Commons Sitting of 6 February 1996

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

    Eurofighter
    Mr. Atkins: To ask the Secretary of State for Defence if he will make a statement on his discussions with the German Defence Minister on the workshare and purchase of Eurofighter. [12026]
    The Minister of State for Defence Procurement (Mr. James Arbuthnot): I met my counterpart, State Secretary SchŐnbohm, on 18 January of this year. I welcomed the announcement by the German Defence Minister of his country's intention to increase its commitment from 140 aircraft to 180, which has largely resolved the question of workshare in the production phase of the Eurofighter project and is excellent news for British industry.
    Mr. Atkins: I and my Lancashire Conservative colleagues thank my hon. Friend for responding to our lobbying on behalf of our constituents and for holding firm in the negotiations over workshare with his German counterpart. Can he confirm that the decision will mean many extra billions of pounds'-worth of work for my constituents and those of other hon. Members and that the production investment phase will move forward as rapidly as possible?
    Mr. Arbuthnot: I am grateful to my right hon. Friend for his comments. I pay tribute to him and our right hon. and hon. Friends from the area for the vigour with which they support an industry that is important not only to their constituencies but to the country. I can confirm what my right hon. Friend says. The agreement that we have reached means that the production phase of Eurofighter will bring to the United Kingdom between 37 and 38 per cent. of the workshare—an increase of 4 per cent. over the development phase. That means that some £9 billion-worth of work will go to United Kingdom industry.
    Mr. Menzies Campbell: The Minister will know that what he just said will be welcome on both sides of the House. Does he agree that Eurofighter is a significant example of the European co-operation on defence procurement that was recently endorsed by the Trade and Industry Committee and the Defence Committee joint report? Does he further agree that if the European
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    industrial defence base is to be maintained and the United Kingdom and others are not to become the compliant customers of the United States, common procurement in Europe will be essential?
    Mr. Arbuthnot: It is an extremely valuable example of the way in which collaboration can work. I am delighted that the project is going ahead and that Eurofighter is now back on track to become the cornerstone of the Royal Air Force's capability into the next century. It is necessary for us to have collaborative links both with European partners and with the United States, where we have many industrial ties and where we can gain many benefits from collaboration.
    Mr. Colvin: Eurofighter is a most important defence industrial project but, last Thursday, in the debate on the Royal Navy, my hon. Friend referred to the review being carried out by his Department into our defence industrial base and announced his response to the Select Committees' joint report referred to by the hon. and learned Member for Fife, North-East (Mr. Campbell). Was that response his definitive statement following the completion of his review, or can we expect another document?
    Mr. Arbuthnot: My hon. Friend is right to refer to that response. We found the Select Committees' joint report extremely constructive. We have given a continuing response that shows the closeness of our ties with British industry. We continue to discuss these important matters with British industry and with the National Defence Industries Council. A sub-group is working on precisely the industrial base questions that my hon. Friend raised.

    Market Testing
    Mr. Barry Jones: To ask the Secretary of State for Defence what plans he has to change his policies concerning market testing; and if he will make a statement. [12027]
    Mr. Arbuthnot: The Government remain committed to market testing. The "Competing for Quality" initiative seeks efficiencies and best value for money through competition and private sector involvement. Our aim is to deliver defence support at the high level that our armed forces deserve, and at a cost that the taxpayer can afford.
    Mr. Jones: Surely the Government will abandon market testing as an instrument of policy, because it involves such a high risk. Will the Minister please receive a deputation from RAF Sealand in my constituency, whose 1,500 staff are now very uneasy about the implications of market testing? Does he agree that RAF Sealand played a magnificent part in the Gulf and Falklands wars? Surely the in-house team bid should be accepted. RAF Sealand is the finest maintenance unit of its kind in the world, and it is a British strategic asset. Surely the Minister agrees with me.
    Mr. Arbuthnot: I agree that RAF Sealand has performed a magnificent job over the years, and I will of course accept a deputation from the hon. Gentleman; but I must discourage him from asking us to abandon our approach on market testing, which has proved extremely

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    successful. Over the past three or four years, it has saved us some £250 million annually—money that can be spent on other equipment for the armed forces. It has also brought us private sector expertise and improved quality, response times and delivery times. I am afraid that we will not abandon it.
    Mr. Wilkinson: In implementing the "Competing for Quality" exercise, will my hon. Friend ensure that the armed forces retain a surge capability, so that maintenance facilities can be expanded at times of emergency or war? To that end, will he ensure that a fair number of the contractor personnel are members of the new sponsored reserves?
    Mr. Arbuthnot: I can certainly reassure my hon. Friend on the first point: we are very conscious of its importance. As for the second point, it is a very interesting idea which I would like to pursue further.
    Mr. Murphy: Will the Minister take his mind back to RAF St. Athan? Can he guarantee that market testing will never again result in the fiasco that occurred there when the former Airwork company botched repairs to Tornado aircraft? When will he give the House the full details of that sorry affair—and will he tell us whether the market testing exercise cost British taxpayers £30 million, £120 million or, as some claim, as much as £300 million?
    Mr. Arbuthnot: This is bizarre. I should like to know whether the hon. Gentleman would abandon market testing in the unlikely event of his ever gaining power. If so, he would abandon the huge savings that we have achieved through market testing.
    As for Airwork, the figures that the hon. Gentleman plucked out of the air—with an irresponsibility of which I had not previously thought him capable—are completely out of the question. We are pursuing a claim against Bricom of which we have made the company aware; I shall not disclose the amount of that claim, because it is commercially confidential. The aircraft are steadily coming back into service as British Aerospace returns them, and they are all well on the way to being properly repaired. The hon. Gentleman's irresponsibility astounds me.
    Mr. Nicholas Winterton: Where did wealth creation, the United Kingdom's manufacturing base and jobs in the United Kingdom feature in the Minister's response to the hon. Member for Torfaen (Mr. Murphy)?
    Mr. Arbuthnot: That is a difficult question to answer, because the hon. Member for Torfaen (Mr. Murphy) is clearly not interested in wealth creation. We know that, if a Labour Government came to power, they would want to cut defence spending. They cloak that intention with the suggestion that they want some sort of review, but we know that they are scared to reveal that they want to cut defence spending. That is why they have called for a fundamental spending review.

    Beaufort's Dyke
    Mr. Jon Owen Jones: To ask the Secretary of State for Defence what plans his Department has to monitor the ammunition dump at Beaufort's dyke. [12028]
    The Minister of State for the Armed Forces (Mr. Nicholas Soames): My Department will contribute to a follow-up survey of the Beaufort's dyke area by the Scottish Office Marine Laboratory.
    Mr. Jones: I hope that the Minister had the opportunity to read yesterday's Western Mail because it contained a revelation that a distinguished bomber in the second world war, Mr. Robert Wannop, and many of his colleagues had disposed of large quantities of chemical and incendiary bombs in Cardigan bay. The British public want to know how many other dumps exist in seas around Britain, where they are and what their state is. Is it not time that the Minister's Department conducted a comprehensive survey and provided the public with the much-needed answers to those questions?
    Mr. Soames: I did not have the great joy of reading the Western Mail yesterday—it passed me by—but I shall ensure that I receive a copy so that I may establish more carefully the basis of the hon. Gentleman's claim. As we have said throughout this matter, there is no marine, navigational, safety or other defence requirement to conduct further monitoring. We have already released a substantial amount of information—the most detailed information that has ever been released in a parliamentary answer—on all the dumping sites. Scientific opinion is that, if left undisturbed, such sites present no significant risk to human health or to the marine environment. I shall certainly read the article that the hon. Gentleman mentioned and report back to him.
    Sir Hector Monro: Is my hon. Friend aware that the local authority in Dumfries and Galloway has been concerned at the washing ashore of incendiaries following the installation of the pipeline? Will he assure me that all Ministries concerned will come to a conclusion on the way forward before a decision must be made on the interconnector between Scotland and Northern Ireland?
    Mr. Soames: I am grateful to my right hon. Friend. Of course we liaise closely with the Scottish Office on the matter. I am sure that he will wish to pay tribute to the remarkable work of members of the Royal Navy's Clyde submarine base clearance diving unit and the Scotland, northern England and Northern Ireland diving units, who have cleared approximately 4,500 devices from affected beaches. I take note of what he said.
    Mrs. Ewing: As the House will be interested today in the change of personnel at British Gas, what direct contacts have been made with British Gas on the laying of the pipeline? What issues were discussed? On what dates were meetings held and what recommendations, if any, were made by the Ministry of Defence?
    Mr. Soames: A contractor working for British Gas surveyed the proposed route north of Beaufort's dyke dump before the pipeline was laid and filmed metallic objects and other debris on the sea bed. The contractor notified the MOD on 29 September that it intended to clear the proposed route. The MOD advised against that, but following confirmation that the Health and Safety Executive had accepted the company's risk assessment, work was allowed to continue. Throughout this matter,

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    the MOD has treated the problem extremely responsibly. Explosive ordnance disposal teams will, whenever necessary, continue to undertake any clearance work.

    Homosexuality
    Mr. Michael Brown: To ask the Secretary of State for Defence when he will publish his departmental report regarding homosexuality in the armed forces. [12030]
    Mr. Soames: I expect to receive the homosexuality assessment team's report later this month and, when I have considered it, a copy will be placed in the Library of the House.
    Mr. Brown: Will my hon. Friend confirm or deny the reports in today's Evening Standard?
    Mr. Soames: Again, that is a pleasure that has passed me by. I assure my hon. Friend, however, that neither I nor my right hon. and hon. Friends have yet received the report. When we do, we will give it the most careful consideration. I am grateful for the sensible and realistic way in which my hon. Friend has approached these matters and for the helpful guidance that he has frequently given.
    Mr. Campbell-Savours: Is it not true that many homosexual service men were decorated for bravery, for gallantry in the field and for their courage during the second world war? Will the Minister confirm that from the Dispatch Box?
    Mr. Soames: I am sure that, in the course of a number of global conflicts, a number of homosexuals have acted with the highest gallantry. The view of service chiefs and Ministers is based not in any way on moral judgment, but on the impracticality of homosexual behaviour, which is clearly not compatible with service life.
    Sir Patrick Cormack: Will my hon. Friend give the House a clear undertaking that no changes will be effected in the armed forces against the wishes of those currently serving?
    Mr. Soames: I know that my hon. Friend will accept from me the clear statement that I have just made, but he will also understand why we commissioned the report, the basis of which will form part of a paper that is to be submitted to the Select Committee on the Armed Forces Bill. A copy will placed in the Library. The House will have a full chance to discuss such important matters, but the view of service chiefs, of Ministers and, I have to say, of the great majority of the people in the armed forces, is exactly as I have outlined.
    Mr. Tony Banks: Is there not some inconsistency in Government policy towards homosexuals in the armed forces? Is it not technically possible for a Defence Minister to be homosexual, even though it is unlawful for someone in the armed forces to be homosexual? Is not that unfair and inconsistent?
    Mr. Soames: I have rarely found inconsistencies in Government policy of any sort.

    Defence Expenditure
    Mr. Whittingdale: To ask the Secretary of State for Defence what proportion of expenditure is currently devoted to defence; and what is the current European average. [12032]
    The Secretary of State for Defence (Mr. Michael Portillo): My Department expects to spend about 3 per cent. of gross domestic product in 1995–96 compared with the current NATO European average of 2.3 per cent. of GDP.
    Mr. Whittingdale: Have not successive Labour party conferences voted to reduce the proportion of our GDP devoted to defence expenditure to the European average? The question was avoided at the most recent Labour party conference only because it was not put to the conference. Will my right hon. Friend say what effect such a policy would have on our ability to meet our NATO commitments and to defend ourselves?
    Mr. Portillo: On the figures that I have given my hon. Friend, it would mean a reduction of more than £4.5 billion in Britain's defence budget. I can confirm that successive Labour party conferences have voted to reduce this country's spending to the European average. Indeed, I calculated the figure so as to give the most benefit to the Labour party, because I used the average of the NATO European countries. If a broader definition were drawn, the figures might have been even more divergent. The time has come for the Labour defence spokesmen to tell us whether the Opposition would increase or decrease defence spending, and whether they would follow the dictation of their party and satisfy their hon. Friends by reducing spending by £4.5 billion or more.
    Dr. Reid: He is a beauty, is he not, Madam Speaker? That is all a scare story to cover up the Secretary of State's own incompetence and cuts. Does he remember that the same scare stories appeared in the 1992 manifesto, in which it was claimed that Labour
    "would devastate our conventional forces by cuts of … 27 per cent."?
    Why is the right hon. Gentleman not boasting, because he has managed to beat that? He has made spending cuts of 27.3 per cent. on the defence budget, and of more than 30 per cent. on the conventional forces budget over the past decade. Why does he feel compelled to spread those scare stories again? Are they a cover-up for further cuts, or are the Conservatives genetically disposed to say one thing and do another?
    Mr. Portillo: The hon. Gentleman has such contempt for his own party and its conference that he sums it up as a "scare story". I am not inventing things; I am talking about Labour party conferences year after year. What I want to know is whether the hon. Gentleman sticks with his party and his party conference. Would he increase defence spending or reduce it? The whole House will have noticed that he had nothing to say about what a Labour Government would actually do.
    Mr. Brazier: Does my right hon. Friend agree that it would be inconsistent for the Government to implement further defence cuts while their Back Benchers were

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    calling for orders for factories in their constituencies and for the deployment of troops to all sorts of destinations in the third world, but that that is what we hear again and again from Opposition Members?
    Mr. Portillo: It is indeed. There are no more vociferous voices than those of Labour Members calling for orders for their constituencies—yet their party's policy is to reduce spending. In the debate on the Navy the other day, three Labour Members told us once again that they are active members of the Campaign for Nuclear Disarmament and that they want our nuclear deterrent to be abolished. What have the Front-Bench team to say about such things? Why do they not tell us the proper policy of the Labour party and, in the process, how they propose to deal with a Labour conference and Labour Back Benchers whose determination to cut this country's defences will not be silenced?
    Mr. Skinner: Is not it true, once we have cut all the cackle, that the Labour party conference regularly passes resolutions proposing a cut in defence expenditure, and the Tory Government carry them out?
    Mr. Portillo: If the hon. Gentleman is so uninfluential in his own party, I do not know why he does not give up and find something else to do.
    Dame Elaine Kellett-Bowman: Does my right hon. Friend recall that the Labour Government's major decision was to cancel the TSR2—the most magnificent aircraft at the time—which decimated jobs in Preston and lost a 10-year lead in electronics?
    Mr. Portillo: Hon. Members on both sides of the House who represent constituencies that depend on defence orders should remember that the contrast between a Conservative Government and a Labour Government is that a Conservative Government announce orders and a Labour Government announce cancellations.

    Official Service Residences
    Mrs. Bridget Prentice: To ask the Secretary of State for Defence how much money has been spent by his Department on the official service residences in the past five years. [12033]
    Mr. Soames: Over the past two years, £2.61 million and £1.51 million respectively has been spent on maintenance, building work, furniture and fittings of official service residences. I have today placed in the Library of the House my Department's detailed response to Sir Peter Cazalet's recommendations, which includes a reduced list of posts that carry an entitlement to an official service residence. The list shows that we have reduced such posts from 75 to 48, with further reductions to 44 as other posts lapse. I understand that Sir Peter is very satisfied by the way in which my Department has implemented his recommendations.
    Mrs. Prentice: Given last year's scandal about expenditure on official service residences, including £33,000 for a set of curtains, does the Minister agree that
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    such a gross waste of taxpayers' money must stop or does he agree with the Daily Express that it makes the Secretary of State appear like
    "a squalid little estate agent"?
    Mr. Soames: No, I do not agree with the Daily Express. The hon. Lady has plainly not done her homework on the subject. In May 1995, the Government commissioned Sir Peter Cazalet, to whom we owe a great debt of gratitude for a very thorough piece of work, to report on representational entertainment in the armed forces. A copy of that report has been placed in the Library. Since then, and in the light of the Cazalet report, a great deal of work has been done and I am pleased to say that we have been able to implement Sir Peter's recommendations in full. I hope that the Labour party accepts that, in future, such matters will be managed more effectively and efficiently, and that, above all, there is no doubt that there is an important requirement for the services, which are a golden asset to this country, to entertain where they have a significant representational role.
    Mr. Key: Will my hon. Friend confirm that our senior officers—when they are not living cheek-by-jowl with service men while winning wars or keeping the peace— are often occupying their first permanent home after a career of moving their wives and families around the world? Do they not occupy houses that represent the dignity of the rank that they hold for a short period? Is not that very necessary in the armed forces? It would be entirely inappropriate for the Prime Minister to live in Lewisham, for example, just as it would be inappropriate for senior officers not to live in official service residences.
    Mr. Soames: My hon. Friend, through his constituency interest, is well aware of the importance of the representational role of very senior officers in all three services. We can now account for these matters more effectively, and I hope that we will be able to go forward from here.
    Mr. Spellar: Is not the sale of Haymes Garth another example of the breathtaking incompetence of the MOD? When added to the sale of the married quarters estate, does not that comprise the giveaway of the century? Will the Minister confirm that the proceeds of the sales will go to the Treasury, but that future rents will come from the Defence budget? Is not that a defence cut by the back door?
    Mr. Soames: That was as fine a display of soundbites as I have heard this year, and it displayed the politics of mediocrity and envy for which the Labour party is famous. Let us establish the facts—Haymes Garth is being sold and, very sadly, the officer who was previously concerned has left the service. The Cazalet report, which was commissioned by the Government, has been thoroughly examined and all of its recommendations carried out. The hon. Gentleman's question seems extraordinary in those circumstances.

    Lost Medals
    Mrs. Gorman: To ask the Secretary of State for Defence what is his policy in reissuing lost medals for ex-service men. [12034]
    Mr. Soames: Where evidence of genuine loss is produced, replacement medals can be supplied. Replacements are charged at cost.
    Mrs. Gorman: Will my hon. Friend accept the grateful thanks of my constituent, Mr. Edwin Rymer, who lost his war medals but was able to regain them, although at a cost of £70—almost a week's pension? Will he also accept that Mr. Rymer and his generation of war heroes would be absolutely devastated if the freedom to run our country for which they fought were ever to be lost? Would not a Labour Government hand over that freedom lock, stock and barrel to Europe?
    Mr. Soames: My hon. Friend does well to highlight again Labour's imperfect understanding of defence matters. I am grateful for her tribute to the work done by the medals office of the Ministry of Defence. We realise how distressing it is when treasured medals are lost or stolen. Claims for replacement take some time to process, as it is important that they are properly verified. As the years go past, such requests will increase, and we must make sure that they are properly satisfied by having an effective and efficient operation in place. As for her question about the Labour party, defence and Europe, the least said the better.
    Mr. Foulkes: Will the Minister consider issuing medals to the service men who advised against the route of the gas pipeline across Beaufort's dyke? Will the Government examine the route of the proposed electricity interconnector with the same degree of care—
    Madam Speaker: Order. The hon. Gentleman is abusing Question Time. He stood to ask a supplementary question on the subject of Beaufort's dyke, but was not called. He now seeks to ask his question, but he will not do so.

    F16 Aircraft
    Mr. Pope: To ask the Secretary of State for Defence what recent discussions he has had with his American counterpart concerning leasing American F16 aircraft. [12035]
    Mr. Portillo: The question was discussed briefly during a meeting with him in October last year.
    Mr. Pope: Will the Secretary of State confirm that the plan to lease American F16 aircraft was the brainchild of David Hart? Will he further confirm that the plan is bitterly opposed by the chief of the RAF, Air Chief Marshal Sir Michael Graydon? Does he agree that to proceed with the F16 will be a kick in the teeth for Lancashire aerospace workers who are working on the Eurofighter?
    Mr. Portillo: I do not agree with any of that. It is a perfectly simple matter of ensuring that the United Kingdom has the best equipment for its defence. In deciding whether to upgrade the Tornado F3, it is necessary for us to make a comparison with the other courses that we might follow, which include leasing the F16.
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    If the hon. Gentleman is trying to tell me that, if the Labour party were in power it would not compare one option with another to get the best solution for the country, he would serve the country even less well than I had imagined.
    Mr. John Greenway: Will my right hon. Friend go a little further and confirm the Government's absolute commitment to the Eurofighter project? In the long run, will that not give the RAF the multi-role aircraft that it needs for the future?
    Mr. Portillo: Yes, my hon. Friend is right. The Government have on many occasions made clear their commitment to Eurofighter, and I am pleased to do so again today. Thanks to the good work of my hon. Friend the Minister of State for Defence Procurement, that project now has the green light. This discussion about the F3 and F16 is about how we fill the gap for that capability between now and the day that we have the Eurofighter. I am pleased to say that the latter will be an excellent aircraft for the RAF.
    Dr. David Clark: Does the Secretary of State recall grumbling to his American counterpart just two weeks ago that Britain had placed defence orders worth more than £5 billion with the United States and arguing that it ought to reciprocate with some orders for British defence equipment? In the light of that grumbling, will he drop his obsession with this one-way deal to lease F16s, which will cost thousands of British jobs and be very expensive, as we shall have to adapt the refuelling arrangements and the aircraft will require new support systems?
    Mr. Portillo: I went to Washington not to grumble, but to represent my country and to say that we demand a two-way street in defence procurement. It is true that, last year, we placed orders worth £5 billion with the United States and, therefore, we look to that country to buy defence equipment from us. I am pleased to say that it is buying at the rate of about £800 million a year, and I want to see more of that. The hon. Gentleman is the Opposition defence spokesman and he wants to hold my job. He cannot be so irresponsible as to say that, if he were in my position, he would not compare one project with another. If he is saying that, there will be no value for money and no way of ensuring that Britain has the defences that she requires.

    Defence Industries
    Sir Roger Moate: To ask the Secretary of State for Defence what assessment he has made of the export potential of United Kingdom defence industries; and if he will make a statement. [12036]
    Mr. Arbuthnot: British defence equipment manufacturers continue to enjoy success in the export market. In 1995, they won contracts worth about £5 billion. That achievement makes us the second largest exporter in the world.
    Sir Roger Moate: Can my hon. Friend give any estimate of how many hundreds of thousands of jobs are dependent on our defence industries? Is it not the case that, if ever the Labour party were in a position to carry

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    out its conference policies of reducing spending to the European average level, a large number of those jobs would be in jeopardy in Labour as well as Conservative constituencies?
    Mr. Arbuthnot: My hon. Friend is right. Around 400,000 jobs throughout the United Kingdom depend on the defence industry. If we were to reduce spending on defence by £4.5 billion every year, it would be devastating to the British defence industry. That is why it is plain to the British people that we cannot trust Labour on defence, or even on industry for that matter.
    Mr. MacShane: Is the Minister aware of the large export potential for British arms in Europe, both in the European Union and the wider continent? Does he find helpful the continuing public hostility of the Secretary of State to European integration and co-operation? Does he find helpful the speech that the Minister of State made in Munich last week, in which he invited Germany, in effect, to re-arm? The last person to say in Munich, "Deutschland Erwache!" which means "Germany Arise, Germany Awake!", caused some little trouble in Europe. Is it not the case that, while we have a Defence Department that is so hostile to European integration and co-operation, the future for Britain's defence industry is poor indeed?
    Mr. Arbuthnot: That question was total, unmitigated drivel. When British defence exports have risen from 15 per cent. of world market share in 1994 to 19 per cent. in 1995, we should feel proud of what the country has done and realise that that shows the strength of British industry and the support of the British Government and the armed forces. We should talk about, for example, the Red Arrows' recent tour, which was a fantastic aerial display. They are excellent ambassadors for British industry. For the hon. Gentleman to come up with a question such as that is pathetic.
    Mr. Mans: Given the importance of the arms industry to the north-west, when my hon. Friend next speaks to his American counterpart, will he ensure that there is fairness in the export of arms to eastern Europe and that certain statements made by the Americans to the effect that eastern European countries will be more likely to be able to join NATO if they buy American combat planes are stopped?
    Mr. Arbuthnot: I am grateful to my hon. Friend. I have some sympathy with what he says because whether countries join NATO does not depend on their buying high-tech US equipment. That is something that they need to be well aware of before they make their decisions

    Korean War
    Mr. Dalyell: To ask the Secretary of State for Defence if he will evaluate the "Time Watch" programme on prisoners from the Korean war, a transcript of which has been sent to his Department; and if he will update the evidence produced by his Department during the meeting between a Minister of his Department and the hon. Member for Linlithgow on this subject. [12037]
    Mr. Soames: I have great sympathy for the families of service men who remain unaccounted for following the
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    Korean war. Nothing has been discovered since the hon. Gentleman's meeting which has altered our view that there is no evidence that British service men were improperly detained after the post-hostilities repatriations. We will, of course, follow up any evidence if it should emerge.
    Mr. Dalyell: As it now seems not entirely inconceivable—I put it no higher—that national service contemporaries of mine in the Royal Armoured Corps could still be in remote Russian camps after 45 years, and as Russia is becoming more free, will the Government follow up any possibility that there are British people, all these years after the Korean and Vietnam wars, still in those camps?
    Mr. Soames: I wholly understand and applaud the hon. Gentleman's honourable concern and sympathy for those who still remain unaccounted for. His words will, I am sure, have been recognised by those families that are affected. As he knows, most careful and detailed investigations were carried out by successive Governments and Administrations to resolve the cases of service men unaccounted for. No evidence has been found of any British service men being detained, but I assure him that we will, and are, taking advantage of greater openness in Russia. My Department has in recent years carried out detailed research and exchanged information with US and Russian experts to see whether any evidence could be found. No new evidence has emerged. I assure the hon. Gentleman that we shall continue to work hard where any leads emerge.

    Royal Navy
    Mr. Devlin: To ask the Secretary of State for Defence what recent additions to the effectiveness of the Royal Navy have been introduced. [12038]
    Mr. Arbuthnot: The Government continue to maintain and enhance the operational effectiveness of the Royal Navy. Over the past year, the second Trident submarine, HMS Victorious, has entered service, the type 23 frigate HMS Richmond has been accepted and the helicopter carrier HMS Ocean has been launched. In addition, a further seven upgraded Sea Harrier aircraft have been delivered.
    Mr. Devlin: How many ships are currently on order or out to tender for the Royal Navy? Will my hon. Friend assure me that none of those orders will be cancelled, which is what used to happen under the last Labour Government, when Labour used to say one thing and do another?
    Mr. Arbuthnot: I agree with my hon. Friend. At least our decisions are positive. As my right hon. Friend the Secretary of State said, Labour's decisions on, for example, the TSR2 were all cancellations. Labour would have cancelled Trident. Even the right hon. Member for Sedgefield (Mr. Blair) once said that he would like to ban all nuclear weapons from our soil. We know that Labour cannot be trusted on defence.
    Mr. Hutton: Will the Minister accept that the effectiveness of the Royal Navy would be improved by

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    modernising its amphibious capability? Will he therefore tell the House and my constituents when he expects the delayed contract for the replacement of HMS Fearless and HMS Intrepid to be signed?
    Mr. Arbuthnot: I accept that the amphibious capability is very important indeed, which is one of the reasons why on Tuesday last week I went to see HMS Fearless as it was being maintained and re-equipped. We believe that it will come out of dock on schedule, in time for its exercise in April. It is very important to maintain that important capability.

    Defence Spending
    Mr. Waterson: To ask the Secretary of State for Defence what assessment has been made of the effect on Britain's contribution to peacekeeping operations around the world of reducing United Kingdom defence spending to the European average. [12039]
    Mr. Portillo: If any Government were to reduce spending to the European average of 2.3 per cent. of gross domestic product, they would be forced to cut spending on defence by more than £4.5 billion. That would severely undermine our capacity to undertake operations of any kind.
    Mr. Waterson: Does my right hon. Friend agree that it is incredible hypocrisy for Opposition Members on one hand to support, by and large, peacekeeping operations and on the other to call for cuts that would be the equivalent of all 40 infantry battalions?
    Mr. Portillo: Every Labour Government increase taxes. Every Labour Government dream up new ways of spending public money and therefore every Labour Government are subject to intense pressure from their Back Benchers to cut defence spending. That is ultimately why we know we cannot trust the Labour party on defence.

  PRIME MINISTER

    Engagements
    Mr. Waterson: To ask the Prime Minister if he will list his official engagements for Tuesday 6 February. [12055]
    The Prime Minister (Mr. John Major): This morning, I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today.
    Mr. Waterson: Does my right hon. Friend agree that the considerable strength of the economy throughout the country, including Scotland, is based in large measure on reduced burdens on business? During his busy day yesterday, did he have the opportunity to—[Interruption.]
    Madam Speaker: Order.
    Mr. Waterson: Did my right hon. Friend have the opportunity to read reports in Scottish newspapers that
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    two different spokesmen had said diametrically different things about whether extra public spending would be required to carry out Labour's plans for Scotland?
    The Prime Minister: I am not remotely surprised to hear that Opposition Members say different things about their devolution policy. They have not yet thought through that policy; it is full of holes and full of damage. We said from the outset that a Scottish Assembly would require increased taxation and increased public expenditure. The right hon. Member for Sedgefield (Mr. Blair) has, I think, referred to that as utter rubbish. The hon. Member for Dundee, East (Mr. McAllion) has confirmed that that is indeed the case and that taxes will go up—a tartan tax of £6 per week initially, but undoubtedly more later. Another instance of Labour saying one thing and doing another.
    Mr. Blair: When customer complaints to British Gas have doubled and the company has been forced to split into two today because of huge losses on gas contracts, does the Prime Minister think that the leaving package of the chief executive—a £4 million pension fund, an annual income of £250,000 a year and £120,000 in consultancy fees—is justified?
    The Prime Minister: As a matter of fact, the company has split into two to increase competition, which I should have thought the right hon. Gentleman would have liked. As for the package that the right hon. Gentleman mentioned, that, in the private sector, is a matter for the shareholders. As those shareholders include the National Union of Rail, Maritime and Transport Workers, I suggest that the right hon. Gentleman takes it up with the union. If the shareholders are unhappy with the arrangements, no doubt they will pursue the matter. If he does not know how to get the RMT on his side, he can ask the right hon. Member for Kingston upon Hull, East (Mr. Prescott), the deputy leader of the Labour party, who is sponsored by it.
    Mr. Blair: Do we take it from that answer that the Prime Minister recognises no responsibility at all on the part of Government? [Interruption.]
    Madam Speaker: Order.
    Mr. Blair: Two years ago the Prime Minister told us that he found those excesses distasteful, and they have grown since then. He then told us to wait for the Greenbury committee, and the excesses continued to grow. We have had Greenbury and nothing has happened. When will the Prime Minister act in the public interest to make those privatised utilities serve the public and not a small group at the top?
    The Prime Minister: A moment ago, I explained to the right hon. Gentleman that he and one of his hon. Friends were saying different things. We have it again here. I wonder whether the right hon. Gentleman agrees that the Government should not attempt to sit in the boardroom in a metaphysical sense. One of his hon. Friends said:
    "We believe that people should be rewarded for a performance, whether in the form of salary or the granting of share options".
    That person, the hon. Member for Edinburgh, Central (Mr. Darling)—a shadow Treasury spokesman— continued:
    "It is not for me to spell out the benchmarks of success".

    133
    The right hon. Gentleman is once again playing the politics of envy. [Interruption.] Let me be a moment. He loathes privatisation, he loathes private ownership and all that he has had to say about private ownership and a new Labour party is exposed every time that he takes that line.
    Mr. Blair: With all due respect to the Prime Minister, can he not see the difference between people operating within a highly competitive market and the privatised utilities operating monopoly services? Can there be any more telling expression of Conservative values than the Deputy Prime Minister yesterday condoning late payment to small companies while today condoning the excesses in the privatised utilities? One group of hard-working people is told to wait for its money and the other group is given by the Government a licence to print it.
    The Prime Minister: Let me explain to the right hon. Gentleman the benefits of privatisation for millions of people who happen to be consumers. Gas prices have fallen by more than 20 per cent. since privatisation. Potential new suppliers are offering price reductions of 15 to 20 per cent. in the south-west. Personally, I believe that we need
    "the enterprise of the market and the rigours of competition".
    I hope that the right hon. Gentleman agrees with that, because that is the Labour party's new clause IV, which he pushed through last year. As ever, Labour's constitution says one thing and Labour Members do another.
    Mr. Hendry: Will my right hon. Friend join me in paying tribute to the exceptional courage of 21-year-old Fleur Lombard who came from the High Peak and who lost her life at the weekend in the course of her work as a firefighter? Does my right hon. Friend agree that there is great scope for a scheme of rewards to recognise the contributions made by young people in all walks of life, whether they have shown great courage—as in Fleur's case—or they have made a contribution to others and to society? Will he consider whether such a scheme could be backed by the Government?
    The Prime Minister: I will of course consider the matter. I am sure that the whole House will join me in expressing our sympathy to the family of Fleur and those of the other firefighters who have lost their lives in service. There is no doubt that such incidents underline the selfless bravery of the fire service. On this occasion, a young lady lost her life while seeking to save the lives of other people. I shall certainly consider what my hon. Friend has said.
    Mr. Ashdown: Does the Prime Minister think that it is right to delay payment on other people's bills and to use their money to gain interest for oneself? Having done that, does he think it wise to then boast about it?
    The Prime Minister: Let me say to the right hon. Gentleman—
    Mr. Skinner: Can't pay, won't pay.
    The Prime Minister: That reminds me of what the trade unions say about their control over the Labour party.
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    They say that unless they maintain that control, they will not pay for the Labour party, and I am grateful to the hon. Member for Bolsover (Mr. Skinner) for reminding me of that.
    On the substantive question, the Government—not least my right hon. Friend the Deputy Prime Minister, when he was President of the Board of Trade—have done a great deal to encourage prompt payment. My right hon. Friend encouraged the establishment of the CBI's prompt payment code. We required Government payments to comply with the code and we improved procedures in the small claims courts. We are making companies disclose their payments rapidly. Those are the practical measures that we are taking.
    Mr. William Powell: Has my right hon. Friend noticed the remarks of the Prime Minister of Belgium, delivered at Davos at the weekend, to the effect that, if the single currency does not proceed in 1999, the single market will collapse? Is it not the case that Belgium has not the slightest chance of meeting the Maastricht criteria as its general Government gross debt is more than twice the threshold level set down in the Maastricht treaty? Does my right hon. Friend believe that there is a secret agenda to proceed with the single currency despite the treaty of Maastricht? Do not Mr. Dehaene's remarks vindicate my right hon. Friend's decision to veto Mr. Dehaene as President of the European Commission?
    The Prime Minister: I certainly do not believe that the single market would be at risk if the single currency did not proceed in 1999 or at any other time in the future. I do not think that anyone can seriously dispute that, at the moment, there are uncertainties about the timetable. No one can say with absolute certainty which countries might qualify for stage 3 if it goes ahead in 1999. What is relevant is that we must address the key issues about how stage 3 would work, and I have raised that point at successive European Councils. Were it to proceed without the right economic background, there is no doubt that it would be a disaster, not just for the countries taking part, but for all the countries of the European Union.
    Mr. Dowd: To ask the Prime Minister if he will list his official engagements for Tuesday
    6 February. [12056]
    The Prime Minister: I refer the hon. Gentleman to the reply I gave some moments ago.
    Mr. Dowd: Does the Prime Minister agree with the Chancellor of the Exchequer in his condemnation of late payment as a serious threat to the very survival of many small firms, or does he side with the Deputy Prime Minister, who advocates becoming skilful at keeping creditors away? Is not that latter approach a kick in the teeth for millions of honest small businesses? Which one does the Prime Minister support? May we have a straight answer?
    The Prime Minister: I think that the hon. Gentleman must have been dozing, because a few moments ago I set out a range of measures that the Government have introduced to encourage prompt payment, some of them initiated by my right hon. Friend the Deputy Prime Minister.
    Mr. Booth: As last week we all heard the German Chancellor say that integration would be a matter of war and peace in the 21st century, will the Prime Minister tell Herr Kohl that integration and federation forced on countries and peoples that are free, against their will, often result in civil war? Where is Yugoslavia now? Will my right hon. Friend tell Chancellor Kohl that this country takes it ill when we hear loose talk of war from Germany?
    The Prime Minister: The whole House recognises the importance of examining very carefully what criteria there might be for any countries that decide to move ahead to stage 3. We need to look at what has been achieved in the European Union over the past 30 years or so and to ensure that that is not imperilled by moves to other advanced changes for which the European Union is not yet ready. That needs to be a pragmatic debate on whether the economic circumstances are right for movement and on what the implications would be, both in the short term and in the long term, for the countries that might be in a single currency and for those that might not be.
    Mr. Mackinlay: To ask the Prime Minister if he will list his official engagements for Tuesday 6 February. [12057]
    The Prime Minister: I refer the hon. Member to the answer I gave some moments ago.
    Mr. Mackinlay: Is the Prime Minister aware of the growing feeling that the country is being run for and by a narrow magic circle of privileged people? In that regard, will he tell the House how it is that former Eton toff Darius Guppy can negotiate his sentence and negotiate his way out of prison—a prison that he likened to his school, Eton? How is it that top rail managers can fail to pay rail ticket fares yet not suffer any penalty? How is it that Cedric Brown can have a massive windfall pay-off? Is it not a case of, "It's the rich what gets the pleasure and the poor what gets the blame"?
    The Prime Minister: That was an exceedingly well worked pay-off line by the hon. Gentleman, but I am not sure that the build-up merited it. This is the first time in my life that I have been told that I am part of a magic circle, and I do not think that I like it.

