Commons Sitting of 6 July 1995

Preamble
The House met at half-past Two o'clock
PRAYERS
[MADAM SPEAKER in the Chair]
PRAYERS
  NEW WRIT
  For Littleborough and Saddleworth, in the room of Geoffrey Kenneth Dickens Esquire, deceased.—[Mr. Goodlad.]
  PRIVATE BUSINESS

    ACCOMMODATION LEVEL CROSSINGS BILL [Lords] (By Order)
    Order for Third Reading read.
    To be read the Third time on Thursday 13 July.

    LONDON LOCAL AUTHORITIES (NO. 2) BILL [Lords] (By Order)
    Order for consideration, as amended, read.
    To be considered on Thursday 13 July.

    CITY OF WESTMINSTER BILL [Lords] (By Order)
    Order read for resuming adjourned debate on Question [26 June].
    Debate to be resumed on Thursday 13 July.

Oral Answers to Questions
  AGRICULTURE, FISHERIES AND FOOD

    Milk
    Mr. Nigel Evans: To ask the Minister of Agriculture, Fisheries and Food what representations he has received about the price of milk quota. [31158]
    The Minister of Agriculture, Fisheries and Food (Mr. Douglas Hogg): The Department has received a number of representations but, as the House knows, the price of quota is dependent on market factors.
    Mr. Evans: I congratulate my right hon. and learned Friend on his new and richly deserved promotion to the Ministry of Agriculture, Fisheries and Food, and I congratulate my other hon. Friends on their ministerial appointments. As my right hon. and learned Friend will know, the price of milk quota is extremely high, and it is difficult for new entrants into dairying to afford it on top of all their other costs. Will he please take note of the problems of new entrants with the price of milk quota,
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    and also consider the possibility of securing more milk quota for Britain, as we have only 85 per cent. of the quota that we need for full production in this country?
    Mr. Hogg: On my own behalf and on behalf of my hon. Friends, I am grateful to my hon. Friend the Member for Ribble Valley (Mr. Evans) for his kind remarks. I know that, with his constituency experience, he is a formidable advocate of the interests of the farming constituency. I am indeed conscious of the fact that the price of milk quota increased substantially last year. That was due to a variety of market factors. I know, too, that there is concern about new entrants, and if there are sustainable proposals for addressing that question we shall certainly consider them.
    Mr. Pike: I congratulate the Minister on his promotion to the Cabinet. Is it not daft that although we have the right climate in this country to produce enough to meet all our requirements both for milk and for dairy products, we cannot do so? That is why the milk quota price is so high. Are not the Government failing the country's farmers if we do not get a higher milk quota which would enable us to meet our requirements?
    Mr. Hogg: It is perfectly true that we are not self-sufficient in milk, but that has always been the case. It arose because the base year of 1981 was less favourable to us than we would have wished. To be honest with the hon. Gentleman, however, the prospect of significantly enlarging our quota is remote.

    Beef
    Mr. Riddick: To ask the Minister of Agriculture, Fisheries and Food what was the cost of beef special premium in the last year for which figures are available in (a) the United Kingdom and (b) the European Union as a whole; and if he will make a statement. [31161]
    The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Tim Boswell): United Kingdom farmers were paid some £120 million, and European Union farmers as a whole some £500 million, during the year ended October 1994.
    Mr. Riddick: First, I warmly congratulate my hon. Friend on his appointment to the Ministry; he knows rather a lot about agriculture. Is he aware that a farmer of my acquaintance recently lost the premium on two of his steers because he misread one number on each tag, in one case mistaking an eight for a three? I was there at the time of the inspection and the inspector was very particular. This is an EU-wide scheme. Can we be sure that the scheme is policed as rigorously on the continent as it is in this country?
    Mr. Boswell: First, I am grateful to my hon. Friend for his kind remarks. We want equality of treatment between ourselves and our counterparts in the EU, and we shall press the Commission to ensure that there is an equal level of enforcement in all member states. I am aware of my hon. Friend's concern about the specific case to which he referred, but perhaps it would be better not to rehearse that case in the House this afternoon. As a general principle, while we will be firm in the pursuit of fraud, we wish to be as flexible and farmer-friendly as possible in the interpretation of the rules and any minor errors that occur.

    Nutrition
    Mr. Clapham: To ask the Minister of Agriculture, Fisheries and Food what projects his Department is funding aimed at improving nutrition for families on income support. [31162]
    The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mrs. Angela Browning): We contribute to the work of the nutrition task force to collate and disseminate examples of effective local initiatives and good practice which might assist those on low incomes to follow a healthy diet.
    Mr. Clapham: I do not think that the Department is doing enough. The Minister will be aware that there are 4 million children living in families with incomes less than half that of the average family. In other words, they are living below the poverty line. Does the Minister agree that many of those children will be living in families whose only income is income support and that those families will be unable to provide the adequate and nutritious meals which ought to be provided to children? Is not the health of those children being harmed? Is the Minister aware that many parents are going hungry to ensure that their children receive adequate meals? In the circumstances, does she agree that the Department ought to be doing more?
    Mrs. Browning: I am sorry that the hon. Gentleman is not fully aware of what the Department is doing. Under the "Health of the Nation" project team, we are contributing to a project—on which a report will be made in October this year—which looks across the lower socio-economic range in terms of nutrition. That project will embrace the people to whom the hon. Gentleman referred. We are funding research by the Institute of Food Research at both Reading and Glasgow universities, and we are also involved in a project by the Joseph Rowntree trust at the London school of hygiene and tropical medicine on one-parent households.
    Mr. John Greenway: Does my hon. Friend agree that fresh produce from British farmers and growers—the price of which has fallen below the rate of inflation since 1979—provides every family in this country with the opportunity of a high-nutrition diet? Will she join me in welcoming the Thank the British Farmer campaign that was launched at the royal show this week and in wishing the campaign every success?
    Mrs. Browning: I am happy to join my hon. Friend in wishing the campaign well. Basic foodstuffs, such as bread, potatoes, pasta, rice, seasonal vegetables and fruit, play an important role in the diets of people on lower incomes.

    Tobacco
    Mr. Etherington: To ask the Minister of Agriculture, Fisheries and Food what will be the cost of the common agricultural policy tobacco regime in 1995. [31164]
    Mr. Boswell: The latest estimate is around £900 million.
    Mr. Etherington: I congratulate the Minister and his Front-Bench colleagues on their appointments and wish them well. The Minister confirms that some £2.6 million per day is squandered on supporting an industry which
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    leads to the death of people. Will he assure the House that the Government will make every endeavour possible within the EU to ensure the complete elimination of subsidies to this nefarious industry which is well known to be full of fraud? Will he also assure the House that more efforts will be made to have such funding put into something which conserves and improves life rather than destroys it?
    Mr. Boswell: I thank the hon. Gentleman for his kind remarks. I share his view that the present cost of the tobacco regime is excessive. We wish to reduce that cost, and we shall take every opportunity that we can to do so. We have had some success in cutting the subsidised tonnage by an eighth and we shall continue to press that.
    On the hon. Gentleman's remarks about the health implications, in a former capacity earlier this week I had the privilege to be on the platform with my right hon. Friend the Member for Surrey, South-West (Mrs. Bottomley), then Secretary of State for Health, in connection with "The Health of the Nation". I certainly agree with the hon. Gentleman that that is a message that we should get across, particularly to our young people.
    Mrs. Lait: Are any studies being conducted into alternative crops to which tobacco farmers could move, so that we can bring an end to this unpleasant subsidy?
    Mr. Boswell: My hon. Friend makes a characteristically helpful and constructive comment. It is clearly the case that fanners in all parts of the Community, especially in difficult areas, who are used to growing tobacco, will need alternatives. We need to look at the matter constructively. The danger is that those will simply add to the cost of other commodity regimes within the common agricultural policy.

    Common Fisheries Policy
    Mr. Kirkwood: To ask the Minister of Agriculture, Fisheries and Food what recent discussions he has had with his European counterparts on effort control functions in the CFP; and if he will make a statement. [31165]
    The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. Tony Baldry): My predecessor sent the hon. Member a copy of his reply of 19 June to my hon. Friend the Member for St. Ives (Mr. Harris) on the outcome of the Fisheries Council held in Luxembourg on 15 June.
    Mr. Kirkwood: I welcome the Minister to his new berth looking after fisheries and I hope that he will not get too far out of his depth too quickly. Does he agree that encouraging skippers to pursue fisheries outside traditional United Kingdom waters could make a significant contribution to reducing pressure on North sea stocks? Is he aware that some skippers in Eyemouth in my constituency are finding it difficult to pick their way through the bureaucracy to get their hands on some of the grants that would enable them to transfer? Will he undertake as a matter of priority to make those grants available to skippers in the North sea fleet, as other European Union Ministers do? As he has now been in office for nearly four hours, is it not about time that he got something done about that?
    Mr. Baldry: First, I thank the hon. Gentleman for his kind comments. I am well aware of the understandable

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    concerns of many fishing communities about their future. The hon. Gentleman's constituents are obviously trying to find out whether there are other opportunities out of traditional fishing waters. If he and some of the skippers from his constituency would like to discuss that with me, I would be interested to find out whether there are ways in which we can help further. It would be disingenuous to suggest that there are either undiscovered waters or undiscovered sources of funding in the European Union budget or our own funds which might give them substantial help, but I am certainly prepared to study every possible detail which might be of assistance to his constituents.
    Mr. Harris: I welcome my hon. Friend to his post and hope that he will not find it too painful a bed of nails. I also pay tribute to his predecessor. Has he had time to grasp the fundamental point that for any control mechanism to succeed it must be seen by our fishermen to be broadly fair in terms of the way they are treated compared with fishermen from other member states? In that respect, may I give him a little advice and suggest that he could make an excellent start by completely dropping any idea of implementing our unilateral days-at-sea restrictions, which the industry will never stand?
    Mr. Baldry: I think that the whole House would join my hon. Friend in his remarks about my predecessor, my hon. Friend the Member for Fylde (Mr. Jack), who did an enormous amount to assist the United Kingdom fishing industry. The House knows the considerable interest that my hon. Friend the Member for St. Ives has in this matter. I hope that in the not too distant future I shall be able to visit his constituency and meet the fishermen with him to hear of their concerns at first hand. He can rest assured that we are taking enforcement of fisheries arrangements very seriously. Of course they have to be seen to be fair. Spanish fishing activity, for instance, will be monitored very closely when the new access arrangements take effect next year.
    On days at sea, as my hon. Friend knows, we have yet to hear from the European Court on that matter. When we do, we shall have to consider the judgment in the light of existing conditions—not least the fact that, since the idea was first mooted, the European Commission has introduced ceilings on effort in western waters. Clearly that has now to be taken into consideration.
    Mr. Macdonald: I join other hon. Members in welcoming the Minister. He mentioned Spanish access. Will he take an early look at the way in which the control regime on Spanish access will affect the inshore fleet around western waters? There is no Spanish access to the inshore fleet, so it would seem absurd to bring the inshore fleet into restrictions that are now being proposed to control both British and Spanish boats in western waters. I ask the Minister to take an early look at that and perhaps write to me about whether an exemption can be provided for boats which operate purely within the 12-mile limit, in inshore waters.
    Mr. Baldry: We must recognise that it was at the United Kingdom's insistence that both the coastal and flag states are to have a key role in monitoring the fishing activities of vessels permitted to fish in western waters. The European Commission has just published its proposals. We shall study those proposals carefully to
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    ensure that they are fully justified and that they are compatible with the commitment to minimise the burden falling on our industry, because obviously a balance must be struck between enforcement and minimising the burdens on industry.

    Animal Exports
    Dr. Spink: To ask the Minister of Agriculture, Fisheries and Food what steps he is taking to encourage the export of animals on the hook rather than on the hoof. [31167]
    Mr. Congdon: To ask the Minister of Agriculture, Fisheries and Food what efforts he is making to encourage the export of British meat rather than live farm animals. [31173]
    Mrs. Browning: I am glad to say that meat exports are well up in 1995 compared with 1994 and we are working with the Meat and Livestock Commission to open up new markets.
    Dr. Spink: I am grateful to my hon. Friend for that answer. Can she confirm that UK meat exports have almost doubled since 1991, and that that is the result of the very high quality of British beef? Can she also confirm that about 80 per cent. of exports today are on the hook, not on the hoof, and that we want to promote more exports on the hook? Will she avoid adopting the policies of the Labour party, which would bring about worse animal welfare for animals throughout Europe as a whole and would simply betray our farmers and our meat industry?
    Mrs. Browning: My hon. Friend is exactly right. Of the meat that is exported—£948 million worth per year—80 per cent. is on the hook. He is also right that if we had followed the advice of the Labour spokesmen and their Back-Bench colleagues—many of whom signed an early-day motion wanting to ban live animal exports completely—my right hon. Friend the then Minister would not have achieved the magnificent arrangement that he obtained in Brussels to ensure that animal welfare is improved throughout the Community.
    Mr. Congdon: Given the concern which exists in the country about the export of live animals, I very much welcome the previous Minister's endeavours in Brussels to obtain a good agreement which reduces journey times and improves the watering and feeding of animals. Can my hon. Friend assure me about the steps to be taken to ensure that the measures agreed will be properly enforced?
    Mrs. Browning: One of the strengths of the agreement achieved by my right hon. Friend was that those measures will be enforced throughout the Community and a licensing system will be introduced which will be policed throughout the Community. That can only benefit animals throughout the Community. That is what we sought to achieve; we were told by Labour Members that it was not possible, but it was and we did.
    Mr. Tyler: While welcoming the fact that the Minister is still there, I also welcome the fresh faces in the ministerial team. May I ask her to communicate to her colleagues the need for fresh priority to be given to the issue of animal welfare and animal disease? I invite her to comment on the changes that have taken place in the

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    European Community this week on bovine spongiform encephalopathy, which may threaten a significant sector of our livestock producers and pose an export problem generally.
    I also ask the Minister to consider the specific issue of bovine tuberculosis in which, as her answers to me this week show, there has been a deplorable increase in the past five years—a 481 per cent. increase in incidence in England as a whole and a 618 per cent. increase in the south-west. That is extremely damaging. Is that not a case of Ministry policy having failed, failed and failed again?
    Mrs. Browning: To deal with the last point first, I am very worried about the incidence of bovine tuberculosis. I only wish that hon. Members on both sides of the House would recognise that the cause of that is badgers. It is an emotive issue.
    I am very worried about the effect of bovine TB on the livelihoods of farmers, especially in the south-west. It is not only the costs of the animals that have to be slaughtered; it is the on-costs of maintaining the farm, with all that that implies. I assure the hon. Gentleman that he has my full attention on that matter and that I continue to look at it closely. On the first point that he raised, I assure him that I shall share with all new colleagues the concerns that he raised.
    Mr. Morley: I congratulate the Minister on his new post and welcome the new members of his team. We note that the Government have felt the need to reinforce their Front Bench against the Labour Front Bench on this issue. Nevertheless, we look forward to a full and frank exchange of views.
    On meat and live animal exports, the Minister will be aware of the opinion obtained by the Royal Society for the Prevention of Cruelty to Animals and the International Fund for Animal Welfare, (by Gerald Barling), QC, that the Government would be within their rights to stop the export of calves going into veal crates that are banned under our laws. Will the new team look again at that opinion, because although there have been some welcome small steps forward in animal welfare legislation, the new agreements will not stop even one calf leaving this country to go into a veal crate system which is banned in this country on the ground of cruelty?
    Mrs. Browning: My right hon. Friend the former Minister replied fully to the hon. Gentleman about the Barling advice on many occasions. Nothing has changed on that. As the hon. Gentleman was unable to support us on the animal transport issue, I ask him to support the substantial progress that we have made in seeking to ban veal crates throughout the Community. The argument is the same: it is not just what we do in this country, but the welfare of calves throughout the Community that matters. That is what we seek and I hope that the hon. Gentleman will support it.
    Mr. Marland: Everybody wants as many animal exports to be on the hook as is humanly possible. Is the Minister aware, however, that there are three slaughterhouses in my constituency and that to my certain knowledge one of them has recently been inspected by the newly created Meat Hygiene Service? In that well-run business, the Meat Hygiene Service has apparently discovered more than 400 items for complaint, which has caused mayhem not only in the company but in the local community because the business employs nearly 100
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    people. That is no way to encourage home slaughtering. Will my hon. Friend undertake to keep a grip on the Meat Hygiene Service and to ensure that over-zealous inspections do not result in extra expense and difficulties for local businesses?
    Mrs. Browning: I am sure that my hon. Friend and all Members of the House support the need for high standards of hygiene in our slaughterhouses. However, I assure him that my grip on the Meat Hygiene Service is as tight as it possibly can be. If a business in my hon. Friend's constituency has a grievance, I invite him, with the owner's permission, to come along to MAFF and I will personally go through that list item by item.

    Torry Food Science Laboratory
    Mrs. Ewing: To ask the Minister of Agriculture, Fisheries and Food when he last met trade union representatives from the Torry food science laboratory to discuss alternative proposals to closure. [31168]
    Mr. Douglas Hogg: Matters relating to staff management at the Central Science Laboratory are delegated to the chief executive, who has regular meetings with the trade union representatives. He informed the staff at Torry of my predecessor's intentions for the laboratory on 6 June 1995 and met staff and their representatives on 7 and 20 June.
    Mrs. Ewing: The Minister will be aware that his predecessor gave a clear commitment that the report from the task force headed by Professor Pennington was to be considered by all at the Ministry of Agriculture, Fisheries and Food before a decision was reached. Will the Minister give us a clear assurance today that that commitment still stands? He will be well aware of the great concern in north-east Scotland about the future of the food science laboratory and its implications for the local economy as a whole.
    Mr. Hogg: The hon. Lady is quite right. My right hon. Friend the then Minister, now Chief Secretary to the Treasury, did indeed give a commitment and I understand that the recommendations have come to the Ministry today, although I have not yet had an opportunity to read them. The proposals will be looked at before any final decision is taken.
    Mr. Hawkins: First, I join the congratulations to my right hon. and learned Friend and his new Front-Bench colleagues. He is already aware of the importance of food science to the many food businesses in my constituency. Can he reassure me that there will be no reduction in the services provided by the Central Science Laboratory to the food industry right across the country?
    Mr. Hogg: My hon. Friend makes an important point to which the short answer is yes. I will expand slightly on that. When I was at the Department of Trade and Industry, I was often responsible for decisions which involved the co-location and relocation of specialist agencies. There are career enhancement advantages in building up quite large specialist facilities because that offers members of staff more assured career progress. While I understand why people are very reluctant to move, there are advantages to staff in terms of career enhancement.
    Dr. Strang: I congratulate the right hon. and learned Gentleman on his appointment. It is a great challenge and I am sure that he will respond to it.

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    Is he aware that the Torry food science laboratory has an international reputation and that it would be an act of vandalism if the scientific teams responsible for that work were to be broken up? Undoubtedly, many of them will not move to York, as the right hon. and learned Gentleman fully accepts. Will he make a name for himself right at the start of his period of office by taking on board the alternative local plan to which he has referred and intervening to secure a long-term future for the research station?
    Mr. Hogg: I thank the hon. Gentleman for his kind remarks and I look forward to exchanges across the Dispatch Box on many an occasion.
    The hon. Gentleman will keep in mind the reply that my predecessor gave on 6 June. I hope that it will be possible to transfer some of the jobs now at Torry to the Scottish Office marine laboratory. Whatever else happens, the science base, which is what matters, will be assured. That is really what the hon. Gentleman should address his attention to and I am able to give him an assurance on that point.
    Mr. Robert Hughes: I thank the Minister for confirming the promise given to me by his predecessor that the issue of the food science laboratory would be looked at again. Now that the task force report has been delivered to him, will he agree to meet Members of Parliament from the area and Professor Pennington and some members of the task force to review the report in detail, as it is most urgent that it receives proper consideration before any final decision is taken?
    Mr. Hogg: Certainly the report of the task force will be looked at before a final conclusion is reached. That commitment was given by my predecessor and it will be honoured. As to meeting hon. Members, perhaps I may say formally that it has always been my practice to respond quickly to requests from hon. Members for such meetings. That practice will be continued in the Ministry by me and by my ministerial colleagues.

    CAP Fraud
    Mr. Stevenson: To ask the Minister of Agriculture, Fisheries and Food what was the cost of reported common agricultural policy fraud in the EU in 1994. [31169]
    Mr. Timms: To ask the Minister of Agriculture, Fisheries and Food how many cases of common agricultural policy fraud were identified in the United Kingdom in 1994. [31170]
    Mr. Douglas Hogg: In 1994, there were 1,610 cases, valued at £313 million, of CAP irregularities, which include fraud, reported across the Community; 228 of these were United Kingdom cases with a value of £9 million.
    Mr. Stevenson: Does that answer not confirm that fraud is endemic in the CAP and increasing? Is the Minister aware that, despite Government protestations, the cost of reported fraud in the CAP for the first nine months of 1994 was £110 million more than for the whole of 1993? What specific proposals has the Minister to address this international scandal and will he at least ensure that CAP fraud gets on to the agenda of the 1996 intergovernmental conference?
    Mr. Hogg: I do not think, by the nature of things, that we can ever say how high the level of fraud is, but I accept that it is an important issue and needs to be tackled. The Government have been doing just that. The hon. Gentleman will know well the steps that we persuaded the Commission to take as a result of the Essen Council. The hon. Gentleman will know too that the policies that move support away from refunds on intervention and exports reduce the opportunities for fraud.
    The hon. Gentleman will also know the importance of pursuing a disallowance policy for Governments who do not have sufficiently tight enforcement regimes in place. All these things are part of this Government's policy and we have secured great agreement within the European Union on their implementation.
    Mr. Timms: I welcome the right hon. and learned Gentleman to his new post. Given the alarming scale of CAP fraud, is it not remarkable that the Government do not use the full allocation made available to them through the CAP for tackling fraud? Is the Minister aware that the proportion of the available allocation that has been used by the Government fell from 81 per cent. in 1993 to 74 per cent. in 1994? Can the new Minister assure the House that he will give a high priority to tackling fraud and that he will ensure that the resources available are used to good effect?
    Mr. Hogg: I thank the hon. Gentleman for his kind remarks. Yes, tackling fraud is important and I will certainly see how, within the Department, we can do that effectively. However, I am sure that the hon. Gentleman would wish to be fair to the British farming community by stressing that in all probability, the level of fraud within Britain is very much lower than the level of fraud elsewhere in the European Union.
    Dame Elaine Kellett-Bowman: I congratulate my right hon. and learned Friend on his promotion. May I point out that what causes concern is not the level of reported fraud, but the level of unreported fraud? I welcome the emphasis that my right hon. and learned Friend put on the fact that the nation states in which most of the fraud occurs should be penalised. I also welcome his emphasis on getting rid of the policies that lead to fraud, such as export refunds.
    Mr. Hogg: It is always a pleasure to be congratulated by my hon. Friend. I am rather relieved that I am out of the reach of her handbag at this moment. My hon. Friend is correct and she has identified a number of the real points that we need to address. I can tell her that we will address them.
    Mr. Garnier: Will my right hon. and learned Friend ensure not only that fraud is combated in this country, but that he will use his own offices and those of the European Union in Europe to ensure that national Governments enforce fraud observation in the other countries of the European Union?
    Mr. Hogg: Absolutely. Beneath my hon. and learned Friend's question is the important point that although we have a problem of fraud in the United Kingdom, it is—I would wager almost anything on this—infinitesimal in comparison with fraud elsewhere in the European Union.

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    That is why we have to work with the Governments of the other countries within the Union and in the Commission; and we will.
    Dr. Strang: The right hon. and learned Gentleman uses the word "infinitesimal". Is he aware that one of his predecessor's last acts was, in a written answer to me yesterday, to confirm that there have been serious irregularities involving the substitution and theft of beef going into United Kingdom intervention stores? Will he publicise all the information that his Ministry has on that? Will he tell us whether the United Kingdom taxpayer will have to pay a fine to Brussels and what sort of fine it might be? Does he accept that fraud is inherent in the market support mechanisms of the CAP? If we want to stop it, we need to end intervention buying and the subsidy of agricultural exports.
    Mr. Hogg: As to the latter point, the hon. Gentleman is simply reinforcing a point that I made in reply to the hon. Member for Stoke-on-Trent, South (Mr. Stevenson). As to the level of fraud in this country compared with the level of fraud elsewhere, the hon. Gentleman will know that throughout the European Union in 1994, there were 1,610 irregularities—I gave the figure earlier—which were worth £313.2 million. In the United Kingdom in the same period, there were 228 irregularities worth £8.5 million. That is why I said that it was a very small part of the whole.

    Fisheries Regulations
    Mr. Couchman: To ask the Minister of Agriculture, Fisheries and Food if United Kingdom fishermen will be able to continue to fish as at present under the proposed regulations for the western waters applicable from 1 January 1996. [31171]
    Mr. Baldry: Her Majesty's Government have negotiated arrangements that will enable current fishing opportunities to continue to be exploited.
    Mr. Couchman: Given the importance of enforcement to our fishermen, can my hon. Friend say what resources have been made available for that purpose by the Government?
    Mr. Baldry: We spend a substantial amount on fisheries enforcement—some £25 million a year, including some £19 million a year on enforcement at sea and aerial surveillance. United Kingdom fisheries protection vessels spend more than 3,000 days a year on patrol and undertake some 5,000 inspections of vessels from all member states and third countries fishing in our waters, because we are determined to ensure that the fisheries regime is enforced firmly and fairly throughout our waters.
    Mr. Salmond: Will the new Fisheries Minister consult Ministry of Agriculture, Fisheries and Food files and see whether there is any evidence in any fishery internationally of a precedent for effective supervision and control of the Spanish deep-water fleet? If he finds no such precedent, will he then conclude that, as Fisheries Minister, it is his duty to recommend that there might well be some aspects of the common fisheries policy that would be suitable for revision at the intergovernmental conference?
    Mr. Baldry: The hon. Gentleman can rest assured that we will ensure that every fleet is properly enforced,
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    whether it be Spanish or any other fleet. The fisheries regime around our waters will be firmly and fairly enforced.

    Arable Area Payments
    Mrs. Gorman: To ask the Minister of Agriculture, Fisheries and Food what is the minimum size of farm which can apply for an arable area payment under the common agricultural policy. [31174]
    Mr. Baldry: There is a minimum area on which the farmer can apply for arable area payments—0.3 hectares.
    Mrs. Gorman: Will my hon. Friend confirm that that is under an acre of land, and that in some countries, such as Germany, because their normal farming methods differ from ours, a large number of people have plots that are really just weekend hobby plots, for which they draw subsidies paid for by our housewives in higher food prices—some £28 a week extra? Will he confirm that allotment holders in Britain would do better to apply for one of these subsidies rather than go on digging over their ground, and that it would be cheaper for them to buy their vegetables in Sainsbury's?
    Mr. Baldry: The Government succeeded in removing most of the discrimination against large, efficient farmers, which Ray MacSharry proposed, when the CAP was last reformed. I agree that the best way to prevent discrimination is to have a market-led CAP that is not dependent on distorting subsidies. That would enable the efficient farmers to flourish at the expense of the inefficient. Where particular rural areas need special treatment for social reasons, those reasons should be addressed by appropriate social policies, not farm policy.
    Mr. Foulkes: Is the Minister aware that some farmers, particularly small fanners, whose applications for assistance are late can lose a substantial amount of ground? Will he consider some mechanism of appeal or some greater degree of flexibility so that their applications can be considered? There is a case in my constituency where the application was just one working day late, and the farmer lost some £4,000 or £5,000. Is that not unfair? Could we have some degree of flexibility when considering this?
    Mr. Baldry: There are very clear rules, and I think that farmers recognise that they have to abide by them. I suspect that what fanners are concerned about when it comes to the CAP is the suggestion by the Labour party that it will undermine the CAP regime. Opposition Members might pay attention to the former Scottish National Farmers Union president, John Cameron—Europe's biggest sheep farmer, with several hill units in Perthshire—who observed:
    "Without subsidies—
    which the Labour party is threatening to undermine—
    "there would be no farming and no farm workers in the hills … The present system maintains rural populations".
    That is what the Labour party would seek to undermine through its proposals.

    Animal Exports
    Mr. Skinner: To ask the Minister of Agriculture, Fisheries and Food what recent meetings he has had with

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    other EU Ministers regarding animal exports; and if he will make a statement. [31176]
    Mr. Douglas Hogg: My predecessor reported the outcome of the latest meeting of the Agriculture Council in an oral statement to the House on 22 June. At that meeting the Council reached agreement on a comprehensive framework of law covering the welfare of animals transported throughout the European Community.
    Mr. Skinner: The Minister will not be surprised to learn that I will not be congratulating him on his—[Interruption.]—sideways move. I do not think that his father would have been all that impressed. In the Earl of Warwick's Government, the lion king—[Interruption.]Is the Minister aware that at that last meeting the Minister of Agriculture, Fisheries and Food was whining and whingeing about the fact that he had been up all night, penned in, negotiating for several hours and that at the end of it, the Council decided to force sheep and cattle to travel for 31 hours? How would this Hogg like to be penned up for 31 hours?
    Mr. Hogg: Well, for the past five and a half years I have been answering questions of a fairly statesmanlike character. I now go back, I see, to the cockpit. I am bound to say that, with a name like Hogg, it is rather an apt appointment. As regards my right hon. Friend's statement in June, he secured an extraordinarily good agreement. Of course, it is only the first step and we will do more, but it is extraordinarily curmudgeonly of the hon. Gentleman not to give credit where credit is due.

