Commons Sitting of 12 February 1996

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

    Fishing Crews (Safety)
    Dr. Godman: To ask the Secretary of State for Transport what proposals he has to modify the regulations governing the occupational safety of the crews of United Kingdom registered fishing vessels fishing in and outwith United Kingdom territorial waters. [13018]
    The Secretary of State for Transport (Sir George Young): The occupational safety of crews in United Kingdom fishing vessels is being pursued through the development of regulations to implement European Union health and safety directives.
    Dr. Godman: May I remind the Secretary of State of the death of a Scottish fisherman caused by an unsafe winch? At this very moment, a court case is under way relating to the disgraceful and tragic foundering of the Pescado.
    Will not European Union directives on occupational safety be extended to the fishing industry in the near future? May we have a debate in the House on those regulations? More important, why does the hon. Gentleman not anticipate them by instructing fishing vessel owners to ensure that survival suits for all crew members are carried on their vessels?
    Sir George Young: I have noted the hon. Gentleman's request for a debate in the House. Any regulations would have to go through the usual procedures. He rightly pointed out that a trial is under way in, I think, Bristol, so we must be careful in what we say. It is true that, in the maritime sector, the United Kingdom will have to implement the framework and 10 relevant daughter directives, including a specific directive on fishing vessels, which build on the existing domestic regulations that apply to fishing vessels. It is a matter to which I attach a high priority. I should like to reflect on the hon. Gentleman's specific point about maritime suits.
    Mr. Dunn: Is it not necessary for the Government to ensure that not too great a burden is placed on fishermen? Should not a balance be found that ensures practical guidance to enable fishermen to go about their business properly and in safety, while at the same time not placing too many burdens on them?
    Sir George Young: My hon. Friend is right to remind the House of the potential costs of compliance. A cost
    636
    compliance assessment will be published with a formal consultation document on each directive. That document will be an opportunity for both the owners and those who work on the fishing vessels to comment on what is proposed.

    A419
    Mr. Simon Coombs: To ask the Secretary of State for Transport when he expects work to commence on the bypasses on the A419 for (a) Blunsdon and (b) Latton. [13019]
    The Minister for Railways and Roads (Mr. John Watts): The A419 Latton bypass is included in the first tranche of DBFO—design, build, finance and operate—contracts and preparatory works have already begun. The A419 Blunsdon bypass scheme has been placed in the longer-term category. It is too early to say when it may be rolled forward into the main programme.
    Mr. Coombs: Is my hon. Friend aware that the villagers of Latton will be delighted to hear that, at long last, they can look forward in the near future to relief from the heavy vehicles that have pounded through their village for so many years? I ask my hon. Friend not to forget the villagers of Blunsdon, who live athwart the same road and who, in my view, are entitled to the same consideration. I urge on him the hope that, in the not too distant future, those villagers will get the same sort of relief.
    Mr. Watts: My hon. Friend draws attention to the fact that all schemes on the route are extremely popular with the communities that they are intended to serve. The Blunsdon bypass was at a very early stage of its preparation and not ready to be included in the tranche of DBFOs, which include three other schemes on the route. The longer-term category means that a scheme will possibly be required at some future date but is not of sufficient priority to be proceeded with at the moment.

    Roads (London)
    Mr. Cohen: To ask the Secretary of State for Transport what discussions he has had with the relevant local councils in London about the effect on their local environments of his Department's major road schemes on which work has already started; and if he will make a statement. [13020]
    The Minister for Transport in London (Mr. Steve Norris): We hold regular discussions with local authorities as part of the process of designing, developing and constructing all road schemes.
    Mr. Cohen: After saying that the M11 link road through my constituency was an urgent matter, fighting with demonstrators at great cost, evicting local people from their homes and demolishing those homes, will the Minister explain why the Government have halted the programme and left the route a mudheap? The leader of the council has described the situation as the worst of all worlds and the Civic Society has said that the Government seem to have a vendetta against Leytonstone. Why does his Department's policy make the art of the absurd look like social realism?
    Mr. Norris: We remain convinced of the merits of the excellent Hackney M 11 scheme. It will provide the link from the docklands to the motorway system, relieve communities in the hon. Gentleman's constituency of the intolerable pressure of traffic from which they suffer—he and I know about that at first hand—and give us the opportunity to do a great deal of work there that will much improve conditions for local residents. Tenders for the next two contracts in the scheme—contracts 1 and 3—are to be invited in a few weeks' time in April. Work is on-going. The scheme will be completed and the funding for it will be provided.
    Mr. John Marshall: Does my hon. Friend accept that the decision to defer the Henlys corner scheme, which is part of the north circular road scheme, was welcomed by many residents of the area? Indeed, if he comes forward with a more modest scheme, he will be even more popular than he is today.
    Mr. Norris: I always welcome invitations not to spend money, but on this occasion I fear that, for once, I shall disappoint my hon. Friend. In the fulness of time, we will complete works on the north circular road, because only when the scheme is complete will all Londoners receive the full benefit of that internal bypass through London, which can help to remove so much rat-running traffic, not least through my hon. Friend's constituency.

    Bus Deregulation
    Mr. Pike: To ask the Secretary of State for Transport if he will make a statement on bus deregulation in the Burnley and Pendle area. [13021]
    Mr. Norris: Deregulation has brought great benefits to bus travellers in Burnley and Pendle, as it has to those elsewhere in the country. Generally, there are more operators running more bus miles at lower cost, with new buses on many routes, and involving significantly less public subsidy than before.
    Mr. Pike: Does the Minister accept that the Liberal-controlled Pendle council's sale of its 50 per cent. stake in Burnley and Pendle Transport to Stagecoach will mean that Stagecoach will have a virtual monopoly in the running of transport in the Burnley area? Should that not be referred to the Monopolies and Mergers Commission? Will the Minister confirm that whether Burnley council should sell its 50 per cent. stake is completely for it to decide?
    Mr. Norris: Far be it from me to intrude on private grief, but, as it happens, the regulatory authorities—not my Department—are satisfied that there is no impediment to Pendle council's sale of its stake. The position that Burnley chooses to adopt is entirely up to it. It is under no compulsion to sell, although logic and common sense should have advised it to sell a long time ago.
    Mr. Allen: Does the Minister accept that bus deregulation has led to serious problems in Burnley and Pendle and, indeed, in many other cities and towns? Will he join us in discussing the appropriate shape of re-regulation in Burnley and Pendle and elsewhere with the bus industry, local authorities and passengers, so that
    638
    we can develop a stable, long-term framework for the bus industry over the next decade? Does he agree that the need for an expanding bus industry should be placed over short-term, ideological dogma?
    Mr. Norris: One of the hon. Gentleman's endearing characteristics is his ability to get to the point about five months after everybody else—not least, these days, members of his own party, who, in their local authority guise, and as members of the bus working group which I chair, have agreed with me on a way forward. It is significant that neither they nor the all-party Select Committee report on the bus industry proposed going back to the old days of regulation, because it is recognised by all that those were not days to which anyone interested in developing the bus industry would wish to return.