British Gas
3.30 pm
Mrs. Margaret Beckett(by private notice): To ask the President of the Board of Trade if he will make a statement on the proposals for the restructuring of British Gas, and his Department's response to them.
The Minister for Industry and Energy (Mr. Tim Eggar): The separation of British Gas's supply and transportation businesses is a requirement of schedule 5 to the Gas Act 1995. This provision was debated at length during the passage of the Bill. The Act received broad support. It has been widely agreed that separation is a necessary step in opening up competition in the domestic gas market and in ensuring that British Gas operates on the same basis as its competitors.
The British Gas schedule 5 transfer scheme, which effects that separation, has now been approved by my right hon. Friend the President of the Board of Trade. Today's announcement by British Gas of a demerger is a commercial decision by the company, and is not imposed by the provisions of the Act. However, it has been welcomed by, among others, the Gas Consumers Council and the GMB union.
Mrs. Beckett: Many people will wonder why Ministers did not volunteer to make a statement on the matter today, since it is of great concern to the 19 million customers of British Gas, and especially since, despite what the Minister has said, what he is telling the House today is the right structure for British Gas seems so closely to resemble the structure that the Government and the Minister himself specifically rejected as "unnecessary" less than nine months ago, when the Gas Act 1995 was being debated in the House. Why have the Government changed their mind? Is it because they have failed to find any other solution to the problems of the potential £1.5 billion losses British Gas faces as a result of take-or-pay contracts?
Is it not the case that what the Minister has just announced means that, while one company retains a natural monopoly over gas transmission, the second, which is the company responsible for gas supply to those 19 million customers, is the one saddled with all the liabilities and all the attendant risks? What assurances can the Minister give that that company will be viable in the long term? Will he give an absolute assurance that the interests of consumers will be protected, especially as consumers are already suffering from a deteriorating service, as evidenced by the loss of British Gas's charter mark and the doubling of complaints since privatisation?
Finally, who loses? British Gas has large liabilities which seem to have led directly to the decision. Those liabilities are still there, so who is going to carry the can? Is it the customer? Is it Sid, who is not getting the deal he was promised by this Government? Plainly, it seems to be neither the board nor Mr. Cedric Brown.
Mr. Eggar: The right hon. Lady asked me who loses. The answer is the Labour party and the right hon. Lady. The right hon. Lady voted against the Bill and in favour of a reasoned amendment that made it quite clear that the Bill would result in harm to the south-west. As she knows
138
very well, the south-west will be the first to benefit from the effect of competition, with most south-west consumers being offered reductions in their bills of between 15 and 20 per cent., and some as much as 25.2 per cent. The right hon. Lady was scaremongering when she voted for the reasoned amendment. She should withdraw it and apologise to consumers in the south-west and elsewhere who will benefit from the results of competition.
The decision on the demerger was a commercial decision for British Gas. The right hon. Lady should know that, under schedule 5 to the Gas Act 1995, it was always envisaged that there would be a transfer scheme that effectively separated the supply side of British Gas from the transportation side.
Finally, the right hon. Lady should be aware that the Gas Consumers Council has welcomed today's announcement, as has the GMB union, and that the chairman of British Gas has recognised that the introduction of competition will lead to a reduction in prices to consumers. Rather than deploring what has been announced today, she should welcome it, because it is good news for consumers.
Mr. John Whittingdale: Does not my right hon. Friend agree that the fact that the right hon. Lady felt it necessary to table a private notice question shows that the Labour party still wishes to intervene in industry, and dictate to private sector companies? Will he confirm that it remains Government policy to leave such decisions to those best qualified to make them?
Mr. Eggar: My hon. Friend is absolutely right. I am amazed that the Labour party should regard the matter as worthy of a private notice question. It is a commercial decision by a commercial company.
Mr. Nick Harvey: Having pressed almost single-handedly during the passage of the Bill for such a division, I welcome the fact that, albeit belatedly, it has been made. What discussions have the Government had with British Gas or the regulator about the possibility of business failure because of the debts that British Gas has accumulated? Is the Minister absolutely confident that the division that has been announced today will protect the consumer against having to pick up the tab for those debts?
Mr. Eggar: The British Gas board, in recommending the demerger, has addressed the issue under its Companies Act obligations. The Government are satisfied that the transfer scheme meets the necessary requirements under schedule 5 to the Gas Act 1995.
Mr. Richard Tracey: Does my right hon. Friend agree that the demerger makes total sense? It makes sense for the companies that will be competing in supplies against British Gas and obviously want the transmission company to be separated, and for consumers, who will benefit.
Mr. Eggar: The decision to demerge is a matter for British Gas; none the less, I absolutely agree with my hon. Friend that the effect of increased competition, which is a direct result of Government policy, will be sharply to reduce prices to consumers and improve the quality of service.
Mr. Ken Purchase: Are not such corporate gymnastics, which were foreshadowed in the Bill, simply a ruse to ensure that the take-or-pay contracts are paid for by consumers and taxpayers rather than by British Gas shareholders, who have already benefited disproportionately?
Mr. Eggar: The hon. Gentleman completely misunderstands the position. He particularly fails to understand that everyone who observes the sector or who is involved in it, including the chairman of British Gas and the Gas Consumers Council, recognises that the introduction of competition will result in lower prices to consumers. The old and new Labour parties do not believe in competition. They do not believe in the private sector; they still believe in state control.
Mr. Bernard Jenkin: I agree with my right hon. Friend that the demerger clearly vindicates the Government's policy of competition in the private sector, as opposed to nationalised industries. I also agree with him that it is clearly a commercial matter. Therefore, can he clarify exactly which of his responsibilities we are holding him to account for in the House today?
Mr. Eggar: I have some difficulty in answering my hon. Friend's question. The Government's responsibility relates to the transfer scheme under schedule 5 to the 1995 Act. The responsibility regarding the demerger of British Gas has nothing to do with the Government, because that is a matter for the board of British Gas.
Mr. Peter L. Pike: Does not the Minister recognise that he cannot guarantee that British Gas Energy—with the contracts that it will inherit on the demerger, and in a competitive market with its reduced market share—will not fail?
Mr. Eggar: That is certainly not the view of the British Gas board. The Government have been satisfied about that, and have had regard to the requirements of schedule 5 to the 1995 Act. Of course, the hon. Gentleman may not be aware that the new entity, which is, at least temporarily, being called British Gas Energy, contains the significant assets of the Morecambe Bay north and the Morecambe Bay south fields.
Mr. Graham Riddick: Is it not the case that the privatisation of the gas industry, which was fiercely opposed by the Labour party, has led to prices falling substantially—by about 25 per cent. since privatization—to far fewer disconnections, and, of course, to greater competition in the industry? Is it not clear that this private notice question, tabled by the right hon. Member for Derby, South (Mrs. Beckett), is simply her attempt to cause mischief? However, does not the question prove that the Labour party still believes in interfering in British industry as much as ever?
Mr. Eggar: My hon. Friend is absolutely right. There has not only been a 23 per cent. reduction, in real terms, in prices to domestic consumers, but there are significant further price reductions in the pipeline in the south-west of the United Kingdom. Most people anticipate that, as competition is extended beyond the south-west, there will be further price reductions in the rest of the
140
United Kingdom. As for the position taken by the right hon. Member for Derby, South (Mrs. Beckett), her instincts now—as they were when she was in government during the previous Labour Government—are to intervene on every possible occasion. She believes that she can run British industry better than British managers can.
Mr. Michael Clapham: The Minister must be aware that the new company could increase gas prices unless the take-or-pay contracts are sorted out. What action will he take, therefore, to ensure that British Gas's 19 million customers are protected against those likely price increases?
Mr. Eggar: The hon. Gentleman simply does not understand the nature of competition. There is no way in which British Gas will be able to raise its prices when its competitors are lowering prices. The future for consumers is bright because competition will produce significant price reductions and because of improvements in the quality of service. The hon. Gentleman should recognise that.
Mr. Anthony Coombs: Given that the demerger is supported by the Gas Consumers Council, in particular, and by the GMB union, will my right hon. Friend remind the House that British Gas is a private company—whatever the Labour party might say—that it is operating in a very competitive sector, and that it is giving an increasingly good service to the public as a result of privatisation? Is it significant that the Labour party is raising this issue on the Floor of the House and showing how much it wants to over-regulate industry and establish a stranglehold on the private utility companies, and so much other British industry, which would take us right back to the 1970s, when this country was the sick man of Europe?
Mr. Eggar: I absolutely agree with my hon. Friend. The fact is that, when faced with a choice between regulation or state ownership on the one hand and competition on the other, the Labour party always chooses regulation and nationalisation.
Mr. Dennis Skinner: I wonder if the Minister understands that the demerger will give an opportunity to some of the Tory Ministers who are leaving Parliament to get jobs on those companies' boards. Can he give us an assurance that he is not among them? Will he condemn the action of any Tory Ministers who leave Parliament and take jobs on those boards? Will he give us a guarantee that no Tory Back Benchers will get moonlighting jobs on those boards?
Mr. Eggar: I have not yet received a job application form from British Gas, and, if I did, I would not fill it in.
Dr. Robert Spink: Will my right hon. Friend confirm that, in future, following the demerger, gas prices will fall? Will he also confirm that those reductions will be in addition to the price reductions that have occurred since privatization—the Prime Minister today said that the fall was more than 20 per cent.? Can he give an estimate of the total reduction in prices in, say, three years' time?
Mr. Eggar: My hon. Friend is absolutely right. We can look forward to significant further reductions. In the

141
south-west trial area, some consumers are being offered reductions of as much as 25.2 per cent., and average reductions of between 15 and 20 per cent. In future, I would expect to see similar reductions available in other parts of the United Kingdom.
Action taken by the regulator in the price review on transportation may lead to additional nationwide reductions. Of course, I cannot anticipate the outcome of whatever proposal she may make or any right that British Gas may have to appeal to the Monopolies and Mergers Commission. I am confident that increased competition in the gas market will lead to lower prices and better-quality service for consumers.
Mr. Michael Connarty: I am sure that the Minister will recall that I did my Industry and Parliament Trust fellowship with British Gas. Is he not concerned that BG Energy—which has only £2.6 billion assets and the possible loss of £1.5 billion owing to its contracts for gas—is a vulnerable British company? There is a possibility of retail closures, with more job losses. Is the Minister not concerned that the other company, which now has most of the overseas assets and transco monopoly, is ripe for overseas takeover? We shall lose a British company because of the predatory actions of foreign investors.
Mr. Eggar: Before the hon. Gentleman stood up, I should have thought that he was one of the last Opposition Members whom I would have to accuse of scaremongering. Why does he have to talk down a successful British company in that way? Only today I was told that the proposals being put forward would
"ensure British Gas was able to compete in the 21st century."
Mr. John Battle: What about the share price?
Mr. Eggar: My opposite number intervenes from a sedentary position, but he does not know that I was quoting from Mr. MacGregor of the GMB union. The view I gave was not mine, but that of Mr. MacGregor, the union leader on the side of the gas workers in the GMB.
Mr. Ian Pearson: In the light of today's revelations about Cedric Brown's pension settlement, how can the Government claim to have
142
implemented the Greenbury report in full, when the Department of Trade and Industry's Companies Acts consultation paper exempts companies such as regional electricity companies from the requirements of full disclosure?
Mr. Eggar: Mr. Brown is
"widely respected by the work force"
of British Gas
"for his years of experience and commitment to the company."
That is not my view, but the view of the GMB union spokesman.
With the greatest respect to the hon. Gentleman, it is a pity that he should ask such a question on the day when Mr. Cedric Brown has announced his retirement—a man who has made a major contribution to the gas industry over 40 years. Of course, the hon. Gentleman is entitled to his views on Mr. Brown's pension entitlements and salary. As my right hon. Friend the Prime Minister said, those are matters best dealt with by the company and its shareholders. If the hon. Gentleman or other customers object to the level of pension paid to someone like Mr. Brown or other executives, under the changes that we have introduced, they will shortly have the right to take their custom elsewhere and to buy their gas from other competitors.
Mrs. Beckett: Does the Minister realise that people will have noticed that we have heard nothing from him this afternoon except bluster and abuse, and not a single answer to a single question? I ask him again: as he is not claiming that the liabilities of British Gas have disappeared, who will pick up the tab)—the customer or the shareholder? Who is it? It must be somebody.
Mr. Eggar: British Gas itself is confident that it will be able to improve service to customers and lower prices to customers. That is not my view; it is the view of Dick Giordano, the chairman of British Gas.
The issue of take-or-pay contracts is, of course, a matter for commercial negotiation between the producers and British Gas. I have no doubt that those negotiations will start shortly, and I am as hopeful as the right hon. Lady that they will be resolved satisfactorily. I am absolutely clear that, at the end of the process, as a result of the Government's policies—first of privatising British Gas and secondly, of introducing competition—we will see lower prices and better quality of service for consumers. The right hon. Lady should support that.

British Gas

  Points of Order
  3.50 pm
  Dr. Robert Spink: On a point of order, Madam Speaker. I rise to defend innocent people. Can you please advise me whether the jealously guarded privileges of the House are being improperly used? Column 20 of the Official Report for yesterday shows that the hon. Member for Birmingham, Ladywood (Ms Short) stated that the London-Tilbury-Southend line management team is "corrupt". I thank the hon. Lady for being present this afternoon; I gave her notice.
  As the hon. Lady knew yesterday when she made her statement, investigations are proceeding, so the matter is surely best left until they are completed, without being prejudiced or prejudged by the House under the protection of privilege. In any event, I believe that those investigations will entirely exonerate all the members of the LTS senior management team.
  Madam Speaker: The hon. Gentleman's point of order is rightly to me. I personally would not have used the expression that the hon. Lady used, but there are hon. Members on both sides of the House who, under questioning and in the often excitable conditions of the House, use language that I personally do not find appropriate. It is used under privilege, and all of us must be responsible for the language that we use in the House. I remind hon. Members that good temper and moderation are the characteristics of parliamentary language, and when our exchanges occasionally become heated and fractious, I wish that hon. Members on both sides of the House would use the English language with care and concern.
  Mr. Dennis Skinner: No split infinitives.
  Dr. Spink rose—
  Madam Speaker: The hon. Gentleman has expressed himself. I should now hear from the hon. Member for Ladywood Birmingham (Ms Short).
  Ms Clare Short: Further to that point of order, Madam Speaker. What I said yesterday, and what is very important, is that, "if the allegations that are made are true, it would show that the management team was corrupt, and therefore there is a question whether the franchise should be awarded—if the allegations prove to be true. That is what I said, and that is my view.
  Madam Speaker: The hon. Member for Ladywood has read the whole of the exchange yesterday. That is now the end of it.
  Mr. D. N. Campbell-Savours: I wonder whether I could ask you briefly, Madam Speaker—
  Madam Speaker: Is it a point of order?
  Mr. Campbell-Savours: Yes, it is.
  144
  I ask whether the matter of a Minister of the Crown sponsoring the pass of a commercial lobbyist has been referred to you, and whether you will refer it to the Serjeant at Arms for an inquiry, because clearly there has been an abuse of our arrangements.
  Madam Speaker: The matter has already been referred to the Serjeant at Arms, and I understand that the pass in question has been made available to the staff member in question since—if I remember correctly—the mid or late 1980s. It has been in the possession of the staff member since that time.
  Mr. Campbell-Savours: Perhaps I can narrow it down a little further. You will know that the Minister involved signed a document last May, three months after his appointment as a Minister, sponsoring that commercial lobbyist's access to the House of Commons with a pass endorsed by the Serjeant at Arms. Clearly that must be wrong. I have checked, as well.
  Madam Speaker: I have checked the matter thoroughly, but as the hon. Gentleman has raised the matter, I shall do so again. It is my understanding that the person concerned has been a staff member of the Minister since the mid or late 1980s.
  Mr. Campbell-Savours rose—
  Madam Speaker: Order. We are not having a debate about the matter. I shall check the matter again.
  Mr. Jacques Arnold: The word "if did not come in the statement on the record yesterday. There was a straight assertion
  "because it has shown itself to be"—
  Ms Short rose—
  Madam Speaker: Order. Let us hear the hon. Lady.
  Ms Short: I should be grateful if you would allow me to read from Hansard for the benefit of the House. The words that I used were
  "because it has shown itself to be a corrupt management team … if the allegations are true."—[Official Report, 5 February 1996; Vol. 271, c. 20.]
  Madam Speaker: I, too, am accustomed to read Hansard every morning. Not only did I listen to the exchange; I read it this morning. We shall take the matter no further.

  NEW MEMBER
  The following Member made the Affirmation required by law:
  Jon Trickett Esq., for Hemsworth.

  Questions to the Prime Minister
  Mr. David Winnick: On a point of order, Madam Speaker. No doubt you noticed that Question 2 to the Prime Minister was reached at 3.28 pm—I was looking at the clock. You are, I am sure, aware of the intense competition for the Prime Minister's questions slot, and you have often asked for short replies.
  You may also have noticed that the Prime Minister took a long time to answer the questions from my right hon. Friend the Leader of the Opposition. It seems unfortunate that, when an hon. Member has been lucky enough to table Question 5 or 6, only Questions 1, 2 and 3 should be reached. Would you like to comment, Madam Speaker? What happened today was extremely unfair to Back Benchers, who, if they are lucky, may find themselves somewhere near the top slot twice or, at most, three times a year.
  Madam Speaker: A total of 10 questions were asked today, although the hon. Gentleman is right: only three of them were listed on the Order Paper.
  Recently, questions to the Prime Minister have not moved as speedily as they used to. When questions and answers were short, those 15 minutes were one of our best periods in the House. I have noticed recently that both questions and responses are rather long, and the hon. Gentleman—and, obviously, the House—have noted that we are not moving as speedily as we could.
  The hon. Gentleman's point of order gives me an opportunity to appeal both to the House as a whole and to those on the Front Benches to move more speedily in the future. It is absolutely right that hon. Members who take the trouble and time to place questions on the Order Paper should at least have a reasonable opportunity of being called. I thank the hon. Gentleman for his comments.
  Mr. Richard Tracey: Further to that point of order, Madam Speaker. I seek your guidance. Can you explain why the Leader of the Opposition needs to ask three or four questions to make his point? That may well answer the point made by the hon. Member for Walsall, North (Mr. Winnick).
  Madam Speaker: I have probably been in the House for at least as long as the hon. Gentleman. Leaders of the Opposition, whatever their party, have often been able to ask three questions. If hon. Members wish to change that procedure, perhaps they should ask the Procedure Committee to have a look at it. I shall certainly make no decision at this stage.

BILL PRESENTED
  REGULATION OF DIET INDUSTRY
  Mrs. Alice Mahon, supported by Mrs. Ann Clwyd, Ms Dawn Primarolo, Ms Jean Corston, Mr. Tony Banks, Ms Diane Abbott, Ms Liz Lynne, Ms Mildred Gordon, Mrs. Helen Jackson, Ms Harriet Harman, Ms Clare Short and Ms Tessa Jowell, presented a Bill to regulate the diet industry; to bring all medicines relating to diets under control; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon 22 March and to be printed. [Bill 53.]

  Periodicals (Protection of Children)
  3.58 pm
  Mr. Peter Luff: I beg to move,
  That leave be given to bring in a Bill to require publishers of periodicals to display prominently on the front cover of their publications their own assessment of the youngest age for which they consider that publication to be suitable; and for related purposes.
  The House has many duties, but none is more important than the duty that we owe to our children. The influences on children in British society are many and varied. The House must be satisfied that it is doing its best to create the healthiest climate possible for our children to grow up in. I am not convinced that we are rising to that challenge.
  I greatly appreciate the support for the Bill that I have received from hon. Members on both sides of House. It suggests that my view is widely shared. The country has been shocked by the case of the 13-year-old bride of a Turkish waiter. It has led many people to question our nation's moral condition.
  We should not be surprised that children respond in worrying ways, when we consider the pressures that are placed on them. As a parent, I worry about all those pressures, whether they be from television soap operas, pop music lyrics, our increasingly materialistic society or the growing drug culture.
  I start from the premise that, although children may be physically mature younger, it is not necessarily true that they are emotionally mature any sooner. I may be a bit old-fashioned, but I believe that childhood innocence still has its value. We may have to warn children of dangers rather younger, but, in doing so, we should not go further than is absolutely necessary to protect them, and we must not lead them to admire aspects of adult behaviour that are less than admirable.
  Therefore, the Bill deals only with one aspect of a much larger problem. In this general climate, some influences stand out as especially worrying and yet capable of some control. My Bill deals with one of those: teenage girls' magazines.
  Hon. Members whose memory of teenage magazines is of the Beano, The Dandy, Jackie, Bunty, Eagle and Look and Learn, may be somewhat puzzled by my concern. I invite them to consider just the covers, never mind the contents, of some of the magazines that are on sale and aimed at young girls. They state:

  "Sex and you—read our sealed section now!"

  "Men unzipped—an intimate guide to men's minds (and bodies!)"

  "Red hot! Sizzling male model posters inside".

  "I had sex with my ex, but was forgiven".

  "Boys in the buff—shots so hot we sealed the pages".

  "First time sex—how to get it right".

  "Seven steps to sexual heaven—bedtime bliss starts here".

  "Your sex secrets—I've slept with over 100 boys".

  Inside, the contents are even more explicit. The worst case was probably that of TV Hits. In the November edition of a magazine probably read widely by 10 and 11-year-olds, there was a reply to a letter giving precise details of how to perform oral sex—and I mean precise.
  The problem pages are often the worst offenders. Letters pages that could often be about the real emotional and physical problems of adolescence too often

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  degenerate into squalid titillation. One page in a magazine aimed at a young audience is called: "Let's talk about SEX".
  The magazines defend themselves by saying that they are offering important advice not offered elsewhere by schools or by parents. That defence is not entirely untrue. Some of the advice that they offer is sensible and useful, but much is not. All the advice is not wrong or inappropriate—girls do grow up younger and need franker advice than the sort once offered by Jackie, but the letters are often written using language more usually seen on the walls of public conveniences. The answers, even in magazines aimed at 12-year-olds and therefore read by much younger children, give explicit advice on sexual technique.
  It is not just the letters—it is their context. Role models are offered. In the present edition of It's Bliss, celebrities such as Jon Bon Jovi, Sean Maguire and Prince boast of losing their virginity at 12, 14 and 11. Such boasts undermine the magazines' claims they are offering only advice that is urgently needed.
  Take the editor's letter in the current edition of one magazine:
  "Us MORE! girls are not known for being shy and retiring when we go on the pull, so I was gagging to see how we'd compare to a bunch of lechy lads out looking for a bit of skirt action."
  The only impression any girl reading such magazines could be left with is that her personal fulfilment will come only from looking good, wearing the right clothes and getting a good sex life. That is deeply sexist. Girls should be encouraged to believe that there are other ways of leading a meaningful life. Sexual stereotyping of that sort is wrong.
  Does it matter? Does such open discussion about sex encourage girls into promiscuity? I believe that it does.
  The House need not take my word for it. Only last Friday, Daniel Wright, of the Medical Research Council's medical sociology unit, told a British Medical Association conference of his concerns about the coverage of sex in magazines for young girls:
  "The way sexuality is presented suggests that most young people are engaged in sexual relations".
  According to reports of his speech, he said that girls were given the impression that they were being left out if they did not engage in sex. But research shows that only 23 per cent. of girls under 16 have had sexual relationships.
  For my money, even 23 per cent. is too high a proportion, but we must not allow the pressures to grow, and thus increase the numbers. I say that not because I am a prude, but because I believe that sex is not a mechanical activity performed for immediate gratification, but a God-given gift that, in a loving relationship, is one of the best things about being a human being. Those magazines undermine the value and the importance of sex.
  I do not say for one minute that we can return to some age of lost innocence; the pass has been sold. Encouraging magazines such as Sugar, Mizz, It's Bliss, 19, and More! to behave more responsibly will not change the world. But it could help to prevent further deterioration. I believe that some of the magazines, too, want to avoid any further drift into salaciousness and smut. Others, such as More!, which is aimed at an older audience, could not but gain from having that fact better
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  understood by readers and parents. Above all, the editors need to pull back. The current edition of 19 gets as close to full frontal male nudity as it is possible to get without actually showing it, and the centre-page spread in Mizz is the same.
  Since I launched my campaign, I have been overwhelmed with letters and telephone calls from parents saying, "We didn't realise what was in them," or, "We thought it was only us who were worried. Now we feel we can do something about it." I want to help editors, parents and schools by making it easier to learn what is inside the magazines. I want editors and publishers to decide the lowest target age for each magazine, and to show it on the front cover.
  Because there would be an outcry if a magazine made a major error of judgment by publishing material unsuitable for its own declared age range, I do not believe that any complex regulatory machinery is necessary— simply a sanction for failing to display on the front cover a clearly defined target age for the periodical.
  I do no more than ask the magazines to follow the lead already set, entirely voluntarily, by the computer software manufacturers. I had the privilege of launching their now well-established age classification system. The European Leisure Software Publishers Association—ELSPA—the trade association for well-known names such as Sega and Nintendo, which I am pleased to say is based in Worcestershire, was concerned that a statutory system might be imposed after concern was expressed about the violent and sexual content of certain games. ELSPA moved voluntarily, and so far it has succeeded. The Bill gives the magazine publishers the chance to do the same. They would be well advised to seize the opportunity to clean up their act, before pressure grows for a more draconian system.
  The Bill is a serious attempt to legislate; unlike so many ten-minute Bills, it is not simply a way of debating or drawing attention to an issue. It is simple, it is not bureaucratic, it has no public expenditure implications, and it enjoys overwhelming support both inside and outside the House. It would impose no burden on newsagents, who have for many months called for just such a scheme, and who strongly support the Bill.
  The Bill does not mean censorship. Magazines would be free to publish as they saw fit. They would simply have to be straightforward about who they wanted to read them. The Bill would not encourage girls to buy magazines intended for older girls; they already know what is in them. It is their parents who have been in the dark. Neither is it an attempt to deny young people essential advice. I accept that the advice in magazines has to be more explicit than that given 20 years ago, if only because girls reach puberty at an earlier age.
  I leave it to the magazines themselves to decide how to go about the task that the Bill would impose on them. If I were them, I would set up some kind of organisation under the Periodical Publishers Association to monitor and implement the scheme, and adopt an age-range classification system.
  The Bill enjoys all-party support. My fellow sponsors know that parents, teachers, Church groups, newsagents, journalists and even many of the children at whom these magazines are aimed, want change. They are right, and I am determined to ensure that they get it.
  4.8 pm
  Mr. Simon Hughes: I welcome the debate, and I shall not try to divide the House. Although it is right that we should debate the Bill, we should proceed carefully. My fear, and the fear expressed by many outside the House, is that, by legislating in such a way, we may not achieve the objective of the hon. Member for Worcester (Mr. Luff), or that of others who support his proposals. The hon. Gentleman and I must accept that men of our age, even parents of daughters of his daughter's age, may not be the best people to form judgments on such issues.
  The law is clear; it says that the age of consent for a girl is 16, and that should be reinforced in the House. Advice is clear-indeed, I concur with the hon. Gentleman in citing the advice of the British Medical Association, the General Medical Council and others— that it is better not to have sex before the age of 16; people are not normally ready for it. The Church, other faith groups and many others are even clearer, and say that sex, especially intercourse, should be left until marriage.
  Even the most well-regulated households, however, do not necessarily manage to avoid under-age sex. According to all the evidence, one in five young people have had intercourse before they are 16 years old. That, of course, means that four in five have not. It is therefore not right for youngsters to try to influence their peers to have sex by saying that everyone else is doing so.
  It is, of course, also true—I hope that the hon. Gentleman concedes this—that, although young people develop in different ways and have different interests at different times, the fact that some people may not have any form of sex until well after the age of 16 does not mean that most youngsters are not interested in sex well before then.
  What should we do? It is a case of separating fantasy from fact. We regulate magazines, yet we do not regulate radio, television, plays, records, tapes, compact discs, newspapers, books or advertisments. Cinema is in part regulated. Records banned from being played on Radio 1 because they were regarded as—potentially—too sexy immediately shot to the top of the charts.
  Young people say that they would rather receive information from parents or at school, but that parents and schools are often not very good at giving that information, and that their peer group and magazines are the best places to turn to.
  In an article printed in the Evening Standard on Monday, a girl of 13, who reads two magazines—Shout and Sugar—said:
  "I think they are the best. They give you really good advice but I don't think I would ever actually write in. Reading about other people's problems is really helpful. I'd be embarrassed to ask my mum some of the questions they ask the agony aunts."
  I am not aware that there has been any criticism that the information given in the magazines has been wrong, which is often not the case with information culled from other sources. It is also clear that young people ask questions and want answers about some matters about which people find it difficult to be explicit.
  To be fair, the magazines generally contain substantially more non-sex parts than sex parts. Indeed, we must be careful not to overstate the amount of sex-related content on the pages that carry it. On the
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  problem page of a magazine published this month, sensitive responses are given to questions about family rejection, being scared in a home alone, being sexually abused and coping with arguments at home.
  Only two letters out of eight dealt with sex. One concerned a reader's knowledge of her brother's under-age sexual activity. Advice was given that it is illegal, and that, if she could not persuade him to stop, she should inform her parents. The other letter was from a girl who had had sex and wished that she had not. The reply was good; it said:
  "relationships don't need to centre around sex, so this is a lesson for the rest of you".
  Some of the difficult issues, such as pregnancy, petting, contraception and orgasm, need to be dealt with in a factual way, since people in their early teens ask questions about such matters and deserve factual answers. All the magazines that I am aware of seek professional, independent advice before writing their advice columns.
  Mr. Luff indicated assent.
  Mr. Hughes: The hon. Gentleman is nodding. The Brook advisory centres are certainly regularly consulted on writing the agony aunt or agony uncle columns, as are the Family Planning Association and the Health Education Authority.
  Very important to the defence of the present situation is the fact that there has been no great recent upsurge in the number of teenage pregnancies. Indeed, as advice has increased, teenage pregnancy rates in this country have gone down.
  Secondly, there is no evidence that sexual education leads to more sexual activity. Indeed, some say that such education may delay the onset of activity, and that activity may decrease overall. Lastly, the countries with the most clear and uncomplicated attitude—such as the Netherlands—have lower conception rates than this country. Surprisingly, the rate of conception in the Netherlands is one seventh of the rate in England and Wales.
  How should we proceed? First, we must not end up with an age marking that makes those magazines more rather than less appealing. Secondly, it is difficult to define an exact age when young people develop, and that applies to boys as well as girls. Thirdly, we must not make it seem that sex is talked about more than everything else, and, in doing so, make sex the centre of attention.
  There is an equal danger of cultivating a view that other things that the magazines promote—a beautiful body, expensive clothes, designer life styles and a certain range of luxuries—are as desirable as anything else. We should be clear about giving the facts, but also about raising young people's horizons. We should make sure that there is proper consultation on the issue before we proceed to legislate.
  We should be discouraging young people from having under-age sex, but not pretending that it is not entirely natural to be interested in it. We should be informing young people that most of their peer group are not having under-age sex, but tell them what happens when they do. We should not pretend that information that is not obtained in teenage magazines will not be obtained somewhere else.

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  We must proceed carefully, because hon. Members may not be the best people to teach parents in the rest of country how to manage these matters. If we proceed carefully, we may be able to have a healthy attitude to this matter, as we have with all matters of concern to young people.
  Question put, pursuant to Standing Order No. 19 (Motions for leave to bring in Bills and nomination of Select Committees at commencement of public business), and agreed to.
  Bill ordered to be brought in by Mr. Peter Luff, Mr. Michael Alison, Mr. David Alton, Mr. Nicholas Baker, Mr. James Cran, Mr. Harry Greenway, Mr. Frank Field, Mr. Andrew Rowe, Sir Timothy Sainsbury, the Rev. Martin Smyth, Ms Tessa Jowell and Ms Estelle Morris.

  PERIODICALS (PROTECTION OF CHILDREN)
  Mr. Peter Luff accordingly presented a Bill to require publishers of periodicals to display prominently on the front cover of their publications their own assessment of the youngest age for which they consider that publication to be suitable; and for related purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 1 March and to be printed. [Bill 54.]

  GP Fundholding
  4.17 pm
  The Secretary of State for Health (Mr. Stephen Dorrell): I beg to move,
  That this House pays tribute to the role that GP fundholders have played in kick-starting and developing innovative practice in both primary care and the acute sector; welcomes the advances that fundholding has brought to many patients; accepts that fundholding has acted as a lever to improve services; and consequently remains committed to the further development of GP fundholding.
  The Government have selected the subject for debate this afternoon for a simple reason: we believe that it is important to expose the double-speak that passes for Labour's health policy. That is true across the whole field of health policy, but it is particularly true of fundholding. I intend to remind the House of the claims that Labour makes for its health policy, and then to examine the reality of those claims in the context of its approach to fundholding.
  Labour says that it favours empowerment of GPs, yet it remains opposed to the system that brought about the greater empowerment of GPs. Labour says that it favours innovation, yet when it sees it in the context of fundholding practices, it immediately retreats into verbiage about a "two-tier service". Most of all, Labour says that it is in favour of a system based on choice and diversity and encouraging professionals to develop their own approach to the profession that they practise. The hon. Member for Peckham (Ms Harman) shows in her decisions about her own family that she holds that principle dear, but Labour as a whole remains resolutely opposed to putting that principle into effect within the NHS.
  Mr. Michael Fabricant (Mid-Staffordshire): Is my right hon. Friend aware that virtually every general practitioner in the Mid-Staffordshire constituency is a GP fundholder? Is he equally aware that they are fundholders because they believe that it helps them to be better doctors and to make the sorts of choices that GPs ought to be making? They live in fear at the thought of a Labour Government, who would oppose GP fundholding, getting in and abandoning it.
  Mr. Dorrell: My hon. Friend is precisely right. I shall quote some of the speculations of the hon. Member for Peckham on why my hon. Friend's constituents have opted for fundholding. He gave us the answer first: they opted for it because they believe that it is the best way to improve the care that is available to their patients and, furthermore, to give full expression to their commitment to the principles of the national health service.
  Mr. Ronnie Campbell: Is it not true that the patients of fundholders are getting preferential treatment for operations in hospitals? We have some evidence of that. Is it not a two-tier system?
  Mr. Dorrell: It is also true that 70 per cent. of the patients in the hon. Gentleman's constituency are covered by fundholding practices. That reflects the choice made by GPs operating in that health area on how best to serve the interests of their patients and to ensure that an improved national health service is delivered, not just to their patients but to those of all GPs operating in the NHS.
  Mr. Simon Hughes: I want to pursue the question asked by the hon. Member

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  for Blyth Valley (Mr. Campbell). A psychologist working in the NHS with whom I spoke on Sunday confirmed that GP fundholders get preferential treatment for their patients from him and his colleagues at the hospital, not because they want it but because they have the resources to buy it. Will he confirm that that is the position and that the perception in every health authority is that those who have the funds call the tune?
  Mr. Dorrell: The hon. Gentleman's intervention is based on a total misapprehension of the position. He can substantiate his proposition that the patients of a particular doctor have an unfair advantage only if the resources available to that doctor to deal with the patients on his list are more generously provided than the resources available to NHS patients as a whole. Within a fundholding practice, a doctor or group of doctors make choices about the use of resources, which certainly allow them to improve the NHS care available to their patients—that is why they do it. That is done on the basis not of an unjust allocation of resources but of better use of the resources available to them.
  Several hon. Members rose—
  Mr. Dorrell: I will not give way now, but I will do so again later.
  Last October, the right hon. Member for Derby, South (Mrs. Beckett) accepted an invitation to speak to the National Association of Fund Holding Practices. For once, that brought a Labour health spokesman, the predecessor to the hon. Member for Peckham, not up against Ministers, whom the Opposition no doubt think are easy conventional targets, and not in a television studio, but face to face with fundholding GPs—individual doctors committed to the principles and future of the national health service, who had decided that it was in the interests not merely of their patients but of their commitment to the health service as a whole to opt for fundholding. It is interesting to examine what the right hon. Lady said when she was face to face with an audience of fundholders:
  "We want genuinely to pay tribute to the role that you as fundholders ) … have played in kick-starting and developing innovative practice in both primary care and the acute sector."
  [HON. MEMBERS: "Ah.] My hon. Friends should wait, because there is more to follow. She continued:
  "We understand and welcome the advances that fundholding has brought to many patients."
  I cannot detain the House with the entire speech, although there was some good stuff in it, but she also said:
  "I do accept that fundholding has acted as a lever to improve services."
  Mr. Denis MacShane: Will the right hon. Gentleman give way?
  Mr. Dorrell: No, I am going to make my point.
  Those three sentiments, every one of which I agree with, have been brought together by the Government in the motion. The motion that the House is invited to agree is no more than the bringing together of those three sentiments out of the mouth of the right hon. Member for Derby, South, coupled with the obvious policy conclusion that, if it is that good, we had better have more of it.
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  When Labour Members later this afternoon choose to substitute, if that is what they vote to do, the words of the amendment tabled by the hon. Member for Peckham, they will be voting against the words spoken by their health spokesman of only three and a half months ago. It must be relatively rare for the Government to table a motion for debate in the House the sentiments of which were drafted exclusively by the person who held the shadow health portfolio until only months ago.
  It is properly described as hypocrisy for the Labour party to endorse a spokesman who went to Harrogate to talk to fundholding GPs in October last year and then invite hon. Members, as no doubt the hon. Member for Peckham will in a few minutes' time, to reject those words when safely away from the audience of fundholders.
  Mrs. Alice Mahon: The right hon. Gentleman referred earlier to verbiage about two-tier services. Does he recall that I wrote to him in November and sent him a copy of a letter from a GP in my constituency? At that time, there were no GP fundholders in Halifax. The GP complained that when he desperately needed clinical psychology services for a patient, he was told by the trust to which he tried to refer her that there were no services for anyone who was not from a GP fundholding practice. The only service available was a Relate counsellor. He pointed out that that was not what he wanted and had to wait a considerable time before the health authority eventually referred the woman to a BUPA hospital. Is that not a classic example of two-tier fundholding? Why should that patient not have access to a service to which GP fundholders' patients have access? Why should she have to wait?
  Mr. Dorrell: The hon. Lady said that there were virtually no fundholders in her constituency. In fact, the health authority that covers her constituency will, from next April, have 44 per cent. of its patients covered by fundholders. She is not precisely right.
  Mrs. Mahon: On a point of order, Madam Speaker. The right hon. Gentleman must get it correct. That is not true in Halifax. It is no good using somebody else's constituency.
  Madam Speaker: That is not a point of order. I am sure that if the right hon. Gentleman is incorrect about fundholding in the constituency of Halifax, he will make a correction.
  Mr. Dorrell: As you know, Madam Speaker, health authority and constituency boundaries are not precisely the same. The health authority that covers the hon. Lady's constituency—and this is what I said—will, from next April, have 44 per cent. of patients covered by fundholding practices.
  Mrs. Mahon: Will the right hon. Gentleman give way?
  Mr. Dorrell: I shall give way once more and then I shall answer the hon. Lady's point.
  Mrs. Mahon: Will the right hon. Gentleman guarantee that patients in my constituency who need a clinical psychologist will be able to get one as quickly as would GP fundholders' patients?
  Mr. Dorrell: I will guarantee that in the hon. Lady's constituency, just as in the rest of the health service,

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  where fundholders use resources to develop or open new services—that is what innovation means—it creates precisely the pressure that she wants to ensure that both the patients of other fundholders and the patients of all other GPs participate in an improving general level of service in the NHS.
  Several hon. Members rose—
  Mr. Dorrell: I wish to make progress, if I may.
  I return to the words of the motion—the words first spoken by the right hon. Member for Derby, South to the National Association of Fund Holding Practices. On 24 January 1996, two weeks ago, I quoted those words in the House and the hon. Member for Fife, Central (Mr. McLeish) said, "This is old hat." Three and a half months is a long time in Labour party politics. He was wrong; it was not old hat. It was a flash of inspiration. St. Paul travelled the road to Damascus; the right hon. Member for Derby, South travelled the road to Harrogate. Converts are always welcome.
  The right hon. Member for Derby, South is not old hat; Labour's policy on fundholding is old hat. Yet again, the Labour party is on the wrong side of an argument. It is the repeated experience of Labour and Labour Members in the past 20 years. They fought against privatisation of nationalised industries, and history passed them by; they fought for unilateral nuclear disarmament, and history passed them by; they fought against a framework of law for trade unions, and history passed them by; and they fought—how they fought—against GP fundholding, and history is in the process of passing them by on that subject as well.
  Mr. John Marshall: Does my right hon. Friend agree that the principles of GP fundholding are the same as the principles of grant-maintained schools—that the budget is delegated downwards? Does he find it strange that a person who approves of, and is willing to use, a grant-maintained school opposes the principle of GP fundholding?
  Mr. Dorrell: I have already said so, and I agree that identical principles underlie fundholding and grant-maintained schools.
  The way to improve a state-provided service is to encourage a diversity of approach in the professions and encourage the professions responsible for delivering the service to try new ways to deliver the service. The hon. Member for Peckham endorses that principle by her private action yet refuses to apply it in the portfolio for which she has policy responsibility.
  Several hon. Members rose—
  Mr. Dorrell: I want to make progress. I will give way to the hon. Member for Hampstead and Highgate (Ms Jackson) in a few moments.
  I want to begin at the beginning of fundholding. My right hon. and learned Friend the Chancellor of the Exchequer was the Minister responsible for introducing fundholding. He did it for a simple reason: he wanted, and wants, to make the national health service more accountable to its patients. He wanted to accept the
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  challenge implicit in the rhetoric about patient-centred care and a flexible health service responsive to its patients, and make those phrases real.
  The hon. Member for Peckham made her approach to the subject clear from the start. She said that
  "there is no support among GPs for the concept of fund-holding practices."—[Official Report, 15 March 1990; Vol. 169, c. 687.]
  Six years later, the evidence on that subject is decisive. She was wrong.
  From 1 April 1996, more than half the patients of NHS general practitioners will be served by fundholding GPs. The hon. Member for Peckham was wrong then in her predictions, just as she is wrong now in her policy prescriptions.
  Several hon. Members rose—
  Mr. Dorrell: I have undertaken to give way to the hon. Member for Hampstead and Highgate in a moment.
  The hon. Member for Peckham is now wrong in a different sense, because she now makes a different charge. On 9 November 1995, in Doctor magazine, she said:
  "Fundholding was not a GP idea. It was imposed on doctors".
  That is insulting to the half of NHS GPs who have opted for a voluntary fundholding scheme. It implies that a few letters from me and my predecessors have led them to adopt a scheme that they believe is damaging to their patients and the NHS. Further, I believe that it is a wilful misrepresentation of the facts.
  In saying that, the hon. Member for Peckham knows perfectly well that the fundholding scheme is voluntary, that more than half of NHS GPs have opted to join that voluntary scheme and that the words of her 1990 prediction are on the record, and she feels the urge to explain them away. She will have to think of a better explanation if her remarks are to carry any conviction.
  Ms Glenda Jackson: Is there not another similarity between grant-maintained schools and doctors' fundholding? The imposition of both was fiercely opposed by the professionals— schoolteachers, governors and parents, and certainly the majority of doctors—yet both groups were aware that the only way to provide the necessary educational and medical services was to take the money that the Government were offering them in only one way.
  I refer the Secretary of State back to innovative practices. There is little that is innovative about elective surgery, but last year the Whittington hospital in my constituency issued a directive that all elective surgery must stop, save for patients of GP fundholders. If that is not a two-tier system, perhaps the Secretary of State could explain what it is.
  Mr. Dorrell: The hon. Lady is simply wrong, as I said in replying to the hon. Member for Fife, Central. [Interruption.] She is wrong about that fact, just as the hon. Gentleman was wrong to describe the comments of the right hon. Member for Derby, South as "old hat".
  The hon. Member for Hampstead and Highgate is wrong because she has said that GP fundholders have more resources available to them to care for their patients than other GPs in the health service. That is not true.