  PRIME MINISTER

    Engagements
    Mr. McGrady: To ask the Prime Minister if he will list his official engagements for Thursday 6 July. [31188]
    The Prime Minister (Mr. John Major): This morning, I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall have further meetings later today.
    Mr. McGrady: After the Prime Minister's success in his little local difficulty, congratulations would normally be in order, if it were not for the very great disadvantage caused to the communities of Northern Ireland by the introduction of the Clegg factor and the damage that it has done to the peace process. However, in the aftermath of that, could I ask the Prime Minister now to devote himself wholly to the pursuit of the cause of peace in Ireland, in view of the increasingly volatile situation there? Will he consider the appointment of an independent international arbitrator or negotiator to break the current logjam, rather than rely on his Northern Ireland ministerial colleagues, who have many departmental and other ministerial duties to attend to? There is a precedent for that in the inter-party talks.
    The Prime Minister: I am looking at ways of breaking the logjam, but I do not think that it would be helpful to the hon. Gentleman if I were to discuss those this afternoon. I remain as committed to proceeding with the peace process in Northern Ireland as I have been since the moment I walked into Downing street. A great deal of
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    progress has been made. It is crucially important that that progress is sustained. I hope that the hon. Gentleman and his hon. Friends, and all hon. Members from Northern Ireland, will join me in that search. I know that it is what they wish for and I am absolutely certain that it is what their constituents most wish to see.
    Mr. Redwood: May I congratulate my right hon. Friend on his win? May I assure him that, like him, I wish to see a Conservative election victory? Would he agree with me that some of the ideas and policies that I set out in the past two weeks could make an important contribution to that victory?
    The Prime Minister: I am grateful to my right hon. Friend for his words. I hope that he will agree with me that we had a fair contest last week. I am grateful both for the way in which he has spoken this afternoon and for the way in which he conceded the result of the election. Let me say to my right hon. Friend that there is a great deal that the Government will be doing in the months ahead which I know that he will wish to support enthusiastically. I will welcome his support, as will all my colleagues.
    Mr. Blair: I offer my congratulations to the Prime Minister on his re-election with, I suspect, rather more sincerity than the right hon. Member for Wokingham (Mr. Redwood), and, of course, I also congratulate him on his new deputy.
    Last year, the Prime Minister gave what he called a cast-iron commitment to nursery education for all four-year-olds. Is that still the case?
    The Prime Minister: I am grateful to the right hon. Gentleman for his congratulations. I think that he congratulates me in the same spirit that Mr. Neil Kinnock did on one occasion. I am equally grateful and I look forward to the same result at the subsequent general election.
    I confirm that, on a phased basis, I look for the introduction of nursery education for all four-year-olds and my right hon. Friend will announce this afternoon our plans and the phasing.
    Madam Speaker: Mr. Peter Luff.
    Mr. Blair rose—
    Madam Speaker: I am sorry. Mr. Blair.
    Mr. Blair: I know, Madam Speaker, that rather a lot has been going on on the Government Benches recently, so it is perfectly understandable.
    If that is the Prime Minister's commitment, and we know that 90 per cent. of four-year-olds get pre-school education at present—indeed, the majority of those get it free in the public sector now—can he guarantee to make good his commitment, first, that he will provide the extra places that are necessary but, secondly, that nobody who now gets and qualifies for free public sector education will be forced to go private and top up the voucher?
    The Prime Minister: I think that the right hon. Gentleman will find the answers to his questions very satisfactory and that he will find them very speedily. It is perfectly clear from events a moment or so ago that not

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    only is the right hon. Gentleman following most of our policies but it would seem that he may actually have joined the Conservative Benches.
    Mr. Blair: It is Labour local authorities that have provided nursery education.
    Never mind the Prime Minister telling us to wait for his right hon. Friend—this is his idea; his scheme. Can he give those guarantees or not? If not, many people will think that this is a con trick, not a genuine scheme for nursery education. Would not it at least be better to consider whether we could not obtain better value for money spending these hundreds of millions of pounds improving present provision for four-year-olds and bringing within the system three-year-olds who are shut out of the Prime Minister's scheme altogether?
    The Prime Minister: No, the right hon. Gentleman will see that what we are proposing this afternoon will meet the points that he has in mind and meet them better than he could. I thought that the right hon. Gentleman was in favour of choice in education since he exercises it. We said that we would deliver pre-school education for all four-year-old children and this afternoon he will see that we will meet that policy. The parents of all four-year-olds will be given a voucher for pre-school education in the state, private or voluntary sectors, and we will put that purchasing power where it belongs. I had thought that the right hon. Gentleman was in favour of exercising rights of choice. We will see this afternoon whether that is true.
    Madam Speaker: Now we will have Mr. Peter Luff.
    Mr. Luff: Thank you, Madam Speaker. Everything comes to he who waits.
    Does my right hon. Friend agree that a policy of withdrawal from the European Union, or a policy of immediate acquiescence in every idea that emerges from the Commission, no matter how damaging to the nation's interests, would both be acts of political and economic folly? Does it surprise my right hon. Friend in the slightest that the Leader of the Opposition has espoused both such policies?
    The Prime Minister: I shall spare the Leader of the Opposition the quotes that I have used often enough in the House to indicate his changing view on Europe, from espousing withdrawal behind closed doors in 1983, to announcing subsequently that he had changed his mind, and then to wholehearted support for everything that happens in Europe without any reference to the British national interest. It is fudge, mudge and split the difference on every aspect of that policy. The right hon. Gentleman does not understand the difference between competitiveness and the social chapter and between national interest and a national veto. He will learn if he stays as Leader of the Opposition—if he stays as Leader of the Opposition. I doubt that he will because after the election I look forward to addressing his successor while I stand here as Prime Minister.
    Mr. Ashdown: Why does the Prime Minister not realise that vouchers that only partly fund pre-school education are bound to be of more value to those who can pay the difference than to the poor whose children need help most? Surely, if the right hon. Gentleman put the
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    whole nation first, he would put universal access to high-quality pre-school education for all before Conservative tax cuts at the next election.
    The Prime Minister: The right hon. Gentleman really ought not to be so silly. We are placing a substantial sum in the hands of parents so that they can make a choice of nursery school education for their children. Now we know the Liberal party's position: no choice at all for parents. I do not know what happened to the Liberal party's old philosophy, but gone it completely has. If people want choice—if they want universal nursery education—they will get it from the Government, and from no one else.
    Mr. Butler: Does my right hon. Friend agree that the appropriate tenure of a Conservative Prime Minister is not four and a half years involving one general election victory, but at least 11 years involving at least three general election victories?
    The Prime Minister: There is certainly an honourable precedent to that effect, and I shall seek to follow it.
    Mr. Nigel Griffiths: To ask the Prime Minister if he will list his official engagements for Thursday 6 July. [31189]
    The Prime Minister: I refer the hon. Member to the answer I gave some moments ago.
    Mr. Griffiths: Does the Prime Minister welcome the strong support that Lord Justice Taylor gave Sir Richard Scott at the distinguished Lord Mayor's dinner last night? Will he, too, give his strong support to Sir Richard?
    The Prime Minister: I gave Sir Richard my support when I appointed him to head the inquiry.
    Sir Anthony Grant: Is my right hon. Friend aware not only that the courageous decisions that he has made in the past week were wholly and absolutely justified, but that his Government are faced with the most inexperienced and fatuous Opposition whom I have seen in all the 31 years for which I have been in Parliament? Furthermore, I do not want a job.
    The Prime Minister: My hon. Friend has been examining Labour Oppositions for many years, and I have no doubt that what he says is entirely right. After the next election, he will have an opportunity to study another Labour Opposition.
    Mr. Flynn: To ask the Prime Minister if he will list his official engagements for Thursday 6 July. [31190]
    The Prime Minister: I refer the hon. Member to the answer I gave some moments ago.
    Mr. Flynn: Is the Prime Minister not appalled by the ungrateful treatment being handed out to the constituents of Basildon? Tory Members are reported to be seeking new seats and abandoning their loyal Tory voters in Eltham, Loughborough and, yes, even Basildon. Is the Prime Minister's advice to all his hon. Friends with majorities of less than 18,000, "Retreat now: abandon your voters, because it is 'No change, no chance'"?
    The Prime Minister: I seem to recall hearing rather arrogant remarks like that before the last general election.

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    I seem to recall hearing rather a lot of them. Yet those who behaved in such an arrogant fashion long before the election are still sitting on the Opposition Benches.
    Mr. Stephen: Does my right hon. Friend share the concern felt by so many of our constituents that the European Court of Justice and the European Court of Human Rights have a tendency to encroach far too much into areas that are properly within the sovereign authority of this Parliament and that if those institutions are to maintain the respect of the British people, they must exercise more self-restraint in future?
    The Prime Minister: As I indicated to the House when I reported on the Cannes summit a week or so ago, there are areas where the European Court of Justice ought not to tread, and it was on that basis that I refused to allow it to have any jurisdiction whatsoever over the Europol convention, which I agreed with our partners in Europe at the Cannes summit. I believe that because it touches on sensitive matters that are rightly the prerogative of the British courts and no other, and on that point the Government's policy will remain as it is.
    Mr. Ainger: To ask the Prime Minister if he will list his official engagements for Thursday 6 July. [31191]
    The Prime Minister: I refer the hon. Gentleman to the reply I gave some moments ago.
    Mr. Ainger: Given the description by the right hon. Member for Wokingham (Mr. Redwood) of the Prime Minister's leadership style as uncertainty based on indecision, is it the new job of the Deputy Prime Minister now to take the decisions, or has the Prime Minister not decided yet?
    The Prime Minister: In elections—[Interruption.] The hon. Gentleman invites me to quote what was said during the Labour leadership election. There is often rough invective during elections. As the hon. Member for Bradford, West (Mr. Madden) said during the last Labour leadership election:
    "It would have been easier to pull out their teeth than to have received straight answers to my questions."
    The right hon. Gentleman the present leader
    "enclosed 30 copies of his 20-page leadership election statement, which he said would answer most of my questions. On the most generous assessment, he touched on only ten of the questions",
    and from the right hon. Member for Kingston upon Hull, East (Mr. Prescott)
    "there was no reply whatsoever."

Pre-school Education
3.31 pm
The Secretary of State for Education and Employment (Mrs. Gillian Shephard): With permission, Madam Speaker, I will make a statement about pre-school education.
In October last year, my right hon. Friend the Prime Minister made a commitment to provide a pre-school place for all four-year-olds whose parents want to take it up. The places would be of good quality, reflect parental preferences, and not crowd out the private and voluntary sectors. He said that the first places would become available in the lifetime of the present Parliament. I can now tell the House how all four-year-olds will be enabled to have a pre-school place for three terms before compulsory school age. Copies of this statement will be available from the Vote Office.
Many parents do excellent work with their children at home, but the United Kingdom also has a long history of pre-school education: in state schools, in private establishments, and in a lively and vigorous voluntary sector led by playgroups. We want to build on that strength in diversity.
My plans will extend the entitlement to pre-school education to three terms for all four-year-olds. Some children already have that. My intention is to give that choice to the parents of all four-year-olds.
Parents know that good-quality pre-school education yields dividends in later educational life, but parents and their children have widely varying needs. Parents—better than Governments or councils—can judge which type of place suits them and their children best. That is why the plans that I am announcing today put power where it best belongs—in the hands of parents.
I intend that the parents of all four-year-olds should be given a voucher worth around £1,100 that they can exchange for pre-school education. The voucher will be exchangeable for: a part-time place—five half days a week—in any independent, voluntary or state sector institution, whether grant-maintained or LEA, providing nursery education; or a full-time place in a reception class in a state school where this is on offer; or up to a full-time place in a playgroup; or a combination of those.
Parents will be free to top up the voucher in the private and voluntary sectors, but not in state schools, where all education will continue to be financed by the taxpayer. Local education authorities and grant-maintained schools will be able to spend more than the value of the voucher on four-year-olds in their schools if they wish.
I fully expect that giving parents purchasing power through a voucher will stimulate the private and voluntary sectors to provide new places. I am sure that innovative partnerships between the public and private sectors—perhaps led by the private sector—will emerge where none existed before, to satisfy the range of parental demand. This will add to choice and diversity in pre-school places.
I intend the issue and redemption of vouchers to be undertaken by a private sector company under contract.
I should emphasise that these plans relate to pre-school education for four-year-olds alone. There are no plans to alter the funding mechanisms for the compulsory years of school.
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In England, the total cost of pre-school education vouchers for four-year-olds will be about £730 million. The vouchers will be funded by a combination of some £165 million of new money for places for those 150,000 or so four-year-olds not already in some form of place in the state sector in England, and recouping some of the money local authorities already spend on pre-school places. Local authorities will continue to be able to provide full-time nursery school and nursery class places.
To ensure that the places are of good quality, I shall require each institution which wants to exchange vouchers to make a commitment to offer education appropriate to a set of desirable achievements for children's learning—including, for example, the areas of language, mathematics, art, and working with others.
I have today asked the School Curriculum and Assessment Authority to consult and advise on the detail of what those achievements should be, and whether one can or should set out the activities likely to lead to such achievements. I do not wish to impose uniformity, but I must be satisfied that the vouchers—which are, of course, taxpayers' money—are being exchanged for education.
I also propose a light-touch inspection framework to ensure that standards are maintained. Together with my right hon. Friend the Secretary of State for Health, I shall consult on the detail of an inspection framework which ensures as consistent an approach as possible across all establishments, taking account of the existing role of Ofsted, and of the local social services departments in establishments registered under the Children Act 1989.
We will also take into account existing registration and accreditation systems in the independent and voluntary sectors. In the spirit of the Government's commitment to deregulation, we shall also examine the case for revisiting existing requirements on child-adult ratios, premises and equipment and planning.
In the same spirit, I have it in mind to remove the requirement to publish statutory proposals to establish nursery places at grant-maintained and local authority schools. All those with an interest in pre-school education are being invited today to give their views. I shall produce a more detailed document in the autumn. Some of these changes will require legislation, and plans will be brought forward in due course after listening to views.
I intend that the policy should start in some areas in England as soon as April 1996. I estimate that about 150,000 four-year-olds in England do not have a pre-school place in the state sector. In the first phase, I intend to cover areas which account for up to 10 per cent. of those new places. Those areas will also cover a proportion of existing places.
I shall invite local councils to volunteer their areas for this first phase, and I aim to choose areas which are representative of the country as a whole. It will be for the independent, voluntary and state sectors in the chosen areas to offer new places to parents in exchange for their vouchers.
My right hon. Friends responsible for Scotland and Wales, and right hon. and learned Friend with responsibility for Northern Ireland and I intend that we shall have full kingdom-wide coverage a year later. My right hon. Friends and my right hon. and learned Friend will make separate announcements in due course.
The changes that I have just announced are a radical new departure. Giving parents vouchers that can be exchanged for three terms of good-quality pre-school

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education for all four-year-olds is a significant step forward. My proposals demonstrate that what we promise, we deliver. They will widen opportunity for many families, without taking away anything that parents and their children enjoy now. More children will benefit from pre-school education. Purchasing power in the hands of parents will stimulate a market in the supply of places that parents want. Above all, parents will have real choice.
Mr. David Blunkett: My congratulations to the Secretary of State for Education and Employment on holding and expanding her brief. After Prime Minister's questions, she will probably call for a recount.
This proposal is a con trick on children and on parents. It is an experiment in offering a paper promise without providing a single extra place in a nursery class in this country. In a single move, the Secretary of State has created a new bureaucracy—perhaps this afternoon, she will tell us how much the new quango will cost. How much will the administration of the scheme involve? Why is £545 million to be recycled from local authorities supposedly back to local authorities? We understand that the transaction costs are well over £10 million.
Does not the Secretary of State agree that such an internal market, reminiscent of what happened in the national health service, creates the same transaction costs that have bedevilled the provision of health service and will now bedevil the provision of nursery education and care for children under five? Does the right hon. Lady agree that her right hon. Friend the Prime Minister has redefined nursery education so that it no longer has to include education?
This afternoon, the right hon. Lady announced that the voucher would be available for everyone, whether in a nursery class, a reception class or voluntary or private provision. [Interruption.] Given that Conservative Members are shouting, "No," will the Secretary of State tell me whether vouchers will be redeemable in private day nursery provision that does not provide education on the premises, and, where it does, which part of the provision will be eligible for the subsidy? How many people will be eligible for that public subsidy who are currently not receiving state education provision?
Will the right hon. Lady confirm that 500,000 children aged four are currently in either a nursery or a pre-school place in an infants school?
The Minister of State, Department for Education and Employment (Mr. Eric Forth): A very good record.
Mr. Blunkett: A very good record, by Labour authorities across the country. Until we wiped out Tory authorities in May, children stood three times the chance of getting a nursery place in a Labour authority as in a Tory authority.
Instead of spending money directly on meeting the needs of those children who do not currently have nursery places, has not the Secretary of State capitulated to an ideological experiment in creating an artificial market that would exist only in circumstances where private providers are prepared to come forward and compete with the public sector? Is not recycling £545 million the most disgraceful way imaginable of using public money?
Will the right hon. Lady confirm what she said on 19 October last year, when she showed that she understood and agreed with the point that I have just made? I ask her to agree or disagree. She said:
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"The machinery must not be allowed to overshadow the policy. We are very conscious of the unwieldy nature of vouchers."
Has she not this afternoon revealed that she has been overruled and ruled out once again in her arguments with the Prime Minister and the Cabinet Office and with the right wing of her party, who have never been in favour of nursery education and are prepared to sacrifice the education of four-year-olds on the dogma of creating a new internal market?
Does not this statement also spell the end of quality standards? Did the right hon. Lady not say—perhaps she would clarify what she meant—that she was going to "revisit" the issue of pupil-teacher ratios for nursery education with a view to diluting them? Is this not an abandonment of years of struggle to get high-quality nursery education to provide standards, achievement and opportunity for all children for the future? Does that not contrast with our clear pledge to set targets for all three-year-olds as well as four-year-olds to have properly and appropriately provided nursery education, openly and freely provided without bureaucracy?
Is this not a disgraceful day, on which the Secretary of State has capitulated to her opponents, and her credentials as an Education Secretary who cares have been desperately tarnished in her desire to placate the right wing? Is it not a disgrace that the many have been sacrificed for the few—the few who will be subsidised at the expense of everyone else?
Mrs. Shephard: I thank the hon. Gentleman for beginning with congratulations. It is unfortunate that he did not listen to a word of the statement. He was obviously concentrating on something that he had prepared earlier. In answering some of his questions, I shall begin with those on quality.
He clearly did not hear me say that I am today asking the SCAA to consult and advise on the outcomes or achievements that we should expect from three terms of pre-school education. It will publish a draft consultation document early in September, with a view to publication in December. I have asked that particular attention be given to the development of early literacy and numeracy, and other abilities—social, physical, moral, spiritual, scientific and technological. Each provider will receive an early educationally related inspection visit in order to be given permission to be registered to receive vouchers.
This afternoon, the hon. Gentleman might like to know, I have discussed those quality proposals with representatives of the teachers' unions, who are well satisfied. I am sorry that he has shown yet again that he is fixated on providers and not consumers. He has also not taken in the fact that we shall examine the way in which the whole system works in phase 1.
It is a pity that the hon. Gentleman has been so ungracious in his reception of what is a real extension of educational opportunity for all four-year-olds: an entitlement to three terms of pre-school education of good quality, with choice for parents, and with a substantial injection of new public money.
However, I know that the hon. Gentleman's attitude is time-limited. Let us not forget that he and his colleagues bitterly opposed the introduction of the national curriculum, testing for seven, 11 and 14-year-olds, the Ofsted inspection system and grant-maintained schools, only to perform U-turns on all of them, and latterly to try to claim credit for themselves.

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We know that the hon. Gentleman's opposition today will melt away when he and his colleagues perceive that parents welcome this extension of choice for their children, that providers, including local authorities, will respond to the innovative challenge, and, most importantly of all, that children and their education will benefit. How long will the U-turn take to appear? Who can say—but appear it will.
Mr. James Pawsey: May I congratulate my right hon. Friend on assuming new responsibilities for learning and training. Conservative Members certainly welcome her announcement? We believe that the idea of placing in the hands of parents an additional £1,100 that they can spend on their child's pre-school education will be widely welcomed, despite the carping and ill-informed criticism by the Opposition. We look forward to April next year when the first phase will begin.
Mrs. Shephard: I thank my hon. Friend for his congratulations and for his welcome of the new policy. Parents will indeed widely welcome the new opportunity to exercise choice in respect of their children's education.
Mr. Don Foster: The Secretary of State talked about quality, but why did she say nothing about the qualifications of the people who will be responsible for delivering high-quality early years provision? Will she also confirm that the administration cost for each voucher will be about £16, and that there will be no new money for new buildings or new equipment, or for the training of the new teachers that will be required? Will she not admit that the proposal is a con trick perpetrated by the Conservative party to deliver votes for the next election, at the expense of pupils' education?
Mrs. Shephard: The hon. Gentleman raises the important question of qualifications. We shall not impose new rules at this stage, because a wide range of qualifications are currently held by those who work with the under-fives—nursery nurse qualifications, accreditation through playgroups and, importantly, a growing number of national vocational qualifications—[HON. MEMBERS: "Teachers?"]—and not forgetting teachers, either.
Level 2 and 3 child care and education NVQs will be reviewed this autumn, followed up by further work on a possible level 4. The Teacher Training Agency will have representatives on the steering group for the review, and full account will be taken of the new policy in the work on teacher training.
I am confident that a combination of inspection and parental preference will encourage high-quality provision, but it is important to note that each provider will be required to publish details of the number of staff, the qualifications they hold and the proposed activities, premises and equipment. Each provider will have to provide certain outcomes based on activities that will be defined by the SCAA, so I think that the question of qualifications can be left for the time being.
Mr. Alan Howarth: Does my right hon. Friend accept that, provided we invest sufficiently and find effective means to insist on quality, her policy will prove of immense benefit to children and
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parents—and, in due course, to employers and the taxpayer? Will the value of the vouchers be taxable, and will it be disregarded for the purposes of income support and family credit?
Mrs. Shephard: The voucher will not be taxable.
Mr. Nigel Spearing: Is the Secretary of State aware that, on 19 November 1993, I presented a petition signed by more than 106,000 people asking for genuine nursery education? Does she not agree that, unless she maintains the present statutory definitions of premises and of qualifications for teachers, she will give an equal subsidy to existing genuine nursery education and to playgroups of a lesser type?
Will that not destabilise and undermine our whole nursery school provision, which has been built up over 60 years, thus prejudicing 4,000 families in Newham who now depend upon it? Does she realise that her statement did not deliver on the promise made by one of her predecessors, Baroness Thatcher, who issued a White Paper in the 1970s?
Mrs. Shephard: I do not accept the hon. Gentleman's premise. I believe, and I am certain that professionals will agree, that the safeguards put in place for quality, and what I have already said about qualifications, will certainly deliver an excellent standard of pre-school education.
Sir Alan Haselhurst: Is my right hon. Friend aware that many grant-maintained primary schools are flourishing in their new status and are seeking to expand into the field of nursery education? What impact will my right hon. Friend's statement today have on them?
Mrs. Shephard: Grant-maintained schools will have the same opportunities as LEA schools, and a grant-maintained school which does not at present cater for four-year-olds but which wants to attract voucher holders will no longer have to publish statutory proposals for a change in character to extend its age range. My hon. Friend will know that the grant-maintained sector was encouraged by the fact that we were recently able to approve eight proposals for nursery classes in grant-maintained schools.
Mr. Greville Janner: May I join in the congratulations to the Secretary of State for Education and Employment? Today is my 40th wedding anniversary, and I offer her my warm personal greetings.
Should not the Secretary of State also make a statement about the abolition of the sole Department that looks after the interests of unemployed people, which is now to be absorbed—at least in part—in her Department? Is she proposing to make such a statement? If so, when? If she is not proposing to make such a statement, who will—
Madam Speaker: Order. The hon. and learned Gentleman may have been married for 40 years, but he has been in the House for many years as well, and should know that he is not questioning the Secretary of State's statement. I understand his interest in the other matter, and if he saves himself, he might be lucky enough to catch my eye on his 40th wedding anniversary and put a question to the Leader of the House. But I cannot ask the Secretary of State to respond to his questions, as they do not deal with the statement.
Mr. Janner rose—
Madam Speaker: I am sorry, but the hon. and learned Gentleman is quite out of order.
Mr. Graham Riddick: May I congratulate my right hon. Friend on her new responsibilities, and also on introducing the voucher scheme to extend choice to parents and give new opportunities to children? Should she not pay tribute to the ideas of people on the right of the political spectrum for what she has described as a radical new departure? May I express the hope that the Government, who have enjoyed something of a renewal this week, will continue to embrace ideas from such people in future?
Mrs. Shephard: I wonder if it is my hon. Friend's wedding anniversary. I was sorry to be denied the opportunity to congratulate the hon. and learned Member for Leicester, West (Mr. Janner), who looks as if he has been celebrating his 40th wedding anniversary.
I thank my hon. Friend for his congratulations, and I am glad that he is interested in and approves of the proposals. Many groups were involved in forming the proposals, and one of our principal concerns was to make sure that this innovative approach would work smoothly and well. That is the reason for introducing the scheme in two phases. I am sure that my hon. Friend will want to be certain that the practical details, as well as the ideas underlying them, are all in order.
Mr. D. N. Campbell-Savours: Presuming that the pilot scheme is the first phase and that the cost of that first phase amounts to some 10 per cent. of the total, as the Secretary of State has said, will the total net cost to the Exchequer of the proposal until the next general election be £16 million?
Mrs. Shephard: No. We think that the general election will be further away than that. The total cost of the scheme is £730 million, taking into account the money available from LEAs. The new money available in total is £185 million, and all stages will be in place by April 1997.
Lady Olga Maitland: May I congratulate my right hon. Friend on her promotion, which will undoubtedly be widely welcomed by parents? Does she agree that LEAs which do not take advantage of this excellent scheme and put in a bid for it will be denying parents choice and diversity? Should not questions be asked of such LEAs, as to whether they are putting politics before children's interests?
Mrs. Shephard: I hope that many local education authorities will offer to take part in phase 1. Indeed, judging from my discussions with education professionals this afternoon, I think that many will find themselves under pressure to do so.
Mr. Edward O'Hara: Will the Secretary of State admit that this statement merely amounts to an undermining of state provision in local authorities such as Knowsley, which has shown its commitment to pre-school education by spending scarce resources and building up an excellent system in the state schools? It is not a question of considering the interests of the provider.
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The scheme penalises consumers in my constituency, who will not be able to top up the £1,000. Will she come clean and admit that it is a bribe in the back pockets of disgruntled ex-Tory voters, who are already spending their money on pre-school education in the private sector?
Mrs. Shephard: No, I do not accept that. Perhaps I can reassure the hon. Gentleman by telling him that all local authorities will continue to be funded for the under-fives whom they are educating. If they continue to educate the same number, they will receive the same amount of funding. If, as a result of parental choice being exercised—I imagine that the hon. Gentleman is inimical to that at the moment—they increase the numbers being educated, the places will be funded from vouchers. This will give more opportunity and choice to his constituents—what a pity that he is condemning it in advance.
Mr. David Lidington: As the father of two pre-school-age children, may I tell my right hon. Friend from the heart that her statement will be warmly welcomed by parents throughout the country? Will she confirm that, during the summer, she will consult all interested parties to ensure that any difficulties over implementation can be identified and ironed out in advance, so that, when phase 1 of the scheme comes into operation next year, it will deliver smoothly the good-quality pre-school education that she outlined to the House today?
Mrs. Shephard: The consultation starts today. In any case, the work that has resulted in this statement is based on a great deal of consultation and discussion with all the parties involved. There will be a very thorough examination of all the issues involved, and I can assure my hon. Friend that good-quality places will be available for his children when they are ready.
Ms Estelle Morris: The Secretary of State will be aware that, in some areas of our country—especially on new, large estates—there are insufficient nursery places for every four-year-old. Will she be providing any new capital money to secure more places? May I be the third Opposition Member to ask how much money she has allocated for administration of the voucher scheme, and can I be the first to get an answer?
Mrs. Shephard: I have given the answer. I said that we expect the administration costs to be 1.5 per cent. of the total, but that may well be pushed downwards by competitive tender.
On capital costs, local education authorities have access to capital, we expect grant-maintained schools to have access to private finance, and other providers will be able to borrow capital for premises against the value of voucher income, or, alternatively—certainly in the setting the hon. Lady described—interesting new partnerships between local education authority and independent, LEA and playgroups and so forth might well be created. I hope that the hon. Lady, who knows a lot about these matters, will welcome the formation of such partnerships in the interests of children and their parents.
Mr. Tim Rathbone: Does my right hon. Friend accept that anyone who is genuinely interested in expanding nursery education provision will be thankful to her and the Prime Minister for carrying this plan forward? On both sides of the House, however, there is shared

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concern about the quality of the educational content. I must ask my right hon. Friend for a reassurance on that matter, because of the mention in her opening statement of the availability of these vouchers for use in playschools, which do not have the educational content or the ability to deliver it.
Mrs. Shephard: My hon. Friend makes a valid point. I repeat again that today I asked the SCAA to consult and advise on the activities and outcomes that we expect providers to put in place if they are to qualify for registration under the voucher scheme.
I have to tell my hon. Friend that the Pre-School Learning Alliance, which is what the playgroup organisation is now called, is extremely enthusiastic about the educational opportunities that the new scheme offers it. For several years, it has been gearing up the educational input in what is provided in playgroups. Indeed, many places provide all-day activity with an educational content.
I am sure that the Pre-School Learning Alliance will make proposals to provide a playgroup setting with the quality education content that it will have to include if those places are to qualify to receive vouchers under the scheme. I hope that that reassures my hon. Friend.
Mr. John Fraser: May I assure the right hon. Lady that, in my constituency, the cost of a half-day nursery place is substantially in excess of £1,100 a year? Does not her announcement therefore open up the prospect that there will be parts of the country where people can take advantage of the scheme only where they can top up, and other parts of the country, where free school places are provided, where people can take full advantage of the scheme? Will not that divisiveness get worse as the right hon. Lady withdraws money from local education authorities, leaving more people to rely on top-ups?
Mrs. Shephard: I can reassure the hon. Gentleman. There may indeed be a need to reflect in the value of the voucher regional variations in the cost of providing a place, and we shall examine that during phase 1.
Mr. Eric Pickles: When my right hon. Friend prepared her statement, did she consult the "Conservative Campaign Guide"? If she did, did she notice a figure of 90 per cent., so approvingly quoted by the Leader of the Opposition? Is she aware that, until this afternoon, that figure has always been hotly disputed by the Labour party? Does she agree that what the Leader of the Labour party quotes from the "Conservative Campaign Guide" today will be the Labour party's policy tomorrow?
Mrs. Shephard: I agree with my hon. Friend. We did all notice that little inconsistency, but there is another little inconsistency—parental choice seems to be okay for some but not for others.
Mr. Alex Salmond: The right hon. Lady says that she would never extend a voucher system into the compulsory years of education—but then she comes, to use her own words, from the "hard centre" of Tory politics. What about Scotland and Wales, which were tossed aside as consolation prizes to the right wing
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in the Prime Minister's reshuffle? Can the right hon. Lady guarantee that the new Secretary of State for Scotland will not extend the voucher scheme into the compulsory years of education, as that is one of the many barmpot ideas that he has espoused in the not-so-distant past?
Mrs. Shephard: What a customarily gracious contribution from the hon. Gentleman. I am sure that he will be interested in what is planned for Scotland.
My right hon. Friend the Secretary of State is setting in motion immediately discussions with providers in the voluntary, private and public sectors about how best a voucher scheme might work in Scotland. His aim is to put in place arrangements that meet the distinctive needs and circumstances of Scotland's education system and to make a further announcement in the autumn.
Mr. Harry Greenway: May I join in the congratulations to my right hon. Friend on that admirable achievement? [HON. MEMBERS: "What achievement?"] Achieving the scheme. Will she accept from me that vouchers will give parents maximum opportunity to choose, and that education that is chosen by parents is the most effective, because they are behind the children wherever they take them or send them?
On costs, bearing in mind what my right hon. Friend has said about the possibility of nursery education costing much less to provide in, say, deepest Scotland or deepest Wales, than it does in Ealing or other parts of London, will the voucher that she provides start at £1,100 and be topped up, or will it be less than £1,100 in regions where nursery education is much cheaper than it is in London? May we have an answer for guidance for my constituents?
Mrs. Shephard: I am glad that my hon. Friend welcomes the extension of parental choice. I repeat what I said to Opposition Members: that, because of regional differences in costs, we may need to look at a regional variation in the value of the voucher. We shall examine that matter in phase 1. I hope that that reply reassures my hon. Friend.
Mr. John McWilliam: Does the Secretary of State accept that there is now some confusion over her figures? She said that the cost will be about 1.5 per cent. Is that a percentage of the £730 million, which works out at about £100 million? [HON. MEMBERS: "What?"] I am sorry—about £1.5 million. It is obvious that, given the number of figures that the Secretary of State has thrown around, it is difficult to get a grip on them.
Let us use some accurate figures. The right hon. Lady said that, of the £730 million, £165 million is new money. That is to be welcomed. However, that leaves £565 million. At the last count, two thirds of the money being spent was spent by Labour local authorities. Is that sum to be redistributed among all local authorities? If so, how can she assert that the net result in excellent councils like Gateshead, which makes good provision, will not be a reduction in the overall real money available for pre-school education?
Mrs. Shephard: I thought that I had already reassured hon. Members about the position of local authorities that currently provide pre-school education. They will not lose money, and may well gain it, if, as a result of parental choice, parents choose a place in an LEA setting. The figures are simple: £545 million is currently with LEAs;

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£165 million will be new money for places; and £20 million will be for inspection and a little bit of administration. I suggest that the hon. Gentleman goes away and learns about percentages.
Mr. Richard Tracey: I applaud my right hon. Friend on this cost-efficient-sounding initiative. Does she agree with many people that there is even more scope for improvement in primary education? Will she underline her guarantee that no resources will be lost to primary education as a result of this initiative, and will she fight the Treasury for even more resources for that area?
Mrs. Shephard: I assure my hon. Friend that the sums that I spoke of are new money for this initiative. He will agree that good-quality pre-school education makes a good contribution to primary education.
Mr. Roy Beggs: I congratulate the Secretary of State, and welcome today's announcement of her commitment to provide nursery education for all four-year-olds throughout the United Kingdom, although I regret that we in Northern Ireland will have to wait for another year.
When discussing provision in Northern Ireland with the Secretary of State for Northern Ireland, will she draw his attention to the fact that the main provision in Northern Ireland is state provision, and that, for all four-year-olds to benefit equally, he would need to look at the possibility of providing capital funding to area boards to ensure that there was inclusive provision for all four-year-olds?
Mrs. Shephard: As the hon. Gentleman will be aware, my right hon. and learned Friend the Secretary of State for Northern Ireland will bring forward proposals in due course. Of course, I shall draw the hon. Gentleman's concern to his attention.
Mr. Anthony Coombs: I warmly welcome what I am sure will be an increase in nursery education, which is presumably why the Opposition so vehemently oppose it. Does my right hon. Friend agree that the principal benefit of competition is that it is likely to ratchet up standards in both the private and public sectors? Will she ensure that the system of inspection that she puts into place ensures that that happens?
Mrs. Shephard: Yes. The purpose of ensuring that everything is inspected before registration is granted is precisely to ensure high-quality provision. High quality is the key. We are spending a lot of money, and we must have good educational provision in return.
Mr. Harry Barnes: Will the £565 million to be taken away from local authorities come back to all local authorities for use, or will it go into a general pot for wide distribution in other areas? According to the Audit Commission's performance indicators for Derbyshire, for instance, 78 per cent. of three and four-year-olds are provided with nursery education. Will Derbyshire be in the same position to make that provision while being topped up from the voucher system? I doubt it.
Mrs. Shephard: I repeat to the hon. Gentleman that all local authorities will continue to be funded for the children under five whom they are educating. If they continue to educate the same number as at present, they will receive the same amount of funding as they do now.
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Four-year-olds will be subject, of course, to the voucher system, and it will be up to LEAs whether they feel that they can afford, or wish, to continue to provide education for three-year-olds.
Mr. Patrick Nicholls: I congratulate my right hon. Friend on this most excellent statement. Does she agree that the public can draw two conclusions from today's exchanges? First, if people really want choice and diversity in education, this policy shows that the Government will deliver them. Secondly, if they think that new Labour would develop them, they could do worse than look at the way that the Labour Front-Bench spokesman contemptuously dismissed people's hopes and aspirations for nursery education for their children as nothing more than "pandering to an artificial market."
Mrs. Shephard: My hon. Friend puts the point well and strongly, as is his custom. I think that it will seem to the general public that extra new money totalling £185 million, and a total of some £730 million in all, is generous funding for this initiative. I believe that they will be delighted at the fact that spending power and choice are in the hands of parents, where they should be. I imagine that, in due course, and probably sooner rather than later, we shall see the normal U-turn by the Opposition parties.
Mr. Michael Connarty: On my calculations, £165 million has been made available for new provision for England and Wales. There should be, pro rata, £16.5 million available this year for nursery education in Scotland. While the consultation goes on, is the Secretary of State aware that, in Scotland, 95.4 per cent. of children are educated in schools run by local education authorities on the comprehensive system?
The last time that we were consulted, on water, 95 per cent. of people who replied rejected the proposals. If the Scottish people reject these proposals, will the Cabinet accept that the extra money for pre-school children should go to local education authority establishments in Scotland?
Mrs. Shephard: I am sure that the hon. Gentleman could not begin to be implying that Scottish parents should not have the same choices available to them as English parents have. If he is, all I can say is, good luck when he gets back to Scotland.
My right hon. Friend the Secretary of State for Scotland, as I made clear earlier, is setting in motion discussions with providers in the voluntary, private and public sectors about how best a voucher scheme might work in Scotland. It is clear that the hon. Gentleman does not want Scottish parents to have choice. I know that my right hon. Friend will wish them to have choice.
Mr. David Tredinnick: May I, too, congratulate my right hon. Friend on her extended responsibilities, and ask her to share in my happiness, as tomorrow will be my 12th wedding anniversary? She referred in her statement to the partnership between public and private sectors being very important, and the way that she hoped it would expand the number of places available. Does she have any specific initiatives in mind?
Mrs. Shephard: We seem to be having a lot of anniversaries and disclosures from all over the House. I note that my hon. Friend is not decorated for his wedding anniversary as the hon. and learned Member for Leicester, West (Mr. Janner) is for his.