    Channel Tunnel Rail Link
    Mr. Jacques Arnold: To ask the Secretary of State for Transport when he expects to announce the promoter for the channel tunnel rail link. [13022]
    Sir George Young: We expect to announce soon the name of the winning consortium in the competition to select a private sector promoter for the channel tunnel rail link.
    Mr. Arnold: My right hon. Friend will be more than aware of not only the battering that the current promoter, Union Railways—a British Rail subsidiary—has taken from people in north-west Kent in relation to the possible damage to the environment but the opportunities in terms of jobs, and so on, that are to be gained from the Ebbsfleet station. Is he aware that we need a decision now on a promoter so that we can ensure that our environment is safeguarded and, above all, that the opportunities deriving from Ebbsfleet are realised as soon as possible?
    Sir George Young: It is an important project for the nation—it has been supported by both sides of the House—and for my hon. Friend's constituents, who will gain access to a quick link to St. Pancras station. As I said in my initial response, we hope to make an announcement soon.
    Mr. Timms: Will the Secretary of State confirm that, when he makes that announcement, he will also announce the Government's decision on intermediate stations? Will he further confirm that, in making that decision, the Government will honour the commitment made by the right hon. Gentleman's predecessor in 1991 that the rail link will bring economic regeneration to east London?
    Sir George Young: It is indeed my intention when I announce the name of the successful competitor to make a simultaneous announcement about the locus of Stratford and the CTRL.
    Mr. Chidgey: Will the Secretary of State please assure the House that, when the channel tunnel rail link is constructed, it will allow the operation of large-gauge

    639
    freight trains and that links will be made to allow them to operate on an improved and upgraded west coast main line track?
    Sir George Young: My understanding is that there is an optional provision for loops for freight traffic. The link is primarily intended for passenger traffic into St. Pancras.
    Ms Short: Will the Secretary of State admit that the Government's obsession with rail privatisation has caused long delays in the building of the channel tunnel rail link, and that those delays have meant prolonged blight for many families and a failure to use the opportunity created by the channel tunnel to get more freight on to the railways? Will he take this opportunity to tell the House more about the allegations of financial misbehaviour at Union Railways? Is he aware that the national joke is now about train delays being caused by thieves on the line?
    Sir George Young: On the hon. Lady's first question, had we not engaged in dialogue with the private sector, and if the project was to be financed entirely by the public sector, it would have taken significantly longer to be realised.
    As for the second point, the hon. Lady will have seen the announcement made last week by Union Railways. I have asked the chairman of Union Railways to keep me abreast of the progress of the investigation. I have no further comment to make at this stage.

    Public Transport
    Mr. Gunnell: To ask the Secretary of State for Transport what are his criteria for the future funding of new capital public transport provision in metropolitan areas. [13023]
    Mr. Norris: Funding criteria are set out in Department of Transport circulars 3/89 on section 56 grant and 2/95 on transport policies and programmes guidance to local authorities, both of which are in the Library.
    Mr. Gunnell: Does the Minister agree that the scheme for a tramway in Leeds meets the criteria set down by his Department, and that it has the support of all parties in Leeds and strong support from the private sector? Will he assure us that, when he comes to decide on the future funding of the tramway in Leeds, he will bear in mind the length of permission issued by the House for its construction?
    Mr. Norris: We do indeed recognise that the tram system in Leeds fits well within the package of measures proposed by the authority. As I explained to the hon. Gentleman and his colleagues when we met the week before last, the weight of demand on available resources meant that we could not fund the scheme this year. Not least among those demands was the Midland metro, which received the go-ahead this year, and the prospect of our entering into a similar commitment, subject to the quality of the bids, on the Croydon tramlink. I assure the hon. Gentleman that not least among our considerations are the time constraints laid on Leeds by the statutory process.

    Capital Projects (London)
    Mr. Spearing: To ask the Secretary of State for Transport if he will list the most cost-effective capital projects he has planned for London; and when each will be implemented. [13024]
    Mr. Norris: The Government's annual report on expenditure on transport over the next three years will be published next month. We are also preparing a document for publication later in the year specifically setting out our transport strategy for London.
    Mr. Spearing: Does the Minister agree that one of the most cost-effective capital facilities in London would be a central London river service, the capital costs of which would be but a fraction of the £80-odd million costs of the single station on the Jubilee line at Westminster? Will he confirm that he received a report about a year ago from the transport on water working party, of which the hon. Member for Romford (Sir M. Neubert) and I are members, which advocated such a service?
    Will he further confirm that he expects to receive a report from London First this week? Does he agree that the best features of those reports should be sent to a working party to see how effective such a project would be in the interests of visitors and Londoners alike? Would not the installation of such a service be a permanent memorial for the millennium, whatever might happen to other millennium celebration services down the river?
    Mr. Norris: I pay tribute to the hon. Gentleman and to my hon. Friend the Member for Romford for the considerable effort and expertise that they brought to the Transport on Water proposals for a river service on the Thames. The hon. Gentleman asked me a number of questions about such a service, and I hope that he will accept by way of an answer today that, from the day in 1931 that Sir Alan Herbert mooted the idea of a river service, a great many people who have uttered the immortal phrase, "We should do more about transport on the river," have run up against the practical difficulties that anyone operating such a service at anywhere near financial viability encounters. That being said, the hon. Gentleman will know that the Government office for London has, with my distinct approval, invited London First and KPMG to study the business case for passenger transport on the Thames. They are, as the hon. Gentleman says, due to report shortly. I will consider their findings in detail, and I hope to be able to take matters forward from there.
    Sir Sydney Chapman: Will my hon. Friend confirm that capital investment programmes for public transport in London are at a record level, and that, even if the Jubilee line extension project were excluded, investment would be about 10 times more today than it was in 1979?
    Mr. Norris: My hon. Friend is entirely right. That frequently embarrasses the Labour party, but it is one of those uncomfortable statistics with which it will have to live. My hon. Friend's constituents are a long way from the River Thames, and, although they would no doubt appreciate such a service, they might query the wisdom of providing a large public subsidy for a service that, by definition, few would be able to appreciate. We must

    641
    compare the costs of such a project with the demands from his constituents and many others throughout London for more investment in the bus and underground rail infrastructure.
    Mr. Tony Banks: If the hon. Member for Chipping Barnet (Sir S. Chapman) is entirely right, why are there so many clapped-out old buses on London's roads? I suggest that the Minister go outside and see how many filthy and dirty old buses that should have been taken off the roads years ago are belching out fumes and suffocating tourists and Londoners. It is all right for the Minister, who goes around in an air-conditioned chauffeured limo, but those who have to breathe the air know how filthy it is. How much has been spent on new buses in London during the past 12 months?
    Mr. Norris: I have it on fairly good authority that my chauffeured limo is not as large as that of the hon. Gentleman when he was chairman of the Greater London council, and the answer to the hon. Gentleman's question lies in precisely that direction. The other day, I looked at a table that showed the tremendous increase in orders for buses nationally that the private sector has been able to institute. The table provided a rather invidious comparison with the very poor record of the industry when it was under national control in 1985. In London, the largest single trial of cleaner fuel buses has been undertaken at substantial public expense by London Transport Buses, and was inaugurated by my right hon. Friend the Secretary of State.

