major investment in the future of football, and it was a significant factor in UEFA's decision to award the finals of the 1996 European championships to England.
Responsibility for organising the championships rests with the FA, but my Department has been fully involved and has provided advice and assistance as necessary. As I have said on a previous occasion, the decision to award the finals to England was a vindication of all the work that the clubs have put into upgrading their stadiums to provide the facilities and comfort which spectators are entitled to expect as we enter the 21st century. It was also a vindication of the Government's policies on football.
Financial assistance from pool betting duty has not been limited to clubs in the top divisions. Clubs in the second and third divisions have received more than £14 million, and that does not include the funding provided to those clubs, and those in the GM Vauxhall Conference, from the Football Trust's income from the 'spot the ball' competition.
Now that the all-seating policy has largely been implemented, we can look forward to increasing the resources available to clubs in the lower divisions to achieve improvements in the safety of terracing and the quality of facilities. As can clearly be seen, the Government are concerned to help the modernisation and development of all football clubs, not just those at the top. That support extends right down to the grass-roots level, with the sportsmatch scheme, which is funded by my Department, providing grants worth more than £900,000 to football, and stimulating an equivalent level of support from private sponsorship. Without a healthy and thriving base, no sport can flourish, and I am very keen to support and encourage that base.
The Football Licensing Authority, on behalf of the Department of National Heritage, is responsible for licensing grounds at which designated football matches are played, and for ensuring that safety certification under the Safety of Sports Grounds Act 1975 is properly implemented, to avoid any repetition of the tragedies that we have seen in the past. Looking ahead, the Sports Council is responsible for distributing sport's share of the money which the national lottery will contribute to good causes, and I have no doubt that football will be one of the beneficiaries.
My colleagues in other Departments are responsible for other aspects of football. The Home Office, for instance, has a very important role in ensuring public order, and I am sure that hon. Members will agree that the police have been very successful in reducing the level of violence associated with football games, and will join me in welcoming that improvement.

833
The reduction in violence can be seen from the fact that, over the past five seasons, arrests at league games have fallen by 30 per cent. I have no doubt that that has played an important role in the rise in attendances, and particularly the increasing number of families who now go to football games.
Having set the framework within which football can operate safely and successfully, it is right that private clubs and governing bodies should be allowed to operate freely without Government interference—as long, of course, as they are seen to be acting in a responsible manner.
Complaints that increases in admission prices are driving spectators away and that clubs are exploiting their supporters by over-frequent changes of their strips are not new, but they should also be seen in the proper context. For example, attendances at football matches have risen every year since the 1986–87 season. Again for example, supporters are not obliged to buy replica kits and all the other souvenirs on offer at clubs these days.
It is also an interesting fact that 70 per cent. of replica kits are sold in large or extra-large adult sizes, which shows that, at least in the majority of cases, it is not children who are being targeted. Besides, a club's commercial activities help to keep admission prices down. It must also be remembered that football is not only a sport but a business, and that, if clubs are to be successful on the field, they must also be successful financially.
As well as paying for the essential ground improvements which I mentioned earlier, clubs must be able to buy quality players, which will enhance their teams' performance and attract more supporters. There have been complaints that transfer fees and players' wages are too high, but, although multi-million-pound transfer fees may seem like lottery money, clubs in this country must compete not only with each other but with those in other countries.
If we want British clubs to be successful in Europe, they must compete for the very best players with the likes of AC Milan and Barcelona. It is also worth remembering that footballers have very short playing careers, and that the majority of the money paid in transfer fees stays within the game.
Complaints about the role of television should also be seen in context. I know that a number of hon. Members are concerned about premier league matches being shown live exclusively on satellite television, but it is for footballing bodies to decide how to market their sport and where best to strike a balance between income and television viewing figures. BSkyB and the BBC are paying the FA over £200 million over five years, which is almost four times as much as television was previously paying, and that is without taking into account the ITV contract with the Football League. It is again worth remembering that these moneys all help keep down the cost of football to the supporters who go and watch their teams on Saturday afternoons.
The hon. Lady listed a number of concerns involving financial irregularities. I would urge her to send all the evidence she has to the appropriate authorities. As she is
834
aware, the Inland Revenue is responsible for these matters, and for some years now it has had a special team which has looked at payments in football.
These are very wide-ranging inquiries covering football clubs, players, management and agents, and involving teams at all levels of the game. The hon. Lady and other hon. Members can be assured that, if there are cases which merit prosecution, this will be done, as it was in the case of Swindon Town in 1992, when the chairman, secretary and treasurer were all successfully prosecuted.
Ms Hoey: Why is the Inland Revenue saying—at senior levels—that it has been told that what the Minister says should not happen?
Mr. Sproat: I do not know if that is true. I can assure the hon. Lady that I will speak to my right hon. and hon. Friends at the Treasury. I shall find out the answer, and send it to her.
Football is not helped, however, by exaggerating the problem—I am not saying that the hon. Lady is, but it has been known—and it is very important to note that Premier League clubs have agreed voluntarily to commission independent accountants to prepare reports for the Inland Revenue, which has agreed the scope and content of these reports with the Premier League. The aggregate cost of this exercise will be half a million pounds. I am happy to see that the clubs have decided to put their own house in order, and the Inland Revenue is very pleased with the co-operation it has received from the Premier League.
The FA Premier League is conducting its own inquiries into allegations of financial irregularities, and have set up a commission of inquiry whose membership includes an independent QC, who is also a recorder and deputy High Court judge. I am sure that the inquiry is conducting a thorough and rigorous investigation.
The inquiry had already been set up before the latest allegations of transfer irregularities were made, and it was quite rightly decided that it should look into those allegations too, rather than having a separate FA inquiry. The inquiry's terms of reference give wide-ranging powers, and I am confident those powers will be fully used.
The FA Premier League has made it clear that there will be no cover-up, and that it wants to produce long-term solutions, which will prevent a recurrence of these problems. The priority is to complete the inquiry properly rather than quickly, but I understand that the findings in the Arsenal case will be available very soon. I certainly agree that it would help public confidence if the findings of the inquiry were made public, and I urge the Premier League to ensure that this is done.
The serious allegations concerning Bruce Grobbelaar are being investigated by the FA and the police.
I see no need for a public inquiry. The Inland Revenue is looking into the financial aspects. I am satisfied that the—
The motion having been made after Ten o'clock, and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
Adjourned accordingly at twenty-two minutes to Two o'clock.