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I expect interesting and innovative ideas for partnerships to develop out of the proposals that are put up for phase 1 of this scheme. I know from the discussions that I have already had that they will be of a kind to please my hon. Friend.
Dr. Lynne Jones: May I, as the parent of two children only one of whom had the benefit of nursery education, say that there is every difference between that and a place in a playgroup, the value of which, I acknowledge, was useful for one of my children? What consultations have taken place with parents and parents' representatives to ask them which they would prefer: this bureaucratic voucher scheme or simply more places in their local nursery schools, and nursery classes in local primary schools?
Mrs. Shephard: The hon. Lady will have heard, although not perhaps have absorbed, the points I have made about quality assurance in all this. My hon. Friend the Minister of State spoke to Margaret Morrissey of the National Council of Parent-Teacher Associations this morning, and she warmly welcomed the initiative.
Mr. Nick Hawkins: In joining in the congratulations to my right hon. Friend on her wider responsibilities, may I say that, as someone who campaigned for the expansion of nursery education for many years before coming into the House, I especially welcome her announcement today?
Will my right hon. Friend pay tribute to the moves that the Pre-School Learning Alliance has made to introduce more educational content into its work? Will she commend the fact that many constituencies, of which mine is but one, already have a wide choice in the private sector, with private playgroups and private nursery schools? All those will benefit, and the parents and children will benefit most, from my right hon. Friend's welcome announcement today.
Mrs. Shephard: I welcome the fact that my hon. Friend has drawn attention to the diversity in pre-school provision that exists in many areas of England. That is a diversity we welcome, and wish to enhance by means of my announcement today. I join my hon. Friend in congratulating the Pre-School Learning Alliance on the magnificent contribution to early years learning and experience it has made for many decades. I hope that it will want to contribute to this initiative in its own inimitable way.
Mr. Hugh Bayley: Will private nursery schools be able to pick and choose the children they admit? If so, how can parents have equal choice in terms of where their children will go? Has the Secretary of State considered the possibility that there may develop an illicit trade in vouchers, whereby poorer parents sell their vouchers to others, who can then buy full-time rather than part-time nursery education? What does the Secretary of State intend to do to prevent the children of the poor from being yet more disadvantaged than they are already?
Mrs. Shephard: We envisage an audit system to combat fraud.
Mr. Peter Luff: Given that I expect there to be a great deal of competition for phase 1 of the
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scheme, and bearing in mind Hereford and Worcester's relatively low level of education expenditure—and, indeed, of children of four years of age enjoying pre-school education at present—will my right hon. Friend give me an assurance that, should she receive a bid from the county council for phase 1 of the scheme, she will look at it with the utmost possible sympathy?
Mrs. Shephard: I hope that there will be a lot of competition for phase 1. Hereford and Worcester represents an interesting mix of urban and rural areas, and we shall want to have a representative group in the first phase. I should say to Hereford and Worcester, "Hurry along."
Ms Glenda Jackson: As there are thousands of families who cannot and will never be able to top up the voucher system, will the Secretary of State give an assurance that their local authorities will not suffer if families who can afford to top up choose to place their children in alternative nursery education? Will she give an assurance that local authorities will not suffer either a reduction in funding or a lowering of standards and services?
Mrs. Shephard: I can give the hon. Lady an unequivocal assurance on that point. There will be no need for LEAs to suffer; they will continue to receive funding as they do now.
Mr. John Gunnell: The right hon. Lady has given a number of guarantees that local authorities will not lose through the scheme. Do those guarantees extend to the administrative costs, which will almost certainly fall on local authorities, in addition to the costs about which she has already spoken? Will the right hon. Lady guarantee that the same arrangement will be available for local authority social services day nurseries?
Mrs. Shephard: I will give an assurance that there need be no extra costs for LEAs as a result of my announcement. On the hon. Gentleman's point about day nurseries, an important distinction is involved. What we are talking about here is educational provision. If day nurseries wanted to become providers of education, they would have to satisfy the conditions for activities and outcomes, laid down by the SCAA after consultation, as purely educational settings.
I would have no objection to that being the case, provided that the conditions of quality, outcomes and activities were met in full. In some cases, it may be convenient for parents to have education provided in a setting that also has day care. The point of these provisions, however, is education.
Ms Margaret Hodge: Will the Secretary of State give an assurance, because Opposition Members are rather muddled on this, that local authorities will not have their grant cut as money is transferred from the grant to fund the voucher scheme? Will her current proposals do anything to ensure nursery provision in, for example, the London borough of Bromley, which has no local authority-provided nursery places in schools or classes?
If the right hon. Lady is interested in quality, why has she not used money more effectively to restore some of the grant for education and training funding that has been cut for people working in early years? Will she give an

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undertaking to reintroduce better quality, including child development, for people who are undergoing teacher training, and ensure that we have more qualified nursery teachers?
Mrs. Shephard: As I have said many times, all local authorities will continue to be funded for the under-five children they are educating. If they continue to educate the same number as at present, they will receive the same amount of funding as they do now.
As for the London borough of Bromley, it would be up to it to provide education that was attractive to the holders of vouchers. That is entirely a matter for it.
On grant for education support and training funding, the hon. Lady should understand that I take very seriously the whole question of quality in education. She might be aware that we recently launched an initiative on improving schools. The important thing is that the activities and outcomes are inspected, as they will be, and that the quality is kept right up to the mark for this new pre-school provision.
Mr. George Mudie: I knew that I would be last, as my wedding anniversary is not until September.
Will the Secretary of State confirm that, in the first financial year in which the scheme operates, only 10 per cent. of the 150,000 children will be covered, at a new cost of £16.5 million, but that in the next financial year—the one that follows the general election—the full cost of £165 million will take effect? Will she reassure the House that that is not the first pre-election spending promise?
On a more serious point, however, why does the right hon. Lady regard it as a triumph to cover only 10 per cent. before the election? Why could she not have got more money to ensure better phasing than 10 per cent. of the children one year and 100 per cent. the next?
Mrs. Shephard: I think that the hon. Gentleman is missing the point a bit, but I will excuse him, given that it is not his wedding anniversary.
The 10 per cent. the hon. Gentlemen mentioned, whom we aim to cover with phase 1, will be piloting and testing the arrangements, ensuring that the practical arrangements
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are in place. It is a question of viability and efficiency, and getting the whole thing effectively into place. That is the point. Equally, the point is that this represents a huge investment of public money in the education of that age group. I hope that the hon. Gentleman, wedding anniversary or not, will find it in him to welcome it.
Mr. Blunkett: I have three points of clarification for the Secretary of State. First, in her statement, she used the figure of £165 million, but in the press release it is £185 million. She has used the two figures interchangeably this afternoon.
Secondly, my hon. Friend the Member for Blaydon (Mr. McWilliam) raised an issue that requires clarification—if four-year-olds are to be safeguarded, in terms of local authority spending not being withdrawn from those who have nursery places, is that not the case also for the 42 per cent. of three-year-olds who currently have a local authority nursery place? This is a crucial issue in terms of whether three-year-olds are to have their provision withdrawn at the expense of maintaining or expanding the provision for four-year-olds.
Thirdly, will the Secretary of State confirm that choice exists only where supply exceeds demand, and that the least new money will be directed to those areas which have the greatest provision? Is it not therefore a fact that the scheme and the vouchers fail to provide new choice, because, where choice was possible as a result of supply exceeding demand, those resources will not be available?
Mrs. Shephard: I can clarify the matter for the hon. Gentleman. The figures to which he refers are as follows: £165 million for the new places, plus £20 million, making a total of £185 million. The £20 million is for inspection costs and a little for administration. As I have made perfectly clear, the scheme is to cover four-year-olds. The position of three-year-olds will continue to be a matter for the individual choice of local education authorities.
The hon. Gentleman has demonstrated yet again that he and his party simply do not understand the purpose of choice in this respect. He does not understand, as he has made clear again, that choice will stimulate supply.

Business of the House
4.31 pm
The Lord President of the Council and Leader of the House of Commons (Mr. Tony Newton): The business for next week will be as follows:
MONDAY 10 JULY—Opposition day (16th allotted day). There will be a debate entitled "Social Division and Economic Inefficiency" on an Opposition motion.
Motion on the Local Government Act 1988 (Competition) (Defined Activities) Order.
Motion on the Legal Advice and Assistance (Scope) (Amendment) Regulations.
TUESDAY 11 JULY—Opposition day (17th allotted day). Until about 7 o'clock, there will be a debate on the rail network, followed by a debate on out-of-hours patient care. Both debates will arise on motions in the name of the Liberal Democrats.
Motion on the Church of England (Miscellaneous Provisions) Measure.
WEDNESDAY 12 JULY—Until 2.30 pm, there will be debates on the motion for the Adjournment of the House.
Debate on the economy on a Government motion.
THURSDAY 13 JULY—Estimates day (3rd allotted day). Debate on social security expenditure. Followed by a debate on the Ministry of Agriculture, Fisheries and Food's operational expenditure and departmental administration and agencies, in so far as they relate to the prevention and control of animal diseases and import health controls on animals. Details will be given in the Official Report.
At 10 o'clock the House will be asked to agree all outstanding estimates.
FRIDAY 14 JULY—Private Members' Bills.
The House will also wish to know that European Standing Committee B will meet at 10.30 am on Wednesday 12 July to consider European Community document No. Com (95) 300 relating to the preliminary draft budget of the European Community for 1996.
MONDAY 17 JULY—Proceedings on the Appropriation (No. 1) Bill.
Consideration of Lords amendment to the Licensing (Sunday Hours) Bill.
Consideration of Lords amendments which may be received to the Child Support Bill.
Consideration of Lords amendments to the Criminal Appeal Bill.
Motion on the Local Government Elections (Changes to the Franchise and Qualification of Members) Regulations.
Motions relating to the Housing Benefit (General) Amendment Regulations and the Social Security (Income Support and Claims and Payments) Amendment Regulations.
The House may also be asked to consider any Lords messages which may be received.
I am not at present able to give details of the business later that week, although I reaffirm that there will be business later that week.
[Wednesday 12 July:
European Standing Committee B—Relevant European Community document: COM (95) 300, 1996 budget. Relevant reports of the European Legislation Committee: HC 70-xix (1994–95).
Thursday 13 July:
Estimates day—Relevant reports: (i) in respect of the first group of estimates: Third Report from the Social Security Committee, Session 1994–95, HC 132 ("Review of Expenditure on Social Security"); (ii) in respect of the second group of estimates: Fifth Report from the Agriculture Committee, Session 1994–95, HC 347-I ("Health Controls on the Importation of Live Animals").]
Mrs. Ann Taylor: I thank the Leader of the House for that statement. Will he confirm that there are still three Opposition days left in the pipeline, even after the two which are to be used next week? That is not counting the half day that I understand is owed to the Opposition deputy Chief Whip.
Will the Leader of the House tell us whether, as a consequence of the changes and events of the past few days, there will be a statement to the House on the Prime Minister's decision to demote science, engineering and technology and abolish the Office of Public Service and Science? What will be the implications for the Select Committee on Science and Technology? Will the Leader of the House also tell us what he proposes to do not only about that Select Committee but about the Select Committee on Employment? In addition, what will happen at Employment questions which are scheduled for next Tuesday?
With regard to business before the recess, will the Leader of the House guarantee that he will find time for a debate and for votes on the issues to be covered in the report due out tomorrow from the Select Committee on Standards in Public Life?
Is the Leader of the House aware that there are at least three on-going inquiries into serious allegations of electoral registration fraud—and I am not talking about the Tory leadership question. They are serious matters. Many of us have long been worried about the inadequacies of our system of electoral registration, with many people at each election not being entitled to vote. May we have an early debate on the changes necessary to ensure that those who are entitled to a vote can do so, but also to ensure that those who are not entitled to vote do not do so?
We have just had a statement from the Secretary of State for Education and Employment on her proposals, such as she knows them at this stage, for vouchers for nursery education for four-year-olds. The right hon. Lady made a statement full of confusion and lacking in clarity—so much so that she had to promise that details would be available in the autumn. Will the Leader of the House therefore guarantee that there will be a debate on those proposals in the autumn in Government time so that parents can see clearly the con trick that is being proposed and contrast that with Labour's proposals for quality nursery education for every three and four-year-old whose parents want it?
Finally, I draw the attention of the Leader to the House to early-day motion 1223 in the name of my right hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris).

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[That this House notes the Top Salaries Review Body's recommendation of 1991, as endorsed by the Senior Salaries Review Body in 1995, that the existing accrual rate of fiftieths should be applied to all service for sitting honourable Members in respect of their future pension entitlement; and calls for speedy implementation of the Review Body's recommendation.]
That is an unusual early-day motion in that it has attracted 353 signatures. I hope that the Leader of the House is aware of the widespread concern on both sides of the House and that he personally has some responsibility and some power to make progress on that matter.
Mr. Newton: As I sometimes do, I shall take that rather long list of questions, to a degree at least, in reverse order.
First, with regard to the subject matter of early-day motion 1223, in which the right hon. Member for Manchester, Wythenshawe (Mr. Morris) has a particular interest as chairman of the parliamentary pension fund, as he knows, I have made it clear that I will seek to bring that matter to the House for debate, although obviously once again this week I cannot give a date in this week's business statement.
With regard to vouchers, I reject the language that the hon. Lady used which I thought was a mixture of over-statement and mis-statement. Naturally enough, if part of the purpose of my right hon. Friend the Secretary of State for Education and Employment is to listen to people's views in working up the details, it is appropriate—I know that this is perhaps an unfamiliar proposition for those on the Opposition Benches—to listen to the views before deciding on the details. Of course I shall consider whether a debate will be appropriate at the appropriate time.
I shall bring the hon. Lady's questions on electoral registration to the attention of my right hon. and learned Friend the Home Secretary. However, I draw attention to the fact that the business that I announced for Monday 17 July included a motion, I accept in relation to local government elections, which referred to the franchise for those elections, so it is just possible that some of those points might be in order there.
With regard to any report from the Select Committee on the Nolan recommendations, I made it clear when the Committee was set up that one of the objectives of seeking a report from it by 7 July was to enable an appropriate debate to take place should that be required in the light of the report.
I come now to the mix of questions that the hon. Lady asked about the recent Government changes both in the machinery and in the personnel. First, our intention is that the Ministers responsible will be at the Dispatch Box to answer all the questions tabled to the Secretary of State for Employment for next Tuesday. As I understand that no questions have been tabled on health and safety matters, Ministers with employment responsibilities from what is now the Department for Education and Employment and Ministers from the Department of Trade and Industry will answer questions on other appropriate matters.
We shall of course seek to make full details on some of the other questions that the hon. Lady asked available to the House in a proper fashion at the earliest opportunity. As for her question about Select Committees, she will know that the proper course is for us to consult the Chairman of the Liaison Committee and others
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concerned before presenting any alterations to the House, in the light of the changes in the machinery of government that were announced yesterday.
The hon. Lady almost underplayed her hand on Opposition days. There are three left, and, as she said, a half day is owed to the Opposition deputy Chief Whip as a result of some delicate usual-channels negotiation earlier in the year. As always, we are mindful of the need to repay our debts to the Opposition deputy Chief Whip.
Mrs. Ann Winterton: Following letters that I wrote earlier today to the Attorney-General, the Minister for Local Government, Housing and Urban Regeneration and the Audit Commission, will my right hon. Friend, as a matter of urgency, arrange a debate on probity in local government, to allow a full investigation of the concerns rightly raised by the former chief executive of Congleton borough council relating to financial irregularities and procedural abuses and cover-ups on that council? The truth could then be revealed, and the currently serving members and officers of the council who are implicated could either face appropriate criminal charges or be cleared of such charges.
Mr. Newton: My hon. Friend will understand that, having not had the benefit of seeing the correspondence, I am cautious about commenting. As for the debate for which she asks, much as I might like to, I do not think that I can undertake to provide time. She may, however, wish to consider the opportunity that will be provided by the three-hour debate before the Adjournment which I expect to take place on Wednesday 19 July.
Mr. Archy Kirkwood: May I pursue the question of arrangements for Employment questions on Tuesday 11 July? Do the Government intend to abolish Employment questions after that date, and are there any plans to provide a Dispatch Box questions slot for the Deputy Prime Minister under the new arrangements?
Finally, will the Leader of the House confirm that the Government have suggested to the Liaison Committee that the Select Committee on Employment should be abolished, and did their consultations lead to the conclusion that a motion must be passed on the Floor of the House before any such action can be taken?
Mr. Newton: The answer to the hon. Gentleman's final question is yes, of course. As it happens, I held my present responsibilities when the same question arose in relation to the former Select Committee on Energy soon after the election. I am therefore well aware that, were such a proposal made, it would have to be put to the House.
As for the hon. Gentleman's more general questions about arrangements for parliamentary questions, my present feeling is that the sensible course would be to maintain the current rota until the end of this bit of the term, as it were, and then consider revised arrangements reflecting the new position for the next Session. I include in that whatever might be appropriate arrangements for the First Secretary of State.
Sir John Cope: As the time for consultation on the Latham report on construction contracts has now been completed, will my right hon. Friend tell me whether we are likely—preferably next week—to hear something about what the Government will

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do in response to the Latham recommendations and the consultation that has taken place? Will he also tell my right hon. Friend who is responsible for such matters that many of us hope that the whole Latham package will be introduced, particularly the aspects that the Government and the House must implement?
Mr. Newton: I have before me the usual carefully worded formulation, which I shall not read out again. I remind my right hon. Friend, however, that I have repeatedly made what I would describe as sympathetic and friendly noises about the proposals. He can take this as another sympathetic and friendly noise.
Mr. Alfred Morris: As the Leader of the House said, I chair the managing trustees of the parliamentary contributory pension fund. Further to the right hon. Gentleman's reply to my hon. Friend the Member for Dewsbury (Mrs. Taylor) may we at least be assured that the Top Salaries Review Body's recommendations will be debated by the House before the summer recess? He will be aware, as I am, of the enormous pressure on the trustees to secure a debate—pressure that comes from hon. Members on both sides of the House.
Mr. Newton: I have told the right hon. Gentleman before, both publicly and privately, that that is my aim, and it remains my aim.
Mr. Jacques Arnold: May we have a debate next week on Britain's relations with Latin America? As my right hon. Friend will recall, we have had such debates for seven successive years using the mechanism of the Consolidated Fund debates that lasted all night. They were noted with considerable interest by Latin American ambassadors in London, and media and political circles throughout Latin America.
The only avenue available to us now is a one-and-a-half-hour Wednesday morning slot. We attempted that earlier in the year, without success. Can something be done about the mechanics in the future, so that a non-party political subject can be addressed with the seriousness that it requires, and could the Government this year find us one and a half hours in which to address it?
Mr. Newton: I cannot make a promise on the latter point. Indeed, I cannot make a promise on your behalf, Madam Speaker, that you will look more favourably on future Wednesday morning applications—although I am sure that you will always listen sympathetically to my hon. Friend.
Mr. Greville Janner: When can the House expect a statement on the blazing scandal of the abolition of the Department of Employment? The hon. Member for Gravesham (Mr. Arnold) may laugh, but it is no joke to millions of unemployed people, and still less of one to those employed by the Department. Surely we must have a statement.
Can the Leader of the House confirm that the Greenbury committee is due to report on 17 July? If so, will he assure the House that there will be a debate on the report before the House rises?
Mr. Newton: The publication date of the Greenbury report is a matter for the Greenbury committee, not for
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me; but I have heard suggestions that it will appear in mid-July. Obviously, any question of a debate can be considered only in relation to that.
I reject the hon. and learned Gentleman's earlier suggestions out of hand, although I understand why, as Chairman of the Select Committee on Employment, he feels it necessary to make them. In my view, the recognition that education and training in the current world of employment should be brought together and examined on a basis that stretches right across people's working life constitutes a sensible acceptance of the realities.
Mr. Charles Hendry: I welcome my right hon. Friend's announcement that European Standing Committee B will meet next Wednesday to discuss a preliminary draft budget for the European Commission for 1996. Can he confirm that the debate will be open to any hon. Member, rather than being restricted to members of the Committee?
Mr. Newton: Yes, of course. Debates in European Standing Committees are accessible to all hon. Members. Indeed, I understand that hon. Members on both sides of the House have suggested that the purposes of scrutiny may be better served by debate in a Committee, where they have an opportunity to question Ministers in detail.
Mr. Donald Anderson: The Leader of the House should be aware of the deep unease in the science community about the apparent downgrading of science in the recent reshuffle. Will he give the House a commitment that hon. Members will have the same opportunities as they have now to table oral questions to the Cabinet Minister responsible for science, and that there will be a rota similar to the one that we enjoy at present?
Mr. Newton: Let me tell the hon. Gentleman—perhaps in a quieter tone, but in rather the same way as I resisted the suggestions of the hon. and learned Member for Leicester, West (Mr. Janner)—that I entirely reject the idea that any downgrading is implied by the change that has been made. On the contrary, I think that that change recognises the importance of science, not least to the industrial life and future of the country, by relating it to the Department of Trade and Industry.
I am more than happy to consider the hon. Gentleman's point about questions, or to arrange for it to be considered, in the wider context of my earlier answer.
Mr. Gerald Bermingham: Will the Leader of the House find time in the spill-over period, because there seem to be plenty of days available then for debate, and it could stretch for several weeks if need be, to have a debate in Government time on the housing market? He will no doubt have noticed the report of the National and Provincial building society, followed by that of the Halifax building society, which showed that, this month, for the fourth month, house values had fallen by 2 per cent. Negative equities are therefore rising. As many people own their houses and many young couples need a home in this land, might it not be a useful use of parliamentary time to discuss that matter in some depth?
Mr. Newton: I simply make the point that house-building starts for the whole of last year were 13 per cent. higher than in the previous year. The position is

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that the affordability of housing is reflected by the fact that house prices are now the lowest in relation to income since 1985.
Mr. Nigel Spearing: On the demise of the Department of Employment, will the Leader of the House confirm that at least a negative statutory instrument must be tabled for a transfer of functions?
On the education statement that we have just heard, despite the notice in the Lobby that says "statement on nursery education", does not that statement, at best, threaten the whole future of nursery education in that there will be three forms of education in relation to finance and structure for three-year-olds, four-year-olds and five-year-olds? Will it not also destabilise training of four years for nursery school teachers and their assistants, and devalue the whole structure that has built up?
Mr. Newton: Of course there will be diversity and choice; that is part of the intention of the exercise. What is clear and was clear at Prime Minister's questions is that the Labour party and the Liberal Democrats do not like diversity and choice and we are in the business of providing it.
Mrs. Margaret Ewing: Would it be possible for the Leader of the House to arrange for a statement to be made, if not tomorrow, certainly next week, in connection with the reports in The Guardian today in advance of the "True Stories: Deadly Experiments" programme, which is to be shown this evening on Channel 4 and which relates to possibility that women, especially pregnant women, were used as guinea pigs with radiation during the 1950s and 1960s? In view of the distress that that has caused, not least in my region, where 91 women were apparently involved, it is important that the Government make clear exactly what happened, and allay other fears that people may have as a result that programme.
Mr. Newton: Depending on what actually appears in the programme tonight, I am sure that my right hon. Friend with relevant responsibilities would want to consider carefully any such suggestion.
Mr. Andrew Mackinlay: When does the Leader of the House intend to move the Statute Law (Repeals) Bill, which was on the Order Paper yesterday and was not moved? Why was courtesy not extended to myself, who had tabled amendments to the Bill, and to my hon. Friend the Member for Swansea, East (Mr. Anderson), who was sitting on the Opposition Front Bench? We were not told that it was not going to be moved. I understand that the Opposition Whips were also not so advised. A simple courtesy should have been extended to us to inform us that that was the intention last night. In any event, when will the right hon. Gentleman get around to arranging for hon. Members to discuss that important, albeit complicated measure?
Mr. Newton: It is well known that the usual channels always move in mysterious ways, and I will see if I can elucidate that mystery.
Mr. Max Madden: First, will the Deputy Prime Minister and the First Secretary of State be speaking on behalf of the Government in any of next week's debates? Secondly, will he be deputising for the Prime Minister at Prime Minister's questions when the
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Prime Minister is absent? Lastly, will arrangements be made urgently to outline the Deputy Prime Minister's responsibilities so that we can address parliamentary questions to him?
Mr. Newton: On the three questions, I do not immediately see any debate that I have announced that would be likely to involve the participation of the First Secretary. Secondly, I would naturally anticipate that the First Secretary, as Deputy Prime Minister, would deputise for the Prime Minister. Thirdly, the First Secretary's responsibilities were outlined in a note on the press release yesterday.
Mr. George Stevenson: In view of the statement by the drinking water inspectorate that the households of some 10 million people receive drinking water with lead levels that could cause brain damage to two-year-olds, which shows that nothing has really changed under this Government, will the Leader of the House arrange for the relevant Secretary of State at least to make a statement as soon as possible on that alarming report?
Mr. Newton: I will certainly bring that question to the attention of my right hon. Friend the Secretary of State for the Environment.
Mr. Edward O'Hara: May I support the request of my hon. Friend the Member for St. Helens, South (Mr. Bermingham) for an urgent debate on the crisis in the housing market? I do not recognise the buoyant picture presented by the Leader of the House. According to the Department of Employment's own latest quarterly statistics, there is a 14 per cent. decline in private starts, a 31 per cent. decline in housing association starts in the past six months, a 15 per cent. fall in new applications, and a corresponding decline in the building merchants supplies trade. It is a picture of no change in housing depression under this Government, no chance for people in negative equity, no chance for people who want a house to rent, and no chance for people involved in the construction and building merchants industries. Cannot the House at least be given a chance to discuss urgently that crisis in the housing market?
Mr. Newton: I cannot add to what I said earlier, but I would draw attention to the fact that what the hon. Gentleman is saying, even though I do not accept the implication of his comments, would appear to be in order during the debate on the economy next week. That is, however, a matter for the occupant of the Chair.
Mr. Paul Flynn: May we have a debate to discuss the corruption of our democratic system? In one country in these isles, the Conservative party can gain only 4 per cent. of the councillors in the last local government election, and only 4 per cent. of the vote in the Islwyn by-election, yet it rules Wales—the other 96 per cent. Why have the Government the cheek to appoint another Secretary of State for Wales, another Governor-General, who is alien to the people of Wales, who owes Wales no loyalty, and who has little understanding and little knowledge of that country? Is that not a slur on the few Tory Members representing Wales, who have been overlooked for the past eight years? Is not the appointment of the new Governor-General a calculated and contemptuous insult to the people of Wales?
Mr. Newton: No.
Mr. Harry Barnes: As we have had success already with early-day motion 1223, will the Leader of the House consider early-day motion 1233?
[That this House warmly welcomes the publication, by the University of Sheffield and Rotherham Metropolitan Borough, of a new study, Confronting Industrial Demise: the Employment and Unemployment Experiences of Miners and their Families in South Yorkshire and North East Derbyshire; recognises that the survey's context is the dramatic and unprecedented dismantling of a major industry with severe implications for employment and communities in already economically deprived areas; welcomes the key conclusion of this authoritative survey that the key to successful re-employment is education; urges serious consideration of its policy recommendations for responding to major redundancies and mass unemployment, including the granting of equal status to education and training, the transformation of the current training for work scheme into an education and training for work scheme, with the same benefits, that the provision by the Further Education Funding Council of financial support for the unwaged and their dependants should also be provided by the Higher Education Funding Council, the establishment of a national fund for small grants for learning materials in support of an education and training for work scheme, collaboration between labour market adjustment services in order to improve delivery and reduce wasteful duplication and the decentralisation of these services to community level in order to focus on and be within the reach of the most acutely affected families; and welcomes the launch of this important document on 14th June in the Palace of Westminster.]
That is about confronting industrial demise and deals with a study undertaken by Sheffield university in association with Rotherham metropolitan council on what happened to miners when they were made redundant. It discovers that there is a link between education and re-employment. It might therefore be useful for us to discuss a matter that actually covers the responsibility of the new Department for Education and Employment. That report might be one of the few matters where those interests link so directly.
Mr. Newton: The report will be read with care. I am grateful, which is relatively unusual for me in relation to the hon. Gentleman, because his point, as he implied, underpins my argument about the importance of the links between education and employment, especially in respect of training, which does not appear to have penetrated to the hon. and learned Member for Leicester, West, who is sitting behind him. Perhaps the hon. Gentleman might turn around and have a word with him.
Ms Glenda Jackson: The Leader of the House will be aware of the unanimous report published this week by the Select Committee on Social Security condemning as massively unfair the compensation recovery unit and calling for a root and branch examination of its procedures. As that has impacted on more than one occasion on my constituents, who have endured, in many instances, lengthy legal struggles before they were awarded damages for injury
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and illness, only to be bemused at the compensation recovery unit dividing those benefits in many instances by more than half, would it be possible to have a debate? My constituents' concern is that, in this matter, the Government seem to be acting for the benefit of not the electorate, but the insurance companies.
Mr. Newton: I should perhaps make it clear that I do not think that anyone would seriously argue that the state should duplicate compensation awards and the Select Committee made it clear that it does not support that view. Beyond that, the Select Committee has raised some points which need consideration, and they will be given that consideration.
Mr. Andrew Miller: May I press the Leader of the House a little further about the Office of Public Service and Science? Will he consider urgently providing time for a debate, particularly so that we can examine the future of the foresight programme and the "forward look" exercise? Those are important exercises that have been well received on both sides of the House and by the science community. The science community will demand an early explanation about what is going on. It is no good leaving this until after the summer recess.
Mr. Newton: I will not add to what I said earlier. Ministers from the Department of Trade and Industry are due to answer questions next Wednesday.
Ms Margaret Hodge: In view of the alarming reports from the British Medical Association conference in Harrogate about what has happened to community care two years after its implementation, with its survey showing that three quarters of those doctors asked said that conditions for their patients had worsened and with four out of five doctors saying that bed blocking was a factor in that, will the Leader of the House make Government time available for an urgent debate on that worrying matter?
Mr. Newton: With the recess not far down the track, I cannot undertake to provide time for a debate. I will draw the hon. Lady's comments to the attention of my right hon. Friend the Secretary of State for Health.
Mr. Janner: On a point of order, Madam Speaker. Is it in order for any Government to abolish a Department of State without giving the House an opportunity to discuss the matter, without the courtesy of a statement from the relevant Minister and with the Leader of the House treating our request for a statement with such contempt? Surely the House should consider this matter. It is for the Government to bring the matter before the House. It is a question of the order of the House, not merely a matter of Government business.
Madam Speaker: It is perfectly in order for the Government to make departmental and ministerial changes. The Leader of the House has answered in detail today the questions about such changes not only from the hon. and learned Gentleman but from the shadow Leader of the House as well as from other Back Benchers. We shall have to leave it at what the Leader of the House has said, which will be in Hansard tomorrow. I shall take no further points of order. We shall get on with our business.