    Channel Tunnel and Midlands Rail Link
    Mr. Lidington: To ask the Secretary of State for Transport what representations he has received about the proposal of Central Railway for a new rail link between the channel tunnel and the midlands. [13025]
    Mr. Watts: My right hon. Friend has received a large number of representations about the Central Railway project.
    Mr. Lidington: Does my hon. Friend appreciate the anger and frustration among large numbers of my constituents at the continuing refusal of Central Railway to make clear either the likely environmental impact of its proposals or the possible effect they will have on existing passenger rail services? Can he impress on the company that it must either take seriously its obligation under statute to public consultation, and to provide details soon of its proposals, or withdraw the proposals completely and relieve my constituents of the blight that is afflicting them?
    Mr. Watts: No application has been made so far. If the company proceeds with its intention of making an application, it will be required to include an environmental assessment in the deposited information. The guidance about Transport and Works Act 1992 applications stresses the importance of proper consultation with local authorities and other affected bodies.
    Mr. Grocott: Should not talk of new rail links on old routes remind the Minister and the Government of a salutary lesson? Just 30 years ago, the vandalism of the
    642
    Beeching era and its obsession with so-called market forces resulted in the closure of many lines that would have provided priceless means of communication today. Will the Minister give an assurance that, whatever happens to the privatisation of British Rail, no significant route miles will be closed? Will he also assure us that routes of lines that have been closed recently will be protected? As sure as eggs is eggs, one day they will be needed again.
    Mr. Watts: I recall that the Beeching approach was a policy continued by the Labour Government of 1964 to 1970, who closed more route miles in that one period of office than any other Government have done.
    Mr. Peter Ainsworth: Given the uncertainty that Central Railway appears to have shown in regard to the exact route of the line—for instance, having stirred up residents of South Nutfield in my constituency by telling them that the line would go through their village, it subsequently discovered that it would not—will my hon. Friend look askance at any future applications from Central Railway for waivers, and bear in mind the need to produce detailed and adequate maps so that local authorities and other local people who are affected can have a proper look?
    Mr. Watts: I assure my hon. Friend that, if any application for a waiver is made, details will be placed in the Library of the House. We shall also consult the local authorities that would be affected about the adequacy of the information to be supplied.

    West Coast Main Line
    Mr. Olner: To ask the Secretary of State for Transport which organisations he has met to devise through ticketing provisions on the west coast main line between various operators. [13026]
    Mr. Watts: None. That is a matter for train operators, who must comply with the approved through ticketing arrangements under the terms of their passenger train operators' licence as granted by the Rail Regulator.
    Mr. Olner: The Minister's answer will disappoint many commuters in my constituency of Nuneaton. My local railway station is served by trains from Liverpool, Manchester, Glasgow and Holyhead; if there is no through ticketing agreement between the various operators, all the stations on the route are likely to be closed. Will the Minister undertake to get involved to ensure that the network and my constituents are protected?
    Mr. Watts: The hon. Gentleman's constituents should not be disappointed. The licence condition is that train operators should maintain the current service at the 1,300 stations that are capable of issuing through tickets. The regulator will permit variations from that only if he is satisfied that a higher, not a lower, standard of service will result. The hon. Gentleman's constituents should be reassured: through ticketing can only become better on the privatised railway than it was on the so-called publicly owned and publicly accountable railway.
    Mr. Mans: Now that the Opposition transport spokesman, the hon. Member for Birmingham, Ladywood (Ms Short), has made it clear that she prefers nationalised railways and wants those that have been moved into the private sector moved back as soon as possible, will my hon. Friend ensure that the west coast main line moves into the private sector as soon as possible, so that, at the next general election, people can see the benefits of privatisation as they are already seeing the benefits of the Stagecoach service to Weymouth?
    Mr. Watts: We intend to bring forward the franchise for the west coast main line in the course of this year.
    Mr. Wilson: Does the Minister share the Prime Minister's surprising view that fraud involving hundreds of thousands of pounds represents no more than misbehaviour which should not be allowed to stand in the way of the privatisation dogma? Does he recognise that problems with through ticketing are part and parcel of the same problem that gives rise to fraud by one operator against the others—the fragmentation of the railway network? Will he join the Rail Regulator in at least apologising for the near collapse of the national rail inquiry system? Fraud, the collapse of the information system and the near collapse of through ticketing are all the results of fragmentation. Which of the three does the Minister defend?
    Mr. Watts: I note that the hon. Gentleman adds a good few noughts on to the end of any figures that have been quoted as the possible cost of the irregularity on the London-Tilbury-Southend line, which was discovered very rapidly as a result of the routine procedures that were put in place for the privatised structure.
    Ms Short indicated dissent.
    Mr. Watts: The hon. Lady shakes her head. She continues to mislead the public in her interviews, when she knows very well that what she has said is not true.
    Ms Short: On a point of order, Madam Speaker.
    Madam Speaker: I take points of order after questions.
    Ms Short: Is it in order for the Minister to say that what I said was not true?
    Madam Speaker: The Minister is responsible for his own comments in the House, as we all are.
    Mr. Watts: I was referring to the hon. Lady speaking through the broadcast media. What I have said is true and fair comment.
    The hon. Member for Cunninghame, North (Mr. Wilson) speaks of fragmentation, but even he should understand that the network, in the ownership and operation of Railtrack, remains integrated. Fragmentation, in the way in which he uses the term, means nothing more than the provision of services by a number of dedicated train operating companies.

    River Thames Working Group
    Sir Michael Neubert: To ask the Secretary of State for Transport how many times the River Thames working group has met in the past 12 months; and if he will make a statement on its work. [13027]
    Mr. Simon Hughes: To ask the Secretary of State for Transport if he will make a statement on the latest programme of initiatives to recommence a riverbus service on the Thames. [13029]
    Mr. Norris: The River Thames working group has met once in the last 12 months, on 11 July, to consider progress on the recommendations contained in its report published in December 1994 and it will meet again this week on 15 February. My hon. Friend will know that the group was set up to examine the potential for developing freight and passenger traffic on the river.
    I continue to support the idea of a riverbus service on the Thames. My Department, as I said in an earlier answer, has sponsored the preparation of a study by London First, with KPMG, on the potential for new passenger services. I look forward to the results of that study being published.
    Sir Michael Neubert: Does my hon. Friend accept that, with the minutes ticking away to the millennium, the unique opportunity of establishing a central London river service as a permanent monument and lasting benefit for Londoners becomes daily more pressing? Will he undertake, as a matter of urgency, to bring together the best of the proposals made to him, including the distinctive ideas put to him by the Transport on Water working party with the aim of achieving a river component of a through ticket travelcard transport system for Greater London in good time for the next century?
    Mr. Norris: I certainly undertake to consider carefully the proposals that the London First study produces, and to seek to find whatever agreement is possible between its report and that which the Transport on Water working party, of which my hon. Friend is a senior representative, has submitted to us. I will not repeat the caveats that I have already suggested must exist in respect of such a service. My hon. Friend speaks of integration into the travelcard system; if he were to talk of integration on the same fare basis that exists for buses and the underground, it might be a different proposition from the idea of incorporating the service into the travelcard system. On that latter front, I know that Peter Ford, the chairman of London Transport, has shown a willingness to consider ways in which we could, perhaps through that mechanism, achieve much wider awareness of riverbus services.
    Mr. Simon Hughes: Further to both the earlier questions on this subject, now that the London First report has been published, we have all the research that we need. We have three catamarans, owned by P and 0, idling in St. Katharine's dock ready to do the job. Can the Minister—I put this as a serious proposition, because there is huge interest in the issue—collect together the authors of the report, the Port of London authority, the National Rivers Authority, London Regional Transport and interested hon. Members from the locks at one end down to the estuary at the other, to find out whether he