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  The resources available to GP fundholders are provided on exactly the same basis as the resources that are available for other forms of patient care.
  Rev. Martin Smyth: I share the Secretary of State's views about the improvement that GP fundholding has made. The fault with the two-tier system lies not so much with the GP fundholders as with the providing authorities, which are leaving much elective surgery until the end of the year because they can then obtain the roll-over from the health authorities. Is that not the real issue, as the KŐrner statistics show?
  Mr. Dorrell: The hon. Gentleman makes a very good point. He is correct in pointing out what is happening in different parts of the country where GP fundholders are finding better ways of using the resources at their disposal. As a result, the standard of service that GPs are delivering to their patients—which is measured in waiting times and in a variety of other ways—is being ratcheted up. I do not apologise for that fact: fundholding and the other reforms were introduced partly to improve patient service.
  The hon. Gentleman is quite right to point out the second-stage effect. Once a fundholder has found a way of improving the care available to his patients, the system is deliberately established to apply pressure to other fundholders—and to purchasing health authorities acting on behalf of non-fundholders—to raise the quality of service, leading to a relentless improvement in the quality of care that is available across the health service.
  I shall return to the question that troubles the hon. Member for Peckham. Why was her prediction wrong and why do more than half of the doctors now plan to be fundholders from the beginning of April? If she will not accept my explanation of why people are opting for fundholding, perhaps she will listen to the words of some independent and friendly advisers. Howard Glennerster said that GP fundholding
  "has produced a shift in the balance of power back to general practice for the first time this century."
  That is the reason why GPs are opting for fundholding.
  Mr. Alan Milburn: And Julian Le Grand?
  Mr. Dorrell: It is not just Howard Glennerster. I do not intend to quote Julian Le Grand today, but perhaps I shall return to him on another occasion. Brian Abel-Smith, the former special adviser to Lady Castle, who was one of the last Labour Health Secretaries of State, said:
  "Fundholding represents a major transfer of power from specialists to GPs".
  The same theme was picked up by Kathy Jones writing for the Fabian Society. The hon. Member for Fife, Central might do well to read some of the Fabian Society material as it is rather more inspired than some of his speeches. Kathy Jones said:
  "Fundholding gives GPs leverage over hospital doctors, changing the balance of power between them."
  Those three quotations are from three different sources, each of them putting the finger on the real reason—not the cosmetic reason that the hon. Member for Peckham
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  prefers, but the real reason—why GPs are opting for fundholding. Not just those commentators but the 13,500 GPs who will be fundholders from April understand the shift in emphasis that has occurred in the national health service as a result of the introduction of fundholding.
  Does the hon. Member for Peckham believe that all those people—all 13,500 GPs and all those advisers—are knowingly undermining the health service? Are they all engaged in a conspiracy to break up a service to which they have given their lives? That is absurd. I have quoted the evidence I have about the support for my policy from people responsible for actually delivering the service. The question I am putting to the hon. Lady and her hon. Friends is whether they believe that all those people who are opting for those changes are doing so because they share the suspicion that that is a desirable way of breaking up the health service. That is the charge the hon. Member for Fife, Central levels at me, but—much more damagingly for him—he is levelling it at 13,500 GPs operating in the national health service.
  Several hon. Members rose—
  Mr. Deputy Speaker (Mr. Michael Morris): Order. It is no good Back Benchers standing up for the whole afternoon when it is clear that the Secretary of State is not giving way.
  Mr. Dorrell: The quotations that I have offered, and I could have chosen a thousand others, demonstrate why doctors are opting for fundholding. They are doing so because fundholding is a means of delivering the objective that so often in the past has been espoused by Opposition Members as a desirable health policy objective—the empowerment of GPs and the strengthening of the role of GPs in the health service.
  Mr. MacShane: May I tear the Secretary of State away from his Oxford Union practice, which will be useful when he is in opposition, and bring him to the point about GP fundholders? In my part of the world, and I hope that the Secretary of State will listen, it is GP fundholders themselves who are concerned about the fact that if they nominate someone for a hip replacement at the Royal Hallamshire hospital in Sheffield it will be done in 12 weeks, but if a non-fundholding GP down the road does the same—and they are all in the same business— the person has to wait 52 weeks. GP fundholders are also concerned that if they put money into private hospitals, it is denied to NHS hospitals that have to provide accident and emergency cover, which the private hospitals do not.
  My right hon. Friend the Member for Derby, South (Mrs. Beckett) went to Harrogate, and I invite the Secretary of State to come to Rotherham to meet fundholders and to hear the problems and questions that they would like to put to him. They are worried, whether he likes it or not, that he is creating a two-tier service.
  Mr. Dorrell: What I am doing is supporting a system that has led to a bigger shift of power in the health service, away from the institutions and towards the GPs, than we have seen at any time since 1948. That has been a matter of common exchange between hon. Members on both sides of the House. That aspiration has been accepted— empowering GPs because they are the people who are

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  closest to the patients, and allowing them to act as guides and advocates for patients finding their way around the health service.
  Spokesmen on both sides of the House have argued that GPs are well placed to design a patient-centred service. The hon. Member for Peckham goes beyond that and has talked about the importance of the development of a broader range of services in primary care. She is right about that too. We have a broader range of provision of post-operative care, shared care arrangements, emergency care arrangements and better provision for GP support for cottage hospitals. All those are important examples of the developments of primary care. What the hon. Lady does not deal with is the fact that the introduction of the fundholding scheme is the biggest single step forward to the delivery of those objectives since 1948.
  Mr. Charles Hendry: Will my right hon. Friend come to north Derbyshire to talk to fundholding doctors, including the brother of the hon. Member for Rotherham (Mr. MacShane), about the way in which fundholding benefits the patients of all doctors? Is he aware that in Glossop, because of the way in which fundholders have introduced new surgery cases and new activities at the cottage hospital, waiting lists for ear, nose and throat treatment have fallen from 20 weeks to four and for general surgery from up to 30 weeks to a maximum of eight, not just for patients of fundholders but for all patients? That shows how everybody has benefited.
  Mr. Dorrell: My hon. Friend is right, and a three-part tutorial might be beneficial. I might go to Rotherham and take the brother of the hon. Member for Rotherham (Mr. MacShane) with me to examine the role of fundholding in strengthening the voice of primary care within the national health service.
  The hon. Member for Peckham used her defence to my argument in a television programme which I saw before I came into the House today. She said that fundholding is not necessary to the delivery of those improvements in primary care, or to the strengthening of the voice of GPs. I ask the House to pause for a moment and consider that argument. For a quarter of century, speeches have been made in the House, from both sides, about the importance of GPs and about how the NHS must deliver a more patient-centred basis of care. Nothing happened. Then we introduced fundholding and it started to happen.
  Is it reasonable to assume that there is a link between those two events, or was that just a massive coincidence? Were the two events entirely unconnected? Would all the changes have happened anyway? Is that the hon. Lady's argument? The changes did not happen for a quarter of a century, but they happened on precisely the day that fundholding was introduced. Is that purely a coincidence? That is what the hon. Lady asks us to believe. The GPs know the answer and on 1 April this year over half of them will be fundholders. They are voting with their feet, and they are not voting for the hon. Lady's arguments.
  Mr. Richard Burden: Can the Secretary of State explain how it is in the interest of patient care to have millions of pounds locked away, unused, in underspends for GP fundholders? In Birmingham, there is a £10 million underspend and the regional executive has suggested that the health authority borrow money from fundholders to get the waiting lists
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  down. That may sound fine, but is it a good idea for the NHS to be in hock to its own fundholders rather than putting the money to use at the time it is needed, through properly allocated resources?
  Mr. Dorrell: The hon. Gentleman must decide whether he believes the speeches that his hon. Friends have made over a quarter of a century about the best way of using health service resources.
  Mr. Milburn: All GPs?
  Mr. Dorrell: I shall come to that argument in a moment.
  Does the hon. Member for Birmingham, Northfield (Mr. Burden) believe that the patients' interests are best served by empowering GPs to make decisions in their patients' interests, or does he prefer leaving those decisions to the regional health authorities which we have introduced legislation to abolish? That is the choice. The hon. Gentleman prefers to make great speeches about a primary care-led NHS. He likes to talk about devolving power to enable GPs to act as patients' advocates, but he backs away from the hard facts.
  Mr. Richard Tracey: Does my right hon. Friend agree that, given that 50 per cent. of the country will shortly be covered by GP fundholders, the Opposition are boxing themselves into a potential crisis? The chairman of the National Association of Fund Holding Practices, Dr. Morris, has said that if Labour ever comes to power and takes the steps it has threatened, those GPs will leave the NHS.
  Mr. Dorrell: If the hon. Member for Peckham pursued the policy that she is committed to pursuing, GP fundholders would have a difficult decision, as my hon. Friend rightly says.
  The hon. Member for Peckham likes to use another argument; she points to the success—Labour's amendment points to this—of commissioners. On that point at least, I can agree with the hon. Lady. There are, of course, many GPs who are not fundholders but who are improving care as commissioning GPs. The hon. Lady should listen to the commissioning GPs to find out what caused the changes that have allowed their commissioning approach to be effective. Numerous commissioning GPs will tell her, if she listens, that it is the introduction of fundholding that has changed the terms of trade—the terms of the relationship between the primary and secondary sectors. That has made possible the success of the commissioning schemes which the hon. Lady likes to endorse.
  The reality of the commitment by the hon. Member for Peckham to replace fundholding with commissioning is that it is bad news not only for fundholders and their patients, as my hon. Friend the Member for Surbiton (Mr. Tracey) said, but for the commissioners. The commissioners are taking advantage of the change in the relationship that the fundholders have brought about. That is a key argument which the hon. Lady prefers to fudge. Indeed, Labour is trying to fudge its way out of an embarrassment. Labour Members know that they are caught in a policy position that does not work. They must decide quickly whether they are prepared to opt for and

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  to back the fundholding scheme, which would be the best way to convert their fine words about empowering GPs into reality, or whether they confine their ambitions to fine prose and press releases, in which case they can continue their policy of abandoning fundholding.
  Several hon. Members rose—
  Mr. Dorrell: No, I will not give way, because I want to make progress. I may give way later.
  Another objective to which the Labour party declares its firm attachment is innovation. Labour is right. Health care is a developing activity and it is important to maintain innovation. There are hundreds of examples of innovations that have been introduced as a result of the initiatives taken by fundholders. However, every one of those is under threat if we accept the two-tier argument that has been the chant from Labour during the debate.
  The guts of the two-tier argument are that nobody can have the benefit of an innovation until everyone can have it. That is an absurd argument. What Labour seems completely incapable of understanding is that it is in the nature of an innovation that it is new and has to be done somewhere first. Furthermore, the problem is compounded by Labour's naive belief that standards can be identical in every part of the country, for every patient, all at once. Everybody knows that that cannot be true even in a static service; it is doubly untrue in an evolving service. The key issue that the House must address is not how to make the service identical for every patient everywhere—that is an undeliverable objective—but how to maintain the pressure right across the service for continuing improvement. That is the key question, and general practitioner fundholding is a key part of our commitment to seeing relentless and continuing pressure for improvement within the national health service.
  That point is the key distinction between Labour's approach and the Government's approach. Labour values uniformity above all. Labour Members talk of diversity and choice, and they use the language of individual responsibility and initiative, but in their actions they opt unerringly for the uniform formula. That absolutist vision represents the hypocritical face of the Labour party. Labour Members say that they favour innovation and diversity, but they set their face firmly against the most effective way in which to bring those factors about.
  The most hypocritical aspect of the whole story is the position of the hon. Member for Peckham. We know that she does not believe this absolutist claptrap; we know that she favours a policy of diversity and choice. We know that she understands that the best way to deliver high-quality social services is to encourage professional people to develop their own approach and to allow responsible citizens to choose which professionals best meet their needs.
  We know that the hon. Member for Peckham is opposed to the imposition of a single unchanging formula, regardless of local preferences and choices. We know all that because she has opted her own family out of the politically correct formula for education and has exercised her right to choose the best education for her son. [Interruption.] This is not a cheap point. We applaud that action and we think that the hon. Lady is right to have
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  taken it. What she has to explain to the House and to the country this afternoon is why she continues to oppose the application within the national health service of those principles which, by her actions, she endorses in the education of her own children.
  4.55 pm
  Ms Harriet Harman: I beg to move, to leave out from "House" to the end of the Question, and to add instead thereof:
  "pays tribute to the role all GPs have played in developing innovative practice in both primary care and the acute sector; regrets that the system of GP fundholding leads to two-tier health care and a massive increase in bureaucracy; believes that the unfairness of the internal market should be ended and GP fundholding replaced by GP commissioning in which all patients get excellent primary care, access to hospitals on the basis of clinical need, and in which all GPs have a say in the planning and development of primary and hospital care.".
  I welcome the debate and the chance that it gives us to talk about what is really happening in primary care. The Secretary of State has clearly forgotten the advice of the Maples memorandum. He has proved again today that no news about the NHS is good news for the Tories. Any time that he wants to use Government time to debate the NHS and our policies, we shall be happy to oblige.
  The Government motion is a disgrace. It congratulates only fundholding GPs; it has nothing to say about all the other GPs who are working hard for their patients. Our amendment, which I commend to the House, pays tribute to the efforts of all GPs who are struggling, despite this Government, to improve patient care.
  Mr. Jacques Arnold: Was the hon. Lady aware, before my right hon. Friend the Secretary of State made his speech, that the Government motion, almost in its entirety, was drawn from three quotations from a speech by the right hon. Member for Derby, South (Mrs. Beckett), her predecessor? Was she aware of that, yes or no? If she was not, that is incompetent; if she was, how can she and her colleagues oppose the motion? If they oppose it, it is clear that Labour spokesmen say one thing, but vote in exactly the opposite direction.
  Ms Harman: It is clear, from the speech that the Secretary of State quoted, that my right hon. Friend the Member for Derby, South (Mrs. Beckett) was proposing all the points that we make in our amendment. I quote from the press release that went with the speech. My right hon. Friend said:
  "Labour's proposals are to end a two-tier system of primary health-care provision … Fundholding"—
  hon. Members should listen to this point—
  "has improved GP services for some, but at the expense of others."
  That is our case.
  I am glad that the Secretary of State mentioned the points that I made in 1990 because we warned then that the Tory internal market in the NHS would lead to unfairness for patients. We said that it would lead to costly bureaucracy for doctors and fragmentation of NHS provision. The experience of patients and doctors has borne out our warnings. Labour rejects the internal market now as we did in 1990, and we will end it.
  Mr. Keith Mans: The hon. Lady keeps making the point about the so-called two-tier service that

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  she believes fundholding to be. Will she confirm, in that case, that she believes that before fundholding was introduced, there was a single-tier service throughout the health service, despite the fact that across the country, people were waiting different times for the same operation?
  Ms Harman: Later in my speech I shall give examples illustrating that there are different waiting times at one hospital because of the two-tier system that has been driven into the NHS.
  Mr. Mans: There always were.
  Ms Harman: No, there were not. Clinical need determined priority before the internal market, but now it is cash before care. The hon. Gentleman is wrong.
  We shall replace GP fundholding by GP commissioning—a system that will benefit all patients, not just a few, and will give all GPs the opportunity to commission care.
  Ms Jean Corston: Is my hon. Friend aware that last week I met a member of the Avon fundholders group? I asked him what innovations he could provide under fundholding that he could not have made available before. He told me that his practice now offered psychological counselling two nights a week and that that would have been impossible before he was a fundholder. However, locality commissioning in south London has enabled non-fundholding surgeries to provide psychological counselling five days a week between 10 am and 3 pm. So fundholding allowed that GP to provide a service that must surely be available to non-fundholding GPs.
  Ms Harman: My hon. Friend is absolutely right. In his speech today, the Secretary of State sought to perpetuate the idea that innovation takes place only in fundholding practices and that all other GPs are letting their patients down. We reject that and GPs are right to be angry.
  The Tories want GPs to compete. They want to be divisive, but Labour wants GPs to work together in the interests of their patients. I shall set out four principles, and the primary care system should measure up to them. We heard nothing about the principles and objectives for primary care from the Secretary of State, so we shall hear whether he agrees with these. The system should provide equal access for all patients; it should make the best use of NHS resources; it should help to provide stability within the NHS so that it can grow; and it should play a part in local health strategies to improve the health of local people.
  The Government's policy of fundholding fails on all those counts. It has created a two-tier service; it has added to the mountain of management bureaucracy and red tape; it prevents hospitals from planning for their services; and it cuts across any chance of strategic planning for health gain.
  The Secretary of State claimed that fundholding is the fount of innovation in primary care. That is a sectarian and partial view. The Government see no merit whatsoever in the work of non-fundholders. There are hundreds of examples, but I shall mention just a few. Dr. Helen Groom, a GP in Gateshead, has set up a nurse
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  assessment unit for men with prostate problems. That is innovative and the Secretary of State should welcome it. Dr. Robin Singer, a GP in Enfield, has set up a new service to treat cataracts and a twilight nursing service. The Secretary of State should welcome that. Why has he not done so?
  Mr. Dorrell: I did. I said in my speech that there was no difference between the hon. Lady and myself on the benefits that commissioning GPs have brought to their patients. However, the hon. Lady has to explain how that would have been possible had the relationship within the health service not been changed by fundholding.
  Ms Harman: We are talking about GPs innovating within their own practices. That has nothing to do with GPs buying hospital care and managing their budgets. Non-fundholding GPs do not control their budgets; they are simply improving primary care in their surgeries. However, we have had some success today because we have forced the Secretary of State, against his motion, to recognise that all GPs are doing a good job, whereas previously he wanted to concentrate on fundholders— to divide and rule.
  The Government's claims for fundholders do not stand up. They claim that fundholders improve efficiency, responsiveness and quality of care. Angela Coulter, director of the independent King's Fund centre, says that those claims
  "are in general not supported by the evidence."
  The Tories claim that fundholding has been the mechanism for reducing prescribing costs, but the British Medical Journal says:
  "Early reports of the effectiveness of fundholding in curbing prescribing costs has not been confirmed in its longer term study.".
  There is one thing about GP fundholding on which the Government like to stay silent and everyone else agrees. A two-tier system is an inevitable part of GP fundholding. Some patients are fast-tracked for hospital appointments, while others have to wait longer.
  The Secretary of State for Health has always denied that unfairness. This afternoon, it was not clear whether he was denying it or admitting it as his line of argument was somewhat confused, but in the past he has denied the unfairness. He said:
  "The role of fundholding is not to allow a two-tier service",
  but the evidence tells another story.
  I have here a bulletin sent out by the hospitals in Sheffield. It shows the two-tier service in action. The first column reveals that cardiology patients of non-fundholders wait 26 weeks for an out-patient appointment, and the second column sets out the waiting time for patients of fundholders. Instead of waiting 26 weeks, patients of fundholders wait only 12 weeks. Dermatology patients of non-fundholders wait 26 weeks, while patients of fundholding GPs wait only nine weeks. [Interruption.]
  Mr. Dorrell: Perhaps the hon. Lady would prefer to make her own speech in her own way, but she is illustrating the force of my argument. Is it wrong to improve the service available to the patients of fundholders? If it is not wrong to improve the service to the patients of fundholders, is it then wrong to apply

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  pressure, as the hon. Lady and many others will do, to improve the service available to all patients of the health service? The hon. Lady is highlighting how fundholders are improving standards and that leads to pressure for improvement across the board. While she is talking about waiting times, she might also recount to the House how waiting times for out-patient and in-patient care have tumbled over the past five years, not least under the pressure created by fundholders.
  Ms Harman: Hospitals, not GP fundholders, carry out operations. The document also deals with hip replacements in Sheffield. It no longer matters who is in greatest pain and needs a hip replacement and who finds it most difficult to get upstairs and has to sleep on the sofa on the ground floor because they cannot get to the bedroom. What matters is whether or not the patient's GP is a fundholder. In Sheffield hospitals, patients of non-fundholders have to wait up to 52 weeks for hip replacements, but patients of fundholding GPs, even if their condition is less serious, have to wait only three months.
  The Secretary of State said that he wanted to know what was wrong. I shall tell him: it is the unfairness of a two-tier system. We are not talking about advantages won by GP fundholders; they are not carrying out the hip operations. The system simply provides unfair access to our hospitals.
  Did the Secretary of State know about the position in Sheffield? Did he know about the two-tier bulletin for waiting times in Sheffield? Does he defend it?
  Mr. Dorrell: Yes, I just did.
  Ms Harman: He defends it.
  Unfairness is built into the heart of the system of GP fundholding because the advantages of the patients of fundholding GPs—
  Mr. D. N. Campbell-Savours: On a point of order, Mr. Deputy Speaker. Will you ensure that Hansard shows that the Secretary of State said, from a sedentary position, "Yes, I do defend it"?
  Mr. Deputy Speaker: It is not for the occupant of the Chair to determine what Hansard reporters record.
  Mr. Alan W. Williams: On a point of order, Mr. Deputy Speaker. My concentration during the debate has been badly upset by the hon. Member for Hayes and Harlington (Mr. Dicks), who at no stage has tried to intervene, but continually barracks from a sedentary position. Will you call him to order?
  Mr. Deputy Speaker: In an ideal world, there would be less barracking from both sides of the Chamber, from both the Back and Front Benches. It has been a lively debate so far.
  Ms Harman: My hon. Friend the Member for Workington (Mr. Campbell-Savours) is absolutely right.
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  In the debate that the Secretary of State has called today, he has just endorsed the two-tier waiting-list system. That is a disgrace.
  It is the same story across the country. In Scotland, the Glasgow royal infirmary issued a letter proposing to give priority to the patients of GP fundholders. In King's College hospital in my constituency in London, there are extra surgery sessions for fundholding patients only. As my hon. Friend the Member for Halifax (Mrs. Mahon) said, it is the same in Halifax. I have a letter that was sent to a GP in her constituency from St. Luke's hospital. It states that
  "we are not able to respond to your recent request to provide a psychology assessment/treatment service for your patient, and I am, therefore returning your letter of referral … We are only able to provide services…where we have contracts with fundholding practices".
  When the Secretary of State responded to one of my hon. Friends, he tried to say that a new system was being developed. What is being developed is not a new system, but unequal access to an existing system. It is not just that the internal market is unfair; it is too expensive to ran and it piles bureaucracy on to bureaucracy. Every GP fundholder has to have his own set of contracts and has to have a business manager in the practice. Each fundholding practice now employs a business manager who is paid twice as much—if not three times as much—as the practice nurse. The hospitals have to employ more managers to negotiate with the fundholder managers and the bill is huge—at least £80,000 extra in administration costs for each fundholding practice. With the current number of fundholders, that amounts to an extra £212 million a year on bureaucracy. There is no contribution to patient care, just more bureaucracy.
  With the multiplicity of GP fundholders, there is no chance of developing what we want to see: an overall strategy for health services in each area. It is impossible for hospitals to plan from one year to the next. Like unfairness, instability is driven into the system by GP fundholding. We do not criticise the patients of GP fundholding; we do not criticise the fundholders. GP fundholding was not the idea of doctors; it was forced on them by the Government and there is still widespread opposition to it among GPs.
  The Secretary of State misrepresented GPs' views. A survey in 1995 by Pulse magazine found that more than three quarters of GPs wanted fundholding abolished; half of all the fundholders wanted the scheme abolished. The GPs joining the fundholding scheme are not giving a vote of confidence to the fundholding scheme; many are simply trying to do the best for their patients in an unfair system. Unless GPs become fundholders, they have no right to choose where patients go for treatment; unless GPs become fundholders, they have no say in the planning of local services. Two thirds of GPs object to fundholding in principle, but half of them said that if other practices in their area started to become fundholders, they would have to apply too.
  Because the fundholding scheme is fundamentally flawed, many doctors across the country are working together to remedy its defects. They are trying to make fairness in an unfair system; they are trying to make sense out of a senseless system. They are struggling to overcome bureaucracy.
  In Hertfordshire, GP fundholders have tried to instil some strategy into the fragmentation of the NHS market. A joint strategy working group there incorporates

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  fundholders and non-fundholding GPs, public health, Hertfordshire health agency and the local medical committee. The group has created a Hertfordshire-wide policy where the fundholders agree to purchase within the policy.
  In Winchester, an attempt has been made to mitigate the two-tier system by using fundholders' budgets to pay for operations for the patients of non-fundholders, who would otherwise have to wait until after April for their operations. In Newham, GPs have tried, single-handed, to influence the purchasing decisions of the health authority by combining to create the Newham Innercity Multifund.
  The Minister for Health (Mr. Gerald Malone): I am grateful that the hon. Lady has at last decided to give way on a constituency point. Does she not understand that if the fundholders had not been in a position to manage their budgets to make savings, the money would not have been available for health care in my constituency? That is the point.
  Ms Harman: No, that is not the point. The situation was unfair: neither the GP fundholders nor the non-fundholders found it acceptable, so they all got together to pool their resources so that the fundholders could help out the non-fundholders in an unfair system. That is an example not of the system working, but of good people on the ground trying to mitigate the unfairness of the Tory system, and I applaud them for that.
  All the examples that I have given show GPs struggling to improve their care for patients despite the problems of fundholding. The Labour party will build on their work and will replace fundholding with GP commissioning— a framework for primary care that will allow all GPs to have a role in shaping local health services.
  All GPs will have substantial new powers and opportunities under Labour's scheme for GP commissioning. First, all GPs will be able to refer their patients to the hospital or specialist they want so that GPs can ensure that their patients are in the right hands without the tangle of red tape. Secondly, Labour offers all GPs an enhanced role in the planning and public health functions of the health authorities. GPs and the health authority will team up to commission health care. There are a number of models, so the relationship between the two can be flexible. But, under our system, health authority commissioning decisions will have genuinely to reflect the views and experiences of local GPs. GPs will have the chance to innovate, while bureaucracy can be cut and strategic planning maintained.
  GP commissioning is, as the Secretary of State acknowledged, already evolving throughout the country: more than 60 commissioning groups are in operation, representing more than 5,000 GPs and covering 11 million patients. The range of commissioning models is still developing. In Nottinghamshire, a commissioning group has been established by 200 GPs, caring for nearly 400,000 patients. They have achieved many improvements in patient care. In Tamworth, first-wave fundholders frustrated with the limitations of fundholding have taken up commissioning instead. Working with non-fundholders and the South Staffordshire health commission, they have created a health commissioning group. They say that commissioning is the way in which the NHS should work in the future.
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  The Tory internal market in the NHS creates division. It sets patient against patient, doctor against doctor and hospital against hospital. Today, the Secretary of State has sought to manufacture further division with his motion. He has tried to play fundholding GPs against non-fundholding GPs. He realised that it did not work and so he backed off. His strategy, however, is widely understood. One fundholding GP, Dr. Marcoolyn, observed that the Government
  "are never happier than with divide and rule situations."
  When they cannot find those situations, they create them.
  The debate should not be about dividing GP from GP or fundholders from non-fundholders. It should be about what the Government could be doing to improve primary care, but the Tories are fixated on one divisive ideological model for primary care—GP fundholding. Their only new ideas for primary care are that GPs should take on casualty work to help out the hospitals because of the hospital crisis, and backing private GPs to set the standard for all other GPs. We have, "Dorrell backs private GPs"— an interesting suggestion that he did not introduce in the debate today. Perhaps we shall hear that he has thought better of it.
  The Tories are prisoners of their own policies, and they are afraid to listen to the experience of GPs and patients. Labour is moving forward, listening to GPs and patients and building on the best practice of all GPs to create a primary care service fit for the millennium. The Tory party is not interested in patients, the state of the NHS or the condition of Britain. It is interested only in clinging on to power. The Tory party has, as evidenced today, shut down the business of government and is simply trying to act like a propaganda machine, and is using the House to do so. [Interruption.] In effect, this has been an Opposition—
  Mr. Deputy Speaker: Order. I understand that an hon. Member used the word "hypocrite" in relation to another hon. Member. If that is correct, will the hon. Member please withdraw the word immediately?
  Mr. Terry Dicks: It was another word, but if the context is offending you, of course I withdraw.
  Hon. Members: What?
  Mr. Deputy Speaker: Order. I would be grateful if the hon. Gentleman would speak slowly and clearly so that I can hear.
  Mr. Dicks: I withdraw the word "hypocrite" and use the words "double standard".
  Mr. Deputy Speaker: I am most grateful.
  Ms Harman: In effect, this has been an Opposition day debate. The tables in British politics have now turned. We are an Opposition preparing for government, and the Conservatives are a Government preparing for opposition.
  5.23 pm
  Mrs. Marion Roe: It is extremely helpful that we have the opportunity today to expose the differences between the Government and the Labour party

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  on GP fundholding. It is about time that we began to hear what the Labour party proposes for health care. I make my contribution to the debate not only as Chairman of the Select Committee on Health but as the Member of Parliament for Broxbourne, and I shall outline the health services that are available to my constituents in Hertfordshire.
  It will not be a surprise to anybody to hear that, during the Select Committee's inquiries into priorities in the national health service—both in the drugs budget and in purchasing—the role of GP fundholders was brought to our attention. In the NHS drugs budget inquiry in 1994, we received evidence that focused on GP fundholders' management of their budgets. We were informed that fundholders had consistently spent considerably less on drugs than had non-fundholders, despite their budget allocation being set on an identical formula. We were given examples. In Mersey, although real costs had increased, 70 per cent. of fundholders had reduced their prescribing costs in relation to their set budgets. In the five months from April to August 1993, Oxford regional health authority published figures that showed a 9 per cent. difference above permitted target growth for fundholders as against non-fundholders.
  Mr. Sam Galbraith: Will the hon. Lady give way?
  Mrs. Roe: Not at the moment. When I have finished this point, I shall give way to the hon. Gentleman.
  Lincolnshire showed a 2 per cent. lower rise in drugs costs between fundholders and non-fundholders. In Derbyshire, fundholders underspent their budgets by 1 per cent. Non-fundholders overspent theirs by 8 per cent.
  We were given three reasons for those results: first, the incentive of being able to reinvest the resulting savings for the benefit of patients; secondly, the ability to contract directly for the minimal use of expensive drugs emanating from hospital prescribing; and, thirdly, the self-imposed commitment required in fundholding health plans to show improvement in the quality and value for money of the delivery of health care. I should also add that we were assured that, in attempting to reduce prescribing costs, fundholders accept that rational prescribing does not necessarily mean cheap prescribing, but the financial incentive and necessary commitment make fundholders much more aware of the general headings under which drug expenditure can be reduced. Effective and appropriate prescribing with a value for money principle must be a worthwhile goal that we would all support.
  Mr. Galbraith: The hon. Lady raises a matter about which there is some evidence rather than just opinions. She will be aware that much of the evidence that she quotes is for the first year of fundholding. A significant reduction in prescribing costs was confirmed in a paper published in the British Medical Journal in 1993. Perhaps she has not read the paper that was published in the BMJ on 9 December last year. I quote from the abstract of the conclusions, which says:
  "Early reports of the effectiveness of fundholding in curbing prescribing costs have not been confirmed in this longer term study."
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  The claims that she makes were for the first year only, and were due to GP fundholders being given more money at the start. They were not borne out in the longer term.
  Mrs. Roe: I am grateful to the hon. Gentleman for drawing that to my attention, but I should explain to him that, during the course of our inquiry, evidence was given to us that showed that on many occasions doctors were handing over a prescription to a patient to get them out of the surgery, which I understand had frequently been the case in the past, and the emphasis was on more appropriate prescribing—not just the budget itself— to benefit the patient.
  In its purchasing inquiry, the report of which was published in January 1995, the Health Select Committee questioned five fundholders. When asked:
  "What changes have you made to secondary care services since becoming involved in commissioning and what changes are you expecting in the next 3 to 5 years?",
  the East Shropshire GP commissioning group replied— the reply is headed "Impact on Secondary Care"—
  "We have virtually eliminated any waiting time for GP direct access physiotherapy. We have influenced the nature of the outpatient experience for patients, driving towards innovative 'one stop' clinics whereby the patient gets everything necessary for operation work-up done in one afternoon rather than up to four visits to hospital. In the next three years, if we still exist, we would expect to achieve much closer integration of the secondary and primary services, possibly with clinicians moving out from the hospital base into the primary care setting.
  We would hope to achieve better communication between consultants and GPs, better measurement of outcome and better quality standards in the purchasing contracts, based upon following an individual patient through the system (not currently possible on the information available to the district health authority)".
  Surely all of us, especially patients, would approve of that statement.
  I was pleased that the hon. Member for Peckham (Ms Harman) drew attention to the innovative ideas that we are implementing in Hertfordshire. We feel that we lead the field in the provision of high-quality health care. My Broxbourne constituency contains 15 GP practices with a combined list size of 97,185; 11 practices are fundholding, and have a combined list size of 92,935. GP fundholders comprise 73 per cent. of practices in Broxbourne, and serve 96 per cent. of all patients. Their combined budgets in 1995–96 amount to nearly £15 million.
  I have no doubt that GP fundholders can claim to be at the leading edge of implementation of the Government's policy of a primary care-led national health service. From the start of the scheme, they have developed services in their own surgeries that are convenient for patients, avoid inappropriate use of hospital facilities and provide better value for money. For example, there are outposted out-patient clinics where hospital consultants hold regular clinics in different specialties. That helps to develop GPs' specialist skills, and has frequently led to jointly agreed protocols for hospital referral. Fundholders have also contracted for, or directly employed, physiotherapists, counsellors, dieticians, chiropodists, nurse practitioners and other professionals, and carry out an extended range of minor surgery procedures in their own surgeries.
  Mr. Campbell-Savours: May I ask the hon. Lady a question that my hon. Friend the Member for Peckham