Local Government
5.2 pm
The Minister for Local Government, Housing and Urban Regeneration (Mr. David Curry): I beg to move,
That the draft Wiltshire (Borough of Thamesdown) (Structural Change) Order 1995, which was laid before this House on 15th June, be approved.
Madam Speaker: With this it will be convenient to discuss the following:
That the draft Staffordshire (City of Stoke-on-Trent) (Structural and Boundary Changes) Order 1995, which was laid before this House on 15th June, be approved.
That the draft Durham (Borough of Darlington) (Structural Change) Order 1995, which was laid before this House on 15th June, be approved.
That the draft Derbyshire (City of Derby) (Structural Change) Order 1995, which was laid before this House on 15th June, be approved.
That the draft Bedfordshire (Borough of Luton) (Structural Change) Order 1995, which was laid before this House on 15th June, be approved.
That the draft Buckinghamshire (Borough of Milton Keynes) (Structural Change) Order 1995, which was laid before this House on 20th June, be approved.
That the draft Dorset (Boroughs of Poole and Bournemouth) (Structural Change) Order 1995, which was laid before this House on 22nd June, be approved.
That the draft East Sussex (Boroughs of Brighton and Hove) (Structural Change) Order 1995, which was laid before this House on 22nd June, be approved.
That the draft Hampshire (Cities of Portsmouth and Southampton) (Structural Change) Order 1995, which was laid before this House on 22nd June, be approved.
Mr. Curry: The nine orders that we shall debate today—
Mr. Andrew Miller rose—
Madam Speaker: Order. I hope that hon. Members understand that I must safeguard the business of the House. There are a number of hon. Members who want to speak in the debate and who are directly involved in the subject of these nine orders. We cannot continue with points of order, many of which are often bogus. If the hon. Member for Ellesmere Port and Neston (Mr. Miller) wishes to speak to me, I am now going to my office and I am prepared to see him there, in spite of the fact that I have been in the Chair since 2.30 pm. We will now get on with the business of the House.
Mr. Curry: The nine orders implement the recommendations of the Local Government Commission for the future structure of local government in Bedfordshire, Buckinghamshire, Derbyshire, Dorset, County Durham, East Sussex, Hampshire, Staffordshire and Wiltshire.
When the orders are implemented, a substantial part of the review of the structure of shire England will have been completed. The end result of that review may not be what many of us expected, but we have always said that a diverse pattern of local government with unitary authorities in some places and a two-tier system remaining in others could be the right outcome overall. I stress that in reaching our decisions about whether to
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accept, modify or reject the recommendations, we have always sought to provide a local government structure which reflected most accurately the different circumstances of differing areas. We believe that that will be achieved by these orders.
It may be helpful to the House if I take together the principal issues common to all these orders. I shall outline the details of the proposed new structure in all the areas. I shall then deal with the boundaries, the powers, the functions, the electoral arrangements, the staffing and planning and the proposed ceremonial arrangements. Where different arrangements are being proposed in specific areas, I shall outline how and why they differ.
From 1 April 1997, Bournemouth, Darlington, Derby, Durham, Luton, Milton Keynes, Poole, Portsmouth, Southampton and Thamesdown will be unitary authorities on their existing boundaries. The remainder of the counties within which they are located will remain two-tier, retaining both district and county councils. Similarly, the city of Stoke-on-Trent will become a unitary authority on its existing boundaries, except for a minor change to the boundary between Stoke and the borough of Stafford. Also, from 1 April 1997 there will be a new unitary authority of Brighton and Hove comprising the areas of the two existing districts of Brighton and Hove. The remainder of the county of East Sussex will remain two-tier.
The minor change to the boundary between the city of Stoke-on-Trent and the borough of Stafford gives effect to the commission's recommendation that the Josiah Wedgwood works at Barlaston should be transferred to Stoke in the interests of business efficiency. It also unites a sewage treatment works into Stoke.
Hon. Members will have noticed that these orders, with the exception of East Sussex, do not contain the powers and duties dealing with preparation and co-operation which were included in the orders that the House has debated before. Rather than repeat those in each order we decided to remove them and place them in general regulations. However, the powers and duties will be the same as in the orders that have already been made and, in addition, we have consulted on them twice; once in draft and once alongside each draft structural change order. We shall lay those regulations before Parliament in the next few days.
The East Sussex order is different because we have to make special provision placing powers and duties on the existing districts of Hove and Brighton. Therefore, the order provides that between the establishment date and the reorganisation date, the new council for Brighton and Hove will be a shadow authority with the function and the powers to enable it to prepare for taking on full local authority powers on the reorganisation date. The existing district councils will continue their functions over that period.
There is no need to create shadow authorities for the other unitary authorities because they will be continuing authorities and will be given additional powers to prepare for the transfer of functions. They continue with the existing district powers until the point at which they automatically assume the powers of a full unitary authority.
The role of staff in the reorganisation is crucial. Newly elected councils must pay close attention to staffing matters. It will be for them to decide on their staffing structures in the light of the new functions that they will

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be taking on. We have taken a number of steps to help ensure that the transition to the new structures is as smooth and fair as possible and my right hon. Friend the Secretary of State for the Environment has had a positive and constructive meeting with representatives of the local authority unions. We will, of course, continue to try to meet their concerns.
Although we expect the majority of staff to remain in local authority employment, we recognise that some may be redundant. For such cases, compensation provision will apply as set out in the regulations that we made last December. We have also announced our intention to provide for the compensation of those staff who wish to stay in local government employment but who may have to take a drop in salary in the new staffing structures. We will consult on those regulations soon.
We believe that authorities which are to be given unitary status should be given a fresh democratic mandate. Therefore, except in Brighton and Hove, all the current district councillors will retire in May 1996 and there will be whole council elections to the new unitary authorities at that time. In Brighton and Hove there will, at the same time, be elections to the shadow authority.
The orders provide transitional arrangements to return the authorities to the electoral cycles prescribed in the Local Government Act 1972. Derby, Stoke-on-Trent, Portsmouth, Southampton, Thamesdown and Milton Keynes will, therefore, be returned to their current arrangements of elections by thirds. In Brighton and Hove, Darlington, Poole, Luton and Bournemouth there will be elections in 1996 and 1999 and every four years after that. If any of those authorities wish to apply to the Secretary of State to change to a system of election by thirds, they can do so, provided that the council passes a resolution with a majority of not less than two thirds of the members. That system already exists.
The unitary authorities that we propose will be responsible for strategic as well as local land use planning in their areas. In Bedfordshire, Buckinghamshire, Dorset, East Sussex, Hampshire and Wiltshire we have concluded that it is desirable for strategic planning to continue across the existing county area. We are therefore asking the new unitary authorities, as structure planning authorities, to work together with the county council in each case to maintain a joint structure plan for their combined areas.
In the cases of Derbyshire and Staffordshire, the commission has proposed that the unitary authority and the county council should also accept joint responsibility for structure planning over their combined areas outside the Peak district national park. In the case of Durham, the commission has proposed that Darlington council should establish joint structure planning arrangements with the unitary authorities to be established in Cleveland. We agree with that recommendation and will give effect to it by transferring Durham county council's strategic planning responsibilities for the area of Darlington to Darlington council. That will enable Darlington to make voluntary arrangements with the Cleveland authorities to work on a joint structure plan for their combined areas. We are confident that voluntary arrangements for joint work in each of those groups will achieve the necessary results.
Each order provides for the relevant existing county police authority to continue to cover both the area of the unitary authority and the residual county area. Each order
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makes provision for the members of the particular police authority to be appointed by both the county council and the new unitary authority.
There will be combined fire authorities covering the new unitary authorities and the remaining county councils so that the existing brigade areas may be preserved. In order that the Home Office can achieve that by making fire combination schemes under the Fire Services Act 1947, the orders each provide for the relevant unitary authority to become a fire authority so that they can subsequently be brought together.
Sir David Madel: When Luton's shadow authority is elected in May 1996, will it mean that the existing county councillors from Luton, who are elected to Bedfordshire county council at county hall, gradually cease to play any part in governing Bedfordshire?
Mr. Curry: They will play no further role from that date in the government of the unitary authority—from the county.
The orders do not provide for ceremonial arrangements, for which separate provision will be made in general regulations. However, it may be helpful if I briefly explain to the House—
Mr. Frank Dobson: I do not want to be contentious. From what the hon. Member for Bedfordshire, South-West (Sir D. Madel) said, I believe that he was trying to find out when the Luton councillors will cease to have any say in the affairs of Bedfordshire. My understanding is that that would happen, not when the authority became a parallel authority, but when Luton took over full self-control.
Mr. Curry: I am sorry—I gave the right answer to the wrong date. [Laughter.] The correct answer with the correct date is that, in 1997, the unitary authority for Luton will assume full powers and, at that date, no county councillors will influence Luton and no councillors from Luton will influence the county council. There will not be a shadow authority, but in 1996 there will be an election for the new authority of Luton, which will have the task of carrying through the existing powers and preparing for the new unitary authority. I shall be happy to write to my hon. Friends the Members for Bedfordshire, South-West (Sir D. Madel) and for Luton, North (Mr. Carlisle) with the specific details.
Mr. John Carlisle: I do not wish to push my hon. Friend too far on the matter, but it is relevant to the budget and whether Luton county councillors have any input into that budget. Are they shadow councillors? Is there any legislation preventing them from having any input into the budget, which will be very relevant for the county in 1997? I appreciate that my hon. Friend may have to write with clarification, but that is important to the representatives of my constituency of Luton and those of my hon. Friend the Member for Bedfordshire, South-West (Sir D. Madel). Perhaps my hon. Friend will clarify the matter by writing to us if, quite understandably, he is unable to give us the information from the Dispatch Box this afternoon.
Mr. Curry: I think that I am able to provide that information from the Dispatch Box, but so that there should be no confusion, I shall ask my hon. Friend the

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Minister of State to ensure that he can give the biblical text on the subject when he winds up the debate. I think that that will satisfy everyone.
The answer in relation to Luton will be the answer that is viable for all the authorities with which we are dealing, with the single exception of the combined Brighton and Hove authority. In that case, because we are combining authorities, not creating a unitary authority entirely on its existing boundaries, there will be a shadow authority. There will not be a shadow authority in the case of the other authorities because they retain their existing boundaries and will continue in the same way in territorial terms. There will be an election for councillors to prepare the transition and to carry on the responsibilities of existing authority. My hon. Friend the Minister of State will clarify that with mathematical precision and digital clarity.
Mr. David Atkinson: Could my hon. Friend clarify the position for my hon. Friend the Member for Bournemouth, West (Mr. Butterfill) and myself in relation to Bournemouth? We understood that, under the draft order, elections would take place in 1996 for the new authority to take over in 1997. But from what my hon. Friend the Minister has just said, it seems that the new authority will take over in 1996. Can he clarify that?
Mr. Curry: The distinction is that there will be elections for new authorities in 1996. Those new authorities will assume the powers of transition until they assume the role of unitary authorities the following year. But they will also discharge some of the functions of the existing authority in that time because they will have to prepare for the new authority. Once again, my hon. Friend the Minister of State will be specific in his answers on that. We have had arguments in the House before about when a continuing authority is not a continuing authority—
Mr. Dobson: We do not want to get into that.
Mr. Curry: As the hon. Gentleman says, we do not want to get into that again.
I was explaining that the orders do not provide for ceremonial arrangements, for which separate provision will be made in general regulations. However, I will explain the proposed arrangements. Each unitary authority created under the orders will be deemed to be part of the relevant county for ceremonial and related purposes, and will therefore remain within the jurisdiction of the existing lord lieutenant and high sheriff. The general regulations will achieve that by making provision for the amendment of the relevant primary legislation. Once those regulations have been made, we shall insert a related provision in each order.
Sir Timothy Sainsbury: An important part of the ceremonial arrangements is the name of the borough. Can my hon. Friend confirm that the name Brighton and Hove—it should, of course, be Hove and Brighton, even if that is less euphonious—can be changed only with the authority of the House? My hon. Friend will be aware that the majority of the citizens of Hove were not altogether happy about being joined with Brighton.
Mr. Curry: Any authority can apply to change its name, but the authority is currently designated Brighton and Hove.
Sir Timothy Sainsbury: That is a partial answer from my hon. Friend, but if the authority applies, does it apply to the Secretary of State? Does the matter have to come before the House or can the Secretary of State make the change by edict?
Mr. Curry: I shall inquire about the precise procedure, but just as a local authority can, with a qualified majority of its members, apply to change its electoral arrangements, I envisage that similar arrangements will be used if an authority wants to change its name. As my right hon. Friend will know, a large number of places in this country are now called by a curious hybrid name that none of us recognises. I hope that some of them may revert to names that are more familiar to us, but that is entirely a matter for their own appreciation, not mine.
Sir Timothy Sainsbury: I am grateful to my hon. Friend for giving way again. Perhaps he will write to me to clarify the situation. If such an application is made, who approves or disapproves it, and how?
Mr. Curry: I shall certainly do that for my right hon. Friend because I am conscious of Hove's identity and its clear anxiety to avoid the assumption that it will be taken over by Brighton. The purpose of the regulations is not that Hove should be taken over.
The changes for which the orders provide will create more accountable local government in the areas affected. That creation of individual and independent unitary authorities will be welcomed. I therefore commend the orders to the House.
5.18 pm
Mr. Frank Dobson: Since the House last debated the product of the local government review, it is fair to say that the situation has changed, and changed considerably for the better—not least because the Local Government Commission itself has been reviewed, also for the better.
The propositions before us are part of an arrangement which is still not ideal, but certainly a great improvement on what we faced at the beginning of the year. As a result of all the changes, a substantial number of cities and towns which used to be self-governing either have been or are likely to be granted self-governing status again, and a number of others which have grown over the past few years will be granted that status and deserve it. That includes those for which the commission has already recommended what one might call county borough status again and where the Secretary of State has accepted the commission's recommendation, and those which, with all-party agreement, have been referred back to the commission with a view to them being considered as county boroughs inside counties, the remaining parts of which are not changed.
Clearly we cannot anticipate the commission's ultimate decision, but it seems likely in the circumstances that most, if not all of those referred back, will be given their independence. The point that needs to be made to them is that now that there is a reasonably well-run, orderly and logical group of people on the commission, they can be reasonably assured of receiving the independence that they deserve, if they make their case reasonably well.
We have already given independence to Hull, Hartlepool, Bristol, Middlesbrough, Stockton, Grimsby, Scunthorpe, Bath and Redcar—some of them, as the Minister has pointed out, with names that I can neither remember nor wish to remember.

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In addition, it is likely that most, if not all, of the following towns and cities will, as a result of the review and the changes agreed between the Secretary of State and myself earlier in the year, become independent. Blackburn, Blackpool, Bournemouth, Brighton and Hove, Basildon and Thurrock, Darlington, Dartford and Gravesham, Derby, Exeter, Gloucester, Leicester, Luton, Medway Towns, Nottingham, Norwich, Milton Keynes, Peterborough, Plymouth, Portsmouth, Reading, Slough, Southampton, Stoke-on-Trent, Thamesdown—which most people think of as Swindon—Warrington and The Wrekin, should all end up independent and having full control over all the services in their areas.
Most of those towns and cities had such an independent role in the past and it was sadly taken away from them in the misguided Conservative reforms of 1974.I am glad to say that, with all-party agreement, the House is putting that right. A limited number, including Thamesdown, alias Swindon, and The Wrekin, alias Telford, will achieve that status for the first time.
Taken as a whole, this is a big step forward. There is now some consistency of approach across the country, although there are still some oddities. I regret the fact that places such as Chester, Carlisle, Lincoln, Oxford and Ipswich are not numbered among those which have referred back to the commission. It would have been better if they had had the opportunity to make their case to the commission.
I thank the Secretary of State—even in his absence. When he last made a statement on this matter, he promised me that he would agree to meet the trade unions to discuss the problems facing staff because of the transfer. That meeting took place. Both the Secretary of State and the unions represented felt that it was a very worthwhile meeting and that some improvements were secured. But there is a danger of the entire process still being marred by the general attitude that worse arrangements, compensation and terms are being offered to the staff who, through no fault of their own, have lost their jobs or their status or had their jobs changed for the worse. Indeed, they are expecting to face worse terms and conditions than when the metropolitan counties were abolished by Mrs. Thatcher.
It is worth reminding the House that many of those people have devoted all their lives to serving the residents of their area, yet their lives are being disrupted and their careers ended through no fault of theirs. Those people, and those who know them, will compare that with the rather generous treatment which the Government have afforded themselves over the past few days. The Foreign Secretary, the Chief Secretary to the Treasury and the Chancellor of the Duchy of Lancaster, who after all have another job to go to—they are still Members of Parliament, setting aside any other jobs that they might get outside this place while they continue to be Members of Parliament—are entitled to a compensation payment of £8,658, for losing ministerial office.
It may come as an even bigger surprise to discover that the former Welsh Secretary who resigned in order to challenge the Prime Minister also entitled himself, by that resignation, to the compensation payment of £8,658. When those outside this place see that people who have worked hard for a local authority in trying to provide a good local service for perhaps 20 or 30 years, are losing
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their jobs, status or income as a result of the changes, they will think that it is a little as though the Government are rather more generous in looking after their friends than others.
The Minister referred to the detriment regulations being brought forward. We look forward to seeing those. I hope that they turn out to be more generous than the original draft. When the metropolitan counties were abolished, detriment was calculated over seven years. Under the draft that has been circulated this time, the period for calculating detriment would be but three years, so I hope that there will be some adjustment.
That brings me to the orders before us today, which will return freedom and independence to Derby and grant it to a combined Brighton and Hove, Bournemouth, Poole, Luton, Milton Keynes for the first time, Southampton, Portsmouth, Stoke-on-Trent, Darlington and Thamesdown. We welcome all those proposals to give full self-government to those areas and we believe that those who had that status before should never have lost it in the first place. There is a proud tradition in those places of being able to maintain good-quality services which satisfied the people of those areas, and under councils of all political persuasions.
Originally, during earlier debates, we asked the Government to make the position clear right across the board on all the proposals covering all authorities. They have now just about done that, which is also very welcome as it gives us an opportunity to check whether there is a consistent approach across the country.
Mr. John Carlisle: We greatly welcome the hon. Gentleman's enthusiastic support for the orders, especially of course for that applying to Luton. Would he perhaps extend his rather generous remarks to those members of his party who are outside the unitary authorities and who have carped and criticised the decisions that have been made? Support from him to them especially his trade union friends, would be most welcome. The House—I hope—will approve orders which will be of enormous benefit to so many constituents of varied hon. Members. Perhaps the hon. Gentleman would like to stop some of his trade union friends who are outside those unitary authorities from carping about what has happened.
Mr. Dobson: There are two points: first, not only Labour people dislike the idea of unitary authorities, of counties being broken up and of county boroughs being created out of counties. Large numbers of people of all political persuasions hold that point of view, which is perfectly legitimate and does not really divide people along party lines. One can believe absolutely profoundly, decently and sincerely in two-tier local government just as easily as one can in single-tier local government. We should not criticise people who are in any position to influence the debate for making their views clear.
Secondly, I utterly reject the idea that it is illegitimate for the people who are elected to represent the staff concerned, be they in the unitary authorities or in the counties—none of them is abolished today, but Berkshire will be abolished eventually—to be concerned about those staff whose jobs will be affected. As a result of the creation of unitary authorities, some people now working for counties may no longer have jobs. Other people who may now have positions with high status and high pay

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may lose that status and some of that pay. Many others will find that much insecurity is brought into their lives as a result of the process of change.
It is perfectly legitimate for those people not to like that, and it is equally legitimate for their elected trade union representatives to make a case on their behalf. That is the way the world is, and that is the way the world should be. We do not want somebody who works for a county council not to be able to have someone to speak up on his behalf. Indeed, as a result of the representations that have been made, several improvements in the terms and conditions affecting the transfers have been achieved. That is a legitimate thing to do.
One advantage of the orders is that new compulsory competitive tendering will not be introduced in the authorities concerned during the process of change. The Government sensibly recognise that that would add complexity and might make matters worse.
It is important that where national conditions are laid down either by order or by national agreements negotiated between the trade unions and the employers, all authorities either honour those agreements to the letter, or exceed them. I would expect all local authorities of all political persuasions—most of them are now Labour, because that is the situation in local government—to honour national agreements or to do even better. I say in advance from the Dispatch Box that I will condemn any authority of whatever political persuasion that fails to stick to the national agreements, and I hope and understand that the Government will not seek to interfere in any of those agreements to the detriment of any of the work force.
I believe that the hon. Member for Bedfordshire, South-West (Sir D. Madel) has already pointed out that great care will have to be taken by people from the counties and from the newly created unitary authorities to ensure that when the split takes place there is a genuinely fair allocation of resources. I hope that no one of any political persuasion will pursue a scorched-earth policy and either try to spend a vast amount of what they have now, or try to hog future resources in the share-out.
Equally the Government will recognise, as all "conservatives" should, that the process of change is costly. As I understand it, one of the conservative philosophical objections to change is its cost. That is why we should not go in for change without being sure that at the end of it there will be enormous gains that will greatly exceed the costs of the process of change itself. Anyone subscribing to a conservative philosophical viewpoint will clearly recognise that the process of change will be costly, so I hope that the Government will ensure that some additional resources are made available to ease that process. If they do not, the process could be quite damaging both to the unitary authorities and to the counties left behind. It would be a pity to spoil the ship for a hap'orth of tar.
When the new standard spending assessments are disaggregated from the counties, the distribution will need fairly to reflect the needs both of the counties and of the new unitary authorities. Unless that happens, the world being what it is, full of cock-ups, both the counties and the new unitary authorities could end up suffering from the new SSAs.
The change will be a difficult and painful process for many people, and we must try to ensure that everybody—existing elected councillors and newly elected councillors,
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the Government and the staff—acts in good faith for the benefit of the people of the areas concerned. We hope that the arrangements will go forward smoothly, and that the future orders that we can reasonably predict will do the same, as will the whole process of change.
Finally, I thank the Secretary of State and the Minister for their co-operative efforts with my colleagues and myself over what could be described as the review of the review commission, and also for honouring to the letter all the undertakings that they gave me during that process.
5.34 pm
Sir David Madel: I shall talk about the fifth order, which refers to Bedfordshire, but first I congratulate the new Minister of State, my hon. Friend the Member for Hertfordshire, West (Mr. Jones), on his elevation. He is my parliamentary next-door neighbour, and I am delighted. All Conservative Members will congratulate him.
I believe that the changes for Bedfordshire can work, not least because we had virtually the same set-up in 1974, before the earlier changes. At that time, Luton had had almost 12 years of governing itself as a unitary authority. The big difference between 1974 and now is that the population in the county has grown considerably, as is reflected by the fact that in 94 weeks' time, when I gather the general election will take place, we shall return six Members of Parliament rather than the four whom we returned in June 1970. The growth in population brings with it challenges, which I shall talk about later.
I am glad that the unacceptable plan for a north-south split in Bedfordshire has been buried—for ever, I hope. We need at least 100 years of stability in the county, and we never want the horrible monster of a north-south split to be resurrected. The order for Bedfordshire paves the way for much closer co-operation between Luton and Dunstable and the rest of south Bedfordshire—co-operation that is needed to deal with our main economic problem, which I shall describe later.
The Government are now actively considering the level of state spending for the next financial year, which will include the revenue support grant. I believe that it is essential that they ease the caps on local authority spending, particularly capital projects, for next year. The most obvious projects that we want to accelerate in Bedfordshire are those that would involve modernising many of our existing schools and building new ones, not least because of our ever increasing population. We would welcome a dramatic and clear easing of the caps for 1996–97.
When my hon. Friend the Minister for Local Government, Housing and Urban Regeneration opened the debate, he said that the new Minister of State would answer in precise mathematical detail a question that I asked about who had what power. As I understand it, as a result of a Government circular, in February 1997, when Bedfordshire county council fixes its budget for 1997–98, the present county councillors for Luton will have no power to participate in the budget decisions.
The Minister for the Environment and Countryside (Mr. Robert B. Jones): I confirm that my hon. Friend's understanding is correct.
Sir David Madel: I am grateful to my hon. Friend. That means that Bedfordshire county council will have

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49 councillors deciding its budget for 1997–98. Meanwhile, the shadow authority elected for Luton next year will decide its budget. I am grateful for that assurance.
I want to raise one or two more detailed points, the first of which concerns education. The whole local management of schools system for Luton will have to go ahead before there is any administration to look after it. By the time the elections for the unitary authority take place, LMS will have had to have been prepared and a consultation draft approved. By the time the chief education officer has been appointed, the whole scheme will have had to have been submitted to the Department for Education and Employment. I hope that my hon. Friend the Minister can say who will prepare and approve the scheme, and which body will give it political approval.
The present system of funding changes means that shire counties such as Bedfordshire have to find the set-up costs for unitary authorities such as Luton. That means cuts in the services provided by the remaining two-tier authorities. At the same time, the counties' resource bases are reduced disproportionately with the removal of big towns and cities. Reducing the scale of operations is costly, and redundancy payments alone could add considerably to county council budgets. Bedfordshire county council has one library computer system, based in Luton. The cost implications of providing a second system are considerable. Many other complications will follow the transfer and downsizing of services.
In future, the structure plan for Bedfordshire will be prepared jointly by Bedfordshire county council and Luton borough council, but no guidance has been given on how the joint working will be established. Waste and mineral planning will not be considered jointly. That is a mistake, as Luton has nowhere to put its waste and will rely on Bedfordshire's landfill sites and waste transfer stations. That needs to be organised jointly.
The make-up of the police authority does not appear to be clear. A total of nine members will be appointed by Bedfordshire county council and Luton borough council. Should not the membership be determined by population, as that would be truly representative and democratic? The county would then have six members and Luton three. A system based on the number of councillors would favour Luton, whose councillors represent fewer electors per division. Luton, with 48 councillors, would have at least four members on the authority while the county, with 49 councillors, would have five.
In the case of the combined fire authority, the membership will be based on population. It would be helpful if the same arrangements could apply to the police authority.
My final point on costs deals with the supplementary credit approvals to implement the reorganisation. Can my hon. Friend the Minister confirm that restructured county councils such as Bedfordshire will be treated in the same way as new unitary authorities in the allocation of supplementary credit approvals to cover the costs of the reorganisation?
Mr. John Carlisle: I am grateful to my hon. Friend, and neighbour, for giving way. While I appreciate that what he has said has come to a certain extent from the county council, I am concerned that the impression might
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go out from Bedfordshire that the unitary authority of Luton will not, in the longer run, make great savings following the split from Bedfordshire. I know that my hon. Friend will not want to give the House that impression, or suggest that the authority will go to the Government with a begging bowl to ask for more cash. We are happy with the arrangements, which could in the long term result in a substantial saving for the council tax payers of the county.
Sir David Madel: I do not disagree with my hon. Friend, but the interim costs of the reorganisation are uncertain. I felt that I should raise some of the uncertainties now, because it will be some time before the new authorities settle down. My hon. Friend is right to say that we must always keep costs in the county down so that council tax payers have value for money.
The big change that has occurred between 1974 and now is the economic problem in the south of the county and the rate of unemployment. The latest unemployment figures provided by Bedfordshire county council show that the rate of unemployment in Houghton Central and Houghton East is more than 10 per cent., while in Northfields it is 8.3 per cent. Across the border in Luton, the rate of unemployment in Biscot is 20 per cent., while in Dallow it is 20.1 per cent.
A great deal of unemployment was caused by the shattering loss of truck manufacturing in Dunstable. As yet, we do not have a replacement manufacturer for the Bedford truck site. I cannot emphasise too strongly the huge pall of despair that still hangs over Dunstable and Houghton Regis about the loss of the truck manufacturing jobs. When the two new authorities have settled down, they will want to work closely together to bring about an improvement in the infrastructure in the south of the county to get those jobs back.
Fortunately, there is one bright light on the horizon to help us—the launch this autumn of the new Vauxhall Vectra in Luton. Vauxhall employs a large number of my constituents, and everyone in Bedfordshire is willing the new car to be a stunning success. Would not it be a wonderful tonic if the rumours going around were true—that Vauxhall is considering building the highly successful Corsa at Luton as well? The jobs created if two types of car were to be produced at Luton would be a colossal boost to the area. I appeal to General Motors, the parent company of Vauxhall, to remember the intense loyalty shown for years by hundreds of truck employees who used to work at the Bedford truck plant and who now, alas, are unemployed.
We want to make every effort to assist in the economic regeneration of the Luton, Dunstable and Houghton Regis area. The population has gone up greatly, and there will be co-operation between the two authorities.
Mr. Dobson: I understand that the hon. Gentleman and the hon. Member for Luton, North (Mr. Carlisle) are trying to find out what will be the status of county councillors from Luton following the election in May next year of the new Luton council. Unless there is some provision which is not in this order, it would appear to me that councillors from Luton will be able to take a full part in the activities of the county council for a further year.
Sir David Madel: I have dealt with that matter.
Mr. Robert B. Jones: It might be helpful if I intervene. The hon. Member for Holborn and St. Pancras