    645
    can sort out the difficulties that remain? Some people need a kick up the backside and the Minister needs to kick them, but the report suggests that it can be done and we need to get around the table to work out the best and most economical way of doing it.
    Mr. Norris: I pay tribute to the hon. Gentleman's continued interest in this subject. He will acknowledge that I am keen that we should produce concrete proposals to build on the work of the studies. I have accepted that if that requires the involvement of my Department, or, indeed, other sources, it is a proposition that I would be prepared to consider. We have all been seeking to ensure that there should be a service that is, ostensibly at least, viable at the operating level. If that can be established—the early work seems to show that it can—I believe that we have the ground on which we might be able to build.
    Mr. Robathan: My hon. Friend will know that the River Thames does not flow close to Leicestershire, but he and I share much the same attitude to the scheme for river transport. Will he confirm that, when he produces proposals, he will study closely the question of enabling legislation, particularly in relation to piers? With the last scheme, if one caught a boat at Chelsea Harbour, the next stop was Charing Cross. That was a ludicrous situation, because invariably one had to use some other form of transport. Will my hon. Friend look into that closely?
    Mr. Norris: My hon. Friend puts his finger on the major weakness of previous schemes, which is that they have had to rely entirely on sufficient stopping-off points linking with the public transport infrastructure. In other words, one has to have a system which takes people where they want to go. The transport on water study, and KPMG, for London First, identified the number of locations that it will be necessary to consider. It is not appropriate to elaborate at this point, but my hon. Friend is right in his observation.
    Miss Hoey: Does the Minister agree that thousands of people are frustrated every day as they sit in traffic jams and watch an empty M11 wind its way through London? Further to the question of the hon. Member for Blaby (Mr. Robathan), does the Minister agree that we also need a change in planning so that, if planning permission is to be given, any major office development along the river must include the building of a pier?
    Mr. Norris: As to the first half of the hon. Lady's question, I am not sure that I agree, because all the studies show that the river is a very inefficient mechanism for conventional commuting—it does not go in a straight line, it has a 7 m rise and fall, and there are many technical difficulties with establishing such a service. There is, however, a market for a service using the river, particularly building on its tourism potential, which could be valuable for London, Londoners and jobs in the capital.
    On the hon. Lady's second point, about the desirability of ensuring that the planning process is sufficiently tuned always to consider the potential of the river when riparian applications are considered, she is entirely right. The Thames working group, which was established by my right hon. Friend the Secretary of State for the Environment, is taking that matter forward.

    Disabled People (Access)
    Mr. Corbett: To ask the Secretary of State for Transport what guidelines and advice he has issued to (a) manufacturers and (b) purchasers of buses about access for disabled people since the introduction of the Disability Discrimination Act 1995.[13028]
    Sir George Young: The Department of Transport has set up working groups with both manufacturers and operators of buses to discuss the regulations that will be drawn up under the Disability Discrimination Act 1995. Also, we shall shortly be publishing the first in a series of information bulletins which will report the progress that we are making in implementing the transport provisions of the Act. Bulletins will be circulated widely to manufacturers and operators, as well as to local authorities and disability organisations. When regulations are made under part V of the Act, we will issue separate detailed guidance to all those affected.
    Mr. Corbett: I am grateful for that answer. Does the Secretary of State recall that, during the passage of the Disability Discrimination Bill and the two similar Back-Bench measures, there was substantial demand from people with disabilities for buses to be made much more accessible to them, as well as for the spin-off benefits for young parents with push chairs, people with heavy luggage, and so on. In passing, does the Secretary of State agree that the bus industry often gives the impression of turning passengers away, rather than trying to attract them? Can he assure the House that he will keep up the pressure on that issue, given that, when measures to help people with disabilities have passed through the House before, the provisions have often been left on the shelf to gather dust?
    Sir George Young: Yes, I can assure the hon. Gentleman that that is a subject to which I attach high priority. He is right to point out that it is not merely the disabled who will benefit from the particular features on the buses. They will help many other people, including women or men with young children, and the elderly. He will be pleased to know that 90 per cent. of new buses now have at least some of the features that were recommended by the Disabled Persons Transport Advisory Committee—DIPTAC—and which make it easy for ambulant disabled and elderly people to use the buses. I hope to see further progress.
    Mr. Harry Greenway: Does my right hon. Friend agree that the smooth driving of buses is of the utmost importance for disabled people, and will he emphasise that to all involved in driving buses?
    Sir George Young: Yes.
    Mr. Tom Clarke: Does the Secretary of State accept that the enthusiasm he expresses does not seem to be shared by the Government? It took us several months to persuade the Government to include access for disabled persons to buses in the Disability Discrimination Act 1995. Will the Secretary of State tell us why he cannot present a timetable today, and why he is not using parts V and III of the Act so that disabled people can gain access to buses, trains, bus stations and rail stations?

    647
    Will he accept that, on the evidence, one of the obvious reasons for the Government's stalling is the chaos caused by bus deregulation and the equal chaos caused by the Government's determination to privatise rail transport?
    Sir George Young: The hon. Member will know that transport infrastructure is covered by part III of the Disability Discrimination Act 1995. We have introduced implementation dates for those parts of the transport industry for which the technology exists to achieve accessibility. For example, for rail rolling stock, the implementation date is 31 December 1998. For other transport modes, there are a wide variety of possible solutions, some of which will be available earlier than others. I will bring forward implementation dates as soon as we and the industry are satisfied that they are achievable and sustainable.

    Central Line
    Mr. Congdon: To ask the Secretary of State for Transport what is the latest estimate of the cost of upgrading the Central line. [13030]
    Mr. Norris: London Underground's latest estimate is that the total cost of upgrading the Central line will be £802 million at October 1995 prices.
    Mr. Congdon: Can my hon. Friend confirm that that enormous investment will lead to the provision of extra trains during the morning and evening peaks? Will he also confirm that, in the current year, more than £1 billion will be invested in the London underground, and that that is in sharp contrast with the figure four times lower in real terms which was invested by the last Labour Government? Does that not show that the Conservative party is the party that is committed to London transport for the benefit of Londoners?
    Mr. Norris: My hon. Friend is right on both counts. The 35 per cent. increase in operating performance is a result of the substantial investment in the Central line and, of course, there is more to come throughout the system. I remind the House, as my hon. Friend invited me to do, that in 1978, for example, the level of investment—at 1995 prices—was £198 million, while the same figure for 1995 was £1, 088 million.

    Rail Employees
    Ms Eagle: To ask the Secretary of State for Transport what estimate he has made of changes in the total work force following privatisation of the railways. [13034]
    Sir George Young: None. Staffing levels are a management matter for the railway industry.
    Ms Eagle: Will the Secretary of State admit that one of the main ways in which the new, privatised railway companies intend to make money is by getting rid of staff? Many women already find it difficult to travel on trains late at night because of the de-staffing of stations
    648
    that has already occurred. They are worried about crime. That situation can only get worse unless we can guarantee that staff will be in place to protect passengers.
    Sir George Young: I hope that the hon. Lady will welcome the announcement by Stagecoach on Monday, when it took over one of the newly franchised services. It has decided to invest £3 million in improvements to station and passenger facilities, including security, lighting, waiting rooms and information services. If companies want the public to use their trains, they must provide a secure, efficient and safe environment. I believe that that is what the private sector wants to do.
    Dr. Spink: Will my right hon. Friend confirm that privatisation and holding down fares will get more passengers on to trains, and that that will work wonders for employment on the railway?
    Sir George Young: My hon. Friend is quite right that it will not only improve employment prospects but improve security for other passengers.