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  (Ms Harman) asked the Secretary of State? The hon. Lady, who chairs the Health Select Committee, has seen the Sheffield document that showed two different waiting lists for the same discipline in a certain hospital. Does she accept that a two-tier system operates there?
  Mrs. Roe: I have not seen that document. It has been displayed across the Chamber, but I have not had an opportunity to read it. I was going to make the point that in Hertfordshire there is no two-tier system. If the hon. Gentleman visits my constituency, I will demonstrate to him that the system there is operating very effectively for the benefit of patients. I shall, of course, look at the document, and I am sure that my colleagues on the Select Committee will do the same. [Interruption.]
  Mr. Deputy Speaker (Sir Geoffrey Lofthouse): Order. The hon. Member for Workington (Mr. Campbell-Savours) has been in the House long enough to know what the procedures are.
  Mr. Campbell-Savours: I know the procedures.
  Mr. Deputy Speaker: If the hon. Gentleman knows the procedures, he should not have crossed the Floor as he just did.
  Mr. Campbell-Savours: On a point of order, Mr. Deputy Speaker. If I may say so, I am entitled to sit on the Conservative Benches.
  Mr. Deputy Speaker: The hon. Gentleman knows the procedures of the House full well. He knows that he should not have crossed the Floor of the House with that document.
  Mrs. Roe: The hon. Member for Workington (Mr. Campbell-Savours) has tried to make his point in a rather forceful way. I listened to what he had to say, and I have told him that, as Chairman of the Select Committee, I shall look at the document when I have an opportunity to do so.
  Mr. David Ashby: Will my hon. Friend give way?
  Mrs. Roe: I am told that a number of other hon. Members wish to speak. I have already given way twice; my hon. Friend will be able to catch your eye later, Mr. Deputy Speaker.
  Through an innovative and flexible approach to health care, GP fundholders in my constituency have now made available an extensive range of diagnostic investigations and screening including blood tests, electrocardiograms, audiology screening before referral to an ear, nose and throat surgeon and ultrasound screening. They are working increasingly closely with hospital colleagues in developing protocols for referrals, treatment and discharge. They have increased the number of community and practice nursing staff to cope with the increased work load as hospital lengths of stay shorten, more day-case surgery is undertaken and the move from secondary to primary care settings accelerates.
  Most GP fundholders place contracts with trusts on a "cost per case" basis, which has led to improved procedure-based costing by trusts and to more timely
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  communications. That is very important. Fundholders are also working closely with the Hertfordshire health agency in developing joint approaches to contracting, and in reviewing the appropriateness and effectiveness of different treatments.
  Those of us who represent Hertfordshire constituencies are proud of the way in which the whole local medical profession is delivering health services to our constituents. I assure the hon. Member for Workington that no two-tier system operates in my area: equity of service for all patients is an acknowledged priority. Moreover, there are four total-purchasing pilot projects in the county, which will begin purchasing all health services in April.
  Mr. David Hinchliffe: Will the hon. Lady give way?
  Mrs. Roe: No. I want to finish my speech.
  Given my experience as the Health Select Committee Chairman and my work in the constituency, I believe that GP fundholders are doing an excellent job in putting the interests of their patients first and ensuring that they receive a high-quality service within the NHS. There is no doubt that fundholders are a success, and also very popular with patients. They have set a standard for others to follow, and I believe that they should be encouraged and assisted to flourish and develop in the future.
  5.38 pm
  Mr. Alan Simpson: I feel very privileged to speak in the debate, mainly because I have done what the Secretary of State suggested and listened to some of the comments of GPs who are members of the non-fundholding consortium that operates in Nottingham. On the basis of those comments, I shall address the seven deadly simplicities offered by the Government in defence of their policy on fundholding, and the four more sensible options that might result from adopting the same course as the non-fundholding group in Nottingham. It may help hon. Members to know about the non-fundholding consortium's structure. It has an elected committee of 13 general practitioners, who represent more than 200 GPs in the city. Between them, they cover more than 400,000 patients. The consortium has proved so successful that it is contracted to advise Nottingham health authority on its purchasing policies.
  The consortium's objectives were set out about a year ago by Dr. Doug Black, Dr. Alan Birchall and Dr. Ian Trimble in the British Medical Journal. They said that they could
  "collectively offer more time and knowledge to the contracting process while minimising the impact on clinical workload. As a large purchaser with low management costs the group has secured access to quality secondary care which is equitably available to all patients, preventing the development of a local two tier service."
  It is in that context that I shall deal with the first of the simplicities and inaccuracies that the Government offer us.
  The Minister for Health recently said that GP fundholders' savings far outweighed their administrative costs. It was on that basis, he said, that fundholding saves money. Let me refer him and hon. Members to last year's Audit Commission report. Paragraph 37 pointed out that, of the £19 million-worth of savings that had been made by fundholders,

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  35 per cent. had been spent on premises and 25 per cent. on office furnishings. One Nottingham GP pointed out in Pulse that the report showed that
  "of the £19 million of fundholders' savings actually spent by 1993/4, less than 20 per cent. was spent directly on patient care. If this pattern continues, fundholders will re-invest less than £13 million of the 1993/4 savings on patient care."
  He added that, if that trend continues
  "fundholding will have resulted in nearly £90 million … being withdrawn from patient care in a single year."
  That is a pattern not of value for money spending, but of a profligate waste of money. In Nottingham, 75 per cent. of general practitioners are non-fundholders. The administrative costs in Nottingham are the lowest in the Trent region. That achievement is a direct result of the non-fundholding consortium's role and contribution.
  The second magical myth that the Government have peddled is that fundholding reduces drug spending. A recently completed study in Nottingham shows, however, that, over a four-year period, fundholding GPs' prescribing bills have been rising faster than those of non-fundholding GPs. It is an objective fact that, in Nottingham, non-fundholding GPs' cost for drugs per prescribing unit is almost £3 less than that of fundholders. Although non-fundholders lay claim to that and view it as a virtue, they also point out that, if the House genuinely wanted to understand the key issues in prescribing costs, it should not simply compare fundholders with non-fundholders but should consider the extent to which any savings are dwarfed by the power and pressure exerted by the pharmaceutical companies in relation to the total drugs bill. A different way of pursuing substantial savings on the drugs bill would be to link hospital and prescribing budgets at district level. That would offer direct incentives for consultants to work alongside their GP colleagues to promote more effective use of budgets.
  The third fantasy that we were offered is that fundholding is popular with GPs. Last year in Nottingham, however, not a single GP moved from non-fundholding to fundholding. A meeting that was scheduled to be held on the invitation of the Health and Safety Executive, to promote fundholding, had to be cancelled because it could not attract GPs to attend—such is the measure of fundholding's popularity. All that must be viewed against the backcloth of nearly five years of direct financial incentives to GPs to opt out of non-fundholding status.
  I did not understand the Secretary of State for Health when he said that the funding arrangements for fundholder GPs did not differ from those for non-fundholder GPs. The consortium in Nottingham tells me clearly that fundholders are paid on an activity basis, that non-fundholders are paid on a capitation basis and that Government rules restrict the way in which non-fundholders can use any savings that they make collectively. The aim of the unequal approach to funding is to drive GPs out of the non-fundholding sector.
  The fourth Government myth is the notion that fundholding is popular with patients. A Which? report last year pointed out that about 59 per cent. of patients did not know whether or not their GP was a fundholder. We can all understand and excuse that: it will not necessarily be
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  the biggest issue in a person's life. What was more significant was that the survey accepted that lack of knowledge and asked patients whether they were getting better or worse access to their GP. It found that more fundholding GP patients were having difficulty in gaining such access than non-fundholding GP patients. So the claim that fundholding is popular is itself somewhat dubious and does not stand up.
  The Government then tell us that fundholders influence service provision. In some cases, they do—evidence of a two-tier system can be seen in the Sheffield list—but they do so at the cost of other patients. Ironically, some of this is beginning to boomerang on Government policy. The National Association of Fund Holding Practices recently surveyed its members and found that a high proportion of them were experiencing increasing prices because of demands by trusts, after purchasing budgets had been set. Their members were having to pay increased moneys to purchase the extra services that they wanted. That is hardly a sensible way of dealing with serious, overall reductions in patient waiting lists.
  Again, in Nottingham, the non-fundholding consortium's role has been precisely what the Secretary of State wished: to exercise a collective role in reducing patient waiting lists. It has been astonishingly successful. I identify just three of the sectors where there have been amazing results. At the Queen's medical centre, a teaching hospital in my constituency, the waiting lists for non-urgent, out-patient operations went down considerably. For example, the waiting list for ear, nose and throat operations went down by 30 per cent., in the ophthalmology department it went down by 48 per cent. and in the orthopaedics department it went down by 15 per cent. Overall, waiting lists have gone down by 14 per cent. That is what can be achieved by GPs acting collectively in non-fundholding consortiums.
  The sixth claim that the Government make is that fundholding promotes change through market forces. Again, the evidence from fundholders is that it takes a huge amount of time to negotiate contracts. Many of them are simply signing copycat contracts that have been written by the hospital trust. Fundholding has not shifted the basis of leverage in terms of innovation. GPs tell me that, although they have a sense of what they can do in terms of patient care and meeting patient needs, if they are drawn into individual contract negotiations, they do not have the time or expertise to view the broader picture and to assimilate epidemiological evidence. That task must be done at a collective level.
  The seventh, and the last, of the fabulous myths and simplicities that we have been offered is that fundholding ensures that the NHS is primary care led. The simple fact is that, in negotiations between a GP and a hospital, an individual practice is dwarfed by the power of the large providers, and their ability to set the agenda.
  In Nottingham, the non-fundholding consortium proposes that an elected group of GPs should share the responsibility for Nottingham's budget with the executive of Nottingham health commission. That would give an innovative, primary-care edge to the whole purchasing process.
  The real excitement about the debate that we should be having lies in the possibilities beyond the fundholding absurdity. Again, Nottingham has come up with an exciting idea—that of a total commissioning project based

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  on four assumptions. The first is the shared fiscal responsibility that I have already mentioned. That would be not an abrogation of responsibility, not a "grab it for yourself and run as far as you can" notion of responsibility, but the establishment of a common and collective responsibility for commissioning, in the interests of all patients.
  The second requirement is that the absurdities and inconsistencies between the funding offered to different GPs should be removed. The consortium wants us to understand the need to accelerate the move towards capitation-based budgets at regional, district and practice level.
  Thirdly, the House should acknowledge the value of allowing for virement between budgets at a district level. If drug budgets are overspent, money now automatically comes out of next year's health service allocation. There is already a direct linkage, but virement at a local level would offer incentives for consultants to work with GPs to get the maximum out of the budget, in the interests of all their patients.
  Finally, the group asks for funding for information technology advances. It is a recognition of the fact that if the different elements can act collectively, they can get far more out of the system, in the interests of patients, than if they all set off down separate paths.
  The group has carried out costings for the project, showing that there would be an overall saving of £3 million, compared with any equivalent move to push an extension of fundholding. That is the local Nottingham advantage that would arise simply from any such approach. If we extended the idea across the country, to the 60 or more commissioning units set up by non-fundholding practices, the benefits would be spread even more widely.
  We must recognise that the choice is between being stuck in a system that will increasingly confer benefits only on the few, and the opportunity of delivering substantial benefits to the many. The new approach that I have described would not be a question of "no change"; it would bring substantive change for the vast majority of people and prospective patients, and we must consider that.
  Of course Labour must scrap GP fundholding, but the real debate—the debate that we should be having now— is about how to replace it with a national programme that incorporates the visionary lessons, and a far more efficient system, that are already being learnt both in Nottingham and by other GP non-fundholding commissioning groups across the country. The challenge is to weld those into a national strategy to restore the structure of a single-tier national health service.
  5.53 pm
  Dame Jill Knight: I am glad to have the opportunity to make a brief speech in support of the motion. Fundholding has a proven record of success, and it is one more milestone on the road of the Government's achievements in modernising, improving and enhancing our British health service. It cannot be said often enough that our health service today is better than it has ever been in the whole of its history.
  Fundholding has indeed done all that the motion says it has. Fundholding doctors know from experience how advantageous it has been for patients, in enhancing primary care and in giving doctors the tools with which to improve their practices.
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  Doctors who have learnt the advantages at first hand have been talking to their friends, and fundholding is soaring. At the beginning of 1991–92 only 7 per cent. of practices were fundholding. In two months' time the proportion will be 51 per cent. That alone, quite apart from anything that my right hon. and hon. Friends or I may say, is a clear sign of how much the GPs like fundholding systems.
  Fundholding has brought so many advantages to patients that I have time to list only a few of them. The range of treatment now available has now improved so much since fundholding started. The quality of care has improved and, as the Opposition agree, waiting lists are much shorter. There has been a reduction in bureaucracy, and services such as chiropody, which is most important for elderly people and makes all the difference to their lives and to whether they can get about without pain and discomfort, have improved.
  The minor operations done by doctors in their practices since fundholding began have also helped a great deal. I could also say much about dermatology, because I was closely involved for a long time as the president of one of the groups of people in my area who suffer from skin diseases. Treatment for all such conditions and many others are now available within practices.
  That has made a tremendous difference to the burdens that hospitals have to bear. Hospitals today are carrying out more and more complicated operations and treatments, and they need all the alleviation of their work load that can be provided. Fundholding has made an important contribution there. As my hon. Friend the Member for Broxbourne (Mrs. Roe) said, doctors can now negotiate directly with hospital consultants in a way that was not possible before. That, too, has been a help.
  Practice nurses are important, because their presence has improved primary care. I was amazed when I learned that since fundholding was introduced the number of practice nurses has increased by 261 per cent. That is marvellous news. I spoke to a practice nurse recently, and she was eulogistic in her support of what had happened in fundholding practices.
  Doctors have been able to use the savings to improve their waiting rooms, and in other small ways whereby patients' comfort can be increased. That is most important. Fundholding has given doctors a power over their own domain that they did not have before.
  I have always felt that those nearest the point where money is spent, those who know the score and know the specific problems, should decide how money should be allocated. That is equally true of school budgets. Those, too, are better decided by heads and governors than by education committees. Doctors running practices know better than health authorities where money is most needed and how it should be spent.
  The Labour party disagrees with all that—at least, I think that it does. It is sometimes difficult to figure out what Labour Members are really saying—especially now we know that, although the motion uses the words of the right hon. Member for Derby, South (Mrs. Beckett), the Labour party apparently proposes to vote against what she said.

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  Labour's response to the fact that the treatment of patients is very much better than it was is absolutely typical. Labour cannot deny that patients are receiving much better treatment. Indeed, Opposition Members are not advancing that argument—
  Mr. Hinchliffe rose—
  Dame Jill Knight: I said that I would make a brief speech. The Opposition are whingeing and whining that patients of doctors who are not fundholders are disadvantaged. The argument is not that patients of fundholding practices are getting a bad deal. Those patients are getting such a good deal that it infuriates the Labour party because the service for everybody else is not improving as well.
  Mr. Hinchliffe: They are getting no service. That is the problem.
  Dame Jill Knight: I understand that constant attention is paid to ensuring that money is as fairly allocated as possible between fundholding practices and non-fundholding practices. The difference is that fundholding practices are managing their money much better.
  Conservative Members want the benefits that patients of fundholders receive to be spread all over the place. There is no absolute ban on the number of doctors who can become fundholders. There is a stipulation about the size of the practice, but many doctors have overcome that problem by amalgamating with other practices. The Government have not said, as one would think from listening to Labour Members, that nobody else is allowed to become a fundholder because the number is limited. Conservative Members are trying to spread far wider the undoubted benefits of fundholding, which is absolutely right and proper.
  The Opposition will have problems if they rubbish fundholding. Although their argument today has not been that fundholding is wrong, they still want to get rid of it. That is extraordinary. The Labour party should recognise that the British Medical Association has given fundholding the seal of approval for good housekeeping, and patients most certainly approve of it.
  I am sorry that the hon. Member for Nottingham, South (Mr. Simpson) could not wait to hear the rest of the debate and has already left the Chamber as I wanted to raise a particular point with him. He said that patients were not very keen on fundholding. If patients are receiving so much better treatment from fundholding doctors, why should they not be keen on the system? They are very keen indeed.
  The support for fundholding among doctors who have experienced it is undeniable. The National Audit Office has approved of it; the Public Accounts Committee has said what a good system it is. The hon. Member for Peckham (Ms Harman) seemed to imply that the King's Fund did not approve of the system. I wonder whether she has read the 1994 report which evaluated NHS reforms and described fundholding as one of the major successes of the reforms. So how can the hon. Lady suggest that the King's Fund is not in favour of fundholding?
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  It is clear that the Labour party will meet strong opposition to its policy to abolish fundholding. I wonder whether it will include that policy in its manifesto at the next election.
  Mr. Hinchliffe: Yes.
  Dame Jill Knight: Good—that will mean many thousands more votes for us. What a good idea that is. [Interruption.] Labour Members are stuck with it now. They will have to put it in the party's manifesto. Will they argue with the BMA, doctors, patients and the King's Fund? They should ask themselves whether all those people can be wrong. Labour is in a tizzy—it is in a mess.
  I am sorry that the hon. Member for Peckham has left the Chamber as I should have liked to draw her attention to the many instances in her speech when she seemed to be facing both ways. For instance, she complained that money which ought to be used for patients was wasted in fundholding practices on management, but at the same time she had to admit that those patients got better care than any patients of non-fundholding practices. She cannot have it both ways, although she loves to try.
  I do not know what the Labour party intends to do, although it has proposed some alternatives—joint commissioning came up again today. So far as I can gather, there is little support for that among doctors who happen to be in the Labour party. I read that the Labour party is suggesting shadow budgets. Labour Members are so used to being shadows that they advocate them even for doctors. Long may they continue being shadows.
  If the Labour party removes real money—I understand that that is what having shadow budgets means—real control will go as well. Running a medical practice is not a game of Monopoly, and Labour Members had better understand that. Other Members wish to speak, so I will conclude my speech. I strongly support the motion.
  6.5 pm
  Mr. Simon Hughes (Southwark and Bermondsey): Anybody without prior knowledge of the subject who heard this debate would have thought that it was a dialogue of the deaf and would probably have left without being further enlightened. Although the benefits and disbenefits of fundholding have been cited, nobody so far has explained what fundholding is intended to achieve. I shall describe why I think that the debate has so far been a dialogue of the deaf.
  The position of my right hon. and hon. Friends is clear from the amendment that we tabled. Although Madam Speaker did not select it for debate, it is on the Order Paper and sets out what we believe. There are problems with the other two expressions of party opinion. The Government motion, which is fine so far as it goes, does not admit that there is anything wrong with the system at all.
  The Labour party's amendment, which rightly points to the failures of the system, does not specifically address the question asked by, for example, the hon. Member for Birmingham, Edgbaston (Dame J. Knight). Does it imply the abolition of fundholding? I have read the Labour party policy document and I know that it proposes the replacement of fundholding with commissioning, but the question of abolition is not answered. Fundholding GPs would want to know the answer to that question.

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  Despite this rather unsophisticated debate, it is none the less obvious why there is such a difference of view. It is clear that the system that the Government set up to devolve power to GPs by giving them budgets enabling them to buy their own health care for a specific list of activities—obviously not forms of acute care and the like—has been welcomed by some GPs, who see it as an advantage. It is also abundantly clear that the system has produced innovation and a knock-on effect on the way in which other practices are organised.
  Disparity of treatment in some areas—described in the document to which the hon. Member for Peckham (Ms Harman) referred, and which, courtesy of the hon. Member for Workington (Mr. Campbell-Savours), has found its way to the other side of the Chamber—has arisen because when hospitals are deciding who is first on the list for treatment, they have to make a choice between keeping fundholding practices happy and keeping the local health authority happy. Non-fundholding GP practices do not have the individual clout of fundholding practices as customers in the marketplace. For example, if GP fundholders do not get put first in the list, they may take their business to another provider or trust. Therefore, the trust will lose out and its budget and prospects will be reduced. That is why there is a difference.
  It may be true that the formula for allocating money in terms of patients is more or less similar, but the providers are dealing with two different sets of people—GPs, who are buying services directly, and the local health authority, which is the indirect purchaser. The health authority is likely to continue to be a purchaser, as the local health authority for the place where the trust is will probably be providing either community care services or acute services from a hospital. It is quite explicable as to why there are benefits for many patients and for fundholders. Fundholders get to the top of the list in some places, even though that is not written into the system and is not part of the defined difference between fundholding and non-fundholding GPs.
  The hon. Member for Nottingham, South (Mr. Simpson) made a good speech and asked some pertinent questions. He alluded to the fact that proper criticisms can be made of the fundholding system. My right hon. Friend the Member for Yeovil (Mr. Ashdown) visited the Mid Devon Family Doctors commissioning group in Cullompton last autumn. One of the doctors at that practice, Michael Dixon, wrote to me enclosing the group's document. The introduction illustrates why at present there is a two-tier system. If the Government would accept only that, we could make some progress.
  Mr. Milburn: The Minister of State does accept that.
  Mr. Hughes: He has certainly defended the system, but he has not formally accepted—so far as I am aware—that there is a two-tier system. The introduction to the Mid Devon group's document states:
  "We are quite happy with the pluralist system of purchasing, which allows for GP commissioning groups and fundholders, but the unnecessary and unreasonable bias in favour of fundholding must end. No-one doubts that historically fundholders have been over-funded. Furthermore, they, but not GP commissioning groups, are provided gratis with money for management and computers from outside funds (approximately £35,000 per practice). It is also unfair that fundholders are able to substantially increase their expenditure on practice staff over non-fundholders by committed overspends on their staff budgets. It is neither fair nor ethical that underspends
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  (which averaged £59,000 per practice in Devon last year), can be spent on furniture, equipment and buildings to the financial benefit of the practice and the partners themselves."
  According to that document, 99 per cent. of fundholders in Devon use underspend money in that way. The national figure is 75 per cent. The document continues:
  "Doubly absurd are the present rules whereby the local Health Authority (and thus indirectly the patients of non-fundholding practices) have to pay out for any fundholding practice that overspends."
  That is true. If a fundholding practice overspends, the tab gets picked up by the health authority, which has to divide the rest of its budget between other practices. That is clearly unfair, and the Government ought to recognise that.
  My hon. Friend the Member for North Devon (Mr. Harvey) received a letter from Dr. Mark Beer of Chumleigh in my hon. Friend's constituency. Dr. Beer quoted from a letter from Dr. Rosemary MacRae of Rainford, St. Helens, that was published in the December issue of Financial Pulse, entitled:
  "Why should GP fundholding savings become 'assets'?"
  Dr. MacRae's letter states:
  "I regret I was not appalled to read that a retiring partner is entitled to a share of assets bought from fundholding savings … I merely read it with cynicism and resignation.
  It seems unjust that money allocated as such can be 'saved' and invested in assets that become the property of the GP. It suggests too much money was allocated in the first place, the services bought were not comprehensive, or there has been inordinate waste in the way patient care has been financed in the past."
  Dr. Beer wrote to my hon. Friend, saying:
  "Would your Health Spokesperson be interested in this …? I am appalled by the implications as I am sure most of the population would be. There should be questions in the House!"
  I have now posed that question in the House, and I hope the Minister will respond to it. Can he explain how certain people can stack up assets by buying that advantage while others lose out because the total amount of health service money allocated in any area is, by definition, limited?
  There is no secret about the Liberal Democrats' position and policy. I believe that the Minister has been sent a copy of the policy document approved at our conference last autumn and entitled, "Building on the Best of the NHS". The document sets out our proposals for unifying the service in the way we have set down in our amendment. Very simply, the document states that there should be
  "a unified system of funding for all GPs … All GPs would be allocated funds by their joint commissioning agencies on the same basis as the joint commissioning agency are allocated funds by the Department of Health."
  That could happen in one of three ways for the individual doctor and practice. First, the doctor would be able to manage his budget independently, although subject to strict accreditation and the expenditure of annual savings in accordance with plans agreed with the health authority. The important thing about that is that GPs and the health authority must agree on a way forward. Secondly, the doctor could manage his funds as part of a consortium. Thirdly, if those options were not acceptable, the local health board could be asked to manage the budget directly as the GP's agent.
  There are two fundamental planks on which we will go forward. First, we need negotiation between the health authority and GPs as to what the plan for the area should

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  be within which GPs work. GPs must also retain the right to buy out of the local authority area if they wish to do so. Secondly, fundholding would therefore be able to continue. In answer to the hon. Member for Edgbaston, we would not propose to abolish fundholding, and she is right to ask Labour the same question.
  The Government must come clean about the fact that the present system is unfair, even if—although I am rather sceptical about this—they may not have intended that to be so. Labour must come clean as to whether it would abolish fundholding. We believe that there is a way forward which recognises the increased power of GPs, but requires them to be partners with all the other GPs and the health authority in their area in planning the provision for all of the services that they provide as part of the primary care service in this country.
  6.16 pm
  Mr. Jacques Arnold: When I first stood to become a Member of Parliament in 1987, I fought the election on the proud boast that the Government had not only replaced health funding lost through inflation, but had gone on to spend an extra 50 per cent. per annum on the health service. Today, that figure is 72 per cent. over and above inflation.
  I could not help thinking, however, that that increased money did not seem to have the right effect for my constituents, who, as patients, felt helpless in the face of the vast monolith of bureaucracy. It seemed to me that the most obvious thing was to try to get the clout in obtaining health care as close to the patients as possible. That is precisely what fundholding practices are all about, and the concept is central to the NHS reforms.
  We have heard time and time again today the allegations about a two-tier NHS. I wish to bring the House's attention to the independent evaluation of fundholding conducted by Professor Glennerster of the London School of Economics, who said categorically that arguing for the abolition of fundholding on the ground that it causes a two-tier service is perverse. He said:
  "It is akin to the philosophical paradox that equality in human needs can best be achieved by starving everyone. Equality is best pursued by seeking to maximise opportunities, not to minimise them—levelling up not down".
  That is precisely the point.
  The particular opportunity to which I wish to draw attention—very rapidly—is obtaining service locally. When I became a Member of Parliament, the Gravesend and North Kent hospital was being reorganised—along with two hospitals in the constituency of my hon. Friend the Member for Dartford (Mr. Dunn)—under the old-style NHS, the idea being to centralise departments.
  When I asked how that helped my constituents who had to travel a long way, the answer was, "Consultants must be all together, nice and cosy. Your patients must travel long distances at great inconvenience, and queue up for their appointments. As consultants, our time is more important than that of the general public who are to be served." Basically, it was the "We know best" syndrome.
  Consultants said that the best health care could come only from centralised hospital provision via consultants, but that idea was completely blown when I went to see the Marshlands practice, the first fundholding practice in
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  my constituency. I was fascinated to find that it had contracted for a consultant physician to come in once a week, a surgical consultant to come in fortnightly, and a neurological consultant to come in monthly. I asked how that could be possible in the light of what the consultants had said. I was told, "It is simple. If we wave a cheque, the consultants come running. They are just like anyone else. They respond to funding."
  What happened in that case? The patients were seen by experts in the local surgery in their own village. It took less time, cost less, and the practice found it had a 50 per cent. saving in the budget. What happened to the saving? It went towards clearing the hip replacement queue in the practice. All the patients in the queue were dealt with immediately. It also went on investment in equipment and skills, so yet further patients were seen in-house without the need to travel long distances to hospitals.
  For example, the practice bought cystoscopy equipment, the consultant handles it locally, and the treatments are done locally. Minor operations are done locally. Investigations such as computerised tomography scanning and those using exercise electrocardiographs are done locally. As a result, that surgery alone—there are many more now—is seeing 25 per cent. more patients, and seeing them faster. Fundholding is for the greater convenience of the patients. In the process, the practice has unclogged hospital waiting lists in our area.
  In the constituency of Gravesham, more than half of my constituents are served by fundholding practices. If fundholding were abolished, patients and GPs would be dismayed. I intend to circulate the speech of the hon. Member for Peckham (Ms Harman), because she demolished Opposition education policy last week, and she is demolishing their health policy this week. That is a gift sent from St. Paul's girls school—the well-known public school—to the Tories.
  6.21 pm
  Mr. Sam Galbraith: GP fundholding is an untested political experiment, so for this debate I thought I might peruse the literature for its effects—old habits die hard. Interestingly, while there is much in the literature, most of it is no more than assertion and opinion. It lacks any scientific rigour or fact. I will deal with some of those assertions, but then I hope to come to the few facts we have.
  I gather from the hon. Member for Gravesham (Mr. Arnold) that general practice fundholding brings medicine closer to the patients. I find it ludicrous to suggest that the fact that one holds a budget makes one closer to the patient. However, there is just as good an explanation of something that makes one more distant from the patient. The doctor-patient relationship is based on trust. Once one imposes a financial constraint on it, that trust is lost, and, if anything, the relationship is further apart.
  The Secretary of State and others said that there were new initiatives in GP fundholding, thereby decrying non-fundholding practices, as though they do not have new initiatives. However, the so-called new initiatives in fundholding are all completely untested and untried. That was one of the great problems. Are they of value? Are they appropriate? That is something we have not even begun to consider.

  183
  A third claim about GP fundholding is that it will help us to achieve the priorities for the health service. That was claimed by Geoffrey Scaife, the chief executive of the national health service in Scotland. I find such claims ludicrous. The priorities include cancer, accidents and coronary artery disease. A GP might see three cancer patients in his or her practice each year, so how on earth can he or she make choices about priorities and how those should be delivered by fundholding? That is ludicrous.
  The fourth claim made by the Secretary of State was that somehow or other GP fundholding is more efficient. On that we have some evidence—no more assertions. The hon. Member for Broxbourne (Mrs. Roe), the Chairman of the Select Committee on Health, touched on that. She sought to describe how GP fundholders have reduced their drugs budget more significantly than non-fundholders. There might be reasons why that happens throughout general practices that become fundholding. Time does not allow me to go into detail about why the costs and amounts they were given might have been overestimated. Much activity was also underestimated in the practices.
  Let us apply the argument to the drugs budget, and the evidence that fundholders are more effective. We must not talk about assertions, beliefs and political dogma—let us look at the evidence.
  There was some initial evidence from the British Medical Journal, which I quoted earlier. I saw the Minister laughing when the BMJ was mentioned, as though that made the evidence invalid. He ought to know that it is a scientific, not a house, journal. The conclusion of the original paper from Bradlow and Coulter in the BMJ edition 1993;307:1186–9 was:
  "Fundholding has helped to curb increases in prescribing costs".
  That was the conclusion mentioned by the hon. Member for Broxbourne.
  There were many reasons why that might have been so, however, and the curb in increases might have fallen off, so a follow-up study was carried out, which was reported in volume 311 of the BMJ on 9 December 1995—again by Brown, Surender, Bradlow, Coulter and Doll. Their conclusion was:
  "Early reports of the effectiveness of fundholding in curbing prescribing costs have not been confirmed in this longer term study".
  That is the evidence, never mind any more assertions. That shows us that the needs and pressures of patients are the main determinants of clinical practice—not the organisation and the budgets, but the necessity for managing and treating patients in the best way. That is what we can conclude from that report.
  Fundholding is bureaucratic, two-tier and grossly unfair, and the quicker we abolish it the better.
  6.26 pm
  Mr. Bob Dunn: Every Conservative Member should issue a press release headed, "Labour will destroy success". The commitment today from the hon. Member for Peckham (Ms Harman) that GP fundholding will be abolished by a future Labour Government, in the unlikely event of that ever occurring, has to be headline news in every constituency where fundholding has been successful.
  Last July and August, I undertook a survey in the communities of Longfield and New Barn in my constituency, where one of the first local practices to
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  receive fundholding status is situated. Three hundred and eighteen households replied by post saying that they supported fundholding and were happy with it. Only one household returned a form saying that it was not. That speaks volumes.
  Of course, it is incumbent on Opposition Members to say where they are coming from. Every speech from an Opposition Member has been from a two-tier opponent. They are elected here to represent their constituents, but 200 of them are sponsored by trade unions, including the hon. Member for Peckham and her number two, the hon. Member for Fife, Central (Mr. McLeish), who is on the Front Bench now. They are sponsored by the health union, Unison.
  The Labour Front Bench receives between £200,000 and £300,000 a year to fund the party's health team from Unison, which is opposed to our reforms, as it has been since 1979. So, when Opposition Members speak, I have to speculate whether they are speaking for their constituents or for the health union that sponsors them.
  I am still waiting for the hon. Member for Peckham to honour her pledge that
  "the information will all be placed in the Register of Members' Interests"—
  meaning how much Labour receives from Unison. It was not placed on the Register in November or December or January, or, so far, in February. I know that the hon. Lady has been busy lately with one or two internal problems, but she ought to honour her commitment. There is no point in Labour Members looking at the ceiling for inspiration, because they will get none. Her commitment is in black and white.
  The Labour party is committed to abolishing NHS trusts, removing control of our hospitals and health service from a local level and taking powers from GPs, because, as ever, it wants to centralise NHS decision making. By removing powers from local doctors, it would create a wasteful and unnecessary tier of bureaucracy. It attacks NHS managers, while supporting the increase in bureaucracy that its own proposals would create.
  It is not only Conservative Members who are in favour of fundholding; doctors and patients also favour it. But let us return to what the right hon. Member for Derby, South (Mrs. Beckett), said in The Observer of 19 March 1995. She said that the Labour party
  "remained firmly opposed to fundholding"
  For her, the abolition of fundholding was "not up for consultation". That was the case then, as it is now.
  Fundholding doctors are able to pioneer improvements in patient care locally. They demand improved performance from hospitals in their communities, and use their budgets more efficiently, ploughing savings back into improved patient care. The facts speak for themselves. Like my hon. Friend the Member for Gravesham (Mr. Arnold), I shall make sure that every GP in my community receives a copy of my speech and that of the hon. Member for Peckham, so that they will know once and for all that Labour will close down GP fundholding for ever. However, it will not get the chance.
  6.31 pm
  Mr. David Hinchliffe: When the hon. Member for Dartford (Mr. Dunn) has calmed down and gathered his senses, perhaps he will read my speech and understand why I am opposed to the consequences of fundholding in my constituency.

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  I am pleased that the Minister for Health and the Secretary of State for Health are here, because they know full well that we have concrete evidence of a two-tier system at Pinderfields hospital, the main NHS provider in my area, that has arisen directly from fundholding. They know the simple reasons for that.
  Wakefield health authority has overspent its budget for patient services by £483,000, that being the last figure available. At the same time, up to the end of November, the last available public figure, GP fundholding shows an underspend of £749,000 on the hospital and community services budget. The Pinderfields trust contract from Wakefield health authority projected 5,100 more finished consultant episodes than the current contract—5,100 people who, rightly, have been treated at Pinderfields hospital against the existing overspend. Fundholders have 1,500 more than the contract—against an underspend.
  The policy of Pinderfields and Wakefield health authority is, rightly, treatment on the basis of patients' needs, but consultants at the hospital are, understandably, choosing to treat the patients they know that they will get paid for.
  I spoke yesterday, with my hon. Friend the Member for Normanton (Mr. O'Brien), to a highly respected consultant, whom I have known for many years, and who has worked at Pinderfields for nearly 30 years. I hope that the Minister and the Secretary of State are listening. He said that the consultants have the management figures, know the reality of the existing overspend and know where the money is coming from. He continued: "Most of them do private work. They wouldn't do that for nothing, and they won't do NHS work for nothing."
  If there are two budgets, and the patients have similar needs, consultants will pick the patient from the budget from which they know that they will get paid. They are picking the patients from fundholders because their budget is underspent. They can get paid for treating those patients. That is why in Wakefield—and elsewhere, including Winchester, Salisbury and other places represented by Tory Members—a two-tier system is arising directly from the existence of GP fundholding.
  We have been told that GPs are choosing fundholding. I have talked to GPs. I will give the Secretary of State the name of a non-fundholding GP who told me that he is being forced into fundholding because his patients are getting a second-rate deal because of the situation at Pinderfields hospital.
  I do not blame the hospital, the health authority or fundholding GPs. I blame the Government, because they have undermined fundamental principles that have underpinned the national health service since the 1940s— equity, fairness in treatment and the idea of treatment according to patients' needs. Fundholding completely undermines those principles. That is why I oppose the whole process.
  6.34 pm
  Mr. Henry McLeish: I have torn up the speech that I had intended to give because there has not been a debate in the House recently in which the Government have conceded so much to the Opposition in so short a time. [Interruption.] I understand the instinctive reaction of Conservative Members, but it has been truly extraordinary.
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  We are puzzled about why this debate was called. This is a Government debate on health, an unusual event in the House. They could pick the subject and the timing to try to defend, laughably, their record. We are still puzzled about what the true intention was. They can shake their heads and laugh in an agitated manner, but the Government have screwed up on a health debate for the second time in two weeks. The proper epitaph for the debate, as Oscar Wilde might have said, is, "To lose one debate, Mr. Worthing, may be regarded as a misfortune; to lose both looks like carelessness." That sums up the Government's predicament.
  I must be specific and make sure that when GPs and the public read about the debate, they know what the Government have conceded. It has not been a happy afternoon for the Secretary of State. He may have been cajoled into the debate by the right hon. Member for Peterborough (Dr. Mawhinney). It is a political issue and it has blown up in their faces.
  First, the Secretary of State has conceded that there is a two-tier service under GP fundholding. He tried to wriggle out of every question that was posed to him about that, but the only logical conclusion was that he not only condoned GP fundholding and a two-tier service but was actively encouraging it.
  Secondly—this will be the issue for the 60 per cent. of GPs and the 60 per cent. of patients not covered by fundholding—the motion, despite the attempts to play around with its words, was deeply offensive, insulting, aggravating and provocative to nearly half the nation's GPs. It is offensive to me, but that is less important than the fact that it is offensive to GPs.
  The so-called one-nation Secretary of State for Health has conceded on the Floor of the House that fundholding is about not one nation but two nations—two types of GPs. GP fundholders are destined for the first division and the rest for the second division. The only distinction between the Government and us is that we want all GPs to be in the premier league. It seems inconceivable that we should have a Government who want to have two classes of patients and two classes of GPs. That is essentially what they have agreed this afternoon.
  The third issue for the Secretary of State, which was thrown up by my hon. Friend the Member for Peckham (Ms Harman) earlier in the debate, was the headline "Dorrell backs private GPs" in Pulse on Saturday 18 November 1995. Where does the Secretary of State stand on some of those issues? He pretends that he is part of the right-wing rabble that has concocted some of the Government's health policies, but privately, in debates at the universities, he is a one-nation health spokesman. He cannot have it both ways. He must tell us why he wants to support private GPs. His statement that the
  "private sector will set a standard that the population of patients will very properly expect the NHS to match"
  was offensive to most GPs.
  Will the Secretary of State return to the Dispatch Box and tell GPs, as the Government are trying to tell teachers and schools, that they are all incompetent—that none of them fulfils the standards that the national health service has set? I suspect that he will not, because it is wrong to attack almost 50 per cent. of GPs along with 50 per cent. of GP fundholders, who do an excellent job on behalf of patients. The hallmarks of Tory health policy as it affects primary health care are that it is particular, exclusive, divisive and partisan.