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(Mr. Dobson) is correct—that matter is not dealt with in this order. We are consulting on the regulations to which my hon. Friend referred, which would mean that county councillors would not be able to take part in the budget process for a year after the formation of the county council in that area. I hope that that satisfies the hon. Member for Holborn and St. Pancras.
Sir David Madel: You probably want me to conclude my speech, Mr. Deputy Speaker. The main difference between the economic situation now and that of 20 years ago is the rate of unemployment. I wish the two authorities well, and I hope that they will succeed in working together successfully. Their main priority must be to do everything they can to drive the unemployment rate down in the south of the county and to get new manufacturing businesses into the area. We are desperate for that, and I am certain that we can succeed.
5.47 pm
Mr. Alan Milburn: The order that brings into being a single-tier Darlington council is long overdue, but none the less very welcome news for the town. Before I became a Member of Parliament, I urged Ministers to give the people of Darlington what they have long wanted—a return to self-government. Many hon. Members who represent former county boroughs will realise that places such as Darlington have a sturdy reputation for independence.
The town first became a borough in 1867, with the grant of a royal charter, but when the Local Government Act 1888 authorised the establishment of both county councils and county borough councils, a conflict of responsibilities grew between Darlington borough and Durham county councils. Happily, the matter was resolved expeditiously—following a six-day Government inquiry—with the granting of county borough status for Darlington in 1915.
It is particularly appropriate then that self-government is finally being restored to the town this year—the 80th anniversary of Darlington's becoming a county borough. It is a pity that what could be achieved in six days in the early part of the century has taken almost three years at the end of it.
After all, there can have been few more clear-cut cases in what has sometimes become a chaotic and shambolic local government review than Darlington's bid to run all its own local services. It must from the outset have been clear to all and sundry, particularly to Ministers, that whatever the outcome of the review in the rest of the county, Darlington had a good case for going it alone.
I say that for a number of reasons, not least because Darlington has a history of self-government. As a county borough, the town ran all local services until 1974, when the last Conservative local government review stripped local people of that right. That decision inflicted wounds that are felt to this day in a town in which traditions of civic pride and community identity are held strongly. Darlington had run local schools, libraries and other services with aplomb until 1974.
As my hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) said, Darlington and other towns that had county borough status should never have lost control over their services in the first place. Local people want their town's local government services run locally. That is certainly the case in Darlington.
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According to the MORI poll undertaken by the Local Government Commission, 74 per cent. of Darlington respondents supported the unitary principle. While residents from elsewhere in the county favoured no change for their local council structure, two thirds of Darlington people wanted a single-tier Darlington authority. In other words, there was and is clear and overwhelming popular support for self-government in the town.
Apart from a slight hiccup—a slight split in the local Conservative party, which is I suppose a fact of life nowadays for Conservative politicians, whether local or national—on the boundaries of any new authority, local public consensus was reflected politically and there was genuine all-party support for a single-tier local authority in the town. That in itself is a reflection of the recognised differences between Darlington and the rest of County Durham. It is distinct from the rest of the county in its patterns of employment, housing tenure, size and history.
To this day, Darlington retains a market town character. It has more people working in service industries and a higher proportion of people who own their own homes than the rest of the county. It is the biggest centre of population in the county and economically the growth pole for future development. Thankfully, Darlington has managed to avoid some of the economic blight that has been visited upon other parts of the county, which has been decimated by the decline of industries such as coal mining.
Inevitably, many people in the town feel that, in a two-tier system of local government, Darlington's differences and needs have sometimes played second fiddle to county-wide objectives when it comes to determining resource allocation by the county council. Despite that, Durham county council has played a positive role in Darlington. As we go forward to a single-tier Darlington authority, I am sure that that positive relationship will be a very real asset. The county council has certainly managed recent changes in local services—not least in the town's schools—with much skill and sensitivity.
None the less, the confusions caused by the two-tier structure of local government in County Durham are a pressing reason for progress towards a single-tier Darlington council. For example, in services such as planning, leisure, arts, museums, economic development and transport, there is an overlap in the functions between the existing county and borough councils. There is also confusion in the public mind about who does what and whether local services are the responsibility of the town hall or the county hall. In Darlington, the public would certainly prefer their services to be run locally rather than from a county hall some 20 miles away from the centre of the town.
Those are the reasons why there is such strong support for the unitary principle in Darlington. I believe that it is a principle that has much to commend it throughout local government. On grounds of efficiency, public understanding, accessibility and sensible decision making, single-tier councils seem to make much sense. In Darlington's case, the unitary principle was always particularly applicable.
Given all of that, why has it taken so long for the Government to get around to agreeing this logical change to the structure of local government in the town? After all, as the Minister is well aware, in County Durham the

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review began in September 1992. The delay in reaching a final decision for Darlington and the rest of the county was caused by one simple fact—we have had not one, but two reviews.
In May 1993, the Local Government Commission first recommended a single-tier Darlington council, outside a two-tier County Durham. In November of that year, after extensive local consultation involving about 28,000 responses from the county's residents, the same recommendation was made—so far, so good. The public had responded and the commission had done its job. It had come up with a commonsense solution for Darlington and there was a clear consensus behind that outcome.
Then things started to go badly wrong because Ministers started to meddle. The Secretary of State for the Environment issued new guidance to the commission. Whatever view one takes of the wisdom of the guidance or the decision, because of the clear-cut position in Darlington, the obvious thing to do was to exempt the town from a further review. Indeed, I led an all-party delegation to the Minister for Local Government, Housing and Urban Regeneration to argue that case in December 1993.
Instead, Ministers decided to ride roughshod over local views by forcing Darlington to go through a second review. Exactly the same organisations and people were consulted the second time round, with just two exceptions—the lord lieutenant of the county and the county's magistrates. Whatever those people and organisations have to commend them, frankly, they were never going to make a substantial difference to the original recommendations, so it was no surprise that, when the commission published its second set of recommendations in July 1994 and its final, final set last December, the outcome was as before—Darlington would go it alone, with the remainder of County Durham staying two-tier. In the process, however, precious time and resources have been lost and wasted.
The farce that I have described threw Darlington's future back into the melting pot. It left the future of thousands of local authority staff members hanging in the air and, crucially, ministerial chopping and changing cost Darlington vital time in preparing its future. When the Minister opened the debate, he spoke warmly of the Tees Valley Development Company, which has great potential. The future of Darlington's strategic planning and economic development functions lies eastwards—rather than northwards—with the four new single-tier Cleveland authorities. Darlington council is eager to play a full part in that emerging Tees Valley Development Company but, unlike the other four local authority founding members, it cannot commit any resources until next year. That is holding the project back.
Those unnecessary delays are especially galling because so many of the pieces of the jigsaw are in place to make Darlington an economic success. The town has everything going for it. It has green-field sites, an attractive location, a proud industrial tradition, major international firms that call Darlington their home and excellent communications.
Darlington also has another ingredient which, in my opinion, nowhere else in Britain can match—local people and local organisations who are committed to the town and want it to succeed. Darlington is blessed with people
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willing to work together in partnership for the benefit of the whole community. It has more than 700 voluntary organisations, many of them bearing the name Darlington in their title. It has almost more charity shops than anywhere else in the country.
That spirit of community, which is so evident in the town, has been given expression by new organisations such as the Darlington employers forum. I am proud to chair that organisation, which brings together the town's largest employers, whether they be in the public or the private sector, and training bodies and community organisations, behind a single economic plan for the area.
The forum's plan, called "Creating New Opportunity", aims to create about 5,000 new jobs by the turn of the century by means of public and private sector partnership initiatives. As long as two local authority decision makers, not one, decide the town's future, however, that plan risks being compromised. That is why the order is so important. It is a matter of regret that Darlington will not have a single decision maker until 1997. That position should, and could, have been avoided.
None the less, the order gives Darlington a chance to shape its own future. It will offer coherent, co-ordinated and efficient decision making. Above all, it will restore to local people power that should never have been taken from them in the first place.
6.1 pm
Mr. Nigel Waterson: First, may I add my congratulations to those of colleagues on the promotion of my hon. Friend the Minister?
I wish to speak against the East Sussex (Boroughs of Brighton and Hove) (Structural Change) Order. I shall try to be as constructive as I can, because we must learn lessons for the future from the process that has taken place in the past couple of years or so. We need to evolve a system whereby the hopes of local people are not raised only to be dashed, councils are not set against one another in a kind of propaganda war, and real weight is given to strong feelings of local identity in a community.
We in Eastbourne have emerged from that process bruised and bewildered. If anyone had told me, at the start of all that, that when we came out of it we would continue to have a two-tier system in East Sussex, but with about 30 per cent. of the population stripped out of it into a separate unitary authority, I simply should not have believed them.
I should say a word about my constituents in Polegate and Willingdon, who will remain part of Wealden. I know that they feel greatly relieved about that, and Wealden is a very well-run council. I am pleased for my constituents in those parts of my constituency. My speech is directed to my constituents in the borough of Eastbourne.
I appreciate that there is always an element of special pleading in such cases, but I make no apology for what I say this evening. Few cases for a unitary authority can have been as strong as that of Eastbourne, a town which had had a long and proud tradition as a county borough from 1910 to 1974.
On that issue there was an outstanding amount of unity in the community, in all political parties, throughout the council, business organisations, voluntary organisations and so on. My hon. Friend the then Minister for Local Government, Housing and Urban Regeneration was good

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enough to say that the delegation that I led to meet him from Eastbourne was one of the most impressive he had seen.
Our brush with the Local Government Commission was an unfortunate experience. I felt that it had placed far too much emphasis on a single, deeply flawed MORI poll. It applied abstract notions which were irrelevant to our real needs. It recognised a strong sense of local identity, but proceeded to ignore it.
In its interim recommendations, the commission produced two options. The first option was the so-called "south downs authority", effectively merging Eastbourne with Lewes and south Wealden. That would have merged communities with different needs and aspirations—a predominantly rural community with a coastal and tourism-oriented community.
The second option, which I dubbed during the process "the option from hell", is basically the position we have now, except that Brighton would have been on its own according to that proposal, and Hove would have joined Adur and Worthing. However, deaf to all entreaties, the commission's final recommendation was basically option 2. The commission never got fully to grips with the special sense of identity in Eastbourne, and its implications.
As I have said, the commission did recognise that identity. I quote from its report:
"The town has a strong sense of place, being a Victorian model town and a former county borough. It is also a significant shopping, business and commercial centre, with good infrastructure to support service delivery which in part reflects its former status as a county borough."
The other evidence is overwhelming. A National Opinion Polls poll showed 74 per cent. support for a unitary authority. A household survey conducted by the council showed 94.6 per cent. support. Even on the commission's green form exercise—in which 14 per cent. of the electorate replied, which is a comparatively large proportion—nearly 70 per cent. of those who replied rejected both of the commission's options and wrote in their preference for the Eastbourne option.
That was the highest percentage vote in England for an option not sponsored by the commission. It equalled the total votes for unitary status in Leicester, Nottingham and Northampton combined. There was ample evidence of that strong feeling in my mailbag.
Eastbourne was a county borough and proud of it, a self-contained town encircled by the downland and the sea, a model town, laid out by the then Duke of Devonshire, described as being built by a gentleman for gentlemen at that time. It was the first town to have its own electric light company, police force and water company, and it had the first municipal bus company in the whole country. It has always been a town that knows where it is going. A more modern example is the £500 million Sovereign harbour development. The town has a tradition of self-governance. [Interruption.]
My hon. Friend the Member for Luton, North (Mr. Carlisle) reminds me that the House once voted through the night, under the persuasion of my predecessor, the late Ian Gow, for that very project.
The population of Eastbourne has increased rapidly. It is now 88,000—not, technically, enough for the rather unimaginative limits imposed by the commission, but we add about 10,000 every 10 years. In the next decade,
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admissions to secondary education are projected to increase by 37 per cent. It is the south-east's major tourist town, with revenues of £110 million a year, 2.8 million visitor nights and 2.6 million day visitors a year. For four months of the year, the population swells to about 150,000. Even in the so-called "shoulder" seasons, it is rarely less than 100,000.
There are also arguments relating to economic regeneration. I am pleased to say that we were recently beneficiaries of £1.5 million from the single regeneration budget. Eastbourne is a town with a long tradition of close co-operation between private and public sectors, especially by means of organisations such as the Eastbourne Business Partnership and the Eastbourne Marketing Group.
There is a major fear that, under those new arrangements, Brighton and Hove and the county will make strategic decisions over the heads of those of us in Eastbourne. Brighton is our closest—and one of our biggest—rivals for tourism, conferences and funding of all types.
We also had strong arguments about the viability of the rump that would be left if Eastbourne also were to be stripped out of the county council. We have provided clear evidence that services such as education and social services would not suffer. We felt that our residual population of about 390,000—nearly equal in size to Shropshire, and more than Northumberland—was more than enough to make the remaining county council absolutely viable.
I make no complaint about my right hon. and hon. Friends who have been wrestling with the contents of this Pandora's box for some time, but I do criticise the role of the county council. Even after the decision to set up Brighton and Hove and to retain a slimmed-down county, the county council has been lobbying hard against Eastbourne achieving unitary status. I publicly described that attitude as "dog in the manger", and I do not resile from one bit of it.
I share the sense of unease left after that process at the failure of the Local Government Commission to appreciate the strength of our case. We felt disappointed about the doubts that emerged later in the process about the Secretary of State's power to modify the proposals emerging from the commission. There was major disappointment that we were not on the list to be referred back to the reconstituted commission.
For all those reasons, it is with real regret that I say that I shall be unable to join my right hon. and hon. Friends in the Division Lobby this evening.
6.10 pm
Mr. David Rendel: It is a great privilege to have a chance to follow such strong criticism of the Local Government Commission with a slightly different speech from that given by the main spokesman for the official Opposition, the hon. Member for Holborn and St. Pancras (Mr. Dobson), who now seems to be in the Government's pocket on this issue.
The whole process of the review of the structure of local government has been a shambles. I have said that before and shall not hesitate to say it again. It has been a tale of incompetence on the part of the Government from start to finish, with guidelines which have shifted radically

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from time to time, an attempt to manipulate the commission to suit the Government's intended outcomes, and a wholly inconsistent process of consultation.
The starting point for the review should have been not the structure of local government but the effective delivery of services to local communities. Yet, as we have seen today, the Labour party has now been dragged into the Government's shoddy game of stitching up county after county for their purposes, despite the fact that Labour Members had previously seemed determined, on behalf of their union friends, to oppose every order as it came before the House.
First, I emphasise that I and my Liberal Democrat colleagues wholeheartedly support decentralising power, not just to unitary authorities but down to town, village and parish councils. But we do that in a way that is informed at all stages by public opinion, and that is how it should be done. It is vital that all the structures of government carry the support and confidence of the people whom they are meant to serve. The fact that the structures set up in 1973 did not do that has caused so many difficulties since.
Mr. John Butterfill: I am interested in what the hon. Gentleman says about the Liberal Democrats being sensitive to public opinion. Does that explain why the Liberal Democrat administration in Dorset so vehemently opposed public opinion in Bournemouth and Poole, and tried its best to deny them unitary status?
Mr. Rendel: The hon. Gentleman knows very well that what is best in terms of public opinion in Bournemouth and Poole may not be best in the rest of Dorset. There are all sorts of views, as I shall show in a moment, and sometimes public opinion in a whole county is not the same as in individual towns and cities. We shall do our best to listen to public opinion throughout.
Many of the boroughs proposed as unitary authorities in the orders before us have not been properly consulted on the specific proposals. I know that the Government have a peculiar view of consultation, but even they must acknowledge that, in many of those cases, local people have not expressed conclusive support for the proposed changes.
Even where reasonable consultation has taken place, there is a huge divergence between the preferences expressed in the NOP and MORI opinion polls. So only some of the orders before us tonight can be said to have the undoubted support of local people, which is why I intend to treat them one by one rather than en masse, as the Labour party seems to wish to do. That is no basis on which to restructure local government.
I have a few comments to make about the practical considerations of implementing and financing the restructuring. The arguments about the provision of strategic services are now well rehearsed, but many people still fear for education and the emergency services, for instance, and for the basic coherence of policy in a number of other areas. It will clearly be up to local authorities to co-operate in various joint arrangements to make those matters work. Unfortunately, the Government give the impression that that is simply not their problem, and that they have no role to play in finding the solution.
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There are also real concerns about finance. The meagre finance support mechanism that is intended to underpin the structural reform is borrowing via the mechanism of supplementary credit approvals. That was to be made available chiefly to the unitary authorities, as the counties were all expected to be abolished. Now that the review is being scaled down, however, it represents a major problem.
In each county, the borough or district that will become a unitary authority will take priority for supplementary credit approval, yet the remaining county will have to foot a large slice of the bill, with only limited access to additional borrowing facilities. That is likely to be a particular problem in Hampshire, and the Government will no doubt have had representations from that county especially.
If capping is to remain in place, it will inevitably mean cuts to services, specifically—almost certainly—to education. But if capping is relaxed, it could mean much higher council tax bills in the coming years for people who have had no say on the matter.
The review has been inspired and instituted by central Government. It is therefore central Government who must ensure that local authorities have sufficient funds to carry the reforms through, even if only through re-prioritising and rescheduling supplementary credit approvals. It would be especially ironic if people who opted for the status quo in their areas on the ground of thrift were now given higher council tax bills because their neighbouring authority had been restructured into a unitary authority.
A related problem could also arise in councillors' representation on police authorities. If councillors from a new unitary authority are to be added to the pool of county councillors on a one-to-one basis for the purpose of selecting the right balance of political representation on a police authority, those unitary councillors will slant the political representation in favour of that existing in their area.
That is clearly not democratic, and will do nothing to improve the workings of police authorities. I know that that matter is a particular concern of the Association of County Councils, and I seek the Government's assurance that that concern will be taken on board and a solution found.
I wish briefly to consider the level of local support for each of the nine counties that we are considering today. I shall take them in the order of the Order Paper. The MORI poll conducted in Thamesdown made it clear that about 50 per cent. of local people were in favour of a change to unitary status and only 11 per cent. wanted to maintain the status quo. In Wiltshire as a whole, the figures were 57 per cent. in favour of unitary status and only 15 per cent. in favour of the status quo. Moreover, the county of Thamesdown and the neighbouring districts were both in favour of that change.
There is undoubtedly a worry about the costs. Annual costs are expected to rise by £2 million and transitional costs by up to 7 million. In that area, however, local support is clear and I shall therefore support that order.
In Staffordshire, the MORI poll showed that, in Stoke, some 39 per cent. of people were in favour of some sort of change, but as many as 35 per cent. were in favour of no change. In Staffordshire as a whole, 39 per cent. were in favour of some change, but 36 per cent. were in favour of no change—very evenly balanced. Moreover, many of

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those, particularly in Stoke city, who favoured change would have preferred an enlarged Stoke city. There has been no real consultation about a unitary Stoke council, so in this case there is not sufficient evidence of local support to support the proposed change.
Mr. Mark Fisher: Will the hon. Gentleman consider for a moment that, by giving the incantation of evidence that he has from MORI polls, he makes a mockery of his protestations that he is in favour of listening to people? He knows nothing about the communities he is talking about, and I doubt whether he has even visited Stoke-on-Trent.
What on earth is the hon. Gentleman doing pontificating about the views of people in Stoke-on-Trent? Will he reconsider his speech, make it considerably shorter, and have more respect for the views of people who live in the communities that he is pontificating about?
Mr. Rendel: I am surprised that the hon. Gentleman does not think that views expressed in MORI polls, and other polls, are worth listening to.
Mr. Fisher: Real people's views are more important.
Mr. Rendel: I should have thought that the real people who respond to those polls are worth listening to, and I am surprised that the hon. Gentleman does not. In Darlington—
Mr. Robert B. Jones: Before the hon. Gentleman leaves Staffordshire and Stoke, he seemed to place a great deal of emphasis on the view that he ascribed to the people of Stoke that the city should be extended. Does he not think that the people of Newcastle-under-Lyme or neighbouring areas may have views which might be in conflict with the views of the people of Stoke, and which must also be taken into account?
Mr. Rendel: Of course the views of surrounding towns need to be taken into account. It is because there has been no proper consultation that there is insufficient evidence to go ahead with the Government's proposal. We do not know what would have emerged had there been consultation on the order.
In Durham and Darlington, the MORI poll showed clear support in Darlington for the unitary principle. It is a pity that there was no consultation on having Darlington as the sole unitary authority, with the rest of the county remaining two-tier, especially because there are worries about the cost of the proposed changes—possibly up to £3 million annually. That will affect Durham county as well as Darlington itself. The people of Darlington clearly wish for unitary status, and that wish deserves to be supported.
In Derbyshire, the MORI poll in Derby showed that 50 per cent. supported some form of unitary solution, with only 19 per cent. against it. In Derby city, the majority was even greater, with up to 66 per cent. supporting it. In Derbyshire as a whole, the figure was 50 per cent. Derby's population of 227,000 makes it one of the largest non-metropolitan districts, and thus a suitable case for a unitary authority.
In the county of Derbyshire, all districts except Chesterfield supported the case for a unitary Derby, and the NOP analysis gave a figure of approval as high as 91 per cent. in Derby. There is still a worry about the annual
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cost of up to £3 million and transitional costs of £5 million, but it seems that local opinion is generally in favour, and the order should therefore be supported.
In Bedfordshire, the MORI poll showed 62 per cent. in favour of a unitary Luton, and only 8 per cent. in favour of no change. In Bedfordshire as a whole, 55 per cent. favoured change and only 13 per cent. were against. Therefore, there is clear support for change, and that is another of the orders that deserves to be supported.
In Buckinghamshire, a unitary Milton Keynes, with the rest of the county remaining two-tier, was the least preferred option in the county, and in Milton Keynes itself. The districts preferred four unitary authorities, and the county preferred a two-tier system to remain. There are considerable extra costs involved—between £1 million and £4 million in increased annual costs and transitional costs of between £2 million and £5 million.
The Government's option for structural change in Buckinghamshire was rejected by the Local Government Commission, which found:
"there has been a lack of general support for this proposal."
I do not believe that there is sufficient local backing for me to support that order tonight.
Mr. David Lidington: Could the hon. Gentleman say whether he supports the option, which was advocated by the districts, of four unitary authorities, which the Local Government Commission said would be a great deal more expensive than that which the Government have brought forward?
Mr. Rendel: I have not attempted to decide which other option is preferable. That would need further consultation with the local people. I have taken what I could of the evidence of what people think about that order, and based my decision on that.
In Bournemouth and Poole, there is considerable support for change, especially in Bournemouth, where the figures are 54 per cent. in favour and 18 per cent. against, according to the MORI poll. That is a much larger proportion than favoured a unitary authority in Poole, where the figures were only 40 per cent. in favour and 35 per cent. against.
However, in the direct representations to the commission, especially from the local councillors concerned, there has been heavy support in both areas for a change. That is not in itself conclusive, but, together with the support shown in the MORI poll, I believe that the order should certainly be supported, particularly because of the high support in Bournemouth.
In East Sussex, which has already caused some controversy tonight, the solution of a unitary Brighton and Hove, with the rest of the county two-tier, was not offered in the consultation process. There was substantial support for no change or for other options, especially in Hove. There is a clear need to re-consult the people in Brighton and Hove on the new proposal for a joint unitary authority. I do not believe that there has been public support sufficient to show that that order should go through.
Finally, in Hampshire, there is much evidence from the direct representations made to the commission of a clear case for both Southampton and Portsmouth to be made into unitary authorities, although the evidence is also

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strong in the case of New Forest. There is great disappointment there that the Government have not gone ahead with a unitary authority for New Forest.
There is concern in Hampshire about the speed with which the Government will move to ensure that ceremonial functions in Hampshire will not be affected by the setting up of new unitary authorities in Southampton and Portsmouth. I hope that the Minister will give Hampshire further assurances on that. There is also a worry about the cost of the change. The annual cost will be up to £3 million, and transitional costs may be as high as £9 million. The MORI poll was somewhat inconclusive, although generally in favour of some change. I therefore believe that there is a marginal case to be made in favour of the unitary authorities.
All in all, this is something of a dog's breakfast. The review of the local authority structure has done considerable damage to local democracy. A review was needed, and local government needs to be brought closer to the people and made more accessible, relevant and responsive. However, very few people of independent judgment would question the view that the Government have made a pig's ear of the job.
Perhaps, in future, Ministers will take more time to listen to local councillors and spend less time pandering to the Tory right. If they do not, they can look forward to ever deeper defeats in local elections—defeats which, so far, have been richly deserved.
6.28 pm
Mr. John Carlisle: On behalf of the 178,000 residents of Luton, and some 500,000 residents of Bedfordshire, I must say that we breathe the most enormous sigh of relief that the hon. Member for Newbury (Mr. Rendel) approved the order that affects us. We were on tenterhooks. We were desperately worried about our future because of the importance of the hon. Member's speech. People would not have slept soundly in their beds tonight had he come down against that order, and others.
The hon. Gentleman's speech was government by opinion poll. So long as the MORI opinion poll said that a particular local populace approved the orders, that was all right with the Liberal Democrats. Never mind the personal opinions that people expressed or the deep historical factors. They were dismissed as pig's ears, dog's dinners or dog's breakfasts.
In the many years that I have been in this place, I have heard some pompous speeches from Liberal Members but that took the biscuit. The hon. Gentlemen had the audacity to go through orders affecting places that he has never, I suggest, seen, visited or even heard of until the orders were published today. To give the House his personal opinion, with no support whatever from other members of his party, and to say magnanimously to hon. Members, who have fought for years for their patches and who have gone through the discussions and deliberations, that he—possibly representing his party—finally approves the orders is almost an insult to the intelligence of hon. Members.
I am glad that the hon. Member for Newbury has sat down because I do not think that many of us could have stood much more. If the Liberal Democrats really mean
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what they say, will they please say that people do matter? The hon. Gentleman and his party have, on many occasions, dismissed opinion polls as irrelevant because they find themselves at the bottom of those polls. They say that opinion polls do not matter and that what matters is people. It is not worthy of the hon. Gentleman or his party for him to give such a pious and pompous speech.
I can speak with some clarity and a great deal of enthusiasm on behalf of the people of Luton and the people of Bedfordshire. We in Luton and Bedfordshire, as my hon. Friend the Member for Bedfordshire, South-West (Sir D. Madel) has said, welcome the order that affects us. We pay tribute, which the hon. Member for Newbury failed to do, to the members of the Local Government Commission for England. They worked extremely hard and spoke not only to residents in the areas concerned, but to Members of Parliament. Perhaps they missed out the hon. Gentleman; I do not know. There were tortuous proceedings and historical discussions, which were absolutely necessary. I pay tribute to the commission for coming up with an extremely satisfactory answer for Bedfordshire.I am sorry that this debate coincides with a speech being made by my right hon. Friend the Prime Minister in the Queen Elizabeth II conference centre. I am sure that my hon. Friends who are present share my disappointment. I know that my right hon. Friend welcomes the orders. If the hon. Member for Newbury presses his rather bizarre thoughts to a vote, we shall ensure that he is defeated.
The order is welcome for Luton. Many of us look back to the pre-1974 days; I speak as a son of the county, having been born and educated there. Before 1974, Luton was a unitary authority, with county borough status, and ran its own affairs. That is why the campaign, admirably led by the citizens of Luton, has been successful. People understand that local authorities must represent the local people; local people have a say and they identify with their area.
People often ask me which constituency I represent. When I say that I proudly represent the town of Luton, they say, "I have been through it," and their face falls. If those people stopped off in Luton, they would find citizens of the highest order—people who are proud of their traditions and of the facilities that the town offers. To return, as I hope we now shall, to unitary status and to be able to look after our own affairs are matters of great pride to us in Luton, and I think that the people of Bedfordshire feel the same.
My hon. Friend the Member for Bedfordshire, South-West rightly expressed to the House and to the Minister certain concerns that are still felt by the county. I appreciate them, but I shall not bore the House by repeating them. There will, of course, be difficult times ahead in the discussions between the Department of the Environment, elected councillors, council officers and the citizens of Luton. As my hon. Friend said, we are worried about the budget and about the decisions that may be made when the shadow council comes into being. I believe, however, that those matters can easily be put on one side. A new spirit of co-operation between the two areas is already apparent.
My hon. Friend the Member for Bedfordshire, South-West rightly mentioned the economic welfare of the south of the county and he was right to point out that we have suffered, as have other areas, from the demise of

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manufacturing, especially in the truck-building industry. My hon. Friend is also right to say that we hope that the unitary authority for Luton will try to restore Luton as a manufacturing base and that it will create some form of employment. There is enormous enthusiasm for regeneration in that part of the county. I congratulate the county council and Luton borough council on their recent success in obtaining £5 million in regeneration grant. We all enjoy the success of Vauxhall and, like my hon. Friend, I hope that the launch of the new car will bring new prosperity for my constituents and for the town of Luton generally. With unitary status, we should go forward on the basis that Luton people are proud of what they have and of what they have done.
There will, of course, be problems in certain areas in the next couple of years, and I shall outline them briefly " to my hon. Friend the Minister. One problem concerns the roads structure. As I hinted earlier, people say that they have been through Luton. They have been through Luton because they have been travelling on one of the main arterial roads of this country—the Ml. In the county of Bedfordshire, we have been lucky in obtaining substantial sums of taxpayers' money to improve our road structure, particularly through bypassing villages and within the borough.
There is, however, a certain concern that, because of the forthcoming unitary status, some of the road projects that are dealt with by the county, especially those within the borough of Luton—I am thinking especially of the Luton east circular road—could be put on one side, even at this stage, by the county council. The road scheme is on the list, but it may not be scheduled for some years yet. Luton will be hived off and there is concern that, because we shall be on our own, grants from the taxpayer may not be forthcoming. There is also concern that the county council may be tempted to say that if a project concerns Luton, it will be left on one side. I ask my hon. Friend the Minister to ensure that if projects come before him, especially if money is made available from the Department of Transport, Luton is not forgotten. I ask that there should be no bias against the town because of its future unitary status.
The hon. Member for Holborn and St. Pancras (Mr. Dobson) talked about a scorched-earth policy and I think that he is right to alert all of us to the difficulties that may occur within the next few years when a county sees part of its area becoming a unitary authority. It would be sad and unnecessary for county councils, whether Bedfordshire, Buckinghamshire, or whatever, to pursue such a policy towards areas that were becoming unitary authorities.
Education is very much a county responsibility at the moment. Some potential problems will be relieved as more schools become grant-maintained; I was interested to note that the hon. Member for Holborn and St. Pancras did not mention that point. If more educational establishments move towards grant-maintained status—I hope that schools in my constituency will do so—the transition period will be so much easier. Not all schools, of course, will go in that direction. For that reason, it is right that the transition should take place as quickly and as smoothly as possible.
In Luton, we have retained an education system in which schools do not have a sixth form. I make this plea to those who may be elected on to the unitary authority, either as shadow councillors or as proper councillors in
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1997. We should perhaps consider bringing back the sixth form to some of our schools. We have a superb sixth form college which I am proud to have in my constituency. I believe, however, that many schools are being held back because they do not have a sixth form. If there is any spin-off advantage from unitary status, I hope that sixth forms may come about.
The other two major activities in the town are the airport and the university. I hope that the airport will go from strength to strength, especially when we have sense enough to ensure that it is put fully into private hands. It is rather sad that there is still some resistance from the Labour council and that there was some cowardice on the part of the former Tory council.
The other plus for our area is the university, which has provided for many students, from my constituency and from many others, an enormous benefit. It is a place where students can get an excellent education. My hon. Friend the Member for Luton, South (Sir G. Bright)—I am sorry that he cannot be here with us this afternoon—made an excellent speech on the subject just a few weeks ago.
Overall, on behalf of my constituents and the people of Luton, I welcome the order. We have been wanting for a long time to return to managing our own affairs and to be rulers in our own fiefdom. It has been welcomed by the people of the county, who, in effect, are staying where they are. The commission's recommendation is right. Luton very much looks forward to unitary status. We can go from strength to strength. On behalf of my constituents, I support this excellent order.
6.40 pm
Mr. John Denham: I welcome the decision to return powers to the city of Southampton and, as the only Hampshire Member present in the Chamber, the decision to return powers to Portsmouth, which I know will be equally welcomed there. It will put both the major cities in Hampshire in a strong position to make the most of their strengths as they move into the 21st century.
I pay tribute to all the people in Southampton who have pressed consistently for this change for the past 20 years, and, if I can strike a partisan note, particularly to the Southampton Labour party and its councillors, who have been unwavering under the Labour Government up until 1979 and the present Administration in pressing for the return of powers to the historic city of Southampton. I believe that the change reflects unambiguously what the vast majority of people in Southampton want to see.
I listened with some amazement to the speech of the hon. Member for Newbury (Mr. Rendel). He provided some explanation for a question that had puzzled me: why the Liberal Democrat members on Southampton city council had voted consistently for a return of powers, whereas their councillors, who represent the same people in the same wards, had reflected, they said, the views of the people by voting against the change, and, on the occasions when those councillors were one and the same person, managed to support both policies on two different councils. Despite the finesse of the analysis of the MORI poll, I suspect that what we heard earlier will lend itself more to numerous ambiguous statements in numerous Focus leaflets in different parts of the country than any serious analysis of what local people in different parts of the country want to happen.