    Disabled People (Access)
    Mr. Alan Howarth: To ask the Secretary of State for Transport when he next plans to meet representatives of the Disabled Persons Transport Advisory Committee to discuss access to public transport. [13036]
    Sir George Young: My Department has regular meetings with the Disabled Persons Transport Advisory Committee to discuss a wide range of issues relating to the transport needs of disabled people. I will be seeing the chairman on the day of the June quarterly meeting.
    Mr. Howarth: Is it the case that the draft European directive on bus and coach construction would prevent the Government from requiring that buses and coaches be made accessible to disabled people? If so, will the right hon. Gentleman assure the House that the Government will insist that the terms of the draft directive are altered so as to ensure, as required by the Disability Discrimination Act 1995, that as soon as reasonably practicable buses and coaches are made accessible to people with disabilities?
    Sir George Young: I am very anxious that there should be no obstruction to extending access to buses by disabled people. Further discussions and consultations will take place on the European directive to which the hon. Gentleman referred.

  HOUSE OF COMMONS

    Child Care
    Mr. Corbyn: To ask the right hon. Member for Berwick-upon-Tweed, as representing the House of Commons Commission, when he expects provision of on-site child care facilities to be made available in the House. [13050]
    Mr. Beith (on behalf of the House of Commons Commission): In the light of a survey of demand for child

    649
    care facilities, and following a debate in the House, the Commission decided to introduce a child care voucher scheme in April 1995 for its staff. It provides financial support to qualifying staff who wish to use any of a range of child care facilities at locations which they find convenient. So far, the responsible domestic Committees have not be able to identify a suitable location for on-site facilities in the parliamentary estate, and have not put forward any proposals.
    Mr. Corbyn: Does the right hon. Gentleman agree that that answer is unbelievably pathetic? The House can apparently manage to find a great deal of money for the refurbishment of the Strangers' Bar, Annie's Bar and the refreshment and dining facilities that are provided ad nauseam, often for private catering, while the only children's facilities in the entire building consist of one shelf of out-of-date children's books in the Members' Family Room. Does the right hon. Gentleman not think that we should get into the 20th century before the 21st century overtakes us and provide a fully staffed on-site nursery in this building for Members' and staff's children just as any other sensible institution would provide for its staff?
    Mr. Beith: I do not think that the staff using the child care voucher scheme find it pathetic; indeed, they find it helpful. The hon. Gentleman's other points must be passed on to his hon. Friends serving on the Committees that I mentioned.
    Mr. Ian Bruce: May I congratulate the right hon. Gentleman on the work of his Committee and on providing a voucher scheme for nursery education? I wish that he could encourage some county councils to do the same thing. Has he found that people using the vouchers prefer to send their children for nursery education close to their homes rather than to this building, which may be a long way from their homes?
    Mr. Beith: Some people find it more convenient to use facilities nearer to their homes. The Commission hopes to establish the general picture when it reviews the scheme next month, a year after it came into operation.

    Listed Buildings Legislation
    Sir Michael Neubert: To ask the right hon. Member for Berwick-upon-Tweed, as representing the House of Commons Commission, what financial provision has been made in the last 12 months for compliance with the law relating to listed buildings. [13055]
    Mr. Beith: Financial provision for conservation requirements is included as part of the cost estimates for individual new works and maintenance projects.
    Sir Michael Neubert: Is the right hon. Gentleman aware of the anxiety caused by the appearance in the House—temporarily, one hopes—of replacement internal doors which look like a job lot purchased at a do-it-yourself store on a wet Saturday afternoon, and also by the flashing red industrial-type lights which appear in the corridors during Divisions? Can the right hon. Gentleman assure us that at all times our concern will be
    650
    less for the exercise of bureaucratic zeal and more for our obligations as custodians of Parliament as a priceless part of our national heritage?
    Mr. Beith: The House has a good and improving record of attention to the conservation requirements of this important building. I am pleased to say that one of the doors, within my sight at this moment, to which the hon. Gentleman referred has already been replaced by its original. The House staff pay careful attention to the need to keep the fittings and furnishings and the building itself in good repair.
    Mr. Gunnell: Does the listed status of the building impose any additional costs or difficulties when replacing the plumbing? Will the right hon. Gentleman comment on reports made earlier in the year that some listed bacteria were present in parts of the hot water system? Can he assure us that, as a result of action taken, there is now no danger of Legionnaire's disease being present in the hot water system of the House?
    Mr. Beith: I have been advised that there is no danger of Legionnaire's disease being present in the hot water system of the House. However, I shall arrange for a detailed written reply to be given to the hon. Gentleman. I do not think that the problem arose because of the listed status of the building.

  TRANSPORT

    Road Accidents
    Sir Sydney Chapman: To ask the Secretary of State for Transport how many deaths and injuries there were arising from road accidents in 1995, 1994 and previous years. [13037]
    Mr. Norris: The number of people killed and seriously injured in road accidents has fallen from the 1981–85 baseline average of 80,130 to 50,181 in 1994, and provisionally to 49,778 in 1995. Slight accidents have increased from a baseline of 241,782 to 265,008 in 1994, and provisionally to a similar level in 1995. That is immensely encouraging, given that the volume of traffic increased by 44 per cent. during the same period.
    Sir Sydney Chapman: I welcome the general decline in the accident rate. Can my hon. Friend say whether the introduction of speed cameras has had an effect? If so, will he give the House an assurance that speed cameras are positioned on roads where there are likely to be accidents, rather than where they are likely to lead to the greatest revenue?
    Mr. Norris: I give my hon. Friend that assurance. For example, as a result of the west London trial, the number of deaths in that corridor has been reduced from 21 to 7. That evidence is compelling. However, there may be evidence that the longer a speed camera site is in operation the less it is respected. That is a common phenomenon with this kind of installation. The Government will monitor the situation with care.
    On my hon. Friend's second point, any revenue received from fines levied as a result of offences detected by speed cameras does not go to the police but to the

    651
    Exchequer in the normal way. Speed cameras are located at accident sites when all other conventional traffic calming and safety measures have been exhausted. They are designed solely to reduce the number of accidents. That is why the Government have insisted that there be large signs to warn motorists that they are entering a speed camera area>

    Disabled People (Access)
    Mrs. Clwyd: To ask the Secretary of State for Transport what steps he has taken to ensure that Railtrack provides improved access and facilities for disabled passengers at railway stations under its control. [13039]
    Mr. Watts: My right hon. Friend will be bringing forward regulations under the Disability Discrimination Act 1995 which will require that all new trains be accessible by disabled passengers. Stations are covered by the requirements of the Act, which gives a right of access to disabled people.
    Mrs. Clwyd: Does the Minister appreciate that removing staff from stations, as is happening at the moment, makes many stations inaccessible? There is no point in having a ramp installed at a station if no one is there to put it in position. Many disabled passengers are being disadvantaged by that situation.
    Mr. Watts: Some train operators have on-board ramps, which are operated by staff on the train. As a result, access can be provided even at unmanned stations.
    Mr. Fabricant: Is my hon. Friend aware that facilities for the disabled have improved since privatisation of the British Airports Authority and British Airways? Does that not augur well for the privatisation of British Rail?
    Mr. Watts: It does not surprise me in the least that services to passengers of industries which have been privatised have improved. Like my hon. Friend, I look to the privatisation of the railways to improve the situation further.