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  The debate has defined the Government's position on primary health care; they have not moved on. All the contributions by Conservative Members, including the speech by the Secretary of State, were about right hon. and hon. Members who want to be stuck in time. The debate has moved on in the health service, in primary health care and in fundholding, and it has moved on politically.
  Mr. Dorrell: We are back in 1990.
  Mr. McLeish: The Secretary of State cannot have it like that, because the debate is moving on.
  Let me do some more defining. We are concerned about the challenges of today and tomorrow, but Conservative Members are still concerned with the problems of yesterday. They are prisoners of their political propaganda, and it is a tragedy.
  Ms Harman: No; it is not.
  Mr. McLeish: My hon. Friend says that it is not, but I shall be more generous than she has been from a sedentary position.
  General practitioners seek leadership from the Government, but they get a Government who table a motion that merely congratulates 50 per cent. of GPs and excludes all other GPs in the primary health care service.
  Mr. Galbraith: It is a disgrace and a scandal.
  Mr. McLeish: It is. The Government cannot wriggle off the hook that they are now on because of their incompetent performance tonight.
  As my hon. Friend the Member for Peckham said earlier, we do not want to pick out GP fundholders or people involved in locality commissioning and set one against another. That would be destructive and wasteful, but it is the hallmark of the Government.
  When the Minister of State replies, why does he not congratulate Dr. Aneez Esmail, a commissioning GP in Manchester who has 70 per cent. generic prescribing, way above the average for fundholders, saving the NHS thousands of pounds? Dr. Esmail has set up
  "a practice based counselling, acupuncture and homeopathy service, a joint clinic with a consultant psychiatrist, a Tele-medicine link clinic with a dermatologist and a drug rehabilitation clinic."
  That shows that there is no monopoly of wisdom in fundholding in progress, innovation or ideas.
  Why are the Government so partisan and blinkered that they cannot lift their eyes above a policy that they adopted two or three years ago, which they are now trying to use to divide GPs and as a political stick to beat everyone else who might not whole heartedly endorse it?
  We know that the Minister of State will not praise in his speech anyone who is not a GP fundholder. The tragedy about 16 years of Conservative Government is that, once wedded to an argument, it is impossible to get them ungripped from it. It is a tragedy that we cannot make progress.
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  It has not always been like that. Take one of the Secretary of State's early speeches. As long ago as 30 July 1995, an article appeared entitled "Dorrell freezes Bottomley's NHS reforms"—God, some of them needed freezing. It stated:
  "In his speech to the Conservative Political Centre Summer School in Cambridge, Mr. Dorrell promised development of the family doctor service—the 'jewel in the crown' of the NHS—and stressed that the Government's favoured GP fundholding scheme 'was not the only model'."
  Well, well—saying one thing and doing another.
  Tonight the Secretary of State supported a partisan, particular, divisive motion. A few months ago, he said that fundholding was not the only model. The Secretary of State needs to convince us that there are other models and that he is thinking about them.
  Mr. Dorrell indicated dissent.
  Mr. McLeish: I was in the Chamber for the whole debate, and I did not hear much praise being lavished on non-fundholding GPs.
  I return to the speech of 29 July 1995, reported in the article of 30 July 1995. The Secretary of State said that there would be
  "no preconceptions, no closed minds, no rejections of ideas because they weren't invented here".
  He said those words far from the House, but some day he must be brought to account for suggesting one thing at a Conservative party summer school and then using completely opposite words in the House this afternoon. [Interruption.]
  Madam Deputy Speaker (Dame Janet Fookes):Order. Before the hon. Gentleman continues, may I say that I have noticed an increasing tendency for a sub-debate to take place between the two Front Benches? I would prefer that to stop.
  Mr. McLeish: The Government debated GP fundholding and lavished praise on GP fundholders but, while definitive policies are being poured down everyone's throats, we find the following quotation from a speech by the Secretary of State in a press release entitled "Department of Health/Looking After Health in the New Millennium", issued on 8 January 1996, four weeks ago:
  "The time is now ripe to take this process further. I have therefore asked Gerry Malone to lead an examination of the options for the future of primary care within the NHS."
  We have not heard much about that in the House. Perhaps the Minister of State will elaborate. He has been charged with the responsibility of considering primary health care. It creates the impression that he may want to consider other options.
  Mr. Malone: Is it a crime?
  Mr. McLeish: I think it is a crime if those words are used in press releases issued by the Department and the Government pretend in the House that there is only one favoured option and that those who do not subscribe to it are second-class GPs and second-class patients. That is why we are angry about the sheer hypocrisy of the Government.

  189
  The Government want GPs to believe that the Conservative party stands for a one-nation health service. Every action, every comment in the House, undermines that idea. It is ridiculous that, in 1996, four years away from a new millennium, the Government are bogged down—becalmed. They do not know what to do because they are fixated with a one-party policy for the future of primary health care.
  In his reply, the Minister should convey to us that he is not fixated by one idea to the exclusion of others and he should try to convince us that he has moved on. If the Government do not move on, when Labour is in government in a few months' time we shall certainly have a one-nation primary health care system that treats all patients and all GPs with equal respect and fairness.
  6.47 pm
  The Minister for Health (Mr. Gerald Malone): That was pretty thin gruel from the hon. Member for Fife, Central (Mr. McLeish), trying to make a case out of very little.
  This has been an astonishing debate, in which the Opposition blamed Ministers for coming to the Dispatch Box to speak about Government policy. We have now reached the extraordinary position where an Opposition Front Bencher, from a sedentary position, was worried about what was happening to the national health service when Ministers were at the Dispatch Box, not running the health service from Richmond house. I am glad that Opposition Members believe that we are so effective from day to day, but the purpose of coming to the House was to concentrate on fundholding, a part of the Government's policy that has been criticised by the Opposition.
  Before the debate we did not know what the Labour party was saying about fundholding; now we do. The soft soap that we have heard Labour spokesmen deliver to GP fundholders when trying to cosy up to them to suggest that there will be no abolition—the soft words of change, and promises to restructure budgets—has now been replaced with the harsh words of abolition. If the debate did one favour to the public debate about fundholding and the health service, it was to clarify Labour's position.
  When the hon. Member for Peckham (Ms Harman) was out of the Chamber, the hon. Member for Strathkelvin and Bearsden (Mr. Galbraith) made wild commitments on her behalf. He shouted, "Hear, hear," and was on record as saying that abolition of fundholding would appear in the Labour party's manifesto before the next election. I wonder whether the hon. Lady will endorse those comments. She will not, so I do not know where that leaves the hon. Gentleman. If the Labour party's claims that it will abolish fundholding are not reflected in the manifesto that it will put before the public, what words will it use to describe this debate?
  The Labour party advanced three arguments to support its opposition to fundholding. The first was the absurd old chestnut that it is a two-tier system. It is not a two-tier system, and my right hon. Friend the Secretary of State did not say that it was.
  Mr. Hinchliffe: Will the Minister give way?
  Mr. Malone: I have debated that subject with the hon. Gentleman before. Last time I challenged him to
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  produce evidence of two-tierism in his constituency and he said that he would name names and present cases. However, we have heard nothing about it. We examined one case that he presented and we found no basis to it.
  Mr. Hinchliffe: I ask the Minister to look at the Wakefield situation. He knows as well as I do—as I said in my brief contribution to the debate—that it is a two-tier system. If he comes to Wakefield, I will introduce him to GPs and to consultants who will show him at first hand why there is a two-tier system, for the reasons that I gave a few moments ago.
  Mr. Malone: I should not have bothered giving way to the hon. Gentleman. I did so during the last debate and I asked him to write to me about specific cases. However, he did not bother to do that, so I shall treat his recent invitation in that light.
  The position is clearly set out in the 1991 guidance on fundholding, which I shall repeat for the benefit of the House. In 1991, guidance was agreed with the medical profession which, according to the Labour party, is unanimously opposed to the process. That guidance stated:
  "Common waiting lists should apply for all urgent cases and no hospital should offer contracts to one purchaser which would disadvantage patients of another".
  Labour Members persistently and obdurately refuse to understand the next point. The guidance continued:
  "However, hospitals can offer spare capacity to anyone who wishes to purchase it. If GP fundholders or health authorities choose to purchase some of the spare capacity so that patients may be seen more quickly, this does not disadvantage other non-urgent patients whose waiting times are unaffected".
  If GP fundholding and conventional purchasing are exercised in different ways, there will be different results. However, that does not undermine the equity of the national health service for one second.
  Ms Harman: Will the Minister admit that the 1991 executive letter expressly allows two-tier waiting lists for non-urgent cases? Will he repeal that circular and issue a fair waiting list circular so that, whether they are emergency, urgent or non-urgent cases, clinical need is the only determinant of priority in the national health service?
  Mr. Malone: The hon. Lady makes an absurd point. If there is any distinction in the way in which GPs purchase health care for their patients, there will be differences. People get their priority placing on waiting lists as a result of clinical need. I point out to the hon. Lady that if patients' conditions change while they are waiting for an operation, they are entitled to return to their general practitioner and be accorded priority. We have absolutely no truck with the Labour party's principal argument that a two-tier system is in place.
  We heard another old chestnut about massive bureaucracy. I shall give the House the facts. The management of GP fundholding costs 2 per cent. of the funds of which GPs ultimately have charge. They have been able to deliver consistent efficiencies of 3.5 to 4 per cent., which can be returned in patient care. Better resource management will lead to an increase in both patient care and the facilities in GPs' surgeries for the delivery of patient care. That is another nail in the coffin of the Labour party's argument.

  191
  Labour Members talked a lot about commissioning. I believe that commissioning has become the Labour party's comfort blanket. It sounds like a very comfortable compromise—and the way the Labour party put it forward, it certainly is. It is fudge and mudge. The Labour party confirmed that it is a step towards a national system.
  I pay tribute to the achievements of individual practitioners, be they fundholders, commissioning practitioners or non-commissioning practitioners—that happens occasionally across the system. The Labour party cannot ignore the fact that those achievements are driven by the power of fundholding and the power of budgets. On Friday, a fundholder told me—I think that this says it all—that one GP with a budget is worth 10 GPs sitting on a committee somewhere. The Labour party's model would return us to the old days of discussions around tables and no possibility of defining what would be done to benefit patients. It is an old argument which has failed in the past. The Labour party is now putting forward an out-of-date concept: it wants to return to the old national systems.
  Let us accept for a moment that perhaps the Labour party is right. Let us assume, for example, that there is some two-tierism in the national health service. A member of the public might say that, if there is a two-tier system and if we argue that fundholding is providing a better service than non-fundholding, it seems extraordinary to opt for a policy that abolishes the system that is delivering better care. The Opposition cannot get away from that fact. The hon. Member for Strathkelvin and Bearsden said that there was no evidence to support that argument, but the matter is being researched and the evidence is growing.
  The hon. Member for Strathkelvin and Bearsden referred to an article from the British Medical Journal. I have read that article, and I looked rather quizzical when he made his observations because I know the narrow base on which that research was founded. Further evidence will be published soon showing that the fundholding practitioners can make real savings from the prescribing budgets and that those savings will continue over time. Of course they will plateau; it would be unreasonable to assume that they could continue year after year.
  I wonder what the position of the hon. Member for Southwark and Bermondsey (Mr. Hughes) is with regard to this debate. He argued precisely for what we are doing with the accountability framework. He said that he opposes fundholding in the way that we have introduced it. He is in favour of a little of what we do—his party opposed it before—and he also opposes what the Labour party proposes. It is the typical Liberal party "push me, pull you" approach. He is the custodian of a policy that his policy officers recently described as "barmy". He failed to take account of the fact that, in the accountability framework, when general practitioners are fundholders— either in the conventional sense or in the total sense— they must share their information with health authorities and they must discuss and agree their public plans, which are placed on the public agenda, before they are put in motion.
  At a time when the whole health profession is looking very positive about developing the arguments on future primary care, the Labour party has decided to take a step backwards. The Government are conducting a debate with the health service to define the boundaries of primary care and what new challenges it will face. We are interested in that debate, but the Labour party is not. We are taking the
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  debate forward not just with fundholders but with doctors and other health care professionals who are responsible for the delivery of primary care. That is the way forward.
  Tonight, the Labour party has chosen to demonstrate that it simply wants to abolish all that has been achieved. New Labour may have new policies in other areas, but the lesson we can take from the debate today is that new Labour does not want them in the health area; it wants to return to national systems in a determined effort to abandon all the progress that has been hard won by general practitioners who have been improving services up and down the country.
  When the Labour party started the debate against primary care reforms in the NHS and when it first decided that it was against fundholding, the situation was very different and only a small minority was engaged in fundholding. Now the Labour party is setting itself against the 50 per cent. of the population who receive primary care, and setting itself against a large proportion of GPs. The people and the GPs will have heard the message that the Labour party has delivered today.
  Question put, That the amendment be made:—
  The House divided: Ayes 246, Noes 320.

  Division No. 43]

  [6.59 pm

  AYES

  Ainger, Nick

  Cook, Frank (Stockton N)

  Ainsworth, Robert (Cov'try NE)

  Cook, Robin (Livingston)

  Allen, Graham

  Corbett, Robin

  Anderson, Donald (Swansea E)

  Corbyn, Jeremy

  Anderson, Ms Janet (Ros'dale)

  Corston, Jean

  Armstrong, Hilary

  Cousins, Jim

  Ashton, Joe

  Cox, Tom

  Austin-Walker, John

  Cummings, John

  Banks, Tony

  Cunliffe, Lawrence

  Barron, Kevin

  Cunningham, Jim (Covy SE)

  Battle, John

  Cummingham, Roseanna (Perth & Kinross)

  Bayley, Hugh

  Beckett, Rt Hon Margaret

  Dalyell, Tarn

  Bell, Stuart

  Darling, Alistair

  Benn, Rt Hon Tony

  Davies, Bryan (Oldham C'tral)

  Bennett, Andrew F

  Davies, Rt Hon Denzil (Llanelli)

  Benton, Joe

  Davies, Ron (Caerphilly)

  Bermingham, Gerald

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

  Berry, Roger

  Denham, John

  Blair, Rt Hon Tony

  Dewar, Donald

  Blunkett, David

  Dixon, Don

  Boateng, Paul

  Dobson, Frank

  Bradley, Keith

  Donohoe, Brian H

  Bray, Dr Jeremy

  Dowd, Jim

  Brown, Gordon (Dunfermline E)

  Dunwoody, Mrs Gwyneth

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

  Eagle, Ms Angela

  Burden, Richard

  Eastham, Ken

  Byers, Stephen

  Etherington, Bill

  Caborn, Richard

  Evans, John (St Helens N)

  Callaghan, Jim

  Ewing, Mrs Margaret

  Campbell, Mrs Anne (C'bridge)

  Fatchett, Derek

  Campbell, Ronnie (Blyth V)

  Faulds, Andrew

  Campbell-Savours, D N

  Field, Frank (Birkenhead)

  Canavan, Dennis

  Fisher, Mark

  Cann, Jamie

  Flynn, Paul

  Chisholm, Malcolm

  Foster, Rt Hon Derek

  Church, Judith

  Foulkes, George

  Clapham, Michael

  Fyfe, Maria

  Clark, Dr David (South Shields)

  Galbraith, Sam

  Clarke, Eric (Midlothian)

  Galloway, George

  Clarke, Tom (Monklands W)

  Gapes, Mike

  Clelland, David

  George, Bruce

  Cohen, Harry

  Gerrard, Neil

  Connarty, Michael

  Gilbert, Rt Hon Dr John

  193

  Godman, Dr Norman A

  Miller, Andrew

  Godsiff, Roger

  Mitchell, Austin (Gt Grimsby)

  Golding, Mrs Llin

  Moonie, Dr Lewis

  Grant, Bemie (Tottenham)

  Morgan, Rhodri

  Griffiths, Nigel (Edinburgh S)

  Morley, Elliot

  Griffiths, Win (Bridgend)

  Morris, Rt Hon Alfred (Wy'nshawe)

  Grocott, Bruce

  Morris, Estelle (B'ham Yardley)

  Gunnell, John

  Morris, Rt Hon John (Aberavon)

  Hail, Mike

  Mowlam, Marjorie

  Hanson, David

  Mudie, George

  Hardy, Peter

  Mullin, Chris

  Harman, Ms Harriet

  Murphy, Paul

  Harvey, Nick

  Oakes, Rt Hon Gordon

  Hattersley, Rt Hon Roy

  O'Brien, Mike (N W'kshire)

  Henderson, Doug

  O'Brien, William (Normanton)

  Heppell, John

  O'Hara, Edward

  Hill, Keith (Streatham)

  Olner, Bill

  Hinchliffe, David

  O'Neill, Martin

  Hodge, Margaret

  Orme, Rt Hon Stanley

  Hoey, Kate

  Pearson, Ian

  Hogg, Norman

  Pendry, Tom

  Home Robertson, John

  Pickthall, Colin

  Hoon, Geoffrey

  Pike, Peter L

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

  Pope, Greg

  Howarth, George (Knowsley North)

  Prentice, Bridget (Lew'm E)

  Howells, Dr. Kim (Pontypridd)

  Prentice, Gordon (Pendle)

  Hoyle, Doug

  Primarolo, Dawn

  Hughes, Robert (Aberdeen N)

  Purchase, Ken

  Hughes, Roy (Newport E)

  Quin, Ms Joyce

  Hutton, John

  Radice, Giles

  Illsley, Eric

  Randall, Stuart

  Ingram, Adam

  Raynsford, Nick

  Jackson, Glenda (H'stead)

  Reid, Dr John

  Jackson, Helen (Shef'ld, H)

  Robertson, George (Hamilton)

  Jamieson, David

  Robinson, Geoffrey (Co'try NW)

  Janner, Greville

  Roche, Mrs Barbara

  Jones, Barry (Alyn and D'side)

  Rogers, Allan

  Jones, Ieuan Wyn (Ynys Môn)

  Rooker, Jeff

  Jones, Lynne (B'ham S O)

  Rooney, Terry

  Jones, Martyn (Clwyd, SW)

  Ross, Ernie (Dundee W)

  Jowell, Tessa

  Ruddock, Joan

  Kaufman, Rt Hon Gerald

  Salmond, Alex

  Keen, Alan

  Sedgemore, Brian

  Kennedy, Jane (L'pool Br'dg'n)

  Sheerman, Barry

  Khabra, Piara S

  Sheldon, Rt Hon Robert

  Kilfoyle, Peter

  Shore, Rt Hon Peter

  Liddell, Mrs Helen

  Short, Clare

  Litherland, Robert

  Simpson, Alan

  Livingstone, Ken

  Skinner, Dennis

  Lloyd, Tony (Stretford)

  Smith, Andrew (Oxford E)

  Llwyd, Elfyn

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

  McAllion, John

  Smith, Llew (Blaenau Gwent)

  McAvoy, Thomas

  Soley, Clive

  McCartney, Ian

  Spearing, Nigel

  Macdonald, Calum

  Spellar, John

  McFall, John

  Squire, Rachel (Dunfermline W)

  McKelvey, William

  Steinberg, Gerry

  Mackinlay, Andrew

  Stott, Roger

  McLeish, Henry

  Strang, Dr. Gavin

  McMaster, Gordon

  Straw, Jack

  MacShane, Denis

  Sutcliffe, Gerry

  McWilliam, John

  Taylor, Mrs Ann (Dewsbury)

  Madden, Max

  Taylor, Matthew (Truro)

  Mahon, Alice

  Thompson, Jack (Wansbeck)

  Mandelson, Peter

  Touhig, Don

  Marek, Dr John

  Trickett, Jon

  Marshall, David (Shettleston)

  Turner, Dennis

  Marshall, Jim (Leicester, S)

  Walley, Joan

  Martin, Michael J (Springburn)

  Wardell, Gareth (Gower)

  Martlew, Eric

  Wareing, Robert N

  Maxton, John

  Watson, Mike

  Meacher, Michael

  Welsh, Andrew

  Meale, Alan

  Wicks, Malcolm

  Michael, Alun

  Wigley, Dafydd

  Michie, Bill (Sheffield Heeley)

  Williams, Rt Hon Alan (Sw'n W)

  Milburn, Alan

  Williams, Alan W (Carmarthen)

  194

  Wilson, Brian

  Young, David (Bolton SE)

  Winnick, David

  Wise, Audrey

  Worthington, Tony

  Tellers for the Ayes:

  Wray, Jimmy

  Mr. Jon Owen Jones and Ms Ann Coffey.

  Wright, Dr Tony

  NOES

  Ainsworth, Peter (East Surrey)

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

  Alexander, Richard

  Curry, David (Skipton & Ripon)

  Alison, Rt Hon Michael (Selby)

  Davies, Chris (L'Boro & S'worth)

  Allason, Rupert (Torbay)

  Davis, David (Boothferry)

  Amess, David

  Day, Stephen

  Ancram, Michael

  Deva, Nirj Joseph

  Arbuthnot, James

  Devlin, Tim

  Arnold, Jacques (Gravesham)

  Dicks, Terry

  Ashby, David

  Dorrell, Rt Hon Stephen

  Ashdown, Rt Hon Paddy

  Douglas-Hamilton, Lord James

  Atkins, Rt Hon Robert

  Dover, Den

  Atkinson, David (Bour'mouth E)

  Duncan, Alan

  Atkinson, Peter (Hexham)

  Duncan-Smith, lain

  Baker, Nicholas (North Dorset)

  Dunn, Bob

  Baldry, Tony

  Durant, Sir Anthony

  Banks, Matthew (Southport)

  Eggar, Rt Hon Tim

  Banks, Robert (Harrogate)

  Elletson, Harold

  Bates, Michael

  Emery, Rt Hon Sir Peter

  Batiste, Spencer

  Evans, David (Welwyn Hatfield)

  Beggs, Roy

  Evans, Jonathan (Brecon)

  Beith, Rt Hon A J

  Evans, Nigel (Ribble Valley)

  Bellingham, Henry

  Evans, Roger (Monmouth)

  Bendall, Vivian

  Evennett, David

  Beresford, Sir Paul

  Faber, David

  Biffen, Rt Hon John

  Fabricant, Michael

  Body, Sir Richard

  Fenner, Dame Peggy

  Bonsor, Sir Nicholas

  Field, Barry (Isle of Wight)

  Booth, Hartley

  Fishburn, Dudley

  Boswell, Tim

  Forman, Nigel

  Bottomley, Peter (Eltham)

  Forsyth, Rt Hon Michael (Stirling)

  Bottomley, Rt Hon Virginia

  Forsythe, Clifford (S Antrim)

  Bowden, Sir Andrew

  Forth, Eric

  Bowis, John

  Foster, Don (Bath)

  Boyson, Rt Hon Sir Rhodes

  Fowler, Rt Hon Sir Norman

  Brandreth, Gyles

  Fox, Dr Liam (Woodspring)

  Brazier, Julian

  Fox, Sir Marcus (Shipley)

  Bright, Sir Graham

  Freeman, Rt Hon Roger

  Brooke, Rt Hon Peter

  French, Douglas

  Brown, M (Brigg & Cl'thorpes)

  Fry, Sir Peter

  Browning, Mrs Angela

  Gallie, Phil

  Bruce, Ian (Dorset)

  Gardiner, Sir George

  Bruce, Malcolm (Gordon)

  Gamier, Edward

  Budgen, Nicholas

  Gill, Christopher

  Bums, Simon

  Gillan, Cheryl

  Burt, Alistair

  Goodlad, Rt Hon Alastair

  Butler, Peter

  Goodson-Wickes, Dr Charles

  Butterfill, John

  Gorman, Mrs Teresa

  Campbell, Menzies (Fife NE)

  Gorst, Sir John

  Carlisle, John (Luton North)

  Grant, Sir A (SW Cambs)

  Carlisle, Sir Kenneth (Lincoln)

  Greenway, Harry (Ealing N)

  Carrington, Matthew

  Greenway, John (Ryedale)

  Carttiss, Michael

  Griffiths, Peter (Portsmouth, N)

  Cash, William

  Grylls, Sir Michael

  Channon, Rt Hon Paul

  Gummer, Rt Hon John Selwyn

  Chapman, Sir Sydney

  Hague, Rt Hon William

  Churchill, Mr

  Hamilton, Rt Hon Sir Archibald

  Clappison, James

  Hamilton, Neil (Tatton)

  Clark, Dr Michael (Rochford)

  Hampson, Dr Keith

  Clarke, Rt Hon Kenneth (Ru'clif)

  Hanley, Rt Hon Jeremy

  Clifton-Brown, Geoffrey

  Hannam, Sir John

  Coe, Sebastian

  Hargreaves, Andrew

  Colvin, Michael

  Harris, David

  Congdon, David

  Hawkins, Nick

  Coombs, Anthony (Wyre For'st)

  Hawksley, Warren

  Cope, Rt Hon Sir John

  Hayes, Jerry

  Cormack, Sir Patrick

  Heald, Oliver

  Couchman, James

  Heath, Rt Hon Sir Edward

  Cran, James

  Heathcoat-Amory, David

  195

  Hendry, Charles

  Maclennan, Robert

  Higgins, Rt Hon Sir Terence

  McNair-Wilson, Sir Patrick

  Hill, James (Southampton Test)

  Maddock, Diana

  Hogg, Rt Hon Douglas (G'tham)

  Maitland, Lady Olga

  Horam, John

  Major, Rt Hon John

  Hordern, Rt Hon Sir Peter

  Malone, Gerald

  Howard, Rt Hon Michael

  Mans, Keith

  Howell, Rt Hon David (G'dford)

  Marland, Paul

  Howell, Sir Ralph (N Norfolk)

  Marshall, John (Hendon S)

  Hughes, Robert G (Harrow W)

  Marshall, Sir Michael (Arundel)

  Hughes, Simon (Southwark)

  Martin, David (Portsmouth S)

  Hunt, Rt Hon David (Wirral W)

  Mates, Michael

  Hunt, Sir John (Ravensbourne)

  Mawhinney, Rt Hon Dr Brian

  Hunter, Andrew

  Merchant, Piers

  Hurd, Rt Hon Douglas

  Michie, Mrs Ray (Argyll & Bute)

  Jack, Michael

  Mills, Iain

  Jenkin, Bemard

  Mitchell, Andrew (Gedling)

  Jessel, Toby

  Molyneaux, Rt Hon Sir James

  Johnson Smith, Sir Geoffrey

  Monro, Rt Hon Sir Hector

  Johnston, Sir Russell

  Montgomery, Sir Fergus

  Jones, Gwilym (Cardiff N)

  Needham, Rt Hon Richard

  Jones, Nigel (Cheltenham)

  Neubert, Sir Michael

  Jones, Robert B (W Hertfdshr)

  Newton, Rt Hon Tony

  Jopling, Rt Hon Michael

  Nicholls, Patrick

  Kellett-Bowman, Dame Elaine

  Nicholson, David (Taunton)

  Kennedy, Charles (Ross,C&S)

  Norris, Steve

  Key, Robert

  Onslow, Rt Hon Sir Cranley

  King, Rt Hon Tom

  Oppenheim, Phillip

  Kirkhope, Timothy

  Ottaway, Richard

  Kirkwood, Archy

  Page, Richard

  Knapman, Roger

  Paice, James

  Knight, Mrs Angela (Erewash)

  Patnick, Sir Irvine

  Knight, Rt Hon Greg (Derby N)

  Patten, Rt Hon John

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

  Pattie, Rt Hon Sir Geoffrey

  Knox, Sir David

  Pawsey, James

  Kynoch, George (Kincardine)

  Peacock, Mrs Elizabeth

  Lait, Mrs Jacqui

  Pickles, Eric

  Lamont, Rt Hon Norman

  Porter, Barry (Wirral S)

  Lang, Rt Hon Ian

  Porter, David (Waveney)

  Lawrence, Sir Ivan

  Portillo, Rt Hon Michael

  Leigh, Edward

  Powell, William (Corby)

  Lennox-Boyd, Sir Mark

  Rathbone, Tim

  Lester, Sir James (Broxtowe)

  Redwood, Rt Hon ohn

  Lidington, David

  Rendel, David

  Lilley, Rt Hon Peter

  Renton, Rt Hon Tim

  Lloyd, Rt Hon Sir Peter (Fareham)

  Richards, Rod

  Lord, Michael

  Riddick, Graham

  Luff, Peter

  Robathan, Andrew

  Lyell, Rt Hon Sir Nicholas

  Roberts, Rt Hon Sir Wyn

  McCrea, The Reverend William

  Robertson, Raymond (Ab'd'n S)

  MacGregor, Rt Hon John

  Robinson, Mark (Somerton)

  MacKay, Andrew

  Roe, Mrs Marion (Broxbourne)

  Maclean, Rt Hon David

  Ross, William (E Londonderry)

  196

  Rowe, Andrew (Mid Kent)

  Thompson, Patrick (Norwich N)

  Rumbold, Rt Hon Dame Angela

  Thornton, Sir Malcolm

  Ryder, Rt Hon Richard

  Thurnham, Peter

  Sackville, Tom

  Townend, John (Bridlington)

  Sainsbury, Rt Hon Sir Timothy

  Townsend, Cyril D (Bexl'yh'th)

  Scott, Rt Hon Sir Nicholas

  Tracey, Richard

  Shaw, David (Dover)

  Tredinnick, David

  Shaw, Sir Giles (Pudsey)

  Trend, Michael

  Shephard, Rt Hon Gillian

  Trimble, David

  Shepherd, Sir Colin (Hereford)

  Trotter, Neville

  Shepherd, Richard (Aldridge)

  Twinn, Dr Ian

  Shersby, Sir Michael

  Tyler, Paul

  Sims, Roger

  Viggers, Peter

  Skeet, Sir Trevor

  Waldegrave, Rt Hon William

  Smith, Sir Dudley (Warwick)

  Walden, George

  Smith, Tim (Beaconsfield)

  Walker, Bill (N Tayside)

  Smyth, The Reverend Martin

  Wallace, James

  Soames, Nicholas

  Waller, Gary

  Spencer, Sir Derek

  Ward, John

  Spicer, Sir James (W Dorset)

  Wardle, Charles (Bexhill)

  Spicer, Sir Michael (S Worcs)

  Waterson, Nigel

  Spink, Dr Robert

  Watts, John

  Spring, Richard

  Wells, Bowen

  Sproat, Iain

  Squire, Robin (Homchurch)

  Whitney, Ray

  Stanley, Rt Hon Sir John

  Whittingdale, John

  Steen, Anthony

  Widdecombe, Ann

  Stephen, Michael

  Wiggin, Sir Jerry

  Stern, Michael

  Wilkinson, John

  Stewart, Allan

  Willetts, David

  Streeter, Gary

  Wilshire, David

  Sumberg, David

  Winterton, Mrs Ann (Congleton)

  Sweeney, Walter

  Winterton, Nicholas (Macc'f'ld)

  Sykes, John

  Wolfson, Mark

  Tapsell, Sir Peter

  Wood, Timothy

  Taylor, Ian (Esher)

  Yeo, Tim

  Taylor, Rt Hon John D (Strgfd)

  Young, Rt Hon Sir George

  Taylor, John M. (Solihull)

  Taylor, Sir Teddy (Southend, E)

  Tellers for the Noes:

  Temple-Morris, Peter

  Mr. Derek Conway and Mr. Patrick McLoughlin.

  Thomason, Roy

  Thompson, Sir Donald (C'er V)

  Question accordingly negatived.
  Main Question put and agreed to.
  Resolved,
  That this House pays tribute to the role that GP fundholders have played in kick-starting and developing innovative practice in both primary care and the acute sector; welcomes the advances that fundholding has brought to many patients; accepts that fundholding has acted as a lever to improve services; and consequently remains committed to the further development of GP fundholding.

  Terms and Conditions of Employment
  [Relevant document: The Minutes of Evidence and Memoranda relating to this instrument contained in the Fifth Report from the Joint Committee on Statutory Instruments (House of Commons Paper No. 34-v.]
  7.14 pm
  Mr. Michael Meacher: I beg to move,
  That the Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 1995 (S.I., 1995, No. 2587), dated 2nd October 1995, a copy of which was laid before this House on 5th October, in the last Session of Parliament, be revoked.
  I cannot let this moment pass without remarking on the fact that the Minister for Competition and Consumer Affairs is the first Department of Trade and Industry Minister to reply on an industrial relations issue since 1915, when the Ministry for Labour and National Service, as I believe it was then called, was set up. I have no doubt that he will revel in being a historical anachronism. However, his anomalous position may turn out to be short-lived.
  The origins of the regulations are the acquired rights directive of 1977, which was transposed into UK law by the Transfer of Undertakings (Protection of Employment) Regulations 1981, and the 1975 directive on collective redundancies, which was transposed into UK law by the Employment Protection Act 1975 and the Trade Union and Labour Relations (Consolidation Act) 1992.
  However, in a ruling in June 1994, the European Court found that UK law did not properly implement the two directives in three respects. It imposed a requirement to inform and consult worker representatives only when the employer chose to recognise a trade union for collective bargaining purposes. It did not require consultation with worker representatives on prospective transfers to be conducted with a view to seeking agreement. It did not provide what the European Court called an "effective, proportionate and dissuasive" penalty for employers who failed to inform and consult.
  The Government, therefore, had to issue new regulations to comply with European Union law. As a result of consultations with the Trades Union Congress, the Confederation of British Industry and others, leading to amendments to the draft proposals issued in April 1995, the second and third points have been largely addressed. But the issue in tonight's debate is the manner in which the Government have decided to address the first point.
  The Government now propose to require the employer, at his choice, to consult either a recognised trade union or elected representatives of the affected employees before making redundancies or transferring his business. At the same time, the Government have used the necessity for the new regulations to exempt employers if there are fewer than 20 redundancies over a 90-day period. They have also weakened the previous requirement to consult at the earliest opportunity by saying, in the new regulations, that consultation must start in good time. That is the background, which is clear and straightforward.
  We strongly object to the new regulations on four main grounds. First, the Government have manipulated the requirement to comply with European Union law in such a way as to promote their campaign to achieve trade union derecognition by the back door. The European Court
  198
  ruling was designed to extend consultation to workplaces where there was no recognised trade union; we all accept that that is perfectly fair and right. The Department of Trade and Industry has undermined consultation with trade unions even in workplaces where there is a recognised trade union.
  What was objectionable in United Kingdom law prior to the European Court judgment was that consultation excluded non-trade union organised workplaces, so that employers could avoid consultation simply by failing to recognise a trade union. The intention of the European Court judgment—I hope that the Minister will be able to disagree—was to universalise consultation. It was clearly not intended to undermine existing systems of industrial relations or to encourage employers to derecognise unions. Yet there is absolutely nothing in the regulations to stop an employer who intends to make collective redundancies consulting an ad hoc group that he had a hand in setting up precisely to circumvent a recognised trade union.
  The Government have been far more concerned with hijacking the regulations to satisfy their own anti-union prejudices than ensuring that employees are properly consulted before redundancies are made. That is the central thrust of our objection. The Government have gone out of their way to undermine the concept of social partnership, which is widely accepted on the continent and provides a far more successful and productive model of industrial relations than anything in Britain during the 1980s or 1990s.
  The Government never wanted to introduce the regulations and they have finally done so in a thoroughly curmudgeonly and resentful manner. As it was so aptly and nicely put in another place, it is as though the Minister were to begin his speech tonight by saying, "I move these regulations in the spirit of a wine waiter asked to serve a coke."
  The Minister for Competition and Consumer Affairs (Mr. John M. Taylor): That was Lord Tebbit.
  Mr. Meacher: It was indeed Lord Tebbit. I am only too grateful to attribute the source of that remark, as it applies aptly to the Government's attitude tonight.
  Our second charge against the regulations is that there is no test of the independence of elected employee representatives. They can be men and women of straw who are beholden to the will of the employer and that defeats the entire purpose of the European Court ruling. There cannot be much dispute about the criteria that should govern the choice of employee representatives. They should be chosen freely without interference from the employer or his agents. The electoral procedures should be impartial and fair and certainly not subject to influence from the employer. Many Conservative Members will agree that employee representatives should be chosen by secret ballot and should have the ability and the resources to reach an agreement with the employer and to carry it through, yet not one of those requirements is written into the regulations.
  Mr. Taylor: Although it is quite true that the selection procedures are not prescribed, the onus of fairness is made perfectly clear. Any employer who did not act fairly in those circumstances would risk an adverse finding and

  199
  possibly a compensation award against him at either an industrial tribunal or an employment appeal tribunal. It is made perfectly clear that the emergent elected representative should have paid time off, access to facilities, lists of names of workers and so on. Any employer who did not honour the spirit and outline of those requirements would find himself at severe risk in the appropriate tribunal.
  Mr. Meacher: My answer is extremely simple. If that is what the Minister and Government intended, why did not they write it into the regulations? It is extremely simple. It is not as though the Government have failed to prescribe in great detail what the trade unions should do, but when it comes to what the employer should do, that is left to his good faith and the onus on him to behave properly.
  Mr. Taylor: I am quite prepared to read Hansard tomorrow and check what I said in my last intervention. I am grateful to the hon. Gentleman for giving way to me twice, but he will find that everything that I said in my last intervention is on the face of the regulations.
  Mr. Meacher: I do not believe that it appears anywhere in the regulations. I have a copy of the regulations and regulation 3(2) covers those matters. If the Minister can show me where it states how the electoral procedure should be operated to ensure that there are proper constraints on the employer so that he cannot use his influence and put forward his own candidate, I shall withdraw my remarks, but in the absence of that, I insist that those crucial matters are not in the regulations.
  Mr. Andrew F. Bennett: Not only are the operation of electoral procedures and the ability of employees to appoint workers' representatives not in the regulations, but employees cannot take the matter to an industrial tribunal unless there is a breach of the regulations. An implied breach of the European Union directive is not admissible at the tribunal. That is the problem. The fact that those matters are not included in the regulations makes it extremely difficult for individual employees successfully to take their employer to a tribunal.
  Mr. Meacher: The regulations also contain other gratuitous deregulation measures, which have nothing to do with the European Court, to restore the two-year waiting period, but that is another matter. My hon. Friend makes a critical point. Even if a dispute reaches the industrial tribunal, it is impossible for an employee to win the case unless the regulations contain a clear and detailed prescription of the duties on the employer and they do not.
  According to evidence to the Joint Committee on Statutory Instruments, of which my hon. Friend the Member for Denton and Reddish (Mr. Bennett) is such a distinguished Chairman:
  "The Regulations do not prescribe any particular means by which this should be done, they merely state that the employer may consult at his choice either the representatives of the trade unions or the elected representatives. If he has not done either of those things there are certain sanctions".
  However, if an employer chooses to consult elected workers' representatives, the manner in which they are chosen is crucial. I repeat, as it is a critical point, that the regulations contain nothing that prescribes that in detail.
  Mr. Gordon Prentice: The Speaker's Counsel advised the Committee to examine that in great detail because it is at the heart of the matter. If an employee goes to an industrial tribunal, on what judicial authority would the tribunal rely? According to Stephen Mason, the Speaker's Counsel, there is no judicial authority.
  Mr. Meacher: My hon. Friend is forcibly repeating the point that my hon. Friend the Member for Denton and Reddish has already made. I hope that the Minister will provide an answer. What he told me across the Dispatch Box is not validated by the regulations. We want an explicit answer on that critical point.
  There are elementary requirements that even the Government should have considered necessary. Unless it was a slip, one Minister did. Lord Inglewood, as Minister of the now defunct Department of Employment, said in another place on 20 March last year that workers' representatives
  "must clearly have appropriate guarantees of independence".— [Official Report, House of Lords, 20 March 1995; Vol. 562, c. 1095.].
  I ask again, as my hon. Friends have asked—it is a general demand from Opposition Ministers—where in the regulations are those guarantees?
  Mr. David Blunkett: There is none.
  Mr. Meacher: If the Minister wishes to intervene, he can freely do so. I take the fact that he has not done so as a silent assent to my point. Let us clear it up as we go along. If the Minister wishes to refute that, perhaps he will do so. Perhaps he could quote to me the regulations which are relevant to this point.
  Mr. Taylor: I am quite content with what I have said in my two previous interventions to the hon. Gentleman's speech. I am grateful to him for giving way to me again, although I am not sure that I asked him to. I will stick by what I said, and I am more than happy to return to the point when I address the House or, with the leave of the House, when I speak again towards the close of the debate. I shall select one of those two opportunities to deal with the hon. Gentleman's point.
  Mr. Meacher: I do not know why the Minister is so coy or, if he is able to tell us, why he does not tell us now. We shall certainly be looking forward to a precise quotation. I have in front of me regulation 3, which is headed "Duty to consult representatives". That is the critical point. I have read it through in detail—it is quite lengthy—and there is absolutely nothing to justify what the Minister has said. The truth is that giving preference in the elections to the employer's chosen candidate or fixing the electoral machinery in such a way as to benefit some candidates and not others will not stop an employer from discriminating.
  Mr. Michael Stephen: Will the hon. Gentleman give way?
  Mr. Meacher: Let me complete this. All that the regulations say, at 3(2)(1B), is:
  "employee representatives elected by them, or … representatives of the trade union … as the employer chooses."