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It is a matter of regret in Southampton that, unlike many other places—I acknowledge what other hon. Members have said—the Conservative party has not supported the return of powers for most of the past 20 years. It has taken a rather curmudgeonly attitude on this issue, which, no doubt, is why it is now in third place in the city that it once controlled. None the less, half the Conservative Members supported the change when it was recently discussed, and I welcome that.
Over recent years, the Labour leadership of the councils of many of the towns and cities that will now enjoy renewed powers has established public confidence in the idea that powerful unitary authorities can play a leading role in making those towns and cities successful. I believe that that is the case in Southampton. The case for a return of powers is based not simply on sentiment and historic identity, although historic identity and pride in it are important to us, but on a confidence that good local government with a clear-cut set of responsibilities, which is close to the people, can be most effective in shaping the future of the city.
The period between 1975 and 1984 was stagnant for Southampton. The Conservative-controlled council did little or nothing as jobs in traditional industries slipped away. The election of a Labour council in 1984 coincided with, and, I believe, helped to lead, a real revival and transformation in the city. I say "helped" to lead, because I am under no illusions that the role of councils is not just in the direct services that they provide, but in the quality of the partnerships that they build with other organisations and with other parts of the community, which constitutes real leadership of a city.
That has certainly characterised my city over the past 10 or 11 years. In that time, the old docks have been opened up for leisure and housing. We have seen significant new retail, office and industrial developments. New hotels have been established. New arts centres, the Mayflower theatre, the Gantry and the Harbour Lights film theatre have been built. The city has come alive with film, music and other festivals. There has been a significant expansion of community and sports facilities. The city council has worked closely and consistently with the private sector and the business community to build strong links with the European Union and the Russian federation. The council has worked particularly closely with neighbouring authorities, such as Bournemouth, Poole and Portsmouth in the south coast area, which will be important in developing our regional economy and its links with other parts of Europe. It has worked closely in partnership with housing associations to build new social housing, and with the private sector to open up flats above shops. It has one of the most successful records of any authority in the country.
We also have much to look forward to: a £250 million retail development in the city centre; I hope very much a new stadium for the Saints; a major expansion of the marine science and engineering industry, based, I hope, on the existing skills in the local economy and the new department of oceanography, which will move into its new building in the docks in the autumn; and, of course, the continued expansion of higher education at the university, at the Southampton Institute and the La Sainte Union college, which, as they have expanded, have played such an important part in the life of the city in the past five years.
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What is important is not only the partnerships that have been formed but the style of local government, which has built public confidence in the future of the city. In particular, there is a deep commitment to decentralisation and devolution of power. Over the past few years, there has been a major expansion in the role of tenants organisations, so that they are not only consulted but are key players—for example, in determining matters as basic as the level of rents in the local council housing service, and in many of the issues on the local estates. Every area of the city is covered by community forums, which give local people direct access to council officers and the right to work with them without having to go cap in hand or with the leave of the local councillor to change and shape local services. I believe that that is the style of local government that will be appropriate to Southampton in the future.
It would be wrong to suggest that the relationship between Southampton and Hampshire has been poisonous, or one based on a total lack of co-operation. There have been many issues on which there has been good co-operation between the two authorities. I recognise that entirely. There have, however, been tensions, which I hope will diminish in the future. As the majority of members of the county are from rural and suburban areas, there has often been a difficulty for the county in recognising exactly what needs to be done in the major cities if they are to play a powerful and central role as regional centres for the local economy. There has been a failure to understand, most recently in the discussions about the Saints football stadium—the community stadium—the importance of such a development for the identity of a city: it is not just a place in which a premier league football team can play.
Problems have been caused simply by remoteness. Hampshire has 1.5 million people, and in an elected authority that means that the elected members are too far away from the people whose interests they are supposed to serve to have a real hands-on feel for what is happening in local decisions. The reality is that many of the decisions in Hampshire have been taken by local government officers who are quite removed from the local communities that they serve and from the members to whom they are nominally accountable. Although many of them are excellent professional officers, I believe that working under the guidance of a local authority that is much closer to the people will improve the quality of the services.
Mr. John Carlisle: Will the hon. Gentleman confirm that his local council is fully supportive of the move of Southampton football club to the site that it envisages?
Mr. Denham: If the hon. Gentleman means 100 per cent. of the members, that would be wrong, but an overwhelming majority of the city council is supportive, including all of the Labour group—the ruling administration—and two thirds of the Liberal Democrat group. Between them, that constitutes something like 36 out of 45 councillors. The proposal has had overwhelming support from the city council, and we have been very grateful for the firm affirmation by the Secretary of State for the Environment that the site chosen is the best site available in the local area.
The final problem in the relationship between the city and the county is one with which all Members whose councils have a two-tier structure will be familiar: the

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sheer duplication. It is extremely difficult to explain to a local community why it takes two councils to paint a yellow line on a road, and often two to repair a pavement and to introduce a traffic calming scheme. The city looks forward to having new powers over education and social services and delivering those services in partnership with schools, voluntary organisations and the social services structure.
I should like to make a few comments about the problems that could be faced in the next two years. The arguments on the finances of the transition can go both ways. It is difficult to establish whether there will be a cash saving or a cash cost. The differences are at the margins of local government expenditure. In my view, the value for money that we shall seek from the change is not so much cash savings as the spending of funds more efficiently and more closely to the priorities of local people than happens under the existing two-tier structure. That will be the challenge for the new authority. Southampton city council will have to show that, working with the resources that it has, it can deliver services that are closer to what the people of the city want.
I am worried about what will happen in the next 18 months. The county council is desperately short of finance. I do not have fears, certainly on the present evidence, of the scorched-earth policy in Hampshire county council of which some hon. Members have spoken. However, this year it had to make cuts of some £20 million. Although the Minister may say that there is no budget settlement for next year, on current trends the council will have to make cuts of about £38 million.
Serious reductions in services, such as the abolition of the school meals service, are being contemplated by the county council. It would be a serious problem for the residual county council and for Southampton and Portsmouth if such damage was done to the quality of county services in the next year, that the new authorities were perceived as starting out with a lower level of services in 1997. I urge the Minister to examine those issues carefully when the budget settlement for local government is made next year.
It is important that the transition can take place in a way that ensures that there is a straightforward handover of services to the new authorities. Declining services and low staff morale should not be inherited by the new unitary authorities because that would make the job of establishing them much more difficult than needs to be the case. I hope that those issues will be taken on board seriously in the autumn when the budget settlement is reached.
6.52 pm
Mr. John Butterfill: My constituency of Bournemouth, West comprises almost half the borough of Bournemouth and a significant part of the borough of Poole. I know from my consultations with people in both boroughs that an overwhelming majority of the residents warmly welcome the orders before us this evening.
There has been considerable tension for many years between the urban area which comprises the south-east conurbation—primarily Bournemouth and Poole—and the rural county that surrounds it. There has been for some time a feeling that many of those elected to serve in the rural county have little understanding of the needs and
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problems of an urban area and vice versa. That inevitably has created a certain tension. That tension has probably been more acute in Bournemouth than anywhere else.
Bournemouth previously had a proud tradition as a county borough. It ruled itself successfully and became a prosperous leading resort in the United Kingdom while it was a county borough. Therefore, there was considerable resentment when in 1974 it was plucked out of Hampshire and thrust into the rural county of Dorset, largely to provide rate product for an impoverished rural county. From then on, Bournemouth felt that its needs and concerns were not met within the county of Dorset.
However, a modus vivendi was established. It was always rather tense, but never more tense than it has become in the past couple of years since the county administration has been controlled by the Liberal Democrats. It says something for the strength of local feeling against the incompetent and insensitive administration that we now have in county hall that councillors of all parties—Conservative, Labour, independent and even the Liberals—in the boroughs of both Bournemouth and Poole are unanimous in their wish to escape from the grasp of the county administration run by the Liberal Democrats. It is hardly surprising that that should be so when one considers the record of incompetence that we have had to suffer in Dorset under their rather malign administration.
Mr. Rendel: Does the hon. Gentleman feel that the results of the local elections this year demonstrate that people have turned against the Liberal Democrats in Dorset?
Mr. Butterfill: I can only speak for the results in my constituency of Bournemouth, West, where we won a seat back from the Liberal Democrats. That fairly conclusively shows what the feeling is in my constituency.
It is true that the councils are united in their wish to escape from the grasp of the Liberal Democrats in county hall. It is true that the administration is incompetent. It is true that it is cutting services throughout the county and claiming that the cuts are the result of Government cuts. I have here a leaflet which says that reductions in library hours are due to Government expenditure restrictions. That is despite the fact that the Government grant to Dorset has been increased by almost £12 million or 4.7 per cent. in the current year. That is almost double the average for county councils.
The reality is that Dorset county council is spending more than £24 million above Government recommended levels on capital expenditure to build new schools to fulfil its election pledges, which were mind-boggling. They were simply bribes to the electorate. In order to fulfil those pledges, the council has had to cut all the other services. For example, it has cut the social services budget dramatically even though it has had a substantial increase of 12.6 per cent.—£8.8 million last year and £8 million again this year. It is blaming that on the Government.
Dorset county council has even cut the education revenue budget, the library budget and the fire service budget. It is spending huge sums of money that it has gained from the sale of assets. It has just agreed to sell—thank goodness—our local airport. The receipts from the sale will be about £7 million. When challenged to say whether it would use some of that money to restore the cuts that it made in social services, it declined to do so simply because it wants to keep its irresponsible election

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pledges on the building of new schools. Of course we all agree that we want to build new schools, but not all at once or all in one year.
Therefore, we shall be very pleased to escape from the grasp of Dorset county council. It claims to be a competent and responsible administration, but, in education spending it spent £660 per pupil per annum on central bureaucracy, which is more than most other shire counties, even though Dorset is assessed by the Department for Education as having one of the lowest needs to spend.
The root of the problem is that Dorset county council is incompetent. That is why we in Bournemouth and Poole will be glad tonight to escape from its grasp. We warmly applaud the orders.
6.58 pm
Mr. George Stevenson: Someone said—the name escapes me for the moment—that a week is a long time in politics. [Interruption.] I hear one of my hon. Friends saying that it was Lord Wilson, who has sadly died. So 23 years can qualify as a long time. That is the period during which the people of Stoke-on-Trent have been campaigning for a return to their former status as a county borough. Therefore, the order covering Staffordshire and Stoke-on-Trent is extremely welcome.
One reason—by no means the only reason—why the people of Stoke-on-Trent have been campaigning for a return to their former status since 1974 is that that reorganisation has never been understood or accepted. If a local government structure is not accepted after all this time by the people whom it purports to represent, it is fatally flawed. We welcome the fact that after 23 years, albeit a long time, the Government have brought forward the order this evening.
The order is also welcome because the former county borough of Stoke-on-Trent had an excellent record in the provision of services. For example, nursery school provision in Stoke-on-Trent is by far the best in the county of Staffordshire. That is not because of developments that have taken place since 1974, because there have not been any. It is because the former county borough of Stoke-on-Trent placed nursery education at the top of its agenda and spent its resources accordingly. Stoke-on-Trent has excellent nursery services because of the actions of the previous county borough.
Despite the best efforts of Staffordshire county council and Stoke-on-Trent city council during the past 23 years, the present system simply has not worked. Therefore, we welcome and support the order. However, I have one or two points of concern to put to the Minister.
Before I do so, I refer briefly to the forensic analysis of the situation in Stoke-on-Trent by the hon. Member for Newbury (Mr. Rendel). The swathe of knowledge displayed by the hon. Gentleman about Stoke-on-Trent was staggering. It was exceeded only by what must be the most arrogant speech that I have ever heard in all my time in politics.
For the record, Staffordshire county council supports the change, Stoke-on-Trent city council supports the change, and business, industry, voluntary organisations and the people of Stoke-on-Trent support the change. The
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management of the Wedgwood factory, which is just outside Stoke-on-Trent, is so impressed with the unitary authority that it fought hard for the factory to be included in the unitary authority of Stoke-on-Trent and I am pleased that the Government accepted that.
All the political parties in Stoke-on-Trent support the change. In year after year of fighting elections in Stoke-on-Trent, the election addresses of all Labour candidates have included a pledge to continue to campaign for the restoration of powers in Stoke-on-Trent and the creation of a unitary authority.
Yet the hon. Gentleman has the temerity to suggest that the people of Stoke-on-Trent have not been consulted. Where does he think that we have been for the past 20 or 30 years? Does he really think that when we go back to our constituencies we sit in a little corner and make up our own minds? Will he at least have the good grace to accept the possibility that, as constituency Members of Parliament, we talk to the people whom we represent, or has that thought not occurred to the hon. Gentleman?
In the May elections this year, a continued commitment to and welcome for unitary status in Stoke-on-Trent was put on every Labour party election address and we won all the 20 seats available. That shows that the hon. Gentleman's suggestion that the people of Stoke-on-Trent have not been properly consulted and do not want the change is not only misplaced but arrogant in the extreme.
If the changes are to work—we all want them to work—there must be the maximum co-operation between the county council, the city council and the Government during the period of transition. The maximum amount of flexibility is needed to ensure that the change is made as smoothly as possible in everyone's interest so that the new authority can begin to work as effectively as possible from the day of the change.
Stoke-on-Trent already has in place a system of consultation and liaison between Staffordshire county council and the city. Progressive plans have been laid for the future which show the determination of Stoke-on-Trent city council to carve out a successful future for the area, and that despite the fact that the area has suffered enormous job losses as a result of pit closures, the halving of employment in the pottery industry, and so on. There is a need for considerable investment in the area.
The Government have an important role to play in the provision of such investment. The city has plans for private and public investment, but we desperately need the Government to be as flexible as possible in the provision of resources so that the great challenges that Stoke-on-Trent will face now and as a unitary authority can be effectively addressed.
There are two particular matters concerning resources that I wish to put to the Minister. The first reiterates a plea that has already been made by a Conservative Member for the relaxation of capping levels. If the Government simply transfer the present capping regime to the new unitary authority, not only will that show how damaging the capping regime has been previously, but it will be catastrophic. I hope that the capping regime will go, but that may be asking too much of the Government. At the very least, the capping regime should be examined and some flexibility shown.
The second matter relates to standard spending assessments. There is particular concern in Staffordshire, and certainly in Stoke-on-Trent, about the area cost

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adjustment element of the SSAs. Representations on that have been made to the Government and I think that they have accepted that the area cost adjustment element is discriminatory and has to be reviewed. I make the plea this evening that if the new unitary authority in Stoke-on-Trent goes ahead with the same discrimination built into the SSAs on education and other services, it will remain at a distinct disadvantage compared with many other areas. We need assurances that the Government will take action on the area cost adjustment element of SSAs as they affect the new unitary authorities and as they will continue to affect the remaining county council.
I was a little worried when the Minister, in response to questions from two of his hon. Friends earlier, said that the Government intend to bring forward orders that will debar county councillors who retire at the end of April 1997 from having any input into the budgetary process before their retirement. I did not know of those plans, but they highlight a number of important issues.
I appreciate the Government's concern about budgetary considerations affecting the residual county council in the year following the transition; but such arrangements should not prejudice a fair distribution of resources from the county to the unitary authorities. We need an assurance from the Government that any move to deprive Stoke-on-Trent city councillors of an input into budgetary provision will not compromise a fair transfer of resources from county to city.
I assume that, during the transition period, the Government will be prepared to consider representations from the "shadow" authority, through its Members of Parliament, just as they would consider representations and delegations from the previous authorities.
The orders are warmly welcomed in Stoke-on-Trent, and I am sure that—despite the Liberal Democrats—they will be strongly supported this evening.
7.10 pm
Mr. David Lidington: I, too, congratulate my hon. Friend and constituency neighbour, the Member for Hertfordshire, West (Mr. Jones), on his promotion. I also thank him and the rest of the ministerial team for the patience and courtesy that they have shown throughout a controversial debate in Buckinghamshire about the future structure of local government in the county.
Many different opinions have been strongly expressed in the debates that have taken place over the past couple of years. I confess that, at times—representing, as I do, a constituency that not only falls within the county council area but includes parts of three district councils—I felt as though I was in the line of crossfire between opposing trenches. Despite the strictures levelled at the order by the hon. Member for Newbury (Mr. Rendel), I believe that we are now discussing the reasonable outcome of that debate.
I appreciate that the hon. Member for Newbury may not have had time to study in detail the many Local Government Commission reports and orders on which he has commented. I think it fair to add, however, that the surveys conducted by or on behalf of the commission show a consistent theme: the majority of residents of the borough of Milton Keynes—between 50 per cent. and 60 per cent.—wanted an outcome that would give the borough unitary status. The controversy within Buckinghamshire centred on whether the area outside Milton Keynes should retain a two-tier system, as is now
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proposed, or should be divided into different unitary authorities. In my constituency, which includes the county town and nearby areas, there was a strong surge of opinion in favour of the status quo, but I should acknowledge that strong contrary views were expressed in other parts of the county—for instance, in High Wycombe and Beaconsfield.
A number of practical issues need to be tackled if the new structure is to be introduced smoothly. Like my hon. Friend the Member for Bedfordshire, South-West (Sir D. Madel), I am concerned about the future allocation of standard spending assessments and about supplementary credit approvals. I also share his anxiety, and that of my hon. Friend the Member for Luton, North (Mr. Carlisle), about the position of members of the existing county council who represent wards which, after 1997, will form part of a new unitary authority.
My understanding of the order was that elected county councillors would continue to sit on the county council and enjoy full voting and policy-making rights until the next county council elections in 1997. That would imply that those councillors—in the case of Buckinghamshire, those representing wards in Milton Keynes—would be able to participate in the setting of the budget for the financial year 1997–98, and hence in the determination of council tax levels for that year. Moreover, if—as I personally hope—the Government relax the present capping limits significantly, the potential difficulties created by that arrangement may well be aggravated. The position of Milton Keynes county councillors would not affect overall political control within Buckinghamshire, but I suspect that the circumstances would be different in other county councils where part of the county is being hived off as a separate unitary authority.
The Government have not yet been able to come up with a decision on the parishing of unparished areas, which was the subject of recommendations from the Local Government Commission. My hon. Friend the Member for Milton Keynes, North-East (Mr. Butler) has asked me to remind the ministerial team that parts of his constituency—and parts of the new unitary authority of Milton Keynes—would, under the current arrangements, remain unparished, while most of the area would be subject to parish councils; and that that distinction would appear, in his case, to be based less on strict logic than on the historic pattern of the development of the new city of Milton Keynes.
The Local Government Commission firmly recommended that Aylesbury, my constituency, should be parished, and that the proposed new town council should take over the civic responsibilities currently exercised by the charter trustees—and also act as a voice for the town, playing a role comparable to that played by parish and town councils representing the smaller towns and villages in my constituency.
I accept that Ministers must strike a balance. On the one hand, however, we need to find a way to allow the view of an authentic local civic community to be expressed in debates about planning, housing allocations and other matters discussed in the context of a particular district or county, while on the other hand we wish to avoid inventing a new system in which people are unnecessarily over-governed.
Those who responded to the commission's consultation exercise in Aylesbury said that they wanted a town council as a focus for civic identity, for ceremony and to

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give the town of Aylesbury a voice that it lacks at present, but which is enjoyed by such places as Wendover and Princes Risborough through the town and parish councils that represent those smaller communities.
Although the debate in Buckinghamshire has been intense and, at times, bitter, it is now of the utmost importance that all local authorities accept the decision that has been reached, and work together for the smoothest possible introduction of the new arrangements and the best possible system of local government. I know that Buckinghamshire county council intends to hold firmly to its promises to the commission and to the Government that it would try to enhance the local relationships between county hall and individual town and village communities in Buckinghamshire.
The county has much to be proud of in its history and in its record on the delivery of services. Each district council in Buckinghamshire has also sought to establish a tradition of providing efficient and cost-effective service. I hope that, despite the disappointment that the district councils in Buckinghamshire have felt at the Government's eventual decision, those councils will work to make a success of the new system.
If there is a Division tonight, I shall support the order, and look to the elected representatives of all parts of my county and of all political parties to ensure that the new system works well on behalf of the people whom we all seek to serve.
7.20 pm
Mr. Mark Fisher: This is an important, indeed, historic day for Stoke-on-Trent. Ever since it lost powers in 1973, the return of those powers, especially those over education, social services and public libraries, has been the dominant political and social issue in that city and, I suspect, in most of the authorities that will regain their powers with these orders tonight.
Like people in other regions and cities, we have campaigned, lobbied and argued for 23 years. When I say we, I mean industry, the voluntary sector and all political parties. There has been complete unanimity in Stoke-on-Trent, as, I think, the Minister and other Ministers in the Department of the Environment know from their visits to the city. That campaign has been ably, articulately and passionately led by the present leader of the city council, Councillor Ted Smith, and by its new chief executive, Bryan Smith. It has been an articulate campaign. All those people and everyone in Stoke-on-Trent is grateful to the Minister, to the commissioners and to my hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) for having got us to this position.
The reasons why we, like others, are anxious to regain our powers do not simply involve regaining control and grandiose ideas of running our own affairs. There are good practical reasons why a unitary authority offers benefits to a community. It brings government much closer to the people. That is especially important for education and social services, which involve personal service. Singular unitary authorities give a coherence of integrated services. Up to now, the interaction, particularly between housing and social services, has been separated in all these authorities. That has been a permanent source of grievance.
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I would have thought that every hon. Member has constituents who come to them and say that they want a housing transfer so that they can be near their elderly parents, look after them in their parents' home, maintain their independence and not have them go to an old people's home. Potentially, that saves the local authority a great deal of money and makes a much better life for such people. When housing and social services are in two different authorities, however, often that is not possible. Indeed, no economic or other incentive exists for the two authorities to co-operate. The frustration that every hon. Member faces with such cases is nothing compared with the misery unnecessarily caused to people. There is an inability to bring together those two crucial services to make a difference to elderly people's lives because those responsibilities are split between two different authorities. There are therefore economic as well as human gains.
In almost all these cases, certainly in Stoke-on-Trent, by having a unitary authority, we are able in that authority to reflect a cultural identity and integrity of a region. In Stoke-on-Trent, the health authority, the travel-to-work area, the local radio stations and the local press all serve a coherent community, the responsibility for which up to now has been split between a county council and a city council. That just simply does not make sense and does not make for good government. There are therefore good practical, pragmatic reasons.
When faced by the scale of social problems that 16 years of this Government's neglect and hostility towards local authority education, housing and social services have caused, and the poverty and unemployment that we are experiencing in Stoke-on-Trent, we need all the coherence and efficiency in running our services to deal with those problems.
Of course, a unitary status is a cure-all for none of those communities. Good government or bad government is possible in any structure but at least unitary status and unitary authorities offer an opportunity to use money better, to get better value for money and to get closer and more personal local government. At least it gives the chance of eliminating one cause of inefficiency in local government, which occurs when two authorities follow strategies and policies that pull in opposite directions.
One or two wider points affect Stoke-on-Trent and probably go wider into national policies. For most of this century, there has been an anti-city trend in the urban policy, especially in relation to planning, of Governments of both political parties and of industry. There has been at best a scepticism about the viability of living in inner cities and often great hostility. It is reflected in the work of people such as Ebenezer Howard, and in the move to suburban living, garden suburbs, urban sprawl, ribbon development, depopulation of inner cities and the deindustrialisation of inner cities.
That trend has been going on throughout this century. Such trends are both reflected in and aggravated by responsibility for Stoke-on-Trent and for the big 11, as they were called—including Cardiff, Swansea, Southampton, Bristol, Hull and Portsmouth—being split between authorities that were rightly concerned about their rural populations, and authorities that had joint responsibility for cities.
It was impossible to deal coherently with that anti-city bias which has existed in both political parties for most of this century. While we have reflected that, Europe has been going in the other direction. Especially in the past

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10 or 15 years, European cities such as Rotterdam, Amsterdam, Barcelona and Frankfurt have had a pro-city policy and strong coherent local government. They have rebuilt their inner areas, trying to attract people back to live there and to attract jobs back.
The difference between our attitude historically towards cities and European attitudes is especially important as cities are such a competitive business these days. All cities are competing desperately, both with cities in this country and cities in Europe, for the same pool of inward investment from the private sector, from Governments, and from the European Community. All are competing for visitors and tourists and fighting desperately for their economic future and their economic lives. Our cities have not had coherent, unified planning authorities. We simply have not been able to compete on an equal footing with other European cities, and it shows.
Hon. Members will know about this matter from visiting places such as Barcelona. The coherence of its city authorities is one of the reasons why it has been able to deliver high-quality living standards and a sense of purpose and profile that the non-metropolitan cities in this country—important European cities such as Nottingham, Cardiff, Swansea and Bristol—have had great difficulty in achieving. They have not been able to compete because they have been living a split life under local authorities. Non-unitary status has therefore held us back.
There is a knock-on benefit from the orders. Hon. Members on both sides of the House will have read the Council for the Protection of Rural England's report last week about urban sprawl. If we have strong local authorities which attract people back to live in the cities, it will help to preserve the countryside. It will be good for the environment; it will reduce the need for commuting and will reduce energy consumption through travel. That is the only way that the country can go. Whether deliberately or inadvertently, by providing the opportunity for much more coherent, positive and strategic planning of major cities such as Stoke-on-Trent and Southampton, the orders have enabled us to correct the balance and bring about a generation of pro-city policies which will be a big historic change for this country.
It is ironic that these orders now leave London in an extraordinary position. It is the only capital in Europe without a democratically elected strategic planning authority and it is the only city of any size in England that does not have single unitary authority status. It should be of concern to everybody in this country, regardless of whether one lives in London, that our capital city is held back from competing with Rome, Paris and the other world cities with which it should rightfully compete because it does not have the unitary status that we are, rightly, giving to the other major cities.
Those of us in Stoke-on-Trent are delighted by the orders and by the work that the commission and the Government have undertaken over the past few years. We know that there will be transitional problems and other hon. Members have already referred to them. I hope that the Government will look at the funding arrangements. This transition is not cheap and the Government have underestimated the costs. As my hon. Friend the Member for Stoke-on-Trent, South (Mr. Stevenson) said, the Government should at least look at relaxing the capping mechanisms and should look again at the area cost adjustments and the standard spending assessments. The
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transition is taking place in difficult times and I hope that the Government will be as constructive about that as they have been about other matters.
I hope that the Minister will look again at the barring plans for consideration of budgetary matters by councillors in city areas of the old county councils. If the Minister's edict is passed, he knows that Staffordshire would be put in an invidious position. The longest serving leader of a county council, Councillor Bill Austin, is a Stoke councillor and, in the last year of the old county council, we will be in an extraordinary position in that Councillor Austin will be unable to participate in the budgetary considerations of the local authority that he leads. I am sure that that will not be unique. The Government should look at that.
I think that we all understand that there should be transparency and openness, but I am not sure that barring is the only way to achieve that. The Audit Commission and the Government will need to ensure that the division of reserves and other matters is fairly and properly done. All authorities are aware of that, but there will be an important ring-holding role for the Government.
We know that as well as the technical problems there will be social problems surrounding the transition. As my hon. Friend the Member for Stoke-on-Trent, South has already said, our city council has made an early start and is anticipating the policy developments and initiatives that will be necessary. The city council is doing a good job talking to head teachers and those involved in social services in trying to get strategies up to speed.
As I have said, Stoke-on-Trent is enthusiastic about the orders and we are grateful to the commissioners and the Government for them. We cannot wait for April 1997, not least because that will almost certainly coincide with a Labour Government. The combination of a Labour Government and unitary status for Stoke-on-Trent in the annus mirabilis of 1997 will mean a positive future for the city.
7.33 pm
Mr. David Atkinson: Like my hon. Friend the Member for Bournemouth, West (Mr. Butterfill), I want to record an unreserved welcome on behalf of my constituents for the Dorset order, in so far as it relates to Bournemouth. It puts right the injustice that was done to us in 1972 when the House decided to abolish the county borough councils. Until then, Bournemouth county borough council had proved to be one of the most efficient, low-cost, value-for-money unitary authorities anywhere, as was Southend-on-Sea county borough council on which I was serving at the time.
We jointly and fiercely resisted the Government's proposals at that time. We could not see how the remote control of all the major local government services could possibly be improved from county hall, even though those elected to represent us from Bournemouth undertook leading roles to make it work. I should like to pay tribute to Alderman Derek Scott, Michael Green and Jeanne Curtis who did so much in that respect for Bournemouth and Dorset at Dorchester.
Sadly, much of what was feared has been proved right. The county has failed strategically to plan for the explosion in demand for school places in Bournemouth, especially in our primary schools, and the problem facing those schools will be transferred to the secondary schools