    Public Transport (Manchester)
    Mr. Bennett: To ask the Secretary of State for Transport if he will make a statement about public transport in Greater Manchester. [13041]
    Mr. Norris: Public transport in Greater Manchester is primarily a matter for the local authorities and the operators concerned. Subject to financial constraints, the Government will continue to consider funding worthwhile public transport schemes in Greater Manchester.
    Mr. Bennett: Does the Minister accept that the MetroLink in Greater Manchester has been a huge success? However, if it is to thrive it needs to have four or five lines added. Does the Minister welcome the current consultations about extending the MetroLink towards Tameside? However, it is no good having permission to build the extra lines if the money is not forthcoming.
    Mr. Norris: I can certainly assure the hon. Gentleman that we believe that the viability of the system and its
    652
    usefulness to Manchester is greatly enhanced as it expands, but I know that the hon. Gentleman will appreciate that affordability is the key constraint. I cannot give him a commitment at this moment as to the funding of extensions to the system which already have statutory approval or those which are in various stages of preparation, but I can say that we shall continue to consider them as part of the package of proposals made by Greater Manchester.
    Mr. Jenkin: With regard to public transport in the Manchester area and the effect of fraud in relation to public transport, has not the greatest fraud been the great nationalisation experiment perpetrated by left-of-centre Governments, which has failed, and should we not look forward to the end of nationalisation?
    Mr. Norris: My hon. Friend is entirely right. The bus industry has never thrived as it thrives now, entirely in the private sector, and long may it prosper. It will not have escaped my hon. Friend's attention that all the criticisms so often levelled by the Labour party at the railway system in this country are criticisms levelled at a nationalised railway, and that outside this place the general public cannot wait for the advantages that the private sector will bring to enhance the quality of rail services.

  LORD PRESIDENT OF THE COUNCIL

    Privy Council
    Mr. Mackinlay: To ask the Lord President of the Council if he will make it his policy to review the functions and role of the Privy Council. [13057]
    The Lord President of the Council and Leader of the House of Commons (Mr. Tony Newton): I have no plans to do so.
    Mr. Mackinlay: Will the Lord President consider taking powers to abolish the Privy Council oath? Does he appreciate that that arcane mumbo-jumbo of an oath has now been totally devalued by the Government's failure to entrust my right hon. Friend the Leader of the Opposition with a copy of the Scott inquiry report on Privy Council terms for a period during which he could read, digest and absorb its contents? Does he agree that the Privy Council oath is justified only on the rare occasions when approaches can be made to the other side in politics on Privy Council terms, but that on this occasion the Government have failed to do so? Is it not time that that arcane oath was abolished and done away with because it is absolute nonsense?
    Mr. Newton: No.
    Mr. Jacques Arnold: Is it not highly appropriate that a recent oath was uttered by the right hon. Member for Kingston upon Hull, East (Mr. Prescott)?
    Mr. Newton: I did not quite catch that question, but my hon. Friends obviously think that the answer is yes. I shall take further advice.

  HOUSE OF COMMONS

    Procedure Committee Reports
    Mr. Tony Banks: To ask the Lord President of the Council how many reports from the Procedure Committee are awaiting debate on the Floor of the House. [13059]
    Mr. Newton: In the current Parliament, the Procedure Committee has produced 17 reports. Five have been debated either on their own or in the context of related business. Of the remainder, six required no resolution of the House or have been implemented wholly or in part by other means.
    Mr.Banks: That still leaves several reports that we have not yet had an opportunity to discuss on the Floor of the House. It is a bit depressing to sit in a Committee producing reports only for them to gather dust on a shelf. Specifically, the whole House would be interested in the Committee's recommendations about Prime Minister's Question Time. Prime Minister's Question Time gets most of the criticism from outside this place, much of which is unfair, and the House should have the opportunity to discuss the proposal to have closed questions on Thursdays to see whether that improves the position. May we have a debate on that as quickly as possible, as I should like my right hon. Friend the Leader of the Opposition to be in place as Prime Minister to see the new arrangements through?
    Mr. Newton: I indicated in a relatively recent answer that that report is still being studied by my right hon. Friend the Prime Minister and myself. For my part, the more I think about the matter, the more I think that it may be difficult to achieve a change that would meet the convenience of both sides of the House and therefore command the necessary agreement.
    Mr. Ian Bruce: Does my right hon. Friend believe that there should be a debate about the implications of the Nolan committee recommendations as to what interests can and cannot be registered in the House? My right hon.
    654
    Friend may be interested to know that, for Question Time today, despite the fact that the House now wants registered interests marked on questions, 14 Labour Members with relevant trade union interests have tabled questions and not one of them seems to regard that as a registrable interest.
    Mr. Newton: On the latter point, I am sure that my hon. Friend will know that it would be proper, perhaps, to put the matter to the Parliamentary Commissioner for Standards. On my hon. Friend's wider comments, I am Chairman of the Select Committee on Standards and Privileges, which is actively considering such issues.

    Voting Procedures
    Mr. Harry Greenway: To ask the Lord President of the Council what plans he has to speed up voting procedures; and if he will make a statement. [13061]
    Mr. Newton: None, Madam Speaker. If my hon. Friend has any particular cause for concern, he may wish to draw it to the attention of the Select Committee on Procedure.
    Mr. Greenway: Will my right hon. Friend consider those days when the House can be delayed if it is pursuing, perhaps, a run of six Divisions? Sometimes it can be delayed by the hon. Member for Bolsover (Mr. Skinner), for example, as a result of being delayed in one of the Lobbies. Could not different arrangements be made on such occasions—for example, taking the first Division in the normal way and subsequent ones by the pressing of buttons or something of that sort?
    Mr. Newton: In its third report of 1992–93, the Committee recommended that the Chair should have discretion to appoint Tellers at any time up to two minutes after the Question was first put, in the sort of circumstances to which my hon. Friend refers. That recommendation was agreed to by the House. However, I believe that I am right in saying that you, Madam Speaker, have not felt it right to exercise that discretion.