  201
  Those are the critical words in the regulations, and it is to those that I expect the Minister will respond.
  Mr. Stephen: The hon. Gentleman has suggested that an employer might seek to fix the election. If he is suggesting that the employer might act fraudulently, surely he will accept that that is a matter that clearly will be overruled by the courts.
  Mr. Meacher: When I said "fix" I was not suggesting anything illegal. I am simply saying that the employer can structure it—if the hon. Gentleman prefers a more neutral phrase—in such a way as to produce a given result. That is perfectly legal, and it is compatible with the regulations.
  Mr. Stephen: How?
  Mr. Meacher: Perfectly easily: the employer can ensure that particular candidates are offered the opportunity to stand for election; he can ensure that those candidates receive the benefit of his and other people's support; and he can arrange the consultation mechanism and the electoral preparations in a manner that benefits them. It is perfectly possible to do those things. That directly contradicts what the Advocate-General in Brussels has said. The Government have been fond of repeatedly quoting what he said because it supported their case. However, in this case, he said in his report:
  "the designation of representatives ought not to depend on the free choice of the employer".
  I believe that those words are directly contradicted by the letter and the spirit of these regulations.
  I think that there is more than a whiff of humbug in all this. The Government have gone to great pains during the past decade, in several Acts of Parliament, to prescribe in the minutest detail exactly how a trade union should operate and precisely what it can and cannot do. On the crucial test of independence, for example, the Trade Union and Labour Relations (Consolidation) Act 1992 states of an independent trade union:
  "(a) is not under the domination or control of an employer or group of employers …
  (b) is not liable to interference by an employer … arising out of the provision of financial or material support."
  Why are not similar rules now applied here to employee-elected representatives? Why should trade unions be strictly independent, yet elected employee representatives—whom the employer can choose as an equal alternative—are allowed to be under his thumb? How can it be right for the employer to decide which employees will be eligible for election, whether they will be elected directly or indirectly and whether the ballot will be by a show of hands or by secret ballot? Why should the employer be able to decide who counts the votes, whether there should be an independent monitor or how any complaints should be handled? Under these regulations, those are the sole and untrammelled prerogative of the employer, and that is what we object to.
  It is obviously not the first time under this Government that there has been one law for the unions and another for the employers. In the Government's eyes, trade unions are dangerous animals whose activities have to be ensnared in comprehensive bureaucratic detail, while employers are
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  very laudable chaps who can be trusted and allowed to get on and do whatever they like. That fantasy may have been the politics of the 1980s, but I suggest to the House that it is wide of the mark today, when job insecurity is rife almost everywhere, like a plague afflicting workplaces up and down the country.
  Mr. Piers Merchant: I do not recognise the hon. Gentleman's description of Conservative Members' views on trade unions and companies. It certainly does not represent my views. On this point, does the hon. Gentleman accept that there is a major difference between a trade union that is charged with a series of responsibilities during a long period, and the much narrower responsibility of the people who are elected to represent a specific and probably small group of employees during a specific period in relation to redundancy?
  Mr. Meacher: Even in relation to the specific question of electing those who will hold authority for a particular purpose—whether it is carrying through redundancies or as elected members of the executives of trade unions— how the election will be conducted is laid down and prescribed in much greater detail for the trade union side. There is not even an attempt to do so for the employer; it is simply left completely open. If the hon. Gentleman does not recognise that description, after six—or is it eight— trade unions Acts, he should examine himself and his party more closely in the mirror.
  Our third charge against the regulations is that the Government have unilaterally decided to put such a high threshold on their application as to largely nullify their purpose. Employers are exempted from consultation under the regulations in cases in which there are fewer than 20 redundancies during a 90-day period. A very important point is that that has nothing to do with the European Court judgment of June 1994. It did not require that threshold in any respect. In revising the regulations, the Government have gratuitously added that exemption, entirely on their own account. It need not have done so because it was not in any way required by Brussels.
  The effect of the new threshold will of course be dramatic, and the Government intend it to be so. The threshold seriously erodes the existing rights of consultation, and it will automatically exclude nearly 6 million workers in small firms and a great many people in larger firms. The Government have openly boasted that it will result in no less than 96 per cent of employers being free to implement redundancies without any consultation with their work forces.
  Mr. Stephen: Will the hon. Gentleman give way?
  Mr. Meacher: This will be the last time.
  Mr. Stephen: Surely the hon. Gentleman will accept that what he is suggesting is over-bureaucratic and, frankly, rather silly. If there are fewer than 20 people involved, the employer could consult them directly. He could get them all together in the canteen, if there is one, or in his own office, if there is not.
  Mr. Meacher: If the hon. Gentleman is seriously suggesting that the purpose of the exemption was to enable the employer to pull employees in one by one

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  to discuss their forthcoming redundancy with them individually, I must say that he is more ingenuous than I thought.
  The significant point is that the regulations, instead of extending consultation rights—which was clearly the European Court's purpose—reduce them. There are many areas in both the private sector and public services where the impact will be damaging. In the education service, more than 8,000 teachers have been made redundant in the past three years, of which I think 1,300 were compulsory redundancies. But in a great many other cases, consultation has prevented redundancies or has reduced the numbers to be made redundant. It has certainly ensured that the procedures are properly followed.
  Under the regulations, consultations may well be minimal—in the case of education, they will almost certainly be minimal because no school will make 20 or more teachers redundant. Therefore, consultation will not take place in the education service. That will also be true in many public services and throughout great swathes of the private sector.
  Why have the Government inserted the huge exemption loophole? The answer is clear from a letter of 19 July last year, which was written by the Minister for Competition and Consumer Affairs' predecessor before they carried out a job swap.
  "The Government believes that it is important to alleviate any unreasonable burden on employers which would otherwise result from the extension of the consultation requirements."
  The meaning of that letter was made clear in the Department of Trade and Industry's press notice of 5 October, which stated:
  "This measure will remove the statutory obligation to consult through representatives from some 96 per cent. of businesses and has been estimated to save up to £85 million per year."
  There we have it.
  Mr. Peter Thurnham: Will the hon. Gentleman give way?
  Mr. Meacher: No, I shall not give way any more. The hon. Gentleman can make a speech, but I should draw my remarks to a close.
  The Government are prepared to sell off the consultation rights of millions of workers as long as they save £85 million for employers. One notes that Ministers have been up in arms over the past few weeks about being fully consulted in advance of the Scott report next week, when they think that their own jobs may be at risk. When it comes to other people, they are quite prepared to sacrifice any right to consultation for 13 shekels of silver. I do not wish to be unkind, but some people might call that the politics of hypocrisy.
  Our fourth charge against the regulations follows from everything that I have said. In several respects, they breach the spirit of the European Court's ruling and they may well be ultra vires. Employee representatives will be ad hoc; there is no prescribed method for their election; only those affected by the proposal can nominate representatives; and there is no way of ensuring their independence from the employer. All those factors suggest that the regulations are wide open to a legal challenge. In addition, as I have said, in some respects they actually weaken existing protection—something that
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  is not generally approved by European directives. I realise that the Minister may not be unduly worried by the Opposition's case, however convincing it seems, because he has in his pocket a block vote from the whipped majority of the Conservative party. But when, as I understand it will, the matter comes up for judicial review in the High Court shortly, it may be a different story.
  The Labour party would extend consultation rights, as the European Court intended and would not use them to undermine or derecognise existing unions. We would require a proper test of independence for elected employee representatives and proper procedures for their election. We would not exempt 96 per cent. of all employers by a threshold that includes cases where there are fewer than 20 redundancies.
  The regulations are deeply flawed; they are inconsistent with natural justice. They breach both the letter and the spirit of the European Court judgment. On those grounds, we demand that they be withdrawn.
  7.43 pm
  The Minister for Competition and Consumer Affairs (Mr. John M. Taylor): There will inevitably be disagreements between myself and the hon. Member for Oldham, West (Mr. Meacher), who opened the debate, but I cannot fault him in one respect: his deployment of the history of the subject, which derives from the collective redundancies directive of 1975 and the acquired rights directive of 1977. All hon. Members who take an interest in such matters can trace the acquired rights directive, via the Transfer of Undertakings (Protection of Employment) Regulations 1981, to the infraction proceedings, and the collective redundancies directive, via the Employment Protection Act 1975 and the Trade Union and Labour Relations (Consolidation) Act 1992, to the two cases that were heard in parallel in the European Court of Justice. It is our contention that the Trade Union Reform and Employment Rights Act 1993 put right all but one of the deficiencies that were raised in those proceedings. On 8 June 1994, the European Court gave its judgments following those proceedings. The Government contend that the measures before the House regularise the one outstanding matter to which the Government should give their attention: the obligation to consult.
  Conservative Members may like to be reassured that the measures are four times blessed. First, they are deregulatory. It is true that the infraction found against the Government by the European Court of Justice has provided the Government with an opportunity to take the gold plate off their response. Conservative Members are pleased to take the gold plate off regulations and directives.
  The second virtue of the measures is that they set the law right in the case of Milligan and Bailey. I shall not dwell on that case because it is a bit of a side show. In fairness to the hon. Member for Oldham, West, I should say that he was right to concentrate on the subject of consultation—which seems to be the point of argument between us—rather than Milligan and Bailey. I think, however, that reference was made to that case in the judicial review proceedings—which the hon. Gentleman also mentioned—where matters will come before the divisional court and where the Government will be quietly confident that their arguments will be sustained.
  The third virtue of the measures is that they clarify uncertainties for everyone's benefit. At present, the position is uncertain because the United Kingdom

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  has been found against in both cases. Both matters were originally brought to the English statute book by Labour Governments. I shall not make a meal out of the fact that those Labour Governments brought them to the English statute book in the wrong form, but I shall defend the fact that we are putting them into the correct form. We reached a point of considerable uncertainty where it looked as though an employer had to consult in cases of collective redundancy only if there were a recognised trade union. If there were no recognised trade union, the employer was apparently under no obligation to consult anyone, which cannot be right. The European Court of Justice must be supported in its judgment. Tonight we are trying to ensure that, in the case of collective redundancies, everyone is consulted, either through a recognised trade union or through an election.
  The hon. Gentleman challenged me twice on a certain subject and, at the risk of saying it for the third time, I repeat that I am well content with the words that I previously used from the Dispatch Box, although I shall look at the report in Hansard tomorrow. Provisions relating to the details of election procedure would not be easy to implement, but elections are necessary. One difficulty is that the regulations refer to much base legislation elsewhere.
  The absence of express provisions concerning elections and the rights of organisers does not mean that access to employees and the use of facilities need not be extended to the organisers of elections. Regulations place a strict duty on the employer to consult appropriate representatives. If the employee representatives or a recognised trade union consider that the employer has not consulted them as required, or the employees affected have not been given a proper opportunity to elect representatives, they may present a complaint to an industrial tribunal. An employer will run a serious risk of an adverse finding if he fails to take such steps as allowing organisers access to the affected employees or providing a list of their names, and in appropriate cases allowing time off and access to facilities. That is almost a paraphrase of what I said earlier. It is necessary to read together paragraphs 4 and 10 and paragraph 3, sub-paragraph 5. Between them, they provide for complaints to be made by an employee, an elected representative or a recognised trade union if there has not been consultation or if the employer has not taken sufficient action to ensure that consultation with appropriate representatives could take place.
  I am sorry to have dealt with that at length, but it is necessary to make it quite clear.
  Mr. Bennett: The Minister read out those requirements, but they are not in the regulations. Only a general wish is contained in the regulations. The specifics that he just read out are not in the regulations, are they?
  Mr. Taylor: I think that I have been faithful to the debate. I have answered the House correctly, consistently and in good faith.
  I want to say one other thing in connection with a complaint made by the hon. Member for Oldham, West, who asked why the Government have introduced a loophole—the threshold of fewer than 20 employees.
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  Perhaps I should say, the 20 threshold that introduces the collective redundancy concept. The loophole to which he refers is in the directive that was agreed by the Labour Government in 1975.
  Ms Joan Walley: On the previous point about clarifying the uncertainty, the Minister told the House that he is putting right an omission from previous legislation. We heard from my hon. Friend the Member for Oldham, West (Mr. Meacher) about how the draft regulations do not contain what is needed. If what the Minister says is not on the face of the regulations, what opportunity will he have to put that right?
  Mr. Taylor: That is a hypothetical question. So far, I have broadly dealt with interventions, and I think that I have dealt with that point. I should like now to make some progress, because there is an important Government case to be deployed in defence of the regulations.
  Mr. Meacher: Before the Minister moves on, let me say that I do not think that he has satisfied either me or any of my hon. Friends. He read a carefully scripted statement, the essence of which he had memorised and repeated earlier. It is true that paragraphs 4 and 10 of the regulations, and paragraph 3, sub-paragraph 5, deal with complaints, and it is true that complaints may, if people are determined, reach an industrial tribunal. He has not answered the key point: when the case reaches the tribunal, how can one make it stick against an employer who has carried out an election that the employee considers improper in terms of its procedure when there is no prescription in the regulations on the form of that election? One may believe it to be unfair, and it may be unfair, but it is not unfair in terms of the strict rules of the regulations.
  Mr. Taylor: I have faced many challenges in my life, but managing to persuade the hon. Gentleman may be a bridge too far. He demeans the ability of employers and employees to arrive at a system of election that will be fair. Nothing is more English or more culturally part of our inheritance than fairness. An industrial tribunal, which is after all a judicial body—[Interruption.] I am sorry if the hon. Member for Oldham, West thinks that this is not merely unpersuasive but amusing.
  Mr. Meacher: It is not amusing.
  Mr. Taylor: I agree that it is not amusing. For the Government to try to lay down in a codified way in the myriad of workplaces how an election should be held is to demean the good sense of our fellow citizens—the employer and employee between them—who are quite capable of setting up an election. If it is not a fair election, an industrial tribunal will be as good a forum as any in spotting that.
  Mr. Bennett: Will the Minister give way?
  Mr. Gordon Prentice: Will the Minister give way?
  Mr. Taylor: I give way to the hon. Member for Pendle (Mr. Prentice).
  Mr. Prentice: There are employers who run sweatshop operations, perhaps recruiting Asian women, to take

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  one example, whose knowledge of English may be rudimentary. In those circumstances, someone from the work force could emerge and act as the group's spokesperson. If the matter were challenged and it reached an industrial tribunal, the Minister told the House earlier that the employer would be at
  "serious risk of an adverse finding".
  An employer being at risk of an adverse finding is very different from an employer acting unlawfully. That is why it is central to the case for matters to be on the face of the regulations. If they are not, we cannot leave it to a tribunal.
  Mr. Taylor: The hon. Gentleman helps me in his own appreciation of the eclectic nature of the workplaces of this country. If a group of employees felt that the procedures that were going on around them were oppressive, there could not be a freer country than this one in which they could pursue their grievance. They can take advice if they wish. After all, there are plenty of solicitors in most of our urban centres who will give advice on legal aid green form, which is two hours of advice for free, and that could be extended if the local legal aid authority so wishes. Furthermore—this may be more congenial to the hon. Gentleman—they could, if they wanted to, take advice from the local office of one of the trade unions, perhaps the Transport and General Workers Union. Most of those great unions have offices in our big towns and cities, certainly in our cities.
  Mr. Bennett rose—
  Mr. Taylor: I have given way once to the hon. Gentleman. This might be the last intervention, but I shall give him the benefit of it.
  Mr. Bennett: The Minister says that it is important that the process is fair. Which is fairer to elect a works representative: a single transferable vote or first past the post?
  Mr. Taylor: I did not know that we would get down that road. I have always preferred an exhaustive eliminator, but that is very much a personal preference, and it is not Government policy, I hasten to add. In that sense, I speak only on behalf of myself, the hon. Member for Solihull.
  Mr. Thurnham: Does my hon. Friend not think it strange this evening that the Labour party is criticising small firms for not wishing to comply voluntarily with the regulations—if small firms wished to comply with them they could, but the Labour party wants to force them— whereas the hon. Member for Hornsey and Wood Green (Mrs. Roche), who I think is the Labour Front-Bench spokesman for small business, has a letter in The Times today praising small businesses as the backbone of the country? I wonder what we are listening to tonight—new Labour, old Labour or a mix. Labour Members obviously do not know what they really mean.
  Mr. Taylor: That intervention has completely wrong-footed me: I simply cannot handle it. I think that, as a matter of courtesy, my hon. Friend—for, after all, he is my hon. Friend—should have given me notice of it. If he had, I might have been able to cope with it in a
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  satisfactory way, rather than being left floundering at the Dispatch Box. Perhaps, given my flummox and fluster, I should press on.
  We are debating the Government's response, in the form of the regulations, to two judgments of the European Court of Justice made on 8 June 1994. Much has been said about what the regulations do or do not require, and a good deal of that has been based on a misrepresentation of their provision or a failure to understand how they are intended to work. I hope to set the record straight on some of those matters, but on some of them our approach is, and will always be, fundamentally different from that of Opposition Members. We believe in encouraging enterprise and job growth through flexibility, whereas Opposition Members would destroy it with excessive regulation.
  The regulations were laid before the House on 5 October, and came into effect on 26 October. They have two purposes. First, they give effect to judgments of the European Court of Justice concerning the implementation in the United Kingdom of the 1975 collective redundancies directive and the 1977 acquired rights directive. Secondly, they deal with the separate matter of the judgment of the employment appeals tribunal in the case of Milligan and Bailey v. Securicor Cleaning Ltd. In that case, the Transfer of Undertakings (Protection of Employment) Regulations 1981—generally referred to as the TUPE regulations—were interpreted in a way that Parliament had not intended. Regulation 8 of these regulations reverses the effect of that judgment.
  The regulations were made under section 2(2) of the European Communities Act 1972, as they deal with matters that are for the purpose of implementing—or are related to our implementation of—our Community obligations. Let me deal first with the main purpose of the regulations, which concerns information and consultation about collective redundancies and business transfers. Both directives require an employer to consult workers' representatives in relevant circumstances, who are defined as
  "the workers' representatives provided for by the laws or practices of the Member States".
  In implementing the collective redundancies directive in 1975, the then Labour Government required an employer to consult only where there was a recognised trade union. In 1981, in implementing the acquired rights directive, the present Government adopted the same approach. It is interesting to note that Opposition Members did not question that approach at the time.
  In 1994, the European Court ruled that, by failing to designate workers' representatives to be consulted when an employer did not recognise a trade union, the United Kingdom had not met its obligations under the directives. The regulations now provide for consultation by an employer, whether or not the employer voluntarily recognises a trade union. They bring UK law into line with the directives as interpreted by the European Court of Justice.
  When we framed the regulations, uppermost in our mind was the need to give proper effect to the directives in a way that gave employers flexibility in deciding how to meet their obligations. That has always been our intention: it was spelt out in our consultation paper last year, and we have acted accordingly. As the Government have said before and will continue to say, we believe in

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  flexibility—in setting a framework, but leaving the details to the good sense of employers and employees. That is what gives our businesses the edge that enables them to compete in global markets.
  The regulations require an employer to inform and consult either a recognised trade union, or representatives elected by the employees themselves. To those who argue that the regulations do not provide a sufficient guarantee of independence for such represenuatives, let me repeat that they must be elected by the employees.
  Ms Walley: Will the Minister give way?
  Mr. Taylor: I will give way in a moment, although I have already given way to more hon. Members than I intended. I believe that others wish to speak.
  As I was saying, the representatives must be elected by the employees. They must not be placemen, nor must they be nominated by the employer. If, in practice, the arrangements made for particular elections are such that the employer has not properly consulted those who are representative of the affected employees, the matter may be considered by an industrial tribunal, which may make an award of compensation.
  An employer may choose whether to consult a union or elected representatives, but he cannot choose not to consult anyone at all. There are, of course, those who argue—as the TUC has argued—that an employer who recognises a union should not be free to consult anyone other than that union. Why should that be so? The extent and nature of union recognition has changed substantially over the past decade, and we are likely to see further changes as employers and unions must adapt to ever more competitive markets and changing employment patterns. Why should an employer who recognises a union for one purpose necessarily be bound to do so for all purposes? We do not believe that that should be the case, and we have therefore removed the existing statutory monopoly that recognised unions have enjoyed in such matters.
  Most employers who recognise a trade union may well wish to continue to consult that union about redundancies and business transfers, but that is properly a matter for them to judge. The regulations provide no obstacle. Unions that are confident that they speak for the majority of the work force and act responsibly in the best interests of both their members and the business should normally have nothing to fear from the measure; but they must also recognise that some employers have developed other channels for consultation with their employees, whether or not they recognise a union or unions. It must surely be right for employers to be able to use such machinery where it exists.
  Ms Walley: What does the Minister think the European Court of Justice intended? Does he think that it intended to undermine trade union representation?
  Mr. Taylor: I do not wish to place any interpretation on the judgment of the European Court of Justice, other
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  than its reported judgment, which I have in my hand. I shall not try to paraphrase or interpret that now, but I am sure that there are copies in the Library.
  Mr. Meacher: Will the Minister give way?
  Mr. Taylor: Yes, but this will be the last time.
  Mr. Meacher: Before the Minister leaves that important point, will he tell us whether he believes that the European Court intended consultation rights to be extended rather than reduced, and that the Court never intended the regulations to be used to undermine or "derecognise" existing trade unions?
  Mr. Taylor: The hon. Gentleman is treating the Court as though it were some kind of political body. I do not need to look behind the judgment to find out what the intention was, because I accept the judgment.
  As I was saying, it must be right for employers to be able to use such machinery where it exists. Not only must that be right in principle; there may be sound practical reasons why an employer would wish to consult elected representatives. For example, an employer who recognises a union for some groups of employees but not others may well feel that it would be simpler and more appropriate to consult elected representatives for all the employees affected by a proposal, rather than a mixture of union and elected representatives. Employers will need to judge carefully the longer-term consequences of such a decision in terms of their relations with the union or unions, and given the prospect of subsequent reference to an industrial tribunal. Again, however, that is properly a decision for employers to take rather than for Governments to prescribe.
  Some commentators have criticised the regulations because they do not set out detailed rules for the conduct of elections or require standing machinery to be established. Their criticisms have been echoed by the hon. Members for Oldham, West and for Denton and Reddish (Mr. Bennett). We chose not to set detailed rules for good reason. The circumstances in which the obligation to consult arises will vary considerably. Complex statutory rules, designed to cover all possible circumstances, cannot possibly benefit either employers or employees. Employers with acceptable existing machinery should not have to adapt it simply to meet rigid bureaucratic requirements.
  Nor could it possibly be right for an employer to have to establish machinery that he may never have to use. Many employers will never, or will rarely, be faced with having to make collective redundancies or be involved in a business transfer. It would be absurd for us to require those employers to establish and maintain some machinery that might never be used. That may be what Opposition Members want, but it is not the sort of bureaucracy in which we wish to indulge.
  Mr. Meacher: Will the Minister give way?
  Mr. Taylor: No. I have given way generously, within the spirit of the House's affairs. Other hon. Members wish to speak and I will not delay the House much longer.
  Although ad hoc arrangements are acceptable under the directives, an employer cannot leave it to the last moment to begin consultation. It must begin in good time and,

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  in the case of redundancies, in a specified minimum time before the first dismissal takes effect. Regulation 3(8) provides that, where there is no standing machinery and the employer invites employees to elect representatives, sufficient time must be allowed for them to do so and for the consultations to take place. A similar provision is made in respect of business transfers by regulation 9(10). It is clear that, if an employer does not take seriously his obligation to consult appropriate representatives, he will be at risk of an adverse finding by an industrial tribunal.
  The regulations provide protection for elected representatives against dismissal or detriment short of dismissal because of their status or activities as a representative—that will be regarded as a discrimination. Those protections have been drafted to provide protection not only to people who are currently representatives, but to people who have ceased to operate in that capacity and to candidates for election.
  The regulations provide a right to time off with pay to undertake representative duties and a right to appropriate access to the affected employees and to facilities such as telephones. They amend the provisions on who may bring a complaint to an industrial tribunal so that they are extended to include not only elected representatives, but, in appropriate cases, individual employees who have been affected by the proposal. Those are substantial rights and protections and I am sure that hon. Members will recognise their importance.
  Although we have provided additional obligations, rights and protections, following these changes it would have been wrong of us not to consider whether it was appropriate for the new arrangements to apply in all the circumstances covered previously. Clearly, there is a balance to be struck between the rights of people in work and the need to ensure that our businesses are not fettered by regulations that divert them from competing, growing and providing jobs for this country's people. It is only by our ability to compete that we are able to create jobs.
  In drawing up this package of measures, we believed that it was right to look for ways of balancing the additional obligations and costs that would be imposed on employers. We have therefore limited the statutory obligation to consult through representatives to collective redundancies. That is where the employer proposes 20 or more redundancies at one establishment within a 90-day period. That is one of the options provided for in the relevant directive, which, I remind the House, is called the collective redundancies directive.
  The directive imposes specific and detailed requirements on an employer and, in setting a threshold below which those requirements do not apply, the Council of Ministers implicitly recognised that those requirements would not necessarily be appropriate to small firms or to small redundancy exercises.
  We make no apology for removing the gold plating that previously existed. As the hon. Member for Oldham, West rightly said, this measure will remove more than 90 per cent. of businesses from the obligation to consult through representatives about redundancies. We have estimated the value of this deregulatory measure at some £85 million per annum, more than offsetting the additional cost to employers of the other measures contained in the regulations. It will provide substantial relief for small and medium employers in particular.
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  I make it clear, however, that the measure does not absolve employers from the obligation to act fairly and reasonably in handling individual redundancies. That includes informing and consulting employees individually, as appropriate. There is ample case law showing the importance that industrial tribunals attach to such matters in considering whether a dismissal is fair. It is simply not true, as some people have suggested, that the regulations give employers a free hand to dismiss without any consultation or any fear of sanction.
  The change made by regulation 8 concerns the right to bring a claim of unfair dismissal in connection with a business transfer. When the draft TUPE regulations were debated in the House in 1981, the then Under-Secretary of State for Employment said:
  "The normal provisions governing unfair dismissal, qualifying periods, and so forth, continue to apply in cases where employees are dismissed because of the transfer."—[Official Report, 7 December 1981; Vol. 14, c. 680.]
  That is how the regulations were understood to operate until last year, when the employment appeals tribunal held in the case of Milligan and Bailey v. Securicor Cleaning Ltd. that the 1981 regulations did not prevent an employee with less than the normal qualifying service from bringing such a claim. The tribunal noted that member states were entitled, under the acquired rights directive, to exclude categories of employees who do not qualify for dismissal protection, but it held that, as drafted, the regulations did not exclude such employees from bringing a claim.
  The effect of that judgment will be to give employees greater rights against their new employer than they enjoyed against their previous employer. That is not consistent with the purpose of the directive, which is to transfer employees' rights, as they stand at the time of the transfer, to their new employment. It is not to improve rights on employees' way to their new employment. Nor, following what was said in the 1981 debate in the House, would the effect of the judgment have been consistent with Parliament's wishes. No appeal, however, was lodged by the employer in the Milligan and Bailey case. Although a higher court may in a different case effectively reverse the judgment's effect, that will take time. In the interim, there will inevitably be uncertainty about the correct position. Such uncertainty can be damaging and we therefore believe it right to make the position clear beyond doubt. Regulation 8 therefore clarifies that the normal qualifying conditions for unfair dismissal apply in these circumstances.
  Whatever the views of the people who would want a return to the disastrous days of compulsory trade union recognition or to impose some still more burdensome provision on business in this country, the Government have no doubt that the regulations provide a proper and coherent response to the European Court judgments on 8 June 1994. It may be one that Opposition Members do not like, but it provides for the maximum flexibility of approach consistent with an employer's overriding obligation to consult. It is a response that demonstrates our continuing commitment to removing unnecessary regulation and to providing our businesses with the right environment in which they can compete with others in the European Union and elsewhere. As I have said, the measures are four times blessed: they are deregulatory, they put the law right, they clarify uncertainties for everyone's benefit and they allow industrial relations to evolve and develop in a flexible way. I commend the regulations to the House.
  8.19 pm
  Mr. Jim Marshall: I start by declaring an interest, as a sponsored member of the Graphical, Paper and Media Union, and later in my speech I hope to explain how the regulations will affect employees in the printing industry. Before doing so, however, I congratulate my hon. Friend the Member for Oldham, West (Mr. Meacher) on the objective and lucid way in which he outlined our objections to the regulations.
  I wish that the Minister who responded had spoken in a similar fashion—and perhaps also more succinctly than he did. I have a fond regard for the Minister, but I am afraid that his previous job has followed him here in two respects. Professionally he is a lawyer, and in this place he also dealt with the law. He responded to my hon. Friend's arguments much in the manner of a lawyer—a lawyer who simply wanted to understand what the judgment was, rather than finding out what its consequences might be.
  I timed the Minister's speech: it took 36 minutes. That is not bad for a lawyer, I suppose, especially one who is not being paid the going rate. [Interruption.] Another lawyer, in the person of the hon. Member for Shoreham (Mr. Stephen), speaks. I had thought that the Minister would respond to my hon. Friend point by point, but he spent the first 17 minutes talking about nothing. Then, probably as a result of looking at the civil servants' Box, he decided that he had a speech to read. For the next 19 minutes he sounded like a lawyer not summing up the case but giving the introduction to it—head down, bolting along and allowing no interruptions.
  I remain unconvinced by the Government's case. The Minister used the phrase "four times blessed", both in his preamble and in his set speech. Yet every time he used it, he gave examples that made the same case as my hon. Friend made on our behalf. He reinforced the deregulation question, but described that as "removing gold plating".
  I forget the exact figure, but more than £80 million was to be saved per year. What will that cost in stress to the workers, and in increased fears and uncertainty in the workplace as a result of the deregulation? I guess that in the long term it will cost more than £83 million per year. To refer to that as gold plating constitutes a sneer at ordinary working people who, because of the nature of their employment, happen to work for an employer with fewer than 20 employees.
  The Minister failed to understand our objections to the election process and method. If the regulations extend consultation to include workers' representatives, I accept that, but we must ensure that the method of election is fair, and is seen to be fair. There is no guarantee of that in the regulations or in what the Minister said. We want neutrality on the part of the employer, who should not seek to influence the election. Despite what we heard about references to the courts, there is no guarantee that that will be so.
  Now that I have got that off my chest, I shall make a few points on behalf of my union and myself. The Minister failed to acknowledge that some concessions have been made on the details of the regulations—as a consequence, I presume, of representations from the Confederation of British Industry and the Trades Union Congress. I especially welcome the stronger protection against discrimination against employee representatives, which also extends to candidates in elections.
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  If the Minister for Science and Technology, who has replaced the Minister for Competition and Consumer Affairs on the Government Front Bench, is listening to me—I see that he is making notes, for which I am grateful—I urge him if possible to extend that protection to former representatives, too. A rogue employer may still seek to exact retribution from someone who is no longer a representative, simply because he or she used to serve in that capacity.
  That change, among others, is to be welcomed. But it does not remove my fundamental opposition to the regulations as they stand. My hon. Friend the Member for Oldham, West cited three criteria on which they fail. I will summarise under two main headings the reasons for my opposition.
  The first reason is that the regulations undoubtedly strengthen the position of employers in comparison with that of trade unions. Despite the bluster from the Minister who spoke, that represents a continuation of the knock, knock, knock policy that the Government have pursued against trade unions over the past 16 to 17 years. The regulations have been used to make a further attempt to undermine the unions' position.
  Secondly, as a consequence of removing the gold plating, deregulation removed from millions of workers the right to consultation prior to redundancy or the transfer of their undertakings. I find it unbelievable—or rather, as it comes from this Government, unacceptable rather than unbelievable—that an employer should have the unilateral choice whether to consult representatives of a recognised trade union or representatives simply elected by the employees. If there is to be such a choice, I should have thought that the employees should be consulted, rather than the employer making a unilateral decision.
  Whether that is deliberate or unintentional—I agree with my hon. Friend's opinion that it is probably deliberate—one result of it would be to undermine established industrial relations machinery throughout British industry. That must be bad, irrespective of one's views on the function and role of trade unions in our society.
  Moreover, the employer's ability to set the date for the elections and to specify the arrangements for them, could—I am tempted to say "will"—undermine the position of employees in the consultation process. The ad hoc arrangements for the election of employee representatives will mean that there is no guarantee that the person elected will have had any training or preparation for the role. How can such an arrangement ensure any degree of equity in negotiations between such a person—on behalf of his fellow workers—and his employers? Clearly the relationship is inequitable.
  On the other hand, the vagueness of the obligation on employers to call elections—I believe that the phrase used is "long enough" before the time that the consultation should start—may be used to thwart the consultative process.
  My hon. Friend the Member for Oldham, West speaks for all of us when he says that he opposes the deregulation measures in the regulations. There is no argument from the Government; they applaud the fact that it could well mean that millions of workers have no rights to be consulted about their continued employment or the transfer of their undertaking to an alternative place.

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  I should like to adumbrate what the regulations mean to the printing industry. The effect on the printing industry will be quite dramatic. As hon. Members probably know, the industry has a large number of small companies—approximately 19,500—of which about 17,000 employ fewer than 20 people. In a nutshell, the regulations mean that almost 90 per cent. of companies in the printing industry will not have to consult their work forces in any way on redundancies and business transfers. Almost 90 per cent. of firms will be able to shut down or move, and their employees will have no right to know about it whatever. That is unfair, inequitable and needs to be opposed.
  8.30 pm
  Mr. Michael Stephen: It is a pleasure to follow the hon. Member for Leicester, South (Mr. Marshall). However, it struck me that he said that he spoke on behalf of the trade union that he represents, not on behalf of his constituents. He actually said so. That should not surprise us, I suppose, because the trade unions created the Labour party and the Labour party is still the creature of the trade unions.
  The regulations stem from the European collective redundancies directive of 1975, which was agreed to by the then Labour Government. I fear that the directive is a very good example of the kind of pettifogging European interference in the affairs of this country that so annoys so many of our constituents. We do not need Europeans to tell us how to regulate relations between employers and employees; we are perfectly well able to do that ourselves. It is about time that the Council of Ministers reviewed the matter and removed the directive altogether under the principle of subsidiarity.
  We have to compete in a global market and, to put it simply, the more the regulation, the fewer the jobs. I am interested in securing jobs for the people of this country. I am glad that, as a result of our relatively relaxed and deregulatory approach compared with that of our continental friends, our unemployment rate is far below the European average—about 8 per cent. at the moment, compared with 13 per cent. or more in France.
  Opposition Members suggest that employers should be obliged to consult only trade union representatives, but why should the employees not elect representatives of their own? It is suggested that employees might elect unsuitable representatives. Coming from the workers' friends on the Opposition Benches, that is a pretty poor view of the British worker's intelligence. British workers have more common sense than their representatives on the Opposition Benches give them credit for.
  Mr. Gordon Prentice: My hon. Friend the Member for Oldham, West (Mr. Meacher) was saying that where there is not a recognised trade union, there should be an obligation for the elected representatives to be elected fairly. The hon. Gentleman has skated over that point.
  Mr. Stephen: As I understand it, Opposition Members were saying that where there is a recognised trade union, there should be no option but that the representatives of that trade union should be the persons consulted, and that there should be no option for the employees to elect representatives of their own.
  It is suggested that the employer could fix the elections. The hon. Member for Oldham, West (Mr. Meacher) accepted that he was not suggesting fraud on the part of
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  the employer—clearly that would be justiciable in itself. He was suggesting that by measures short of fraud, the employer might somehow procure an election result that was to his liking; the employer might put forward candidates and support them, with the intention that they should be elected. However, I suspect that that would be counter-productive in most workplaces. I should have thought that in a redundancy situation the last person for whom the employees would wish to vote would be someone who was seen to have the approval of the employer.
  If the employer were to succeed by measures short of fraud in rigging the election result, Opposition Members have asked for the juridical basis on which a complaint to an industrial tribunal might be made about that procedure. They will find the juridical basis in regulation 3(1B)(a) on page 3 of the regulations, coupled with regulation 3(2)(1) on page 2 of the regulations.
  Clearly, if the employer had rigged the election, it is perfectly arguable—and would be argued—that the persons elected were not representatives elected by the work force. In those circumstances, an industrial tribunal would have no hesitation in saying that the employer had not complied with the regulations.
  Mr. Bennett: Perhaps the hon. Gentleman could answer the question that the Minister failed to answer. How does the employer decide between first-past-the-post elections, a single transferable vote system or some sort of exhaustive ballot? How would the employer demonstrate to a tribunal that elections had been conducted fairly?
  Mr. Stephen: We can all disagree about what types of election produce a better result, but almost any system of election that might be put forward—first past the post, single transferable vote or whatever—might be said to be fair. If in the circumstances the election could be shown to be manifestly unfair, as I have said, the employer would be in danger of being found by an industrial tribunal to have breached the regulations to which I referred.
  Let us be quite clear what we are talking about since it has not yet been defined. We are not talking about the election of persons whose agreement to the redundancy has to be obtained. We are talking about the election of persons to put forward the views of the employees about the prospective redundancy. We are talking about the election of persons to whose views the employer must listen.
  Why should the employer want to fix the election of those persons? Why should he not be interested in listening to any constructive or reasonable point of view that his work force may wish to put forward? The work force may not dissuade him from the unenviable task before him of dispensing with the services of some of his employees—some might be very valued employees—but why should he not be prepared to listen? Why, as has been suggested, might he even go so far as to intimidate those representatives? I have not heard so much nonsense in this place since this morning.
  It has been suggested that the person elected will be less likely to be representative of the views of the employees concerned than a trade union representative might be. It has also been suggested that a trade union representative will always be a faithful representative of the interests of

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  the particular workers concerned, while the elected person may not. I would suggest that both categories could conceivably not be true and faithful representatives of the workers concerned. As the workers concerned are those facing redundancy, it could well be that the trade union representative will attach greater weight to the interests of the rest of the employees in the company than to those few who have been selected for potential redundancy.
  It has been suggested that Conservative Members are anti-trade unions, but very few of us are today. Most of us used to be, because the trade unions used to behave in a thoroughly reprehensible and irresponsible manner and did enormous damage to labour relations and the competitiveness of this country. By and large, the unions do not do that any more. I have no confidence, however, that if Labour ever formed a Government and gave the unions back the powers of intimidation that they once enjoyed, we would not see the old trade union movement resurrecting itself like a phoenix from the ashes to do the kind of damage in the future that we are all well aware that it did in the past. For the time being, however, the trade unions are acting responsibly, and no Conservative Member has any objection to them performing the role for which they were formed and which their members expect them to perform.
  The regulations exempt companies where 20 or fewer redundancies in a 90-day period are envisaged. The first point to make about that is that the exemption is provided for in the regulations themselves. If—like the hon. Member for Leicester, South—Opposition Members object to that, why did the Labour Government in 1975 sign up to the directive that contained the exemption? These regulations will merely give effect to that directive.
  As I pointed out in an intervention on the hon. Member for Oldham, West, it is rather bureaucratic—and, frankly, rather silly—to say that an elaborate system of collective representation is needed in situations where there are fewer than 20 people involved. The employer could get all the workers concerned together in a small room. Even the printing industry has such rooms where 20 people could gather together to be collectively consulted by their employers. It is fatuous to suggest that fewer than 20 people need such an elaborate system of representation.
  Where employees elect a representative for the purpose of giving their employer their views about potential redundancies, there is no prohibition upon the employees or the employees' representatives consulting trade union officials. Indeed, employees could actually elect a trade union official to be their representative if he worked in the same company. If trade union representation is as desirable as Opposition Members seem to think it is, I would expect employees to elect trade union representatives.
  I dealt earlier with the suggestion that the elected representative may be intimidated. In addition, the regulations state clearly that those representatives are protected against discrimination. They are also entitled to time off and to the necessary facilities to discharge their duties to those who elected them.
  Regulation 8 rightly reverses the decision of the Milligan and Bailey case, which resulted in employees whose firms were being transferred being put in a
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  different position from those whose firms were not being transferred. The effect of these regulations is to provide the same qualifying period whether there is a transfer of the undertaking or not.
  Finally, the hon. Member for Oldham, West said that the regulations might be subject to proceedings for judicial review and, for all I know, they may be already. This is a very worrying trend. Some people think that if central or local government do something that they do not like, all they have to do is get a judge to overrule it. That is a very dangerous trend and could lead to constitutional implications that Opposition Members may not have considered.
  Our constitution—although it is unwritten—has, over many centuries, developed a fairly clear division between the responsibilities of the judiciary on the one hand and the elected representatives of the people in this House and Members of the other place on the other. I fear that, of late, judges have trespassed too much into areas that the people have entrusted to their elected representatives. No one has elected the judges, and most of them accept that fact and conduct themselves accordingly: they do not get involved in politics. Indeed, Lord Denning always made a point of not getting involved in political issues in the other place while he was still sitting as a judge.
  I am afraid that today many judges do not have so much regard for those self-imposed constraints as they should. Clearly, judges are there to make sure that the Executive do not stray outside the legal powers that Parliament has given to them, but we have had a number of cases of late where there has been no clear breach of the law by a Minister. Cases have arisen where a Minister might be considered, by one interpretation, to have trespassed outside an Act or regulation, while another perfectly reasonable interpretation of that legislation might produce a different result.
  A good example was the criminal injuries compensation scheme where, from memory, about half of the judges who considered the case thought that the Secretary of State was right, while the other half thought that he was wrong. The decision went against the Secretary of State because the majority in the supreme court of the land—the House of Lords in its judicial capacity—thought that he was wrong. That does not negate the fact that about half of the judges who directed their minds to the case thought that the Act could perfectly reasonably be interpreted in another way.
  In my respectful submission, where regulations or an Act of Parliament can be interpreted either way, it is the duty of the judges to give Ministers the benefit of the doubt. Otherwise, they are interfering in the political process, taking sides on political issues and bringing the judiciary into disrepute. [Interruption.] I notice that the hon. Member for Oldham, West is laughing, but I do not consider this a laughing matter.
  8.48 pm
  Mr. Andrew F. Bennett: I do not want to follow the hon. Member for Shoreham (Mr. Stephen) down the path of praising or castigating judges, but I do want to say who I am speaking for. The hon. Gentleman criticised my hon. Friend the Leicester, South (Mr. Marshall) for speaking on behalf of his trade union. I wish to make it quite clear that I am speaking for the employers in my constituency, who are—to run two cliches together—at the cutting edge of the global market.