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before the end of the decade. Despite that, the county closed the Beaufort school complex at Southbourne in my constituency just a decade ago. As we heard from my hon. Friend the Member for Bournemouth, West, it is now having to find sites for new schools.
There is growing concern about the provision of community care, especially for the elderly and disabled. The Liberal Democrat-controlled county council proposes to raise domiciliary charges by a massive 700 per cent. Recently, the county council irresponsibly abandoned plans to complete our inner urban highway which would link Wessex way to Dorset way and which had been planned by the former county borough council.
During this period under the control of the county council no service in Bournemouth has suffered more than the library service. During that time, no new libraries have been built in Bournemouth whereas Weymouth, Gillingham, Crossways, Lytchett Minster, Corfe Mullen, Ferndown, Littlemoor, and Creekmoor have all seen the erection of new libraries. Whenever the county wanted to save money it tried to close libraries in Bournemouth. For example, it tried to close Ensbury park in the constituency of my hon. Friend the Member for Bournemouth, West as well as Springbourne and Strouden park in my constituency. Fortunately, the plans were thwarted, mainly through local protest. Plans for the desperately needed new central library in Bournemouth have twice been cancelled at the last minute by the county council—once in 1974 and most recently in 1993. Among Bournemouth libraries, only Westbourne has seen any significant improvements.
As we heard from my hon. Friend the Member for Bournemouth, West, the opening hours of the libraries have just been cut and most are to see a further reduction of three hours a week in the current year. The council is seeking to blame the Government for that when it is entirely its decision and responsibility.
It was clear to all of us that Bournemouth had no future in Dorset. That is why the Local Government Commission found such widespread support for what is proposed in the order. I congratulate this Conservative Government on providing us with an opportunity to make a case for the return to a unitary authority. I want to record my thanks to the commission for accepting Bournemouth's case in full. I believe that Sir John Banham undertook a difficult job and that we should give him credit for the way in which he carried it out. I congratulate my hon. Friend the new Minister of State on his promotion and I thank him and my hon. Friend the Minister for Local Government, Housing and Urban Regeneration for accepting without compromise the commission's recommendations for Bournemouth.
We are now actively planning for a successful transition in 1997 with the full co-operation of the county council. I very much hope that when my hon. Friend the Minister of State sums up the debate, he will use the opportunity to confirm what my hon. Friend the Minister for Local Government, Housing and Urban Regeneration said in answer to my question to him earlier about the election timetable in Bournemouth. Are we to understand that elections to the new authority which takes over in 1997—elections to the shadow authority—will take place in May 1996 and that the present authority, which was re-elected this year, will continue to serve until the new authority takes over in 1997?
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Whatever the outcome of those elections next year, I hope that men and women of calibre and experience, not least in managing multi-million pound budgets and in the purchasing of services, will be elected. Further thought should be given by my hon. Friends the Ministers about how to attract and encourage such people to offer themselves as candidates in those elections next year. We must seek to reduce further the amount of time that they will have to commit to local government service and the almost inevitable loss of income and career prospects that many of them will experience should they be prepared to stand for the new unitary authorities.
In conclusion, I am sure of one thing: the conduct of all local services from under one roof over the town hall will lead to their more efficient provision for my constituents. That will be to the eternal credit of the Conservative Government, led by my right hon. Friend the Prime Minister.
7.41 pm
Mr. Harry Barnes: It was, perhaps, natural—a Pavlovian response—that, when the Government Whip saw me in the Chamber, he assumed that I was here to force a Division on the order that relates to Derbyshire, even though it is supported by the Labour Front Bench. It would not be unusual for me to act in that way, but I can assure him that I am content with the order. I am not a zealot who has come to the Chamber to argue against it. The order is entirely in line with my initial submission to the boundary commission when it began its investigations into Derbyshire.
The hon. Members who strongly dislike the order are the Conservative Members of Parliament who represent Derbyshire—and they are not present tonight. They dislike it because one of its consequences is that Derbyshire county council, less Derby, remains. They fundamentally and unreasonably oppose many of the actions taken by Derbyshire county council. They often argue in the House against the work that it does.
The Government are in an odd position in relation to the order. They are presenting it to the House now but, for three years, and until recently, they worked against what is now being proposed. They did not work against the proposal for a separate unitary authority of Derby, but they were against allowing Derbyshire county council to remain intact.
The first sign that action was being taken against Derbyshire was when it was revealed that it was to be examined by the boundary commission under the first tranche of proposals. Although the commission had to go back to the Government to obtain agreement, we had to consider the matter carefully and try to protect Derbyshire's external boundaries.
The parliamentary and local government boundary commissions were operating at the same time, and they were sending submissions to each other—partly to keep each other informed and partly to influence each other. The parliamentary constituencies in Derbyshire could have been changed and overlapped into other areas, which would have affected the shape of Derbyshire. My initial approach was to seek to defend Derbyshire's external skin and to argue that, whatever the structures inside it, Derbyshire had to be retained.
The boundary commission adopted three positions on Derbyshire. First, there was a report and recommendation known as the doughnut; The proposal was for two unitary

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authorities in Derbyshire—one for Derby and the other for Derbyshire. The suggestion made local Conservative Members of Parliament blow their tops because they did not want Derbyshire county council to take authority throughout the area except Derby.
The second proposal was for unitary authorities in the north-east corner of Derbyshire—in the Chesterfield area—and in Derby and for the rest to consist of a strange two-tier structure that had no great cohesive qualities and wandered throughout Derbyshire. We finished up with a sensible system that anyone in Derbyshire could have said, right from the start, was reasonable.
During that process, the Government interfered, stage by stage. Sir John Banham admitted that there had been strong ministerial pressure to offer up Derbyshire for review after the commission recommended that there should be a Derby unitary authority, another unitary authority in the Chesterfield area, and the status quo in the rest of the county.
It took the High Court to prevent the Secretary of State from gerrymandering the Derbyshire result. Revised policy guidance issued by the Secretary of State sought to direct the commission to recommend unitary structures. Justice Jowitt in the High Court, presiding over a challenge brought by Derbyshire and Lancashire, ruled that the Secretary of State had acted unlawfully in trying to influence and constrict the commission. The High Court ruling was the turning point in the review, and enabled the commission to act independently.
The Secretary of State had made key mistakes. He tried to fiddle the political guidance and was caught out. That allowed the commission the freedom to make two other recommendations that had to be pursued. First, it recommended that the views of local people on the structure of their local councils were of paramount importance. Secondly, it suggested that the review of local government should deliver more effective and cost-effective structures.
MORI surveys conducted in connection with two of the reviews showed that local opinion was solidly behind the sort of structure that we now have. Only for Derby was it thought that the district should have its own unitary authority. Everywhere else, the overwhelming view was that the status quo should prevail. The areas in which there was the strongest feeling that things should be left as they were were those which, in the second review, it was considered should be changed to a unitary authority. The areas were Chesterfield, Bolsover and north-east Derbyshire, which were to be placed together in one area. That was not what was required—the view of local people was that the structure that had existed and served them well should continue.
Any greater unitary split had no local support, even from the then Tory-controlled district councils, and it would have cost millions of pounds to run. It is a shame that it has taken three years of utter disruption and £2.5 million of wasted resources to reach the conclusion that most local people would have come up with in five minutes.
There are problems about the future, many of which have been raised tonight. The transitional stage of a reorganisation requires carefully thought out provisions. We must ensure that there is proper assistance from Government Departments as well as from the local bodies.
The cost of transition must also be taken into account. In the case of Derby and Derbyshire, it was estimated at between £3 million and £5 million. On top of that, the
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state of the standard spending assessment has to considered, as many hon. Members have stressed. I endorse that view. Derby, as an area of great social deprivation, scores higher than the surrounding areas in what used to be termed the all-ages social index. That means that, without Derby, Derbyshire will receive less SSA per head.
I do not deny that a great deal of the extra SSA intended for Derby was spent where it should not have been, but that money was in a general pot, which helped to achieve economies of scale in Derbyshire county council. That factor must be added to other points about how SSAs are determined, such as the change in provision due to the area cost adjustment and the assessment of grants for fire services on the basis of the length of an area's coastline. There are not any coastlines in Derbyshire—it is in the middle of the country and cannot score on that count, yet moneys are initially ripped out of that area of funding.
I hope above all that, by recognising that it is sensible for Derby to have its own authority and for the rest of Derbyshire to be kept together in a two-tier authority, the Government will at last stop directing disgraceful and persistent attacks toward Derbyshire county council. The Secretary of State has attacked it time and again, but I shall cite only one example. On 15 June, when discussing council tax orders that had nothing whatever to do with Derbyshire, the Secretary of State said:
"The performance indicators"—those of the Audit Commission—
"are simple to understand, and one of the facts that emerges clearly is the incompetence of Derbyshire county council, which, as I have said in the past, is and has been for many years one of the worst councils in Britain."—[Official Report, 15 June 1995; Vol. 261, c. 910.]
When one looks at the performance indicators, they tell us nothing of the sort. On average, Derbyshire county council finishes 18th out of 47 shire counties when assessed by the 10 performance indicators. The 10th indicator records the total expenditure per head of population—Derbyshire county council comes 27th. It is 27th in the list because it does not receive a reasonable SSA or Government grant. That 10th indicator should therefore be seen in terms of the services that the council provides.
For three of the performance indicators, Derbyshire county council comes first, second and third among shire counties. Today there has been a statement on nursery education. For nursery education provision for three and four-year-old children, Derbyshire is seventh out of 47 authorities, achieving 78 per cent. as opposed to a national average of 53 per cent.
The council is strapped for cash. The Government have directed the most horrendous policies towards it through the structure of the SSA and yet it provides good and decent services for its people. That is why it is re-elected time and time again. Conservative Members of Parliament who represent Derbyshire, and the Secretary of State and the people around him, should end their persistent attacks on Derbyshire county council. Derbyshire's problems are massive because of the standard spending assessment. For instance, 370 teaching jobs have been cut recently. Indeed, I could produce a list of difficulties that it has had to face recently.
In terms of structure, the order represents what the people of Derbyshire want and therefore it should be supported, but what will those councils be allowed to do?

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What will Derby county borough, the district councils and Derbyshire county council be able to act on and provide? Honest, decent people are working away producing the best work that they can in very awkward circumstances. It is time that the Government moved in to assist them.
7.55 pm
Mr. Simon Coombs: I am grateful for an opportunity to contribute to a debate which, by its nature, has been wide ranging—it involves a variety of orders that affect many parts of the United Kingdom. I hope that all hon. Members will tolerate the fact that what I have to say—I know that others have found themselves in the same position—relates to my own area of the country, which was referred to earlier as Thamesdown alias Swindon. I want, essentially, to speak in favour of the order. Certainly I want to speak in favour of the principle of the order although, as I shall explain, I have some reservations about its likely impact.
I should begin by explaining that I was a councillor in a county borough—Reading, in Berkshire—which ceased to exist in 1973 as a result of the previous local government reforms. In the three years during which I was a county borough councillor, it seemed that the principle of a unitary authority representing the people of its area and looking after all their needs was good. I thought that there might come a time when that principle could be extended.
Reading county borough council ran its affairs well. It avoided the confusion that derives from two-tier authorities and people not knowing which authority to turn to for different services. Not surprisingly, when Reading county borough council was abolished and became Reading district council for the first time—one of the six districts of Berkshire under Berkshire county council—services were duplicated in several areas and important schemes were delayed.
For example, once traffic schemes were approved by the district council, they had to go before the county council. After one set of professional officers prepared proposals, a second set would evaluate them. Sometimes, the second set of officers agreed with the first set, but sometimes they disagreed and sometimes they could not quite make up their minds, so they simply sat on the idea until it was too late to carry out the scheme. That was my first experience of two-tier local government.
As early as 1968, the Redcliffe-Maud report gave unitary authorities a very strong feeling of respectability. It was, perhaps, the first time that they had been given a true voice. I supported that idea at that time—a year before I became a county borough councillor—with enthusiasm. I prepared a report for my local Conservative party on the idea of unitary authorities in Berkshire. What an irony. Now, Berkshire is the only county in the country for which the idea of a unitary authority has been put forward, but it is inevitably subject to judicial review. Perhaps on that basis I should steer clear of the subject. I would say only that, at the end of such a long exercise undertaken by the Local Government Commission, it is strange that only one county has emerged with that old idea. To my way of thinking, that is a shame.
As I do not wish to bore the House with the history of my local government career, I shall come back to the present—at least to two years ago when we began the
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process of evaluating what might be the appropriate form of local government for the county of Wiltshire. The Government announced their intentions and that they were willing to listen to all strands of opinion. Indeed, the Government have heard all strands of opinion over the past two or three years. The cacophony of disagreement from all round the country has been sad to listen to.
In my innocence, I thought that unitary authorities were the way forward. My hon. Friend the Minister will notice a certain consistency in my views in 1968 and 1993. Bearing in mind the Government's desire to move towards enabling authorities and smaller local government, it seemed appropriate to conclude that, in the county of Wiltshire, with slightly more than half a million electors, two unitary authorities would be appropriate.
There could be one unitary authority for the north of the county, which is drawn together by the M4 motorway, has good links to London via the great western railway and has a community of interest among towns such as Swindon and Chippenham, which have grown tremendously during the past 20 or 30 years, and a second unitary authority for the south and west of the county, which is still essentially rural and based on beautiful towns such as Salisbury, Westbury and Warminster, but no—I had reckoned without the conservatism of so many people in the county of Wiltshire.
Hon. Members will recognise that my experience was by no means unique. Such conservatism meant that the county councillors said, "Let us keep the county council. It has served Wiltshire well." Indeed it has. In the districts, the view was the same but different. There, people said, "The districts are more than capable of providing local government services. Why not get rid of the county council and keep the districts?" Already the disagreements were mounting.
Needless to say, party politics played a part. No doubt the Liberal and Labour parties came to conclusions in their cabals and caucuses, and I make no secret of the fact that, on my side of the political divide, we looked at what might be desirable.
What emerged, in the traditional British manner, was compromise. Thamesdown, alias Swindon, had always had ambitions to go it alone. The town did not have unitary status in the arrangements before 1973, but it has grown so substantially since then that it saw itself as more than capable of handling its own affairs. Its population of 175,000 made that a serious possibility.
In Thamesdown, alias Swindon, there was a move for independence and, in the event, for whatever reason, the rest of the county was happy to say goodbye to it. Some people felt that, as the most rapidly growing part of the county, it had been given too much of the resources made available to local government by central Government. Others felt that the great town of Swindon was somehow not quite in keeping with the rest of the county. Many reasons were advanced, some privately and some publicly. The rest of the county said, "Let us soldier on together. Let us say goodbye to that great industrial city. After all, it has sometimes been described as a piece of the west midlands on the Wiltshire plain. Let us say goodbye to Swindon, alias Thamesdown."
So much for single-tier local government as a principle. Expediency triumphed, and the voice that emerged clearly from the county of Wiltshire in the end produced the hybrid principle enshrined in the Thamesdown order.

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I do not want to give too grudging a welcome to the new arrangements. They look too much like the pre-1973 set-up, which I remember with affection and pride, for them to be all bad. I suspect, however, that the order will not constitute the last word on the topic. It would not surprise me if the House found it necessary to revisit the structure of local government in years to come. There will be problems in the transition, and I shall say a word or two about those in a moment, but I have little doubt that the subject will have to be revisited.
I shall raise two specific matters with the Minister. The first is the name that has been given to the area two thirds of which I have the honour to represent in the House. Since 1973, the name Thamesdown was given to what was previously the municipal borough of Swindon and the rural district of Highworth when the two were amalgamated under the 1973 reforms and became a new district council.
At that time, members from the rural parts of the new district—the Highworth rural district council area—insisted that they did not wish to be known as Swindon. It is for them, if they are ever to be allowed to speak again on that subject, to say why, but rumour has it that Swindon was not a place of which they could feel proud. They felt threatened by it, and therefore sought a name to distinguish the future from the past.
The mellifluous but rather vague name of Thamesdown was chosen because the new district ran from the river Thames at Lechlade in the north to the Marlborough downs in the south. From that day to this, it has been difficult for people who come from Thamesdown to explain to others where they come from. There was no move to rename the football team, for example. Most hon. Members will recognise the name of Swindon Town football club because of its heroic efforts in the premiership two years ago, including the double over Queens Park Rangers. Swindon is the name that has survived on the lips of virtually everybody who comes from the area, and I suspect that this is a good opportunity to suggest to the Minister that we revert to the old and trusted name of Swindon.
I believe that there is now a new feeling of pride in the town. It has changed enormously over the past 22 years and developed rapidly to become a modern high-tech town of which its citizens can be justly proud. You will not need to be reminded, Madam Deputy Speaker, that only this week the new cashless society started in Swindon with the Mondex pilot scheme. In that respect, Swindon has led the world into the 21st century.
Swindon continues to be proud of what it has to offer to television journalists who seek the vox pop there. Only last week they came to Swindon—where else—to ask for its views on the Conservative party leadership election. I am happy to say that the voice of Swindon was raised firmly in support of the Prime Minister, whose re-election I very much welcome.
Polls conducted in the local newspaper showed a massive majority in favour of the change of name to Swindon. Even a poll attached to the council tax demand produced a massive majority in favour of the change of name. If the people of Swindon can face an increase in the council tax perpetrated by their Labour-controlled council and still vote for the change of name, clearly that is what they want.
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There is massive support for that change, so I hope that my hon. Friend the Minister will be able to answer the question asked by some of my hon. Friends about the process by which he thinks it appropriate for towns such as Swindon to achieve that happy outcome.
My hon. Friend will do me a kindness if he agrees to reconsider the ward boundaries in Thamesdown—or perhaps I could now call it Swindon. At present, Wiltshire county council is elected on boundaries that came into effect in 1993, but Thamesdown borough council's boundaries date back almost unchanged to 1976.
My constituency covers two thirds of the borough, and the effect of population changes in the town means that Toothill, the largest ward in my constituency, has more than twice as many electors as the smallest, Whitworth. The new county council wards address that imbalance, and I hope that my hon. Friend will address it too, recognising that equality between the electorates in different wards is a desirable end, which could be achieved by insisting that the new unitary authority, Thamesdown—or Swindon—will be elected as soon as may be on the revised updated boundaries, not the old ones.
I must address a point about the difficulties of transition. I make no apologies for quoting a letter that was sent to me in March by the chairman of governors of a secondary school which lies just outside the borough, but which takes 45 per cent. of its students from within the borough of Thamesdown. The letter refers to a meeting between the head teacher, Ian Perkins, and the chairman of the governors and writer of the letter, Francis Young, with the then leader of the Labour group, and therefore the leader of Thamesdown borough council, Tony Mayer.
The letter stated that Bradon Forest school wishes to maintain the status quo, and that 45 per cent. of students come from west Swindon by choice. Wiltshire county council pays for transport to the school, and the school buys into the administration of entrants through Sandford house, the county council's administration centre.
The letter continues:
"These students mean that the school can maintain a roll of approximately 1000 enabling it to be able to offer a wide curriculum and excellent special needs arrangements."
At the meeting, Mr. Mayer said that it was likely that
"a new authority would continue to provide transport for students already on roll, but new students—possibly from September 1997—would have to pay. Free transport would be provided to schools with space in other parts of the authority regardless of the standard of the school and distance.
He also mentioned the construction of a new Secondary School in the northern sector"—
a new development of 10,000 houses in the northern part of the borough—
"to 'absorb' the students from Bradon Forest. Again the distance would be far greater."
Mr. Mayer obviously did not like the fact that the school is grant-maintained, and said so. The letter continues:
"We were greeted with 'you made your bed now you will have to lie in it' and 'we would certainly have viewed you differently if you had been an LEA school'.
As far as we are concerned going Grant Maintained was, and is, the right thing for the school. We are again oversubscribed this year.
The effect on our school if Mr. Mayer's plans go ahead would be devastating. The school would halve in size—probably more so, given the fact that the reduction in size would also reduce our curriculum range which would in turn make us less attractive to parents. The effect on teachers jobs would be appalling.

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Bradon Forest is a good school and achieves excellent results in all areas. (As I write this 14 year old Jenna Arrowsmith, one of our students, is competing for England in the senior women's figure skating world championships in Birmingham).
Above all, the proposed changes remove the choice for parents of where to educate their children—this I think is a key issue.
Simon, I cannot think that the devastation of an excellent comprehensive school for the sake of local politics is in anyone's best interest, least of all the children it educates and their parents.
I apologise for the length of this letter but do not apologise for the passion behind it."
I apologise to the House for reading such a long extract, but my hon. Friends will understand why I felt it right to do so. I took the matter up with Ministers, and received an assurance that section 55 of the Education Act 1944 guarantees free transport in such a way as to make the suggestion put forward by Mr. Mayer outwith the law.
Similarly, I was able to reassure Mr. Young and Mr. Perkins that any attempt to force a secondary school out of existence purely out of malice and without regard to the viability of other secondary schools in the area would be subject to appeal—ultimately to the Secretary of State for Education and Employment.
Mr. Mayer is no longer a councillor, as he retired at the local elections, but he has announced his intention to seek a parliamentary seat. So much for new Labour. If that is what we have to look forward to from new Labour, people in Swindon and the rest of the country will be much better off without it.
I support the order because it will be right for the people of my constituency to find themselves with a single point of contact for local government services, but I fear that we shall return to these matters, and I shall have no hesitation in doing so if Labour councillors and those who support them seek to harm the interests of my constituents or their children in the future.
8.15 pm
Mr. Eric Illsley: This has been an interesting and good-humoured debate on the subject of the new unitary authorities. The Opposition welcome the orders, which arise out of the local government review which established 11 new unitary authorities. Most hon. Members have welcomed the orders, and have spoken for their individual constituencies.
The two dissenting voices were the hon. Member for Eastbourne (Mr. Waterson), who did not oppose the idea of unitary authorities but perhaps wished that the Local Government Commission had looked at Eastbourne as a case for a unitary authority. The hon. Member for Newbury (Mr. Rendel) opposed some of the orders, but not others. He misjudged the mood of the House by basing his opposition to the orders on the contents of MORI polls, rather than on the feelings of hon. Members who had judged the views of their constituents.
The hon. Members for Luton, North (Mr. Carlisle) and for Bedfordshire, South-West (Sir D. Madel) welcomed the order which relates to Luton, and the latter called for an end to the capping to enable the new Luton authority to get a good start and address itself to measures to regenerate the Luton area. Speaking as a Member who represents a former mining area and whose local authority has been a metropolitan, and therefore unitary, authority for the past few years, I can tell the hon. Gentleman that
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the new local authority faces some difficult tasks ahead if the experience of Barnsley and other mining areas is anything to go by.
My hon. Friend the Member for Darlington (Mr. Milburn) gave a warm welcome to the Darlington order, while the hon. Members for Bournemouth, East (Mr. Atkinson) and for Bournemouth, West (Mr. Butterfill) welcomed the order which relates to their area. My hon. Friends the Members for Stoke-on-Trent, South (Mr. Stevenson) and for Stoke-on-Trent, Central (Mr. Fisher) gave gushing welcomes to the order in respect of Stoke-on-Trent.
The Opposition believe that the 11 new authorities meet the criteria that we have maintained are necessary for the creation of unitary authorities. The authorities need to be viable, and the Local Government Commission supported that principle. The average population size of all the new authorities is about 187,000, and the authorities will be large enough to provide a full range of local government functions and services. Many of the authorities fulfilled exactly that function before 1974. They also have to be able to carry out their functions without recourse to contracting out.
One other criterion that we put forward was that of all-out elections before the establishment of the authorities, and the orders also meet that criterion. The authorities which are born out of the orders are based on the consistent principles for which the Opposition have argued and are in accordance with the legislation and the policy guidance that was restated in the Local Government Commission report that was published in March this year. I shall not refer to the guidance at any length, but I shall simply mention the fact that the Government and the commission attached great importance to local consensus. It would appear from the contributions this evening that there is much consensus for local unitary authorities in the areas under consideration.
One of the commission's assumptions and criteria was that unitary authorities and the review of local government would strengthen local government in England and not weaken it. That should be the case, but local democracy should be strengthened as well. We want a return to accountable local government without central control and without local authority powers being hived off to quangos. In that respect, I support the hon. Member for Bedfordshire, South-West in his call to end capping which other hon. Members repeated.
We hope that staff transfers will be available to all staff who want to transfer from an old authority to a new one. I understand that a voluntary agreement is already in place between the Association of District Councils and the Association of County Councils, which includes a 100 per cent. staff transfer. We hope that that can be honoured and implemented as far as possible, although we realise that there is bound to be some duplication in the services provided by the county authorities and the new unitaries. We also hope that the Government will ensure that adequate compensation and redundancy packages are available to those who face redundancy.
There are a number of arguments in favour of unitary authorities and most hon. Members who spoke were in favour of unitaries. They are more accountable, as it means one council tax, far easier to understand and far more accountable than a confusing two-tier structure. People will realise which level of government provides

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their service. The system is also more democratic. Local communities will have a greater say about the functions that were determined by county councils some distance away and unitary authorities will be more responsive, with local elected councillors better placed than the more remote county councillors. The authorities will be more efficient and, perhaps, more stable.
We are discussing large, urban, focused authorities, which all have a strong local identity and an average population of more than 187,000. Five are major cities—my hon. Friends the Members for Derbyshire, North-East (Mr. Barnes) and for Southampton, Itchen (Mr. Denham) made a strong case for their cities. Eight of the 11 authorities that will be created once had county borough status and, therefore, will have powers and responsibilities restored to them. Nine of the 11 are larger than the smallest unitary authorities in London and the smallest metropolitan authorities. Most have different characteristics from the remainder of the county area. We heard, for example, from my hon. Friend the Member for Itchen about the difference between that city and the structure of the county in which it is based.
All the authorities are urban, which will allow the remaining county authorities to concentrate on the rural needs of the county. Each authority will have self-governance restored and, as I said, each is capable of providing a full range of services.
All the authorities have public support. Hon. Members made that clear and the local knowledge of hon. Members is better evidence than MORI polls, to which the hon. Member for Newbury (Mr. Rendel) referred at some length. There is strong support for both the principle of unitary authorities and the specific proposals.
On costs and savings, the Local Government Commission estimated that the changes will be cost neutral, but there will be transitional costs of between £3 million and £5 million per authority, which will be funded through borrowing.
One matter on which I can agree with the hon. Member for Newbury is the concern expressed, especially by the ACC, about the continuing costs to county authorities where services are transferred to unitary authorities. For example, the hon. Member for Bedfordshire, South-West mentioned the county-wide library service, which is based in Luton. Bedfordshire believes that the service will involve it in some costs.
The ACC also believes that counties will be restricted when applying for supplementary credit approvals. Perhaps the Minister will comment on whether it will be difficult for the counties to obtain such finance.
There are also concerns that the commission's estimates might be on the low side, judging from the experience of the other newly created authorities in Avon, Cleveland and Humberside.
I share the concerns that have been expressed on standard spending assessments. I have always believed them to be unrepresentative and unrealistic and they are badly in need of reform. The Government should ensure that the SSAs for the new unitary authorities are calculated properly and assess their needs, to enable them to get a fair start.
We believe that the orders should be passed tonight and we will not divide the House on any of them. We hope that the new authorities will prosper and be successful. For many, it is a return to the situation before 1974, when they were county boroughs, and we wish them every success.
8.25 pm
The Minister for the Environment and Countryside (Mr. Robert B. Jones): First, I must thank my hon. Friends for their kind comments of congratulation, which I very much appreciated, particularly those of my hon. Friend the Member for Bedfordshire, South-West (Sir D. Madel), because he is my constituent and I always like it when my constituents are pleased about something that their Member of Parliament does.
As the hon. Member for Barnsley, Central (Mr. Illsley) said, this has been a good-humoured debate and there has been much to unite both sides of the House. I welcome that fact. Hon. Members had matters that they wanted to raise in response to the situations in their areas, and some common themes ran through the debate, with which I hope to deal in my response.
In some ways, the debate reminded me of a series of maiden speeches. Pretty well every hon. Member took the opportunity to describe the glories of the areas that they represent and good for them, because that is one of the great joys of our electoral system. We are there to take a pride in our constituencies and not simply to be numbers in a manipulative game, as the hon. Member for Newbury (Mr. Rendel) would like. We would not then have such a relationship with our constituents.
My right hon. Friend the Member for Hove (Sir T. Sainsbury) made the first general point, which concerned names, in an intervention on my hon. Friend the Minister for Local Government, Housing and Urban Regeneration. Central Government do not have powers to determine what the names should be and I do not believe that we should. The names in the orders reflect the commission's recommendations. In the case of my right hon. Friend, the recommendation was for Brighton and Hove and it is up to the elected members of that authority to decide whether they are content with that name or want another. Plenty of authorities have changed their names since the reorganisation in 1973–74, but a change requires a two-thirds majority of council members and I do not know the figures in Brighton and Hove. My strong suspicion is that Brighton alone would not have sufficient weight to dump the name Hove and I think that politicians from the Brighton end would be well advised to bear in mind the fact that a balance in an authority's name is as appropriate as it is in any other aspect of the authority. If I were my right hon. Friend, I would not worry.
Similarly, my hon. Friend the Member for Swindon (Mr. Coombs) asked about the position in Thamesdown. For the same reason, we could not declare the name to be Swindon, but if the newly elected authority votes by the right majority, it will be able to change it. I rather suspect that that might be the pattern. Having described the appropriateness of naming the football team Swindon and having said that there was no Thamesdown football team, he spoke about Queens Park Rangers. We do not propose, in the orders before us or any future orders, to name any local authority Queens Park Rangers. The name must be what the local authority wants.
A second general argument that was made was a ceremonial one by the hon. Member for Southampton, Itchen (Mr. Denham). We want to resolve that matter so that everything works smoothly. There are some issues to be tackled. Hampshire is unlikely to be a problem, as the two cities there have historically been in the Hampshire area, but that is not always the case. We have had a tricky

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position in Cleveland, where one of the districts comprises parts of the former Durham and parts of the former North Yorkshire.
As my hon. Friends the Members for Bournemouth, East (Mr. Atkinson) and for Bournemouth, West (Mr. Butterfill) will acknowledge, there is also an issue about the boundary, in ceremonial terms, between Dorset and Hampshire. We shall try to resolve that as speedily as possible, and I hope with common sense. Obviously, that depends on the representations that we receive.
My hon. Friend the Member for Aylesbury (Mr. Lidington) mentioned parishes. The policy of the Government until now has been as described in a circular, the number of which I cannot remember, which relates to populations and so on. We feel that that was too rigid an approach. Obviously, it is difficult to have a parish council in a local authority area where that parish council might, for example, cover 80 per cent. or 90 per cent. of the population, as is the case in one district where that has been considered. At the other end of the scale, it is a bit silly to rule out an area having a parish council simply because it has 21,000 residents as opposed to 20,000. Therefore we are considering in some detail the policy and the way in which it will apply, but we shall obviously consider all the areas on their merits.
There is, however, another rub to that, in that the commission has not recommended, or even considered, the parishes in every area. Therefore we need to decide at some stage whether it would be appropriate to ask the commission to consider a specific area in the parish context. We shall bear all that in mind before announcing our decisions, although I hope that that will be soon because I know that the issue rouses considerable interest in the places affected.
My hon. Friend's focus on parishes reminded us how easy it is for us to speak about the two-tier system. We should be aware of the fact that it is a three-tier system, and that parish councils and town councils are very important organisations.
It is hardly surprising that finance was an important theme running throughout the debate. We shall consider all types of matters. We want to have a careful look at the transitional costs, and at the supplementary credit approvals for which local authorities apply. We must achieve the right balance between ensuring that the transition runs smoothly and not fuelling an expansionist mode by some local authorities, which was associated to some degree with the reforms of the early 1970s. It is not easy to get that right, and we must judge the SCA applications of each authority on the merits of the case that it makes. That will relate to things such as software, hardware and offices as well as other issues.
On SSAs, hon. Members have made two sets of arguments, one relating to the SSA system in general and the other relating to the way in which SSAs would be affected by reorganisation. On SSAs in general, we try to ride the two horses, which have two ends, like most animals. [Interruption.] I shall tell the hon. Member for Itchen what I mean, because they are very different from one another.
Local authorities want to have both a fair system, which implies complexity, and a simple system. They want to have a system that changes in response to different circumstances and they want continuity and no
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turbulence. It is very difficult to ride both those horses at the same time. It means that we must steadily overhaul the system to ensure that we take into account the representations that are made, but we must not keep shaking the system up to such an extent that it becomes difficult for local authorities to live in it.
The hon. Member for Stoke-on-Trent, South (Mr. Stevenson) made a specific argument about the area cost adjustment. Another hon. Member mentioned that, and it is being considered. It is not discriminatory in the sense that the hon. Gentleman means it. It is certainly distinctive, but it reflects real evidence that costs are different in the places that receive it. I do not know of anyone who has suggested that that is not the case. However, people may believe that the costs are not as great or that they are greater, and we must consider that before making any changes.
On the effect of reorganisation on SSAs, there will have to be disaggregation. We shall speak to the individual local authorities about the way in which we envisage that occurring, to try to resolve the difficulties. If necessary, we shall have to consider whether some transitional scheme should be put in place. We shall do that on the basis of the evidence submitted to us as we go along, which is the only fair way to go about it because there is not a great deal of evidence at the moment. We have done some preliminary studies with different local authorities, but I do not claim that those are perfect, and we must await what emerges from further work.
Budget setting was mentioned from opposite points of view by the hon. Member for Stoke-on-Trent, South and my hon. Friend the Member for Aylesbury. It would be wrong, for reasons of accountability, for members who represent an area that will not be in the residual county to have a strong say in the setting of budgets after it has disappeared, but there are problems. Therefore we have formulated a consultative document about that. We shall make a decision, taking into account the representations that are made by local authorities and the arguments of the hon. Member for Stoke-on-Trent, South and others during the debate.
The hon. Member for Stoke-on-Trent, Central (Mr. Fisher) made an argument about city versus country. It is not as simple as that, because authorities do not simply consist of big cities and rural counties. Those rural counties often consist of suburban areas or largish towns in their own right, or mining villages, which are not necessarily the same as agricultural areas because they are different economically.
It is inevitable that there will be a debate in individual authorities about the balance of expenditure in one part or another. For goodness sake, we were reminded of that recently in the Monklands context, in what Professor Black said about Coatbridge and Airdrie. There is nothing that central Government could or should do to determine the way in which an authority spreads its spending across its area. That is rightly a matter of local accountability. However, we wish to ensure that in the reorganisation there is a fair balance between the authorities that come about as a result of those orders, and no doubt others to come.
Co-operation is much more important than conflict in that regard, and I welcome what several hon. Members have said about the way in which local authorities are getting on with the job. The hon. Member for Darlington (Mr. Milburn) made that argument in respect of Durham county council. He fairly paid tribute to the council for