Northern Ireland Peace Process
3.30 pm
The Prime Minister (Mr. John Major): With permission, Madam Speaker, I will make a statement on the bomb explosion in the South Quay area of London last Friday, the declared end to the IRA ceasefire and the implications for security and the peace process in Northern Ireland.
There is no doubt that the evil act in London was the work of the IRA. It has all the hallmarks of its operations, with the callous sacrifice of innocent lives. The bomb followed shortly after an IRA statement, given to the Irish broadcasting organisation on the evening of 9 February, that the complete cessation of hostilities ordered in August 1994 was now at an end. The IRA admitted its responsibility for the bomb on 10 February.
The facts of the incident are briefly these. Around 5.45 pm last Friday, warning calls were made that a large bomb had been placed at South Quay station, Marsh Wall, in London. Local police arrived at the scene shortly after 6 o'clock, and anti-terrorist branch officers shortly after that.
At around 6.30 pm a suspect vehicle, a Ford flat-backed lorry, was identified, and the immediate area was cleared. While the area was being evacuated, the vehicle exploded, causing extensive damage to buildings in the area, and a large number of casualties. Two people were killed and 43 injured, two of them critically. Three police officers were among the casualties. I know that the House will join me in extending our deepest sympathy to all the innocent victims and their families. It is little short of a miracle that the casualty list was not much longer.
I should like to pay tribute to the efforts of the emergency services. Despite being hampered by a fractured gas main at the scene, they responded magnificently and they richly deserve all our thanks.
I must say to the House that this may not be the last such atrocity. More may follow, both here on the mainland and in Northern Ireland, if the IRA ceasefire is not renewed. We will do all that we can to prevent that and to catch those responsible. The protection of the public will remain our first priority.
In Great Britain, security has immediately returned to pre-ceasefire levels. In Northern Ireland itself, we had been careful from the very first moment of the ceasefire to take no irreversible steps to downgrade our security capability. All necessary measures to cope with the present situation are now in place. The Royal Ulster Constabulary is on full alert. We have sought to make an appropriate and proportionate response to the increased threat without disrupting daily life more than absolutely necessary.
The IRA has brought the 17-month-old ceasefire to an end. There is no shred of an excuse for this return to violence, least of all now, when all-party negotiations were clearly in sight. After the August 1994 ceasefire declaration, we called repeatedly on the IRA to make it clear that it was permanent, despite criticism by some for doubting the good faith of the IRA. We did doubt its good faith and the IRA did not say that it was a permanent ceasefire. None the less, after a prudent period, in order to move the process forward we were prepared to act on the working assumption that the ceasefire would last.
656
In the months that followed, we reduced the more visible and inconvenient aspects of security. We took soldiers off the streets and opened all the border crossing points. We did everything possible to create new jobs in Northern Ireland through renewed inward investment, and we helped to produce a remarkable economic upsurge. We talked to Sinn Fein leaders at official and at ministerial level. We constantly sought to move the peace process forward towards the all-party negotiations that everyone knows are necessary.
No one took more risks for peace than the Government over the past two years, but we never lost sight of the fact that the IRA commitment had not been made for good. No responsible Government could have done otherwise. That was why we and many others saw a start to the decommissioning of illegal arms as a way of creating confidence in Sinn Fein's acceptance of democratic peaceful methods, and showing that the violence had really ended. But all the time that Sinn Fein was calling for all-party talks, we knew that the IRA continued to train and plan for terrorist attacks. Punishment beatings and killings continued, as the House well knows. It remained ready to resume full-scale terrorism at any time. We could never be confident that its behaviour was that of an organisation that had decided to renounce violence for ever. The IRA peace was not a true peace.
I regret to say that the events of last Friday showed that our caution about the IRA was only too justified. The timing of the return to violence may have been surprising: the fact that violence could resume was not. We must now continue the search for permanent peace and a comprehensive political settlement in Northern Ireland. Let there be no doubt that the Government's commitment to that is as strong as ever, and will remain as strong as ever.
We will work for peace with all the democratic political parties and with the Irish Government. But a huge question mark now hangs over the position of one of the parties—over Sinn Fein. Its leaders have spoken often of their commitment to peace and peaceful methods, but they have always ducked and weaved when they have been questioned about the IRA and its methods. After the events of last Friday, their ambiguity stands out starkly. The test for eligibility to take part in all-party negotiations was set by the British and Irish Governments in paragraph 10 of the Downing Street declaration. They should be democratically mandated parties, which establish a commitment to exclusively peaceful methods and which have shown that they abide by the democratic process.
Sinn Fein's leaders claim that they did not know about the bomb at South Quay and the IRA's ceasefire statement, but they have refused either to condemn or to dissociate themselves from either. Sinn Fein must decide whether it is a front for the IRA or a democratic political party that is committed to the ballot and not the bullet. Meanwhile, one thing is clear: in the absence of a genuine end to this renewed violence, meetings between British Ministers and Sinn Fein are not acceptable and cannot take place.
That is also the position of the Irish Government. They have made it clear to Sinn Fein that their attitude and willingness to meet at political level will be determined by whether the IRA ceasefire is restored. We and the Irish Government are at one on this: the ball is in the court of Sinn Fein and the IRA, if indeed that distinction means anything. It is for them to show through their words and

657
actions whether they have a part to play in the peace process. I am not in the business of slamming doors, but the British and Irish peoples need to know where Sinn Fein stands.
The people of a democracy are not passive spectators to events. They have the right to make their views clear on these issues, and the people of Northern Ireland, from both communities, have consistently done so. The popular will for peace has never been clearer or more coherently expressed than in recent months. The peace process will go on. I commend all those who have had the courage and the sense, in the face of this latest atrocity, to work to prevent a wider return to violence.
My right hon. and learned Friend the Secretary of State for Northern Ireland and I have met all the parties in the past two weeks. That process will be intensified with the parties that have not, for the present, disqualified themselves. The aim is, as it has always been, to establish the necessary confidence to enable negotiations between all the parties to begin. I want everyone to be absolutely clear on that point. The objective of all our actions and policies, before and since the ceasefire, has been to get to a position in which all the constitutional and democratic parties can get around the table together. Everything else is a means to that essential end.
On 24 January, I told the House that, if the paramilitaries would not start decommissioning their illegal arms, one alternative way forward was through elections, to give the electoral mandates and confidence that could lead straight, and straight away, to negotiations. As proposed by the Mitchell report, decommissioning could go ahead in parallel with those negotiations. The proposal has been consistently misrepresented by Sinn Fein, and it has been misunderstood more widely. I repeat now that its purpose is to lead directly and speedily to negotiations between all the parties that are committed to peaceful and democratic methods, and it is aimed at reaching a comprehensive political settlement.
An elected body would have to be broadly acceptable and it would be strictly time limited. I am not proposing—as I have made clear on many occasions—an assembly with legislative and administrative powers. Any suggestion of a return to old-style Stormont rule is manifest nonsense on the basis of the proposals that we have put forward. The proposed elections are a door to full negotiations, and I continue to believe that they provide the most promising available opening. We will pursue that proposal and seek to persuade all concerned that it is indeed a way forward and not a means of delaying progress.
Our ideas are still being discussed with the parties. I should like to reassure the House that there are ways forward to negotiations with all the parties, which could include Sinn Fein—but only, of course, if there is an unequivocal return to the ceasefire. Others, including the Irish Government, have ideas, too. Our minds are not closed, and neither, I know, are theirs. I have talked to the Taoiseach twice since the bombing, and we plan to meet soon in London to discuss all the possibilities. I intend to find a way through to the negotiations, with all those who are committed to democracy.
The peace process in Northern Ireland has received a serious setback from the men of violence, but the process is not over—not by any means. We have seen the benefits
658
of what has been achieved since the ceasefire: the freedom to live and to work normally; the freedom to enjoy life; increased prosperity and new jobs; and new hope for the future of the people of both communities in Northern Ireland. Those benefits must not lightly be thrown away.
This Government will not be deterred by terrorism. The people of Northern Ireland have tasted peace—a peace that has changed their lives. I have told the House before that I will leave no stone unturned in the search for peace. That is true today, and it will remain true in the future. The people of Great Britain and Northern Ireland deserve no less than that.
Mr. Tony Blair: First, I join the Prime Minister in condemning without reservation the atrocity at Canary wharf and expressing our deepest and heartfelt sympathy to the victims and their families, and our gratitude once again—as so often before—to the emergency services for their unstinting courage. I also offer our thanks to the people of Northern Ireland, who deserve some credit for the calm and responsible way in which they responded to Friday's bomb. Their steadfastness among the sadness, anger and frustration that they must feel is a lesson to us all.
The Prime Minister has said all that needs to be said about the bombing itself. I would add just this: there has been much speculation about whether, as a matter of tactics, the IRA meant the bomb as a one-off or as part of some more prolonged campaign. For the IRA it may be a matter of tactics, but for the victims it has been a matter of life and death. There can be nothing but the most profound contempt for those who will butcher wholly innocent people in the pursuit of any such strategy, whatever it is.
So the question now is hard but simple. How do we regain the momentum for peace without concessions to the men of war? Will the Prime Minister confirm that the Downing Street declaration made two things very plain? One was that Britain had no selfish interest in Northern Ireland; its future could rest with its people—indeed, with the people of the whole of Ireland.
Mr. Tony Marlow: What about the United Kingdom?
Mr. Blair: Of course the United Kingdom, too. The second was that, for a lasting settlement to be reached, there had to be a clear commitment by all parties to exclusively peaceful methods. Will the Prime Minister also confirm that all the main parties in the Irish Republic and, indeed, the Social Democratic and Labour party in the north, are committed to those principles?
Is it not the case, therefore, that the vast majority of people from both traditions are committed to peace? They may differ as to the future of Northern Ireland, but they do not as to the means of achieving it. Sinn Fein represents a section of nationalist opinion, but it is worth recalling that it is not predominant even in the nationalist community, north or south. In those circumstances, is not the demand which the Prime Minister makes and which I echo today—that if it wants to participate in negotiations, Sinn Fein must accept the same peaceful methods as everyone else—not only right but the only conceivable course that any British Government could justify? The question then is, if that is so, how do we establish with confidence, now,