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  Those employers require two things—good trade unions in the works they run, and certainty in the law. In the years that I have been representing Stockport and Tameside, I have been amazed at the number of times that employers have praised the trade unions and shop stewards within their workplaces. They understand the vast advantages to running a business of good negotiations within it. They go further, and point out the number of occasions when companies have announced redundancies, but some other solution, such as short-time working, has been found after negotiations with the trade union, which has avoided that necessity. Some months later, the management will say how thankful they are that they did not put people through the door because they will need their skilled work force once orders pick up.
  I must make it clear that there is no advantage in wearing away or reducing this sort of regulation. There is every advantage in having them in place.
  Mr. Stephen: Of course, when a company is blessed with good trade union officials, in which the employer has the sort of confidence to which the hon. Gentleman referred, there is nothing in the regulations to prevent the employer from consulting such trade unionists. One would expect the employer to do so.
  Mr. Bennett: I am sure that he would do so. I am pointing out that it is in everyone's interests to set up good situations, in which trade unions are respected by the employer and an effective negotiating process is in place, in as many companies as possible.
  On the question of certainty, employers do not want to have to face the prospect of being castigated by an industrial tribunal. They do not want to have to go to the courts. They want to be able to look at the regulations and be confident that they are carrying them out correctly, and that they will not be challenged through an industrial tribunal or the courts in some other way. I came here to point out that I fear that the regulations fail on that question of certainty.
  Hon. Members will notice on the Order Paper a note to the effect that an extract from the fifth report of the Joint Committee on Statutory Instruments is relevant. I chair that Committee, and in November we were advised by Speaker's Counsel that it appeared from the regulations that the Government had failed properly to implement the European directive. Speaker's Counsel suggested that it would be reasonable to ask the Department for a memorandum, which is published in the extract mentioned.
  As a result, Speaker's Counsel made it clear to the Committee—made up of Members of this House and of the Lords—that the directive had not been fully implemented. At our meeting just before Christmas, it was clear that the Committee would not be able to produce a unanimous report, as we normally attempt to do. We therefore decided that we would take oral evidence in the first week after the Christmas recess.
  Following that oral evidence, which is printed in extract from the report, it was clearly the view of the Speaker's Counsel that the Government had failed to implement the European directive fully. That is a pretty serious warning to the Government. Obviously, Speaker's Counsel is most
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  experienced when it comes to considering such regulations, and does not lightly suggest to a Committee that the Government have failed to implement a directive.
  Mr. Roy Beggs: Is the hon. Gentleman saying that there is a danger that the regulations will be referred back to Europe at some stage, and that our Government will be found to have been negligent?
  Mr. Bennett: Speaker's Counsel certainly suggested that that was a possibility. Since the Government have already been found wanting by the court, this time round they could face a substantial fine. Clearly, the system does not work if Governments keep failing to implement directives.
  The Joint Committee was given a clear indication that everything was not right with the regulations. Most of the time, the Committee manages to pass reports unanimously, and there is no party political pressure. On that occasion, regrettably, it was obvious from the way in which the Committee voted that Conservative Members were determined to defend the Government, and were not prepared to accept the criticism. That is why hon. Members have the memorandum, but not a recommendation, from the Joint Committee that the regulations demonstrate that there has been a failure to implement the European directive.
  Uusually, the Government majority can carry them through, both in Committee and in the House. I must warn the Minister, however, that, once someone as respected as Speaker's Counsel suggests that the Government are failing to implement a directive properly, there is a great possibility that someone outside this place will decide to challenge them and take the matter back to the European Court. Even at this late stage, I suggest that the Government should have second thoughts and look carefully into fully implementing the directive.
  I am particularly concerned about the lack of facilities for people who want to organise an election to put representatives in place. There is the question of a room being made available. It does not happen often, but one does get companies that do not recognise a trade union and are irresponsible. They might feel that they want to negotiate with a particular worker, perhaps to come up with an alternative scheme to make one group of people redundant as opposed to another. The company will offer that individual a room within the factory or the workplace in which to negotiate with his or her fellow employees, while someone else whom the management do not view so sympathetically will be told that they can negotiate outside the factory gate or in the yard.
  We want the regulations to spell out clearly the right of individuals to have the time to negotiate and to get a list of the people involved so that there can be a proper ballot. Without an electoral register, it is difficult to guarantee a fair vote. From the point of view of the employer, I should have thought that it was important to have a check list to enable him to say, "These are the things I have done. I am safe. I cannot lose in an industrial tribunal."
  The Minister says that he wants it all in regulations, but he wants finally to leave matters to the good sense of the people involved. It is that good sense that it is almost impossible to challenge in an industrial tribunal. I think that the Government will be in difficulty.
  On behalf of the Joint Committee, I must also point out that we are in a mess with statutory instruments resulting from European directives. In many ways, the directives

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  do little more than the long title of a Bill—perhaps, one could say that they go a little further and that one gets the first explanatory clause as well. A great deal of the material that would normally form legislation now goes into statutory instruments, which cannot be amended. We must consider carefully whether new procedures are necessary to deal with regulations that come from European directives. I suggest that the Government could study regulations such as these to try to find some new procedure.
  I must point out to my hon. Friend the Member for Makerfield (Mr. McCartney), who is to reply on behalf of the Opposition, that I am concerned, when we get a Labour Government, which is not far away, that the House will have a limited amount of time for primary legislation. There is a premium, therefore, on ensuring that, in the first 100 days of a Labour Government, we get on with doing things by regulation.
  I hope that my hon. Friend will be able to say that he has examined the regulations—he now has a long list of all their defects—and will quickly be able to come forward with a replacement regulation that would put back the things that are missing from the present regulations. I hope that he can give me that assurance, and say that we are doing the work to make sure that we have regulations ready to remedy the mistakes about which we have criticised the Government over the past few years.
  8.58 pm
  Mr. Piers Merchant: I am mainly concerned about the law on redundancy, of which these regulations are part, because, sadly, there are going to be a number of redundancies—perhaps a large number— at the biggest employer in Beckenham. The House will remember how, last year, the large pharmaceutical company Glaxo took over Wellcome. The biggest employer in Beckenham is the Wellcome research laboratories at Langley Park. As part of the rationalisation that followed the takeover, Glaxo decided to close the laboratory, with the loss of some 1,600—or perhaps slightly more—jobs.
  My first concern was for what would happen to the work force—whether those people would be made redundant or offered other jobs, and, if made redundant, what help they would be given. Like any hon. Member in the circumstances, I talked to the company and to trade union representatives. I also talked to other people in the work force who were not members of a trade union, so that I could get the view from all angles.
  I am pleased to be able to report that, at the moment, in so far as anything good can come from such a situation, the matter has been well handled by all those involved. Glaxo is a large, responsible company, which abides by its social obligations, and is doing the best it can to look after the workers who will no longer have jobs in Beckenham.
  A large number of workers have been transferred elsewhere. There has been thorough consultation over that—not only through official union and other channels, but individually, with every member of the work force— to try to find out what is best for them: whether it is best for them to be transferred, made redundant or to take early retirement, and, if they are to be made redundant, whether
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  some help can be given to them in, for example, setting up in business or retraining and moving to a different sort of job.
  That happens in the majority of cases where there are redundancies. Companies, perhaps sadly, are used to handling them, and go out of their way to ensure that there is thorough consultation. They accept their responsibilities to their former employees. They try to keep the number of redundancies to a minimum, and find alternatives for those who are made redundant.
  The truth, perhaps also sadly, is that there is a limited amount that can be done during consultation once redundancies are inevitable. Obviously, as much consultation as possible should occur; I thoroughly support that. However, we would be fooling ourselves if we imagined that that would cure the fundamental problem that resulted in the redundancies in the first place. Often, all the discussions can do is try to ease the passage and explain to those involved, if they did not already realise it, why the situation has come about.
  I speak as someone who has been a trade union convenor, and twice been in such a situation. I have also been on the other side of the fence, and realise what it is like to manage and the difficulties involved when the work force must be rationalised. I also speak as someone who has been made redundant twice—once in industry and once in 1987, when I was made redundant from this place. I might add that the people who made me redundant, my then constituents, did not consult me until election day.
  Sir Michael Grylls: I have listened carefully to my hon. Friend. Is it not the case that, the more Parliament or Europe imposes complicated social regulations—the intentions of which are good—on companies, the more redundancies may result? Firms find it difficult to compete when there is so much paperwork and bureaucracy. Their main competitors on the other side of the world do not have such difficulties. We are making a major own goal.
  Mr. Merchant: My hon. Friend is correct, except that I would say that it is not that such regulations "may" make more redundancies, but that they will. They would certainly prevent jobs from being created in the first place. Perhaps the most important thing when redundancy occurs is that there should be alternative jobs available to try to soak up those made redundant.
  The hon. Member for Oldham, West (Mr. Meacher) stereotyped Conservative Members' opinions by suggesting that we all supported companies, which we believed never did any wrong, and that we regarded trade unions as beasts, which were entirely evil. That was the impact of what he tried to say.
  I reject that, as I said in my intervention. I believe, and have always believed, that trade unions have played, and play, a very important role in industry. I felt wholeheartedly that the law needed reform, but even before that reform, I recognised that trade unions played an important role, which is why I was an active member of a trade union.
  The hon. Member for Oldham, West is stuck in the groove of the 1970s. That may make him feel nostalgic, and I hope he is happy in the groove, but it does not reflect today's world. He portrays an era when there was

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  perpetual confrontation in industrial relations. The main thrust of his speech related to a confrontation between a wicked employer who was trying to do down the work force that he was about to make redundant.
  In the vast majority of cases, that is not the position; employers desire full and proper consultation. In the worst case, they do so because it is in their interests to do so, to make the process easier, but in the best cases they do so because they recognise their responsibilities.
  The hon. Gentleman implies that company bosses would conspire to fix the consultation process by fixing the election of representatives of the work force. Why should they go to the trouble of doing so? In a sensitive redundancy position, the last thing any sensible employer wants is to stir up the animosity of the work force. I can imagine no better way of annoying the work force and making the redundancy more difficult than blatantly trying to fix the representatives' voice.
  The hon. Gentleman spoke of derecognition. Why should an employer who had recognised a trade union suddenly derecognise it during a difficult period in industrial relations, with impending redundancies? The suggestion is absurd. An employer who did not want to recognise trade unions would have derecognised the union long before that critical point was reached. The hon. Gentleman sinks into paranoia when he suggests that that is not so.
  The hon. Gentleman spoke as though, under the regulations, the company had the power to appoint the representative of the work force. As he well knows, that is not so—there must be elections. I do not understand how the employer could control the result of the free election that the regulations require.
  I believe that the hon. Gentleman wrongly interprets the impact of the regulations. I accept that, in unusual cases, an employer may choose to bypass trade union representation. Those cases are as follows.
  First, the employer may choose to bypass trade union representation when the trade union—or representatives of the trade union—obviously does not represent the employees. That happens occasionally, as the hon. Gentleman knows. In those circumstances, the regulations will help employees, by ensuring an alternative means of consultation.
  Secondly, the recognised trade union may represent only part of the work force. The employer may, on receiving representations from employees who are not members, decide that it is better to have an elected representative of the entire work force, instead of a representative of the trade union portion of it.
  Finally, there may have been severe confrontation between the employer and the trade union. The hon. Member for Oldham, West appeared to believe that severe confrontation was universal. In my opinion, it is rare. In such circumstances, the only way to achieve meaningful and positive consultation may be to bypass the trade union apparatus completely and hold an election of representatives from the part of the work force affected, purely for the purpose of consulting on redundancies. In those circumstances, the regulations would effectively protect employees' interests should that prove necessary.
  Finally, I refer to the question of independence, which the hon. Member for Oldham, West made great play of. I believe that the regulations contain sufficient
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  requirements to ensure that independent elections take place. My hon. Friend the Member for Shoreham (Mr. Stephen)—who has left the Chamber temporarily— quoted the regulations chapter and verse, but he did not refer to three very important aspects—the right not to suffer detriment, which is extended to all those who are elected to represent the work force; the time-off provisions; and the granting of provisions, such as telephones and office space, to elected representatives.
  Those measures will ensure that elected representatives are independent and that they cannot be intimidated or denied the means with which to represent the work force. That proves that the hon. Gentleman did not represent the situation fairly.
  The regulations are constructed in a flexible way, in accordance with the real industrial relations situation in Britain today. They represent a light touch in regulation terms, but why should we have more regulation than is necessary? That is not in anyone's interests. I think that the regulations generally strike the right balance, and I am therefore very happy to give them my full support.
  9.11pm
  Mr. Gordon Prentice: I have asked myself why we are having this debate this evening, and I have concluded that it is the product of an almost unprecedented vote in the Joint Committee on Statutory Instruments. As my hon. Friend the Member for Denton and Reddish (Mr. Bennett) said, the Committee usually operates on a consensual basis, trying to find common ground wherever possible. However, it divided on this issue—which is not a trivial matter. It was not maliciously invented by the Opposition, but flows from the considered advice provided by Speaker's Counsel.
  I shall begin by addressing the point that Conservative Members make incessantly. They recite the deregulation mantra: the Government have cut the red tape and freed small businesses from oppressive burdens. We hear that week in week out, month in month out, and year in year out.
  Mr. Gary Streeter: It is true.
  Mr. Prentice: I have considered the number of statutory instruments—like the one that we are considering this evening—that have passed through this place and I discovered that, in 1987, there were about 2,300 statutory instruments and in 1995 there were 3,300. I thank my hon. Friend the Member for Denton and Reddish for providing those figures. There has been an explosion in the number of statutory instruments, yet Conservative Members claim that they want to cut red tape. The much-trumpeted deregulation initiative is a damp squib; it is a mouse.
  I am serving on the Committee that is considering the Finance Bill, including the provisions relating to landfill tax. Much of that tax will be implemented by regulations and the Committee has received submissions from the Institute of Chartered Accountants—
  Mr. Deputy Speaker (Mr. Michael Morris): Order. I am sure that the Committee has received submissions from all sorts of people, but that is not terribly relevant to the debate this evening.
  Mr. Prentice: I shall move on, but I just wanted to make that point about the difference between reality and the rhetoric from the Conservative party.

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  We are here because of the advice that we received in the Joint Committee on Statutory Instruments from Speaker's Counsel. That advice was unequivocal. Mr. Mason told us that, in respect of the two judgments of the European Court, United Kingdom law—in a non-recognition situation—allowed an employer to frustrate the protection offered by the directives. That is not my understanding; it is from Speaker's Counsel.
  Speaker's Counsel had reservations on a whole raft of matters, and he was very critical. He was concerned about the duties on employers to organise the elections and he was also concerned about the absence of any duties on employers to those organising the elections. The Minister for Competition and Consumer Affairs talked eloquently about the rights that are conferred by the statutory instrument on elected representatives. However, the elected representatives do not materialise out of the ether. They must be elected. Who organises the elections? There is no duty imposed on employers to make time or rooms available or to give facilities to the people who organise the elections that produce the elected representatives. That may seem a very arcane point, but it is right at the heart of the debate.
  Another point that I wish to make was picked up by my hon. Friend the Member for Denton and Reddish. As he said, there is no certainty with the regulations. There is no judicial authority to which a tribunal can turn. The Minister was pressed on that point by my hon. Friend the Member for Oldham, West (Mr. Meacher), but he was incapable of citing the judicial authority to which tribunal members could turn. When we quizzed the civil servants at that extraordinary meeting of the Joint Committee on Statutory Instruments, they could not point to a judicial authority either. Speaker's Counsel could not point to any judicial authority. It will be left to the members of the industrial tribunal to lick their fingers and stick them in the air to determine whether an employer in a given situation may have acted unreasonably. There is no authority to guide the tribunal, and that is a very serious matter.
  The statutory instrument is another example of the deep antipathy that the Government have towards organised labour. It is frankly astonishing that the regulations should build in an either/or provision that, where there is a recognised trade union on site, the employer is allowed to set aside all the previous relationships that he has had with that recognised trade union and may consult a representative of the work force. That is absolutely bizarre.
  There is a massive chasm between the Government and the Opposition. The Government trumpet the virtues of non-recognition, but we would give everyone the right to be represented at the workplace by a recognised trade union.
  The consultation period is very short. For undertakings that employ fewer than 100 employees, it is only 30 days. That is no time at all, as anyone who has had experience of organising an election knows. That is a serious matter which has not been properly addressed.
  I address my next remarks to the hon. Members for Shoreham (Mr. Stephen), who is not in his place at the moment, and for Beckenham (Mr. Merchant), who touched on this point as well. Both hon. Members relied
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  on the virtues of sensible employers and could not imagine employers acting in a way that would get them hauled up before an industrial tribunal. In the magical, fantasy world they painted, employers would always behave reasonably. Real life is not like that and life outside the Bar of England is not like that.
  There are rogue employers; some in my constituency pay people derisory sums, such as £1 to £1.50 an hour. They employ, as I said earlier, people who are illiterate, people who are not at home with the English language and people who have hitherto lived a cosseted existence, such as Asian women. There are rogue employers and people need to be protected from them. Who must do the protecting? It must be Parliament. If we pass that responsibility to an industrial tribunal, which will have no guidance, we are not doing our job.
  9.20 pm
  Sir Michael Grylls: This debate has been valuable, and I hope that it will be widely reported because it lifts the veil—[HON. MEMBERS: "Where were you?"] I have heard a good deal of the debate which, once again, lifts the veil and reveals that we are dealing not with a reconstructed Labour party but with a Labour party that has the same old boring, irrelevant prejudices.
  Although the hon. Member for Oldham, West (Mr. Meacher) is an agreeable parliamentarian, I have to take him to task: he is not in the real world and he does not appear to represent the new Labour party; he is going back over the old stuff again. The debate also lifts the veil on what we could expect in the unlikely event of a Labour Government being elected. My hon. Friends may well roar with laughter; the prospect is such an absurdity that it is not worth spending 30 seconds discussing it. However, the country is entitled to know Labour's views, because people will have to make judgments.
  Horrors would come from the social chapter. The hon. Member for Pendle (Mr. Prentice) rightly talked about the fact that there was far too much legislation; I am with him on that. However, this Government are at least trying to deregulate. They may not be as successful as they should be, and I would like to them to do even more, but at least they are trying. A Labour Government would flood us with legislation and we would be up to here in paper and red tape. That may not matter too much in the House of Commons, because we are up to here anyway in paper and bumph, but it does matter in business. Hard-working firms throughout the country battle to win export orders and to compete against firms in countries outside the European Union that are not shackled by the social chapter, which shackles so many companies on the continent and from which our Government have, happily, saved Great Britain.
  The debate has lifted the veil. The statutory instrument is, of course, important, but the debate is even more important in showing what could happen. The statutory instrument is a sensible reaction to the two European Court of Justice decisions, and I am glad that there are exemptions for cases in which a small number of employees are made redundant. That will help smaller firms which, if they are to survive and to maintain work for the remaining employees, need to be quick on their feet—
  Mr. Meacher: In getting rid of their employees.
  Sir Michael Grylls: The hon. Gentleman has lifted a bit more of the veil—this is fascinating—by saying that firms would get rid of people.
  In the real world, if a firm suffers a setback and loses an order, it may have to reduce its work force. If it does not, it goes bust and all the employees lose their jobs. That is something that Labour has never understood and that is why the reforms carried out at the beginning of the 1980s by Lord Prior, when he was Secretary of State for Employment, were so important. They freed businesses— particularly small and medium-sized firms that need to be able to take people on and lay them off according to prevailing circumstances. It has been proved that, ultimately, flexibility leads to more, not fewer, jobs. Sometimes one has to take some medicine in order to get better.
  The House has had many debates about British Leyland. I remember when it had to get rid of people, but when it became Rover and was more efficient, it started taking people on. That is the real world of business, so we must not shackle people as Labour would do.
  We have had a valuable debate, because it has lifted the veil and showed British people what would happen if a Labour Government were elected. I end on an optimistic note, as nobody in the House or outside really believes that that will happen, but it is as well that we are warned.
  9.25 pm
  Mr. Ian McCartney: I must place it on record that the hon. Member for North-West Surrey (Sir M. Grylls) made a speech based on the debate in the House, but he was not in the Chamber throughout the debate. He criticised the speech of my hon. Friend the Member for Oldham, West (Mr. Meacher), yet he was not present to hear it. He said that Labour would flood the country with regulations on companies. Perhaps the hon. Gentleman should have done the House the courtesy of reading out a list of his own remunerations. He is flooded with directorships and other little earners outside the House, representing, I assume, some of the people who will benefit from the proposed regulations.
  The Minister's speech was more reminiscent of the Old Bailey than of the House. He ploughed on regardless of evidence and continued representing his client in the certain knowledge that his client was as guilty as hell.
  Mr. John M. Taylor: I am enjoying the spirit that the hon. Gentleman brings to the debate, but I must tell him that I have no right of audience at the Old Bailey.
  Mr. McCartney: Perhaps a Labour Government will deregulate and make sure that the hon. Gentleman has that right. It would give him something to do after the next election.
  The Minister said that his deregulation formula was four times blessed. One could take that seriously if one had not seen the Government's record on burdens on business. They have produced record levels of bankruptcy among small businesses. The Deputy Prime Minister practised late payment of bills, as he boasted recently, and that can lead to companies going bust. The Government refused to take action on bank charges, although the banks have ripped hundreds of millions of pounds out of the system at the expense of businesses. The Government have done nothing about the crippling record increases in
  228
  unified business rates and have lumbered small businesses with the costs of implementing statutory sick pay legislation. The Government are no friend of small business and nor are the regulations, as I shall explain.
  My hon. Friend the Member for Leicester, South (Mr. Marshall) made some telling points about the printing industry and the necessity for the regulations to set out a fair method of electing workers' representatives—an issue that has been avoided. He made another fair point, on which the Minister failed to give any assurance, concerning the employer's neutrality during the process of a ballot. The Minister failed to respond to points raised by the Speaker's Counsel and other serious complaints about the flaws in the regulations.
  The hon. Member for Shoreham (Mr. Stephen) is not in his place. I am not surprised that he took part in the debate, as he may be made redundant at the next election. I am surprised, however, that he did not remain to hear the end of the debate, as he made allegations about employment and trade union rights. He missed the point that we are debating not trade union rights but employees' rights that can be facilitated, if they wish, through a trade union of their choice. The regulations try to prevent that from happening.
  The hon. Gentleman made another amazing contribution—perhaps it had something to do with the fact that the Conservative party has been in power for 17 years. He argued that the Government had the right to be above the law. He argued—cogently in his terms—that the legal profession and the courts had no right to determine whether the Government were acting within the law in respect of the legislation before the House. That was an incredible attack—after 17 years of Conservative Government, it is not the first one from a Conservative Member. Conservative Members are so arrogant about power that they believe in dismantling our constitution, under which the judiciary is independent. That independence should be jealously guarded and attacks on it, whether from wild Back Benchers or from Ministers, should be rejected. We utterly reject the notion that this Government or any other Government can be above the law.
  My hon. Friend the Member for Denton and Reddish (Mr. Bennett) made telling points on behalf of his constituents, particularly employers. He put the employers' case for social partnership and made an important point about the deficiencies in the regulations. He spoke of the uncertainty for employers, even those who want to act reasonably and to co-operate. The regulations fail to give them the appropriate guidance.
  My hon. Friend made the most damning attack on the Government in relation to the Speaker's Counsel's opinion and he made a sensible suggestion which I hope the Minister will take up with his colleagues. My hon. Friend suggested that we should look at regulations and how we introduce them in the House. Many hon. Members are frustrated by the system which sometimes undermines Members' rights to scrutinise legislation.
  My hon. Friend also asked about what we, as an Opposition, would do. I can assure him that we are working seven days—and seven nights—a week preparing for government. We are considering all types of legislation, including primary legislation, to ensure that an incoming Labour Government are not only prepared to govern but understand the priorities for government in terms of social partnership, and the sort of legislation to

  229
  introduce to ensure minimum standards at work and the co-operation needed between employers and employees in developing the economy, both here and in Europe.
  The hon. Member for Beckenham (Mr. Merchant) made an interesting contribution about the effects in his constituency of the merger mania which has become a plague in substantial parts of the United Kingdom economy. As a consequence of that merger mania, thousands of well-paid, well-established jobs have been stripped out as part of short-term measures to pay for the acquisition costs in different sectors of the economy.
  One of the most telling points that the hon. Gentleman made involved the consultation programme introduced by a company in his constituency. In consultation with trade union representatives, it set up a retraining programme, a relocation programme, a self-employment programme and an early retirement programme that ensured that anyone retiring early would not find himself or herself in abject poverty. That is precisely what the court ruling in Europe was supposed to be about—it was supposed to facilitate such a process, not as a one-off but as a matter of course to deal with all aspects of redundancy negotiations. Although he did not intend to do so, the hon. Gentleman's contribution supported the arguments so eloquently set out by my hon. Friend the Member for Oldham, West.
  The Minister failed to give a detailed response to the opinion of the Speaker's Counsel and others about flaws in the regulations; instead, he ploughed on, on the basis that the Government are likely to have to return to the court on this subject. They are prepared to defend themselves in court—that is not an unusual practice for a Government who regularly find themselves before the European Court or courts in this country owing to their failure to act within the law. The hon. Member for Shoreham, although a radical, right-wing Back Bencher, made comments on that subject with which Ministers agree and in which they believe. They believe that they are above the law, so they are not prepared to take the advice of those who advise the Joint Committee on Statutory Instruments, those who advise the European Commissioner, or, indeed, European Court judgments.
  The Minister is arrogant in another way: he decided that the consultation process on the introduction of the regulations would be private. He decided that it was not to be reported to the House or to individual Members of Parliament. Indeed, he wrote to me and refused me access to the consultation process. One thing that he could not refuse me was access to the organisations that participated. I contacted them by letter and telephone, and the overwhelming majority were astonished to learn that the consultation was not public. They thought that the reason for giving a view—whether it was pro-Government, anti-Government or a mixture—was to give Members of Parliament an understanding of what the situation should be in the workplace regarding the European ruling. They were amazed and astonished that the Minister had refused me access. No one refused me a copy of the submissions, and when I received them it became clear why the consultation was not made public.
  Mr. John M. Taylor: I do not know what the hon. Gentleman is talking about.
  Mr. McCartney: Of course the Minister does not, because he does not understand his job. That was clear from his speech earlier.
  The Minister signed the letter. Perhaps he was ill advised in not providing information. It was a personal letter. He took time out from his busy day to ensure that neither the House nor I could have access to the consultation process. I shall give two examples to give hon. Members the flavour of the independent advice that the Minister and his Department failed to put before the House, and which they did not want the House to see.
  The first letter is from the Advisory, Conciliation and Arbitration Service, which is an independent body, a tripartite organisation, protected by law, and which represents employers and employees. It was set up by statute of the House to advise the Government and industry on procedures to improve industrial relations and to resolve industrial relations problems. It wrote to the Minister on 2 May 1995, and said:
  "The Council views with some concern the requirement ߪ of the proposal for employers to consult, at their choice ߪ 'either a recognised independent trade union or elected representative of the affected employees.' The Council felt that allowing employers such freedom of choice might well result in established and accepted procedures being overturned. In ACAS's experience such a consequence would not be conducive to good industrial relations."
  That was the independent advice that the Government had sought and received. They not only decided to ignore it. as my hon. Friend the Member for Sheffield, Brightside (Mr. Blunkett) said, but tried to suppress the information by not giving it to the House.
  Secondly, I received a letter—a very nice letter—from the Engineering Employers Federation, the voice of engineering, which responded to me immediately. This is what it said of the Government's position:
  "It is our view that proposed changes to the law do pose a number of new practical problems for many employers."
  So much for deregulation. The letter continued:
  "The Regulations will need to be clear and sufficient time will need to be given after the details of the Regulations are known but before they are brought into force to enable companies to understand the changes and to plan how they intend to comply with the new requirements."
  The Government did not do that, either. The letter stated:
  "Unless the Regulations are carefully drafted, they may result not only in increased litigation but also may adversely complicate and undermine existing employee relations practices."
  We cannot get any clearer than that.
  The EEF went on to say that the regulations should include a process to ensure that the balloting procedure is independent and can take place, to ensure that effective voting arrangements are available to employers and employees, to ensure that it is clear who can vote and to ensure the rights and duties of elected representatives in ballots.
  That is the suggestion of an employers' organisation, but it has not been included in the regulations. It has been ignored. Ministers, however, still parrot the fallacy that the regulations are, in fact, about deregulation—about removing burdens from industry. They are nothing of the sort; they are simply an ideological attack on organised labour and the right of individuals to be represented by that organised labour.
  The regulations have not secured the wholehearted support of industry, and on that basis I ask the Minister to withdraw them. Why did he reject the advice of ACAS

  231
  and the Engineering Employers Federation? Are not the regulations concerned with the deregulation of the United Kingdom's labour market, with a sweatshop Europe, with dragging down standards—imposing minimum standards as regards rights at work—with increased working hours, with low pay and with insecurity? Is all that not part and parcel of proposals that, over the past 10 years, have led us into three recessions?
  The Minister refused to appear before the Joint Committee considering the statutory instrument, choosing instead to hide behind his officials and let them face the music. They could not respond, either in principle or in detail, to the allegations and complaints made by the Committee; they simply said that, in all circumstances, an industrial tribunal would be available to individuals wishing to seek redress.
  We know that the tribunal system is experiencing a crisis. Tens of thousands of cases are awaiting consideration; in some areas, people may wait for six months. Equal access to tribunals does not exist, because there is no right to legal aid. Is the Minister suggesting that industrial tribunals should be the sole recourse for employees who wish to resolve a grievance? Will he return to the matter later, and announce financial provision to make that possible? If people are not represented by trade unions, they will have to meet the cost of tribunals from their own pockets—and they may already be in receipt of benefit, because their redundancies may already have taken effect.
  Is the Minister going to tell us, clearly and specifically, that the Government will change their policy and provide legal aid? I do not think that he will. If I am right, the issue of access to tribunals was no more than a smokescreen to get the legislation past the Joint Committee. The Government, however, could not get past either the members of the Committee or the cogent legal argument that their proposals were flawed.
  It is interesting to note that nearly 8.5 million people have been unemployed at least once since the last general election. Since the election of the present Prime Minister in November 1990, 11 million people in England alone have been unemployed at least once. The Government see unemployment and redundancy as a key element of their economic strategy. The regulations are intended to do no more than facilitate the continuation of that strategy, and their proposals for deregulation.
  The Government will not get away with this. Either they will be forced to go back to court and defend their position, and lose—as they are likely to—or it will be up to an incoming Labour Government to resolve the issue, as we shall. No intellectual, moral, economic or social case can be made to exempt 96 per cent. of employers in Britain from allowing employees access to consultation— allowing them their minimum rights—in the event of redundancy. It flies in the face of the European Court ruling and puts up two fingers to that court.
  The threshold in the Government's proposal negates the court's proposals, which contained the simple proposition that, when a redundancy situation exists, employees are entitled to a minimum standard of representation, and that that representation and consultation are about an amelioration of the redundancies to take place. They also aimed to put in place an agreement with employees to facilitate a reduction in redundancies, retraining or
  232
  relocation—all the things that the hon. Member for Beckenham set out in his speech on behalf of the Government.
  The Government's proposal negates that responsibility. As a consequence, they will again face being a lawbreaker instead of a lawmaker. Whether it be the Secretary of State for the Home Department, for Trade and Industry, for Social Security or for Scotland, Cabinet members end up before the courts as lawbreakers. They have brought the House into contempt.
  An incoming Labour Government will rectify that position at the next general election. If the Government will not give people appropriate opportunities to have discussions on redundancies, at the next general election, it will be Conservative Members who will be made redundant. We will have a Government in place who not only give people basic rights but have an economic policy that gets rid of redundancies and starts producing jobs.
  9.45 pm
  Mr. John M. Taylor: With the leave of the House, in a breathless and breathtaking winding-up speech, the hon. Member for Makerfield (Mr. McCartney) asked me why I had not slavishly followed some selected employer representative. He then hopelessly exaggerated the improving process times of industrial tribunals. He gave us a clear glance of old Labour in all its bitter fulmination and then asked me about the consultation process. A copy of the Department's consultation paper was placed in the Library of the House. Perhaps he cannot find the Library. The replies informed the Government in drafting the regulations—that was the purpose of the consultation. As a matter of courtesy to the people consulted, I did not send him copies of their responses, but of course he could have approached them and asked them for a copy. I am entirely happy that he should have done so.
  Hon. Members have referred to the advice of the Speaker's Counsel. Whatever advice the Joint Committee on Statutory Instruments may have received, it has not drawn that advice to the House's attention. The courts will decide whether the regulations implement the judgments. We are confident that they will decide in our favour.
  The hon. Member for Pendle (Mr. Prentice) asked about judicial authority. If by judicial authority he means case law, there can be no case law—certainly not yet— because this is new law on employee representatives. If he means legal authority, the text of the regulations is sufficient, as my hon. Friend the Member for Shoreham (Mr. Stephen) ably explained. They clearly provide that the employer must consult representatives and include sanctions if he does not.
  My hon. Friend the Member for North-West Surrey (Sir M. Grylls) wanted more deregulation and, separately, more glimpses of old Labour so that the electorate would not be beguiled. In short, he wanted to save small firms and save England too. Even so, he concluded optimistically and reassuringly, at least in my opinion.
  My hon. Friend the Member for Beckenham (Mr. Merchant) spoke cogently—as he always does—and vividly about his qualifications to speak on these matters. He lent to the debate special authority, sympathy and insight in his sharply focused approval of the Government's proposals.
  The hon. Member for Leicester, South (Mr. Marshall) implied that he thought that former representatives do not have protection. I must tell him that former

  233
  representatives are protected under the regulations. I am sure that if he looks carefully at the wording of regulations 12 and 14, he will see that protection against dismissal and detriment short of dismissal applies not only to candidates and representatives, but to former candidates and representatives, if their dismissal or the detriment suffered relates to their status or activities while acting as representatives.
  The hon. Members for Oldham, West (Mr. Meacher) and for Leicester, South both asked me to summarise for them the gist of the European Court judgments. The main point arising from those judgments is that there should be consultation of employees' representatives regardless of whether there is a recognised trade union. Most hon. Members who take an interest know that at present the only consultation required is consultation with a recognised trade union, if there is one. If there is none, there is no current obligation to consult at all. That is the deficiency in our law—laws that were put on the statute book by the Labour party. The Government are now putting that right.
  My hon. Friend the Member for Shoreham developed his arguments lucidly, as always, not least on the subject of judicial review. His remarks will merit rereading tomorrow, and what he said about the right of employees to challenge the way in which an election was conducted, was exactly correct.
  The hon. Member for Denton and Reddish (Mr. Bennett) has played a particular part in the deliberations outside the Chamber, not least in the Joint Committee. Tonight he spoke about employers in his constituency, and described how careful and well-conducted industrial relations had often resulted in short-term working rather than lay-offs, and how both employers and employees had benefited from that mature form of industrial relations. He took me with him there, and I understand and respect what he said.
  The hon. Gentleman spoke in favour of certainty. So do I, but there our convergence falters. We agree that there was uncertainty, but on behalf of the Government I say that the regulations before us properly remove that uncertainty.
  It has been said both in the debate and outside the Chamber that the Government oppose trade unions. That is not the case. We are neither for nor against unions. Just as we believe that every individual employee must have the right to choose freely whether to be a union member, so we believe that every employer should be free to decide whether to deal with trade unions. That was not so under the Labour Government's legislation, which both permitted and encouraged the closed shop, and enabled unions to compel employers to recognise them. That remains an area in which there are clear differences between the policies of the Government and those of the Opposition.
  Since 1980 we have implemented a series of reforms to industrial relations and trade union law to correct the previous imbalance of power between unions and employers, and between unions and their own members.
  I remind hon. Members that it is as a result of the Government's reforms that workers are free to choose whether to join a union; that secondary industrial action and flying pickets are unlawful; that trade union
  234
  members have the right to vote in postal ballots on industrial action, the election of leaders and the establishment or maintenance of political funds; that trade unions rather than their officers are legally accountable for their actions and can be sued if they act unlawfully; and that employers can no longer be forced to recognise trade unions if they do not believe that it is in the interests of their business to do so. At every stage those reforms were bitterly opposed by the Labour party and the union movement.
  I am happy to say that strikes, whether official or unofficial, no longer dog our economy as they did in the 1960s and 1970s. The Government's trade union reforms have transformed industrial relations, and I make no apology for quoting some more statistics. The average number of working days lost for every 1,000 employees between 1975 and 1979 was 512. Between 1990 and 1994, it was 37—a reduction of 93 per cent. There were only 205 recorded strikes in 1994—the lowest annual total since records began more than 100 years ago.
  That transformation in our industrial relations has generated greater confidence in the economy. That has attracted inward investment, which has of course brought jobs and opportunities. During last year alone, almost 37,000 new jobs were created through inward investment, while more than 51,000 jobs were safeguarded. Better industrial relations and the positive climate for growth and enterprise that we have created have brought more work and better opportunities for the people of this country— whether they are trade union members or not—and strengthened the economy.
  I should not need to add that the Labour party has voted against every reform that we have introduced, just as it will vote to revoke the regulations. It was no more right about the other issues than it is about this one.
  We have had an interesting and instructive debate— for some of the time. It has been interesting not only because of what has been said, but for what was not said by the hon. Member for Makerfield and other Opposition Members. We have heard no more than might have been predicted in a Trades Union Congress brief on the issue.
  As I said, I would not expect any meeting of minds on some points for we approach such matters from fundamentally different standpoints. I would not expect Opposition Members to welcome a provision that allows an employer freedom of choice on whether to consult through a trade union or through representatives elected by employees themselves. I did not expect Opposition Members to approve measures designed to minimise the statutory burdens on UK businesses to enable them to remain competitive and create jobs.
  Nor did I expect to hear—although I challenge him to tell us now—how the hon. Member for Makerfield would give effect to the judgments. Would the hon. Gentleman return to the practices of the past? Is he a representative of old Labour? Looking down the bench below the Gangway, I see that there are rather a lot of old Labour members in the Chamber. Where the others? Where is new Labour? Where are the stakeholders? We have the old stakeposts here tonight, and I think that they will win the battle for the heart and soul of the Labour party.
  Question put:—
  The House divided: Ayes 258, Noes 295.