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the work that it has done over the years. There have always been tensions in the system, as we all know, but that does not mean that those tensions must be all-enveloping. I hope very much that there will not be big rows about that and that all will be resolved satisfactorily, but we must wait and see.
Staff are one of the most important elements of local government. They provide the service and, by and large, they do a pretty good job. We believe that we have achieved the right balance in what we have done, but we must monitor the way in which it works out in practice—such as whether local authorities are fair in their interview procedures—and we stand by to take appropriate action if necessary.
That brings me to the speech of the hon. Member for Newbury. I thought that he was pretty well sunk by my hon. Friend the Member for Bournemouth, West, but he was wallowing in the water when there was another broadside from the hon. Member from Stoke-on-Trent, Central. I never like to interfere in spats between old Etonians; as a player, I would rather let the gentlemen get on with it. But both my hon. Friend the Member for Bournemouth, West and the hon. Member for Stoke-on-Trent, Central made a vital point about how we reach our conclusions: it is real people and weighing opinions that count, not opinion polls.
I have no desire to end up in the position of my right hon. Friend the Member for Loughborough (Mr. Dorrell) in being asked about the films that he likes or dislikes, but I shall recommend one film to the hon. Member for Newbury. It is a Peter Cook film called "The Rise and Rise of Michael Rimmer", about the ruthless way in which that gentleman sought to get to the top in politics using opinion polls. In that film, the opinion poll system of working out what people thought and did not think was completely shipwrecked by employing large numbers of people to go to the city of Coventry and say when asked that they were Buddhists. The opinion poll then came up with the result that 95 per cent. of the citizens were Buddhists, which wrecked the credibility of the opinion poll.
Mr. Rendel: Is the Minister suggesting that the Local Government Commission, which his party set up, was so foolish as to use opinion polls, the results of which were fraudulent on the ground that somebody, presumably the Local Government Commission, set people up to give the right answers?
Mr. Jones: The hon. Gentleman takes himself too seriously. I simply point out that opinion polls are not the be-all and end-all and that I prefer to make decisions on the basis of evidence submitted and the balance of opinion. It is not a black or white issue. We all know that there are splits in political parties on this matter. We all know that county councillors and district councillors in the same area will express different views and adduce evidence to support views that they consider overwhelming. In many cases, however, it is a balance of argument and not an easy matter.
I am only pleased that, ultimately, we have succeeded in presenting orders to the House this evening which have commanded the general approval of hon. Members who have spoken. My hon. Friends the Members for Bournemouth, East and for Bournemouth, West welcomed what was being done in their area. My hon. Friends the Members for Swindon, for Aylesbury, for Bedfordshire, South-West and for Luton, North (Mr.
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Carlisle) did likewise. Although my hon. Friend the Member for Eastbourne (Mr. Waterson) was disappointed, that was inevitable unless we are to look at every area again. On the other side of the House, the hon. Members for Stoke-on-Trent, Central, for Stoke-on-Trent, South, for Darlington, for Derbyshire, North-East (Mr. Barnes) and for Itchen spoke for their areas.
On that basis, I think that this is a pretty good package and I commend it to the House.
Question put and agreed to.
Resolved,
That the draft Wiltshire (Borough of Thamesdown) (Structural Change) Order 1995, which was laid before this House on 15th June, be approved.
Resolved,
That the draft Staffordshire (City of Stoke-on-Trent) (Structural and Boundary Changes) Order 1995, which was laid before this House on 15th June, be approved.—[Mr. Bates.]
Resolved,
That the draft Durham (Borough of Darlington) (Structural Change) Order 1995, which was laid before this House on 15th June, be approved.—[Mr. Bates.]
Resolved,
That the draft Derbyshire (City of Derby) (Structural Change) Order 1995, which was laid before this House on 15th June, be approved.—[Mr. Bates.]
Resolved,
That the draft Bedfordshire (Borough of Luton) (Structural Change) Order 1995, which was laid before this House on 15th June, be approved.—[Mr. Bates.]
Resolved,
That the draft Buckinghamshire (Borough of Milton Keynes) (Structural Change) Order 1995, which was laid before this House on 20th June, be approved.—[Mr. Bates.]
Resolved,
That the draft Dorset (Boroughs of Poole and Bournemouth) (Structural Change) Order 1995, which was laid before this House on 22nd June, be approved.—[Mr. Bates.]
Resolved,
That the draft East Sussex (Boroughs of Brighton and Hove) (Structural Change) Order 1995, which was laid before this House on 22nd June, be approved.—[Mr. Bates.]
Resolved,
That the draft Hampshire (Cities of Portsmouth and Southampton) (Structural Change) Order 1995, which was laid before this House on 22nd June, be approved.—[Mr. Bates.]

EUROPEAN COMMUNITY DOCUMENTS
Motion made, and Question put forthwith pursuant to Standing Order No. 102(9) (European Standing Committees),
EUROPEAN COMMUNITY DOCUMENTS

  CINEMA AND TELEVISION FILMS
  That this House takes note of European Community Document No. 6398/94, the Commission's Green Paper on strategy options to strengthen the European programme industry in the context of the audiovisual policy of the European Union, and supports the Government's overall approach towards fostering a competitive and healthy audiovisual sector; and of European Community Document No. COM (94) 523, relating to two draft Council decisions on the implementation of the MEDIA II programme on training for audiovisual professionals and on the development and distribution of audiovisual works; takes note of the outcome of the negotiations in the Culture/Audiovisual Council of 21st June, at which a common position was reached on both decisions; and supports the Government's approach to these and subsequent negotiations.—[Mr. Bates.]
  Question agreed to.

  Motor Industry Block Exemption Scheme
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Bates.]
  8.43 pm
  Mr. Stuart Randall: The relationship between motor manufacturers and their dealer networks is determined by an arrangement called the block exemption scheme. The scheme is defined by the European Commission under procedures that result in the European Parliament having limited opportunities to intervene and influence. Although the Commission has just produced a new version of the block exemption scheme, which comes into operation in October, the principles on which it is based remain the same. That means that there is no free market in the operation of the relationship between manufacturers and dealers. On the contrary, the block exemption scheme is skewed very much in favour of manufacturers, which gives them considerable powers over dealers.
  My main reason for initiating this debate tonight is to present to the House and the public details of the abuse of those powers by certain car manufacturers, particularly Fiat UK Ltd. Fiat has been attempting to rationalise its dealer network, which seems a perfectly reasonable thing to do. After all, it is in the business of making cars and must make a profit. So nobody would argue with that. What is unacceptable, however, are the unscrupulous and highly discriminatory methods that it uses to control its dealer network.
  Fiat has terminated franchise agreements with some of its smaller dealers just because they are small. The fact that they have been loyal dealers for 20 or 30 years and have performed excellently is not relevant to Fiat. When Fiat decides to terminate a franchise, it generally does so in a way that results in the total destruction of the dealership concerned. The businesses often go into liquidation and the owners, who may have spent their lives building up the businesses, are often ruined. The result is also the loss of jobs and livelihoods for employees. All that adds up to an abuse of power by manufacturers through the block exemption scheme. Because no free market is in operation, dealers do not have freedom of action to protect their interests.
  Before I became a Member of Parliament, I spent 25 years in business, including a spell in the motor industry for three and a half years. As a result, I strongly believe that when an organisation such as a big multinational car manufacturer is given powers via the block exemption scheme, it should take on certain responsibilities. Fiat has shown a disgraceful lack of responsibility and is bringing considerable discredit to the motor industry. A key complaint against Fiat—I have had an unbelievable number of complaints—is that it deliberately pursues a policy of undermining small dealers by terminating their franchises for no cause other than to replace them with larger groups. Moreover, it does so without offering compensation.
  All dealer agreements contain a provision for termination, which, at this point in time, is usually 12 months, although that will change. However, under domestic law, Fiat has the right to terminate at will, and it certainly does. What disappoints me is that, under the revised block exemption scheme, the power to terminate in that way will remain. That means that a manufacturer
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  can terminate a franchise at any moment without giving a reason. Termination should at least be based on breach of contract or objectively valid grounds, and we are far from that in the motor industry. Instead, there is no legal base in the block exemption scheme for challenging termination.
  EU law provides for equal treatment by manufacturers of their dealers, regardless of size. In practice, that means that the terms of trading should not be conducted in a way that discriminates against a dealer purely on grounds of size. Fiat, however, ruthlessly ignores those laws and resorts to large-scale discrimination in a disgraceful way. For example, it has supplied cars at a greater discount to large dealers, set unrealistic targets for small dealers and set minimum sales levels in circumstances where a much larger discount has been given to larger rivals. The European Commission should not allow Fiat to get away with such dirty tricks. Does the Minister condemn the breaking of EC law in that way?
  Dealerships devote their own time and money to develop expertise in Fiat products to meet the conditions of their franchise agreements, only to find the rug pulled from under their feet by the policy operated by Fiat. In terms of fairness and reasonableness, the actions of Fiat are extreme and without moral justification.
  Fiat's directors, especially Ian Rowlands, have sought to justify their actions by reference to their rights under the dealer agreement. He told me that Fiat has powers under the block exemption scheme which it intends to use in its commercial interest with no reasonable regard to the dealers' interest and well-being. Many dealers have worked for Fiat all their working lives.
  Lancia, which is owned by Fiat, is terminating all of its dealer agreements and withdrawing from the United Kingdom. Most Lancia dealers are also Fiat dealers. Termination of the Lancia franchise came as a complete surprise to most dealers. The reputation of Fiat has suffered as a result. No compensation has been offered to those dealers. In addition, Fiat lied by suggesting to various companies that Lancia was in Britain to stay.
  What prompted me to initiate this debate was the dreadful treatment that a company in my constituency, AB Motor Company of Hull, received from Fiat UK. It was established in 1919 and is the oldest established motor company in Hull. It had a very successful track record for 75 years, right up to the time when the franchise was terminated by Fiat. It has had that Fiat franchise since 1971 and the agreement was renewed in 1986.
  When the agreement was renewed, Mr. Trevor Good, who was the proprietor of AB Motors in Hull, was advised by his lawyers not to sign the agreement as it offered no protection to the dealership. However, if Mr. Good refused to sign, he would no longer be a dealer and his business would have to close down. He had no option but to sign the franchise agreement, which was so stacked against him.
  Fiat terminated the franchise without giving reasons and then undermined the company during the notice period. While AB Motors still held the franchise, Fiat released all of the fleet listings, which are the lists of customers, to a competitor. The revenue of AB Motors completely collapsed. Fiat also encouraged discriminatory advertising in the local press during the termination period by another Fiat dealer, which damaged AB Motors by suggesting that it was no longer a Fiat dealer even though that was not true. That had a massive impact on the revenue stream, which dropped immediately by 40 per cent.

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  This may sound strong but I have a long list of other cases, which, clearly, I cannot go into during the debate. However, I would like to touch on one or two so that the House realises that there is a lot of beef behind what I am saying. Mr. Christopher Keeley, chairman of Datchet Green Motors, had a Toyota dealership. He had just invested £80,000—the points that I am making are the allegations of the people concerned—in the business on the understanding that Fiat would continue the dealership. When the termination threat came, no compensation was offered.
  Mr. S. Davies of Altrincham said that the problem with the block exemption scheme, whatever its terms, in negotiating new agreements, is that it cannot work for the dealers unless there is a forum for presenting termination grievances in which they can be dealt with expeditiously. That does not exist.
  Mr. J. P. Vilton, managing director of Vilton Cars, Cannon Hill, London, entered a franchise agreement in 1990 to sell Lancia cars. Five months later, Fiat ran down the Lancia operation and failed to maintain previous levels of support. The impact was so disastrous that the business is no longer viable.
  Mr. Chris Horrock, of Page Motors, Essex, had a Lada and Citroen dealership. His dealer agreement was terminated, after he had made a big investment. His database of customer listings was given to other companies. Again, there was discriminatory advertising. His chief salesman was headhunted.
  Mr. Malcolm Fitch was given 90 days' termination notice by Fiat, which took his parts computer. He alleges that Fiat owes him money and will not pay.
  Mr. Tony Stillwell's dealer agreement was terminated at roughly the same time. Fiat insisted that he invested and would not take parts back when the termination notice ended. Fiat offered him an alternative Lancia dealership only for him to find that four months later it had wound it up. That is discreditable behaviour.
  That is only a tiny fraction of the horror list that I have. AB Motors—the company in my constituency—is planning legal action against Fiat to obtain compensation for the losses that it incurred as a result of Fiat's actions. It is being supported with legal services and costs by the Retail Motor Industry Federation, RMI, which regards this as an important test case and is to be commended for its continued support.
  I have also tried to operate as an intermediary. I arranged for AB Motors and Fiat to meet in a country house away from telephones to resolve the dispute by means of a compensation package without recourse to the courts. Although there seemed to be some goodwill in the beginning, Fiat showed its true colours when one of the directors, Ian Rowlands, said that it was not interested in the merits of the case because Fiat was bigger, had more power and money and would win. That was its attitude. It would just crush the smaller company. Fiat representatives at that meeting went on to say that Fiat believes that the liquidation of dealerships is an inevitable consequence of termination. Statistics show that once terminated, dealerships are dead.
  Many of the organisations that I have talked to about this matter, including RMI and certain manufacturers, believe that the block exemption scheme is still deficient. It still allows unscrupulous manufacturers to abuse the considerable powers that it gives them over their dealers,
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  especially in respect of termination. I regret that the Commission, in carrying out its review of the block exemption scheme, did not use the opportunity to prevent abuse by certain manufacturers, which has resulted in the breaking of EU law through discrimination against small companies.
  In this debate, I have attempted to speak up for small companies, which are generally good performers. They are loyal to their manufacturers, but they have been hammered because they tend to be on the small side. The Commission could have restored a sensible and realistic balance between dealers and manufacturers by introducing a form of compensation to dealers when their franchise was terminated. That would not be an unreasonable burden on manufacturers and it could provide the opportunity for dealers to remain in business, providing jobs and economic prosperity locally, or to adopt an alternative business strategy.
  Another key benefit of the compensation argument is that it would encourage manufacturers to move towards fewer and larger dealerships. The possible efficiency improvements were outlined in the Monopolies and Mergers Commission report called "New Motor Cars", which was produced in February 1992. We must all recognise that there has to be a move towards efficiency improvements and we must encourage that. What is at issue is the way in which the manufacturers have gone about it. Perhaps the Minister could tell the House what the Government's position is on the MMC report. So far, no action has been taken and we would be pleased to hear about the Government's view.
  Mr. Piara S. Khabra: I apologise; I should have been here earlier in the debate but, unfortunately, I could not be. I believe that my hon. Friend knows that one of the dealers concerned lives in my constituency. Under the block exemption scheme, he has been given notice by Fiat that it is terminating its deal with him. My constituent has been in business with the company for the past 12 years. He had invested money, he was successful and he gave business to Fiat, but he is now about to be bankrupted. Does my hon. Friend agree that the block exemption scheme is a disaster and that the House should take action to deal with it?
  Mr. Randall: I suspect that my hon. Friend is talking about First County Garages in Norwood Green.
  Mr. Khabra: Yes.
  Mr. Randall: That was one of the companies to which I did not refer and I appreciate the fact that my hon. Friend has raised the case. I spoke to the managing director of the company. The threat to the company arose after massive investment; the gentleman who owns the company put everything into it to try to meet Fiat's needs. Even after that, he has been kicked hard by Fiat. It should have come clean with him and said that he was not suitable or that his expansion plans were not good enough. To lead people up the garden path, to encourage them to invest and then to take such actions is a disgrace and I appreciate the fact that my hon. Friend has raised the point.
  From the information that I have, I believe—this is strong—that Fiat UK Ltd. is behaving like a serial killer. It is wiping out lots of viable businesses with superb track records, with obvious consequences for jobs. I hope very much that Fiat will review its policy and that that will be the case for other companies that are abusing the block

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  exemption scheme. I hope that the companies will provide compensation, because that is the way out and would provide a balance. I hope that the Commission will recognise that the changes that it has just introduced to the block exemption scheme will still leave it deficient and open to abuse.
  9.3 pm
  The Parliamentary Under-Secretary of State for Corporate and Consumer Affairs (Mr. Jonathan Evans): I thank the hon. Member for Kingston upon Hull, West (Mr. Randall) for his speech. It is well known in the House that he has wide experience, especially of the motor trade. His speech is timely because, as he said, the negotiations on the new block exemption scheme have recently been concluded. I am pleased to report that the aims of the United Kingdom have been broadly met in the negotiations. Later, I shall deal in detail with many of the points that the hon. Gentleman raised.
  It would be helpful for me to explain the background to the block exemption scheme before turning to the Government's policy. Paragraph 1 of article 85 of the treaty of Rome prohibits agreements between undertakings that affect trade between member states and which have as their objective, or effect, a distortion of competition. However, there are occasions when such agreements may have positive benefits that outweigh those negative effects. Paragraph 3 of article 85 of the treaty therefore provides that agreements may in fact be granted an exemption in such circumstances.
  To gain an exemption, such agreements must provide benefits to the Community, and consumers must receive a fair share of those benefits. The restriction on competition to be permitted must, however, be no greater than that which is necessary to deliver those benefits. In essence, that is what the structure of EU competition policy is, and the way in which an exemption can be applied for.
  Agreements that satisfy those criteria must be notified to the Commission for individual exemption, and it is then for the Commission to decide whether they do indeed merit exemption, or whether the negative effects are so great as to outweigh any of the benefits that may arise. There are, of course, occasions when there is likely to be a large number of similar agreements that qualify for exemption, and in such cases the Commission will often grant a block exemption. Agreements that satisfy the terms of a block exemption do not need to be individually notified to the Commission; they will be valid without there being any specific authorisation.
  In the European Community, most manufacturers of motor vehicles distribute their new cars using a system known as selective and exclusive distribution. Selective distribution allows the manufacturer to select dealers who meet certain standards. Exclusive distribution means that the manufacturer will grant each dealer an exclusive territory in which to operate. In return, the dealer undertakes to sell only that manufacturer's cars in that territory.
  That system, though, can and does restrict competition. It may also have an effect on trade between member states. Not everyone is allowed to sell new cars, as manufacturers choose their dealers and expect them to maintain high standards. They also ensure that there is
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  only one dealer for each brand in any given area. Furthermore, dealers are restricted to selling only the manufacturer's brand of car. That system is permitted because it also provides a number of positive benefits for the consumer.
  As we know, cars are technically complex machines and require a high degree of expertise, both before they are sold, to ensure that they are safe to use, and after sale, to ensure that they stay that way. The hon. Gentleman knows that from his wide experience at the highest levels in the motor industry.
  Furthermore, a consumer rightly expects to be able to buy his car, perhaps in one part of the country, and, if need be, have it serviced in another part of the country. For those reasons, it is necessary for a manufacturer to maintain a national network of high-quality sales and service facilities. Selective and exclusive distribution is one way of ensuring that the manufacturer is able to do that, and encourages high standards through specialisation.
  The selective and exclusive distribution system is therefore exempted from EC competition rules by a block exemption, which initially came into force in July 1985. The exemption on that occasion was to last for 10 years and would expire on 30 June 1995. One will see from that how timely the debate is.
  Mr. Randall: I am grateful to the Minister for outlining these points, particularly on competition, but many of the points to which he referred are in the recommendations of the MMC report. What the MMC was saying in its investigation into the industry in 1992 was that the block exemption scheme is stifling competition and that we need to change it to ensure that the dealers have more flexibility to be able to compete.
  Mr. Evans: I certainly accept that. I shall come to the context of the MMC report, because it is important to set the context of these matters. There was the block exemption for a period of 10 years, the MMC report and the negotiations. It is important, within the context of the pertinent remarks that have been raised by the hon. Gentleman, to set the matters in context. I assure him that I will come to the MMC report, because it has been the agenda for subsequent negotiations over the adjustments to the block exemption to which he referred.
  Mr. Randall: Although the new block exemption scheme is coming into operation in October, the discussions by the Commission are now complete, and the new document has been produced. Unfortunately, it does not include many of the proposals that were included in the MMC report. What mechanism, if any, will there be for us to make changes?
  Mr. Evans: Yet again, the hon. Gentleman's remarks are premature. I wish to set out the context for him. That is important. I am sure that he will know that one of the important aspects of his success in obtaining this Adjournment debate was that it was an opportunity to set out the context of the matter for the industry in general. If I am to outline, not only to the hon. Gentleman but more widely, the Government's policy in this regard, it is important that I should be able to deal with the matter in the context that I have set out. I hope that he understands that.
  The selective and exclusive distribution system is therefore exempted from EC competition rules by the block exemption, which would have expired on 30 June

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  1995. Interestingly, the cars block exemption scheme was the first sector-specific block exemption to be granted by the European Union.
  The exemption goes into some detail in setting out the terms for a number of the other parts of the agreement between a manufacturer and his dealers. For example, it specifies the minimum length of agreements. It also stipulates that each party must give one year's notice of termination. In the context of many of the cases that were raised by the hon. Gentleman, the operation of the one-year notice of termination has led to many of the concerns that have been raised by him. However, I accept that there are others.
  The block exemption has not been without its critics. Some feel that it offers too much power to the manufacturer at the expense of the dealer. There have also been a number of complaints from consumers, who feel that car prices in the European Union are inflated because of the exemption, as it permits a restriction of competition.
  This lack of competition was perceived to be due to a number of factors. Most dealers could sell only one brand of car. Dealers could not advertise to customers outside their contract territory. It was also felt that manufacturers were able to discriminate against customers who purchased a car in another country within the European Community. That matter was the subject of considerable publicity some years ago.
  For the reasons that I have outlined, a number of consumer organisations believed that, when the block exemption expired in June 1995, it should not be renewed. On the other hand, manufacturers argued that competition in the market was fierce. They said that renewing the block exemption in its original form was essential in order that they could continue to offer a high-quality service to customers. Dealers' views were mixed. The larger dealers wanted to be able to sell more than one brand of car.
  The hon. Gentleman said that smaller dealers wanted to have a free market. I am bound to say to him that that was not the universal view of smaller dealers. Many smaller dealers felt that the selective and exclusive distribution system offered them some security, and that in a free market they might be edged out by the larger dealers. However, all dealers believed that their position within the manufacturer-dealer relationship needed to be strengthened, although they wished to retain the basic principles of the block exemption.
  Mr. Randall: On a point of correction, I did not suggest that small dealers wanted a free market. There is enough co-ordination in the motor industry for me to say that. I was saying that the block exemption scheme was not a free market. If there were a free market, the dealers could protect their interests, but as they are caged into the system, with all the powers stacked in favour of the manufacturers, manufacturers can do what they like with dealers. That was the point that I made about the benefits of the free market in this context.
  Mr. Evans: I am grateful for that clarification. It underlines the point that I have made, that the general view of all dealers is that they want to ensure that their position within the manufacturer-dealer relationship is strengthened. That is one thing on which we can all agree. That brings me to the position in relation to the Monopolies and Mergers Commission inquiry.
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  The Government's policy on the renewal of the block exemption was guided by the Monopolies and Mergers Commission's investigation of the supply of new cars. It is worth examining the background to that inquiry, and the outcome. The hon. Gentleman has asked me to give the Government's response in this regard.
  In May 1990, the Director General of Fair Trading referred the issue to the Monopolies and Mergers Commission for investigation. His primary concern was the price of new cars in the UK. That was the focus of the inquiry. The MMC was also required to establish whether a scale or complex monopoly existed, and whether it operated, or might be expected to operate, against the public interest.
  The MMC's report was, as the hon. Gentleman says, published in February 1992. It concluded that prices in the United Kingdom were not significantly higher than in other countries. Where they were higher, that was due to factors such as exchange rates, and because cars in the United Kingdom were of a higher specification than on the continent. The report found a scale monopoly in favour of the Ford Motor Company, but that it did not operate against the public interest.
  However, the MMC concluded that the operation of selective and exclusive distribution by 24 manufacturers constituted a complex monopoly. The report did not conclude that the system as a whole should be prohibited, but it did find that a number of restrictions on dealers might be expected to operate against the public interest: while they did not lead to higher prices, they might be able to sustain higher prices. The MMC therefore recommended that the restrictions should be lifted.
  The MMC said that dealers should be allowed to advertise outside their contract territories. It said that they should be granted greater freedom to sell competing brands of cars, both inside and outside their contract territories, and that they should also be able to sell car-related goods, and provide services outside their territories.
  The overall effect of the changes would have served to increase the independence of dealers in the United Kingdom. That would increase competition in the industry, which would ensure that prices were not artificially higher in the United Kingdom than in other countries.
  The Government were minded to agree to and implement those recommendations. To that end, undertakings were sought from the major suppliers in the United Kingdom. Those undertakings were not forthcoming. The alternative was to implement the MMC's recommendations by an order in the House. However, in March 1994, the Government announced that an order would not be sought.
  That decision was made because a review of the block exemption regulation was imminent. The Government felt that to seek an order for enforcement of the MMC's recommendations would subject the industry to a period of uncertainty which might be altered within a relatively short time by the outcome of the Commission's own review of the block exemption.
  The Government announced instead that they would encourage the Commission to take account of the MMC's findings. The analysis in the MMC's report, and its recommendations, therefore, have formed the basis of the United Kingdom's negotiating position and policy during negotiation on the new regulation.

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  I come now to the outcome of that. The Commission's review of the block exemption began towards the end of October 1994, when it issued a preliminary draft to competition authorities in member states. In the United Kingdom, officials from my Department conducted an extensive consultation exercise. That sought the views of all interested parties. Many helpful comments were received, which reflected the importance of the issue to all concerned.
  Having heard the views of member states in November 1994, the Commission published an official draft of the proposed new regulation. Again, a number of comments were made, by a variety of organisations. They included groups from within the industry, as well as consumer associations and legal bodies. Following further consultation with member states, the final regulation was approved by the College of Commissioners in June of this year. The current exemption has now been extended for three months, and will now expire not on 30 June but on 30 September. The provisions in the new regulation will come into force on 1 October 1995, for a period of seven years.
  I come now to the new provisions in the block exemption. The hon. Gentleman has made it clear that he is disappointed by the outcome of the negotiation, but the Government take a rather more positive view of the outcome than would be apparent from the remarks that we have heard in the debate. I shall outline why we take that view.
  Among the significant changes that have taken place is that dealers will now have greater freedom to sell competing brands. They will also be able to advertise outside their contract territories. The importance of that is that those were key recommendations in the MMC's report.
  Furthermore, the minimum duration of agreements has been increased to five years. Both parties will now have to give at least two years' notice of termination. That is a doubling of the previous period, and it is an important step in the right direction. Each party will be able to request the views of an independent expert in the case of disputes over sales targets. That, as well as the right to compensation if only one year's notice of termination is given, further strengthens the position of dealers.
  Mr. Randall: I understand that the new arbitration facility can be invoked only after a court hearing has taken place. Will the Minister confirm that it is not possible just to go along and say, "Will you rule on this?", as I think it should be, and that a breach must have been perpetrated for the arbitration procedures to be invoked?
  Mr. Evans: One of the challenges of the current system is the absence of any facility for the introduction of a third-party element to resolve disputes, although an independent element has been negotiated for disputes involving, in particular, sales targets. That is a step in the right direction. I shall be happy to give the hon. Gentleman more details in due course, but the important point is that, for the first time, there is that independent element.
  For that reason, among others, the Government believe that the settlement is good for the United Kingdom, and represents a good deal for UK car dealers. The MMC's analysis has been reflected in the Commission's conclusions. The elements of selective and exclusive distribution have been retained, but some of the other restrictions have been lifted.
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  The Commission has expressed the belief that, previously, there were a number of instances of non-compliance with the terms of the previous block exemption. Others—notably, some dealer trade associations—have said that it offered the manufacturer too much power at the expense of dealers, and that that led to abusive treatment of dealers. That is relevant to many of the concerns expressed by the hon. Gentleman.
  Each block exemption contains a list of clauses known as the blacklist, which sets out a number of restrictive practices that may not be included in any agreement that seeks the benefit of the block exemption. It is worth noting that the blacklist in the new regulation has been extended to provide much greater certainty; that also demonstrates the Commission's commitment to stamp out malpractices that have occurred under the current block exemption.
  The hon. Gentleman suggested that the block exemption might be amended to prohibit all forms of abusive treatment of dealers by manufacturers. I do not think that appropriate.
  Mr. Randall: The manufacturers want bigger and fewer networks. That was highlighted in the MMC report, which suggested that such an arrangement would produce greater efficiency and productivity. During that process, however, many smaller companies are being discarded because they cannot secure the necessary investment and the right structures to provide that efficiency. How are we to move from the current position to the new position? I am merely saying that we should have a scheme that allows terminations to take place in a way that does not wipe out companies.
  That is a dilemma, but I feel that it could be handled better. It is clear that the Commission has not got to grips with the problem; in my view, a compensation system is the only answer.
  Mr. Evans: The hon. Gentleman has made it clear that he is not happy with the outcome of the negotiations on the block exemption. The Government believe, however, that many of the concerns raised in the MMC report have been addressed during those negotiations. We part company, ultimately, on the Government's belief that the block exemption is not there to regulate every aspect of the manufacturers' agreement with dealers; it is there to deal with trade and competition issues. In those circumstances, it can be taken only so far.
  The Commission has stated explicitly that, in future, it will monitor compliance with the block exemption closely. That statement is to be applauded, as block exemptions permit restrictions of competition. Owing to the benefits that such restrictions provide, it is essential that the provisions of the exemptions are not abused. As I have made clear to the hon. Gentleman, they may have been breached in the past.
  If a manufacturer breaches the terms of the block exemption, the Commission will take appropriate action to deal with the matter. It is for that reason that the new block exemption is a useful step forward. It will stimulate competition and encourage competitiveness, and it should equip all members of the industry to face the challenges of the future.
  Question put and agreed to.
  Adjourned accordingly at twenty-four minutes past Nine o'clock.