  Division No. 44]

  [10.00 pm

  AYES

  Adams, Mrs Irene

  Eagle, Ms Angela

  Ainger, Nick

  Eastham, Ken

  Ainsworth, Robert (Cov'try NE)

  Etherington, Bill

  Allen, Graham

  Evans, John (St Helens N)

  Anderson, Donald (Swansea E)

  Ewing, Mrs Margaret

  Anderson, Ms Janet (Ros'dale)

  Fatchett, Derek

  Armstrong, Hilary

  Faulds, Andrew

  Ashton, Joe

  Field, Frank (Birkenhead)

  Austin-Walker, John

  Fisher, Mark

  Banks, Tony (Newham NW)

  Flynn, Paul

  Barron, Kevin

  Foster, Rt Hon Derek

  Battle, John

  Foster, Don (Bath)

  Bayley, Hugh

  Foulkes, George

  Beckett, Rt Hon Margaret

  Fyfe, Maria

  Beith, Rt Hon A J

  Galbraith, Sam

  Bell, Stuart

  Galloway, George

  Benn, Rt Hon Tony

  Gapes, Mike

  Bennett, Andrew F

  George, Bruce

  Bermingham, Gerald

  Gerrard, Neil

  Berry, Roger

  Gilbert, Rt Hon Dr John

  Blunkett, David

  Godman, Dr Norman A

  Boateng, Paul

  Godsiff, Roger

  Bradley, Keith

  Golding, Mrs Llin

  Bray, Dr Jeremy

  Grant Bernie (Tottenham)

  Brown, Gordon (Dunfermline E)

  Griffiths, Nigel (Edinburgh S)

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

  Griffiths, Win (Bridgend)

  Bruce, Malcolm (Gordon)

  Grocott, Bruce

  Burden, Richard

  Gunnell, John

  Byers, Stephen

  Hall, Mike

  Caborn, Richard

  Hanson, David

  Callaghan, Jim

  Hardy, Peter

  Campbell, Mrs Anne (C'bridge)

  Harman, Ms Harriet

  Campbell, Menzies (Fife NE)

  Harvey, Nick

  Campbell, Ronnie (Blyth V)

  Hattersley, Rt Hon Roy

  Campbell-Savours, D N

  Henderson, Doug

  Canavan, Dennis

  Heppell, John

  Cann, Jamie

  Hill, Keith (Streatham)

  Carlile, Alexander (Montgomery)

  Hinchliffe, David

  Chidgey, David

  Hodge, Margaret

  Church, Judith

  Hoey, Kate

  Clapham, Michael

  Hogg, Norman (Cumbernauld)

  Clark, Dr David (South Shields)

  Home Robertson, John

  Clarke, Eric (Midlothian)

  Hoon, Geoffrey

  Clarke, Tom (Monklands W)

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

  Clelland, David

  Howarth, George (Knowsley North)

  Coffey, Ann

  Howells, Dr Kim (Pontypridd)

  Cohen, Harry

  Hoyle, Doug

  Connarty, Michael

  Hughes, Robert (Aberdeen N)

  Cook, Frank (Stockton N)

  Hughes, Roy (Newport E)

  Corbett, Robin

  Hughes, Simon (Southwark)

  Corbyn, Jeremy

  Hutton, John

  Corston, Jean

  Illsley, Eric

  Cousins, Jim

  Ingram, Adam

  Cox, Tom

  Jackson, Glenda (H'stead)

  Cummings, John

  Jackson, Helen (Shef'ld, H)

  Cunliffe, Lawrence

  Jamieson, David

  Cunningham, Jim (Covy SE)

  Janner, Greville

  Cunningham, Roseanna

  Jones, Barry (Alyn and D'side)

  Dalyell, Tam

  Jones, leuan Wyn (Ynys Môn)

  Darling, Alistair

  Jones, Jon Owen (Cardiff C)

  Davidson, Ian

  Jones, Lynne (B'ham S O)

  Davies, Bryan (Oldham C'tral)

  Jones, Martyn (Clwyd, SW)

  Davies, Chris (L'Boro & S'worth)

  Jones, Nigel (Cheltenham)

  Davies, Rt Hon Denzil (Llanelli)

  Jowell, Tessa

  Davies, Ron (Caerphilly)

  Kaufman, Rt Hon Gerald

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

  Keen, Alan

  Denham, John

  Kennedy, Jane (L'pool Br'dg'n)

  Dewar, Donald

  Khabra, Piara S

  Dixon, Don

  Kilfoyle, Peter

  Dobson, Frank

  Kirkwood, Archy

  Donohoe, Brian H

  Liddell, Mrs Helen

  Dowd, Jim

  Litherland, Robert

  Dunwoody, Mrs Gwyneth

  Livingstone, Ken

  236

  Lloyd, Tony (Stretford)

  Radice, Giles

  Llwyd, Elfyn

  Randall, Stuart

  Loyden, Eddie

  Raynsford, Nick

  Lynne, Ms Liz

  Reid, Dr John

  McAllion, John

  Rendel, David

  McAvoy, Thomas

  Robertson, George (Hamilton)

  McCartney, Ian

  Robinson, Geoffrey (Co'try NW)

  Macdonald, Calum

  Roche, Mrs Barbara

  McFall, John

  Rogers, Allan

  McKelvey, William

  Rooker, Jeff

  Mackinlay, Andrew

  Rooney, Terry

  McLeish, Henry

  Ross, Ernie (Dundee W)

  McMaster, Gordon

  Rowlands, Ted

  MacShane, Denis

  Ruddock, Joan

  McWilliam, John

  Sedgemore, Brian

  Madden, Max

  Sheerman, Barry

  Maddock, Diana

  Sheldon, Rt Hon Robert

  Mahon, Alice

  Shore, Rt Hon Peter

  Mandelson, Peter

  Short, Clare

  Marek, Dr John

  Simpson, Alan

  Marshall, David (Shettleston)

  Skinner, Dennis

  Marshall, Jim (Leicester, S)

  Smith, Andrew (Oxford E)

  Martin, Michael J (Springburn)

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

  Martlew, Eric

  Smith, Llew (Blaenau Gwent)

  Maxton, John

  Soley, Clive

  Meacher, Michael

  Spellar, John

  Meale, Alan

  Squire, Rachel (Dunfermline W)

  Michael, Alun

  Steinberg, Gerry

  Michie, Bill (Sheffield Heeley)

  Stott, Roger

  Michie, Mrs Ray (Argyll & Bute)

  Strang, Dr. Gavin

  Milburn, Alan

  Straw, Jack

  Miller, Andrew

  Sutcliffe, Gerry

  Mitchell, Austin (Gt Grimsby)

  Taylor, Mrs Ann (Dewsbury)

  Moonie, Dr Lewis

  Taylor, Matthew (Truro)

  Morgan, Rhodri

  Thompson, Jack (Wansbeck)

  Morley, Elliot

  Touhig, Don

  Morris, Rt Hon Alfred (Wy'nshawe)

  Trickett, Jon

  Morris, Estelle (B'ham Yardley)

  Turner, Dennis

  Mudie, George

  Wallace, James

  Mullin, Chris

  Walley, Joan

  Murphy, Paul

  Wardell, Gareth (Gower)

  Oakes, Rt Hon Gordon

  Wareing, Robert N

  O'Brien, Mike (N W'kshire)

  Watson, Mike

  O'Brien, William (Normanton)

  Wicks, Malcolm

  O'Hara, Edward

  Wigley, Dafydd

  Olner, Bill

  Williams, Rt Hon Alan (Sw'n W)

  O'Neill, Martin

  Williams, Alan W (Carmarthen)

  Orme, Rt Hon Stanley

  Wilson, Brian

  Parry, Robert

  Winnick, David

  Pearson, Ian

  Wise, Audrey

  Pickthall, Colin

  Worthington, Tony

  Pike, Peter L

  Wray, Jimmy

  Pope, Greg

  Wright Dr Tony

  Prentice, Bridget (Lew'm E)

  Young, David (Bolton SE)

  Prentice, Gordon (Pendle)

  Primarolo, Dawn

  Tellers for the Ayes:

  Purchase, Ken

  Mr. Malcolm Chisholm and Mr. Joe Benton.

  Quin, Ms Joyce

  NOES

  Ainsworth, Peter (East Surrey)

  Bates, Michael

  Aitken, Rt Hon Jonathan

  Batiste, Spencer

  Alexander, Richard

  Beggs, Roy

  Alison, Rt Hon Michael (Selby)

  Bellingham, Henry

  Allason, Rupert (Torbay)

  Bendall, Vivian

  Ancram, Michael

  Beresford, Sir Paul

  Arbuthnot, James

  Biffen, Rt Hon John

  Arnold, Jacques (Gravesham)

  Body, Sir Richard

  Ashby, David

  Booth, Hartley

  Atkins, Rt Hon Robert

  Boswell, Tim

  Atkinson, David (Bour'mouth E)

  Bottomley, Peter (Eltham)

  Atkinson, Peter (Hexham)

  Bottomley, Rt Hon Virginia

  Baker, Nicholas (North Dorset)

  Bowden, Sir Andrew

  Baldry, Tony

  Bowis, John

  Banks, Matthew (Southport)

  Boyson, Rt Hon Sir Rhodes

  Banks, Robert (Harrogate)

  Brandreth, Gyles

  237

  Brazier, Julian

  Gardiner, Sir George

  Bright, Sir Graham

  Garnier, Edward

  Brooke, Rt Hon Peter

  Gill, Christopher

  Brown, M (Brigg & Cl'thorpes)

  Gillan, Cheryl

  Browning, Mrs Angela

  Goodlad, Rt Hon Alastair

  Bruce, Ian (Dorset)

  Goodson-Wickes, Dr Charles

  Budgen, Nicholas

  Gorman, Mrs Teresa

  Burt, Alistair

  Gorst, Sir John

  Butcher, John

  Grant, Sir A (SW Cambs)

  Butler, Peter

  Greenway, Harry (Ealing N)

  Butterfill, John

  Greenway, John (Ryedale)

  Carlisle, John (Luton North)

  Griffiths, Peter (Portsmouth, N)

  Carlisle, Sir Kenneth (Lincoln)

  Grylls, Sir Michael

  Carrington, Matthew

  Gummer, Rt Hon John Selwyn

  Carttiss, Michael

  Hague, Rt Hon William

  Cash, William

  Hamilton, Rt Hon Sir Archibald

  Channon, Rt Hon Paul

  Hamilton, Neil (Tatton)

  Chapman, Sir Sydney

  Hampson, Dr Keith

  Churchill, Mr

  Hanley, Rt Hon Jeremy

  Clappison, James

  Hannam, Sir John

  Clark, Dr Michael (Rochford)

  Hargreaves, Andrew

  Clarke, Rt Hon Kenneth (Ru'clif)

  Harris, David

  Clifton-Brown, Geoffrey

  Hawkins, Nick

  Coe, Sebastian

  Hawksley, Warren

  Colvin, Michael

  Hayes, Jerry

  Congdon, David

  Heald, Oliver

  Conway, Derek

  Heath, Rt Hon Sir Edward

  Coombs, Anthony (Wyre For'st)

  Heathcoat-Amory, David

  Cope, Rt Hon Sir John

  Hendry, Charles

  Cormack, Sir Patrick

  Heseltine, Rt Hon Michael

  Couchman, James

  Higgins, Rt Hon Sir Terence

  Cran, James

  Hill, James (Southampton Test)

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

  Hogg, Rt Hon Douglas (G'tham)

  Curry, David (Skipton & Ripon)

  Horam, John

  Davis, David (Boothferry)

  Hordern, Rt Hon Sir Peter

  Day, Stephen

  Howell, Rt Hon David (G'dford)

  Deva, Nirj Joseph

  Howell, Sir Ralph (N Norfolk)

  Devlin, Tim

  Hughes, Robert G (Harrow W)

  Dicks, Terry

  Hunt, Rt Hon David (Wirral W)

  Dorrell, Rt Hon Stephen

  Hunt, Sir John (Ravensbourne)

  Douglas-Hamilton, Lord James

  Hunter, Andrew

  Dover, Den

  Jack, Michael

  Duncan, Alan

  Jenkin, Bemard

  Duncan-Smith, lain

  Jessel, Toby

  Dunn, Bob

  Johnson Smith, Sir Geoffrey

  Durant, Sir Anthony

  Jones, Gwilym (Cardiff N)

  Eggar, Rt Hon Tim

  Jones, Robert B (W Hertfdshr)

  Elletson, Harold

  Jopling, Rt Hon Michael

  Emery, Rt Hon Sir Peter

  Kellett-Bowman, Dame Elaine

  Evans, David (Welwyn Hatfield)

  Key, Robert

  Evans, Jonathan (Brecon)

  King, Rt Hon Tom

  Evans, Nigel (Ribble Valley)

  Kirkhope, Timothy

  Evans, Roger (Monmouth)

  Knapman, Roger

  Evennett, David

  Knight, Mrs Angela (Erewash)

  Faber, David

  Knight, Rt Hon Greg (Derby N)

  Fabricant, Michael

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

  Fenner, Dame Peggy

  Knox, Sir David

  Field, Barry (Isle of Wight)

  Kynoch, George (Kincardine)

  Fishburn, Dudley

  Lait, Mrs Jacqui

  Forman, Nigel

  Lamont, Rt Hon Norman

  Forsyth, Rt Hon Michael (Stilling)

  Lang, Rt Hon Ian

  Forsythe, Clifford (S Antrim)

  Lawrence, Sir Ivan

  Forth, Eric

  Leigh, Edward

  Fowler, Rt Hon Sir Norman

  Lennox-Boyd, Sir Mark

  Freeman, Rt Hon Roger

  Lester, Sir James (Broxtowe)

  French, Douglas

  Lidington, David

  Fry, Sir Peter

  Lilley, Rt Hon Peter

  Gale, Roger

  Lloyd, Rt Hon Sir Peter (Fareham)

  Gallie, Phil

  Lord, Michael

  238

  Luff, Peter

  Smith, Sir Dudley (Warwick)

  Lyell, Rt Hon Sir Nicholas

  Smith, Tim (Beaconsfield)

  MacGregor, Rt Hon John

  Soames, Nicholas

  MacKay, Andrew

  Spencer, Sir Derek

  Maclean, Rt Hon David

  Spicer, Sir James (W Dorset)

  McLoughlin, Patrick

  Spicer, Sir Michael (S Worcs)

  McNair-Wilson, Sir Patrick

  Spink, Dr Robert

  Maitland, Lady Olga

  Spring, Richard

  Malone, Gerald

  Sproat, Iain

  Mans, Keith

  Squire, Robin (Hornchurch)

  Marland, Paul

  Stanley, Rt Hon Sir John

  Marshall, John (Hendon S)

  Steen, Anthony

  Marshall, Sir Michael (Arundel)

  Stephen, Michael

  Martin, David (Portsmouth S)

  Stern, Michael

  Mates, Michael

  Stewart, Allan

  Mawhinney, Rt Hon Dr Brian

  Streeter, Gary

  Merchant, Piers

  Sumberg, David

  Mills, Iain

  Sweeney, Walter

  Mitchell, Andrew (Gedling)

  Sykes, John

  Molyneaux, Rt Hon Sir James

  Tapsell, Sir Peter

  Monro, Rt Hon Sir Hector

  Taylor, Ian (Esher)

  Montgomery, Sir Fergus

  Taylor, John M (Solihull)

  Needham, Rt Hon Richard

  Taylor, Sir Teddy (Southend, E)

  Neubert, Sir Michael

  Temple-Morris, Peter

  Newton, Rt Hon Tony

  Thomason, Roy

  Nicholls, Patrick

  Thompson, Sir Donald (C'er V)

  Nicholson, David (Taunton)

  Thompson, Patrick (Norwich N)

  Norris, Steve

  Thornton, Sir Malcolm

  Onslow, Rt Hon Sir Cranley

  Thurnharn, Peter

  Oppenheim, Phillip

  Townend, John (Bridlington)

  Ottaway, Richard

  Townsend, Cyril D (Bexl'yh'th)

  Page, Richard

  Tracey, Richard

  Paice, James

  Tredinnick, David

  Patnick, Sir Irvine

  Trend, Michael

  Patten, Rt Hon John

  Trotter, Neville

  Pattie, Rt Hon Sir Geoffrey

  Twinn, Dr Ian

  Pawsey, James

  Vaughan, Sir Gerard

  Peacock, Mrs Elizabeth

  Viggers, Peter

  Pickles, Eric

  Waldegrave, Rt Hon William

  Porter, Barry (Wirral S)

  Walden, George

  Porter, David (Waveney)

  Walker, Bill (N Tayside)

  Portillo, Rt Hon Michael

  Waller, Gary

  Powell, William (Corby)

  Rathbone, Tim

  Ward, John

  Redwood, Rt Hon John

  Wardle, Charles (Bexhill)

  Renton, Rt Hon Tim

  Waterson, Nigel

  Richards, Rod

  Watts, John

  Riddick, Graham

  Wells, Bowen

  Robathan, Andrew

  Whitney, Ray

  Roberts, Rt Hon Sir Wyn

  Whittingdale, John

  Robertson, Raymond (Ab'd'n S)

  Widdecombe, Ann

  Robinson, Mark (Somerton)

  Wiggin, Sir Jerry

  Roe, Mrs Marion (Broxbourne)

  Wilkinson, John

  Rowe, Andrew (Mid Kent)

  Willetts, David

  Rumbold, Rt Hon Dame Angela

  Wilshire, David

  Sackville, Tom

  Winterton, Mrs Ann (Congleton)

  Sainsbury, Rt Hon Sir Timothy

  Winterton, Nicholas (Macc'f'Id)

  Scott, Rt Hon Sir Nicholas

  Wolfson, Mark

  Shaw, David (Dover)

  Wood, Timothy

  Shaw, Sir Giles (Pudsey)

  Yeo, Tim

  Shephard, Rt Hon Gillian

  Young, Rt Hon Sir George

  Shepherd, Sir Colin (Hereford)

  Shepherd, Richard (Aldridge)

  Tellers for the Noes:

  Sims, Roger

  Mr. Simon Burns and Dr. Liam Fox.

  Skeet, Sir Trevor

  Question accordingly negatived.

  Frances Withers Home, Sutton Coldfield
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Knapman.]
  10.15 pm
  Sir Norman Fowler: The previous Adjournment debate that I initiated was about the Good Hope hospital in my constituency. I criticised the position at the hospital and argued, among other things, that more beds needed to be opened there. I am glad to report that that has been done, and almost everyone in the community has welcomed that—the sole exception being the Labour party's health spokesman, the hon. Member for Peckham (Ms Harman).
  I hope that the hon. Member for Peckham will take note of the issue that I draw attention to tonight—the future of a 40-bed residential home for elderly people, the Frances Withers home which, contrary to strong local feeling, the Labour-controlled Birmingham city council intends to close. It is a case, not of reducing beds, but of cancelling them and withdrawing care. Once that policy, which is in its last stages, has been implemented, no facilities will remain at the Frances Withers home for the elderly people who are there, or for any future residents from Sutton Coldfield and the rest of Birmingham.
  I was Secretary of State for Social Services for six years, and this is one of the most extraordinary cases that I have come across. The media are rightly used to becoming passionate about the health service. I hope that the television companies which frequently visit Good Hope hospital will visit the Frances Withers home and confirm what I am about to say. The impression has been given that the Frances Withers home is decrepit and run down, requiring hundreds of thousands of pounds to bring it up to standard. In fact it is a modern, purpose-built home, providing single rooms for all 26 current residents and with other single rooms available to bring it up to capacity. The home is below capacity only because new entrants are being refused.
  On entering for the first time, any visitor receives an impression of space. There are lounges on both floors and the atmosphere is self-evidently happy. The home, situated in a quiet part of Sutton Coldfield, is surrounded by gardens and has a good view of Sutton park. In other words, it is an ideal spot for a residential home for elderly people and, in the opinion of some people who have visited all the homes in Birmingham, it is one of the best homes in the city, if not the best. That makes the proposal to close that excellent home, with all the consequences that it will bring, all the more extraordinary. In my opinion, it is a policy of social vandalism.
  What does the closure of Frances Withers mean? First and foremost, residents who have lived there for several years will be moved from what they rightly describe as their home. They are very elderly men and women, almost all of whom are in their 80s and 90s. There is Alice who is 96, Mary who is 91 and Gregory and Jessie who are both 90. No one should doubt the trauma involved in moving people of that age.
  My mother died before Christmas, aged 93. She spent the last years of her life in residential and then in nursing care. As far as she was concerned, stability was essential. She would have been devastated had she been shuffled
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  about at that stage of her life. Fortunately, she was not, but the 26 people now staying at Frances Withers face that traumatic prospect.
  No one should doubt the strength of feeling of the relatives who are witnessing what is happening at Frances Withers. One wrote to me in the following terms:
  "I believe this to be a mean and heartless measure on the Council's part. For many of the pensioners residing at Frances Withers this is the only home they have known for several years and to move them elsewhere would be a sad and traumatic experience."
  The policy means distress for residents and relatives as the council breaks up an established home. It will also mean splitting up the excellent team of staff who work at Frances Withers, some of whom have been employed there since it opened in the early 1970s. The closure of Frances Withers is opposed by me and my team of Conservative councillors—Alan Rudge and John Hood. David Roy, the Lord Mayor, obviously steers clear of controversy, but he has also kept himself informed about that issue. The closure is also opposed by Unison, the union which represents the staff, and by a number of Labour councillors. In other words, the policy has very few friends.
  If the closure of the nursing home goes ahead, the supply of much-needed residential accommodation for elderly people in north Birmingham and the surrounding area will be permanently diminished. Apologists for the closure quietly suggest that demand for places in residential care is diminishing and that that is likely to continue, but that argument flies in the face both of present experience and of the estimates of future demand.
  Last Friday at my advice bureau I met relatives of Frances Withers residents who are deeply anxious about the future. I pay tribute to the way in which they have put their case. My next appointment was with another resident of Sutton Coldfield who was concerned about her mother who is almost 80. At the end of October her mother fell and broke her hip and she was admitted to Good Hope hospital on the same day. It was decided that she could not return home—her daughter had cared for her for the past 18 years—as she now needed a greater degree of care. It took no fewer than 95 days to find her an alternative place—during which time she waited in the same bed, in the same ward, at Good Hope hospital. I acknowledge that that was an exceptional case, but we would be foolish to ignore the warning.
  Mr. D. N. Campbell-Savours: Will the right hon. Gentleman give way?
  Sir Norman Fowler: Yes, I will, although the hon. Gentleman's knowledge of Sutton Coldfield and Birmingham is not exactly encyclopaedic.
  Mr. Campbell-Savours: I do not claim that it is. Has not the local authority said that it has to make so many closures because it does not have the resources to keep the facilities going?
  Sir Norman Fowler: I shall come to that point and I hope that the hon. Gentleman will be persuaded by what I have to say about it. I hope that he will not rely on that point, however, because it is a dud and invalid point.
  I was making a serious point. If the Frances Withers home is closed, the same will happen as happened to my constituent: beds in the local hospital at Good Hope will

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  be used for people who should be in residential care. That lady was kept in Good Hope hospital for no fewer than 95 days in a bed that could have been used for other patients. That is a disgrace. Doubtless, that is an exception and I do not claim that it is common, but the risk inherent in the council's policy is that such cases will become more and more common.
  I will deal now with the argument that the hon. Member for Workington (Mr. Campbell-Savours) raised. What arguments have been used to defend a policy which, frankly, I believe is indefensible? Money, of course, is one of the arguments used. Birmingham has a budget of £1.2 billion a year. In 1996–97, some £188 million will be available to spend on social services. That is an increase of £11.5 million over 1995–96, and an increase of almost £83 million on 1990–91.I simply cannot believe that, in that vast budget of Birmingham council, the only decision that can be taken to save money is to close a purpose-built—I emphasise purpose-built—20-year-old old people's home. If that is the case, the council should pack up and go home.
  Dr. Lynne Jones: Will the right hon. Gentleman give way?
  Sir Norman Fowler: I will not give way. The hon. Lady was not here at the beginning of the debate. If she wants to have an Adjournment debate on the situation in her area, she has opportunities to do so.
  When the press has asked about the policy, another argument has been advanced by the council spokesman. The press has been told about an estimated £530,000 that needs to be spent on refurbishments to meet the "1998 regulations". It has been suggested that they are European regulations—not so. It has been suggested that they are Government regulations—again, not so. Indeed, they are not regulations at all but a policy and a time scale that Birmingham council has itself decided to follow to make improvements to the home. It is, of course, sensible to improve physical standards in any home, and that should be done steadily year by year—councils should not allow spending to pile up so that they need to make a big investment all at once and have an enormous single bill— but there is no reason to set down an inflexible timetable.
  The Government's policy was set out in the ministerial introduction to "Home Life":
  "It will be for registration authorities individually to ensure that the code is applied positively and sensitively in a way that makes sense in local circumstances".
  Personally, I endorse those words entirely as I wrote them in conjunction with Lord Crickhowell, then Secretary of State for Wales. No one ever envisaged in a million years that a local authority would misuse guidance on best practice as an excuse for closing down a modern residential home.
  I am not talking about an ancient, decrepit building. The home was purpose built. No requirement has been laid down by the Government or anybody else that certain standards should be met by 1998. That is a rod that the council has devised for its own back. If the net result is to close down a modern building, that is bureaucracy gone mad. Perhaps my hon. Friend the Under-Secretary of State for Health will confirm that there is nothing in Government regulations that would force the spending of £530,000 by 1998.
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  I do not think any more of the further argument that has been made—that residential provision for the elderly is above average in the Sutton Coldfield and Erdington areas. That is a fascinating statistic, but it is next to meaningless because the people there do not always come from Sutton Coldfield and Erdington—certainly, as I well know, their relatives come from all over Birmingham.
  I believe that the policy is wrong because of the potentially disastrous impact that it will have on present residents. I believe that it is wrong because of the effect that it will have on future residents. I believe that it is wrong because it is bound to have the effect of increasing the pressure on local hospitals. And it is wrong because many of the reasons that have been given as justification for it are misleading.
  We now know that alternative uses for Frances Withers are being actively considered. A letter from the head of acquisitions and valuation services to the social services department says:
  "I should be grateful if you could kindly let me have some indication of when vacant possession of the premises is likely to be obtained and your thoughts on their future use, particularly with regard to the need to satisfy your committee's policy regarding the disposal of surplus homes."
  Another letter at the end of October from the social services department notes that the North Birmingham Mental Health trust, in partnership with MIND— the National Association for Mental Health—is among the organisations that have expressed interest in alternative uses for Frances Withers. In other words, we can take it that the policy of closure is being pursued vigorously.
  The question is what can be done. I am highly critical of the policy and I do not withdraw one word of what I have said about it. I hope that there are now sufficient people of good will in all parties who do not want to see an excellent home closed down and residents moved against their will. One solution is obviously for the council to reverse its policy and to continue to run the home. If that is not to be the case, it needs to be said now that all other options should be explored to see how the home can go on running and how its residents can be cared for.
  It may be that some new partnership arrangement can be reached with the council. It may be that a voluntary organisation will be able to help or even that a new voluntary organisation can be formed. However, I make it clear that it must be a voluntary organisation that wants to preserve the home for the elderly people who are there and does not want to dedicate it to some other use. Perhaps some form of private sector organisation may be interested.
  If the council is not to run the home, the aim must be to continue to run Frances Withers as a residential home for elderly people. Clearly, options for the future cannot be explored sensibly with an axe poised over the home. What is now required is a minimum six months' stay of execution so that all the options can be explored. I very much hope that the council will agree to this, and I very much hope that the Minister will be able to confirm my understanding of the requirements that govern the home and to confirm that what I propose is an option that is open to the council. Above all, the aim must be to develop new policies that will give fresh hope to the elderly residents of Frances Withers home.
  10.32 pm
  The Parliamentary Under-Secretary of State for Health (Mr. John Bowis): I am grateful to my right hon. Friend the Member for Sutton Coldfield (Sir N. Fowler) for raising the issue this evening and for bringing it to my attention, to that of the House and to that of the decision makers in the city of Birmingham. As a distinguished and long-serving former Secretary of State for Social Services, my right hon. Friend brings great personal experience and expertise to the subject, so much so that I am almost tempted to sit down and let him answer the debate. However, I will not do that tonight.
  I know, too, that my right hon. Friend will acknowledge that we have built on his years of achievement, and have gone on advancing the provision of care for elderly people, especially since the introduction of the community care reforms in 1993.I also welcome his reference to the progress that has been made in the NHS in Birmingham, where, as he has acknowledged, work has started on two new operating theatres with emergency facilities at the Good Hope hospital, at a cost of £1.4 million. A further £1.4 million is to be spent on work at the City hospital NHS trust for refurbishment of the accident and emergency department.
  At both national and local level, care for the elderly has, rightly, become one of the highest-profile and closely followed aspects of health and social services. In this place before Christmas, we had a debate on care of the elderly in Lancashire. A couple of weeks ago, my hon. Friend the Member for Hastings and Rye (Mrs. Lait) examined the regulation and inspection of homes. Last week, I was able to give evidence to the Select Committee on Health on the future of long-term care.
  I very much welcome the attention that my right hon. and hon. Friends have given to this area of policy implementation, and the scrutiny that they have given to the decisions by local councils, so many of which are currently in the hands of the Labour and Liberal Democrat parties. Tonight is no exception.
  The introduction of community care represented a major step forward in the delivery of services to the elderly. By the end of 1996–97, local authorities will have been given an additional £2.2 billion for their new responsibilities, representing a massive injection of resources at a time of tight restraint in public spending, and a total of well over £5 billion for community care. To take Birmingham as a example, the local authority's total personal social services resources will have risen by 46 per cent. in real terms since 1990–91. Its total social service resources in 1996–97 will represent an increase of 9 per cent. over the 1995–96 figures, as my right hon. Friend said.
  Dr. Lynne Jones: Will the Minister acknowledge that Birmingham already spends well in excess of the standard spending assessment for social services? The council may be Labour-controlled, but the Government impose budget constraints. The Government grant has increased by about 0.5 per cent., and overall expenditure has risen by 2.5 per cent., so Birmingham faces cuts of about £41 million.
  Mr. Bowis: The hon. Lady is quite right. Birmingham has to manage with the generous resources that it receives from the taxpayer. As my right hon. Friend pointed out,
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  the increase in resources to social services from £105 million in 1990–91 to £187.8 million in 1996–97 is fair funding indeed, and Birmingham should be able to provide good and efficient services. Perhaps it needs to be more efficient.
  Important as investment has been, we are committed to developing services that increase user and carer choice and control—choice in the services they receive and the way in which those services are delivered. Our reforms are about putting people first, and my right hon. Friend is absolutely right to say that, first and foremost, local councils should be looking at what is best for the residents of the Frances Withers home. He mentioned Alice, Mary, Gregory, Jessie and the other residents. As he says, they are at perhaps the most vulnerable stage of their lives, and they deserve utmost consideration from those entrusted with their care.
  My right hon. Friend would be among the first to recognise that improving care for the elderly is not a task that central Government can approach by seeking to intervene and interfere in every local decision. Good-quality local care can be delivered only if the elected leaders of local authorities take responsibility for the planning, commissioning, inspection and, in some cases, management of services.
  The Government have set out a clear policy framework within which local authorities can discharge their statutory duties. In addition to the National Health Service and Community Care Act 1990, we have in recent years issued guidance to local authorities on the procedures they should follow in making service changes, such as closing homes.
  We have supported the development of guidelines for standards in residential care homes. My right hon. Friend will no doubt recall endorsing the "Home Life" report of 1984, to which he referred. He will be reassured to know that we have not endorsed the draft "Home Life II" report which has been circulating in recent weeks and caused such dismay as a result of its intrusive and politically correct content and tone. We have introduced a statutory direction on choice that gives anyone entering residential care, following an assessment by the local authority, the right to choose the home in which they wish to live, subject only to availability, appropriateness and reasonableness in terms of cost.
  We have continued to develop the role of the social services inspectorate in overseeing standards and the local inspection of those standards. The Audit Commission is developing its work, and we have a Bill before Parliament to develop that further.
  Within that framework, we want to allow local authorities as much scope as possible to carry out their functions, enabling them to diversify and, in partnership with providers, users of services and carers, to determine appropriate provision for the local population. The people of Birmingham elect their councillors to do exactly that job. They will be looking to them for solutions to problems such as those that my right hon. Friend raised this evening, and in due course they will hold them to account.
  Local authorities around the country are increasingly providing residential care through contracts with independent sector providers rather than running directly managed homes many of which do not meet the registration standards required of independent sector

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  homes. There is no requirement on local councils to provide directly managed homes, and that has been clarified by a recent judgment in the House of Lords. Their duty is to arrange for appropriate and good-quality care to be provided by residential and domiciliary care providers, no matter in which sector they are.
  The key current responsibilities of local authorities towards their local populations are to assess needs and to make arrangements as necessary for residential and other forms of care. Their prime function is that of purchasers of care, but we make no requirements on them to reduce, or divest themselves of, their own homes. We certainly do not include the sort of requirements to which my right hon. Friend referred. Local needs and priorities must drive local decisions.
  I stress that, even if a local authority decides that it is not best placed to run its own homes, there are alternatives to closure that should be considered. Many local authorities have transferred the ownership or management of their homes to the independent sector—private or voluntary—as my right hon. Friend suggested. Such transfers can take place without any disruption to the lives of the residents themselves, while giving better value for money for residents and ratepayers alike.
  When a decision is being made to close a local authority-run home, we have made it clear in guidance—and it has been confirmed in judicial reviews—that local authorities have a duty to inform and consult existing residents. They should take fully into account the welfare and wishes of both residents and staff of the home involved.
  Factors to take into consideration should include the availability of other homes in the area and any deficiencies in the existing buildings. Residents of a home should be informed of any proposal to close as quickly and sensitively as possible; they should be fully consulted about the range of alternative homes in which they can and might wish to be accommodated. When doing that, local authorities are expected to make every effort to enable residents to preserve friendships that they may have built up in the home, so that the move is carried out with the minimum of disruption.
  There are two avenues that can be pursued where anyone is not satisfied that a closure has been carried out with due regard to such considerations: the first is judicial review, which I believe has recently happened in terms of another home closure in Birmingham; secondly, there is the local authority complaints procedure, with eventual recourse to the local authority ombudsman. I know that my right hon. Friend will understand when I tell him that Ministers cannot and have no power to intervene in individual cases. To do so would undermine one of the strengths of community care—that it puts local people in charge of local decisions.
  With regard to the Frances Withers home in Sutton Coldfield, I can understand why feelings run so high on such a sensitive issue, which affects very elderly and vulnerable people. I understand that the director of social
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  services has given an assurance that the council will not undertake any precipitous action. He has stated that the decision to close the home was taken after due consultation and consideration of the options available. I understand that his officers in the social services department have sought to engage residents in discussions about alternative accommodation, although there remains a group of people who have so far declined to engage in such discussions.
  I know that, in arriving at its decision, the social services committee claims to have considered a number of factors, including the overall level of provision in the area—to which my right hon. Friend referred—and the extent to which the services are provided by the council. I believe that the council's provision is higher than the national average.
  Other factors include the occupancy levels, which I am told have been less high in Frances Withers than in other nearby homes. That may be partly due to the uncertainty over the home's future. Some 23 of the home's 40 beds are currently occupied. The council claims to have concerns about the levels of staffing and the maintenance of good-quality care. It also claims to have taken into account the number of admissions, which suggested that the home was not being used as much as neighbouring homes, particularly for respite care.
  There was also the question of the cost of refurbishment, to which my right hon. Friend referred. That is certainly not due to any Government requirement.
  Sir Norman Fowler: My hon. Friend is making an important point. Will he confirm and underline the fact that there is no Government requirement that £530,000 should be spent on Frances Withers home, by any regulation propagated by Government, by the year 1998?
  Mr. Bowis: I can give that assurance. There is no such requirement to do so, by 1998 or any other date.
  I have listened carefully to the points made by my right hon. Friend. I was particularly concerned to hear about the wait endured by the lady who was finally admitted to a home. If he would like to let me have further details of that case, I shall certainly look into it. I shall be asking the social services inspectorate to keep a close watch on the position in Birmingham and to report back to me as appropriate.
  The council in Birmingham, the social services and we in government need to ensure that there is a coherent strategy in place that is flexible enough to take account of the wishes of local people, particularly the residents of local care homes. I hope that Birmingham councillors will consider carefully the fact that, if they cannot continue to run the home—for whatever reason—they must adequately consider the option of inviting the independent sector to take it on and keep it going. I think that that is what my right hon. Friend is asking for on behalf of his constituents. It seems to be a perfectly reasonable option, which should be considered by the city council.
  Question put and agreed to.
  Adjourned accordingly at fifteen minutes to Eleven o'clock.