659
that it will accept exclusively peaceful methods in the future? That is a question self-evidently even more central after Friday than before.
Decommissioning weapons was one way. In our judgment, it is and remains the obvious way, but that has been ruled out by Sinn Fein. A new electoral mechanism is sought as an alternative to that. Will the Prime Minister confirm that if it is to work, there must be broad agreement to it and that he will pursue all sensible avenues to achieve it? Can he also confirm, as I think he implied in his statement, that if elections go ahead, they will be on the following terms: that that is not a return to Stormont; that it will lead directly to substantive negotiations—in other words, that it is not a delaying tactic—that decommissioning could begin in parallel and that it will remain part of the three-strand peace process? So that is a way to negotiations.
The Prime Minister is surely right to emphasise that other options, whether they come from the Irish Government or from elsewhere, will always be open to consideration. All options are therefore being examined, but no option can include Sinn Fein unless it comes within the democratic process in a genuine, complete and irreversible way. Does not that mean that it must be prepared to play by the rules of democracy, namely, that sometimes one gets one's way and sometimes one does not, but one cannot achieve by violence what one is denied by the will of the people? Does the Prime Minister agree that it would be a start at least if Sinn Fein said even that it agreed with the six principles of Senator Mitchell?
I do not believe that this is the end of the search for peace. It cannot be. The benefits of peace have been incalculable in jobs, industry, confidence and security—plain, simple normality. People can go out and enjoy themselves without fear. They can learn to get on with and to come to befriend those of a different tradition. But more than that, peace is what the vast majority of the people of all Ireland—Northern Ireland and the Republic—want. To deny them peace is to vanquish democracy and to let violence determine events. The bombers should not gain concessions from the bomb, but neither should they be allowed to thwart peace.
As I have no doubt the right hon. Gentleman knows, many hard decisions will have to be taken over the next few days and weeks. Those taking them, both here and in Northern Ireland and the Republic, will require unusual courage and determination. There will be a need for still more and, perhaps, even greater risks than ever before to be taken, but the risks are justifiable. The people in Northern Ireland should know that, whatever the political differences between myself and the Prime Minister, on this matter we shall stand four square together in the cause of peace.
The Prime Minister: I am very grateful to the right hon. Gentleman for his continuing and firm support for our efforts to produce a satisfactory outcome and a permanent peace for the people of Northern Ireland. As I have said before, our activities are greatly strengthened by the support that we have had from across the Floor, and I deeply appreciate it.
The right hon. Gentleman expressed his warm appreciation for the emergency services, and also referred to the courage of the people of Northern Ireland. I warmly echo that. The bomb on this occasion was in London,
660
but Northern Ireland has suffered for many years and the courage of its people has been remarkable. That courage deserves a reward, which is why it is right that this House should continue to pursue peace.
The right hon. Gentleman asked the right question—how do we regain momentum? He accurately set out the background, so I shall not reiterate what he said. He was equally right to say that all the democratic parties are committed to peace and that Sinn Fein is but a fraction of the nationalists in the north. The other nationalist party has been a firm adherent to the peace process from the outset.
If Sinn Fein is to re-enter negotiations, it must be upon the basis that the right hon. Gentleman and I have both set out; it must be on the same basis as the other parties; and it must be with the same commitment as the other parties. I do not seek today to erect barriers, to produce harsh words or to make it more difficult for those in Sinn Fein to do what needs to be done, but Sinn Fein-IRA will need to decide again that the ceasefire must return. It is essential that they do that.
On the question of the election mechanism, of course there must be broad agreement and of course it is seen as a route to negotiations. That is the underlying purpose, and I entirely agree with what the right hon. Gentleman said. Equally, he was right to say that we must look at other options. No options can be excluded if they are likely to prove practicable and if they are likely to advance the process. No wise man would turn his back on an option that may enable us to make practical progress and ensure, perhaps, that the bomb that went off the other day is not followed by others.
Sinn Fein must indicate that it is determined to become a democratic party. Doubt has once again savagely and clearly been expressed about its activities in the light of what has happened in the past few days. The right hon. Gentleman pointed out that it has not clearly and unequivocally adopted the six principles set out in the Mitchell report. The Mitchell report itself did not incorporate a seventh vital principle to Northern Ireland, accepted by all the other parties—the principle of consent. That is accepted by all the mainstream parties in Northern Ireland, and has been so accepted for some time. That was not in the Mitchell report, and it has not been accepted by Sinn Fein.
As the right hon. Gentleman said, we are not at the end of the road to peace. If we are pushed back, we will start again. If we are pushed back again, we will start again. If we are pushed back a third time, we will start again. There can be no end to the search for a permanent settlement in Northern Ireland until we have achieved a permanent settlement in Northern Ireland. That should be—and, I hope, will be—true of this Government and all successor Governments, for as long as it may take and of whatever party those Governments may be comprised.
The right hon. Gentleman offered his unequivocal support for the efforts that we are making, and I am grateful for that. We may, as he said, have to take more risks. We will not take reckless risks, but if we believe that a risk is appropriate in the cause of peace—a justifiable risk—we will take it and seek the support of the House in doing so.
Mr. Tom King: Does my right hon. Friend accept that we owe a duty to all those who suffered

661
in the bomb outrage in docklands, as we have owed it to all those in both Great Britain and Northern Ireland, who have suffered outrages at the hands of terrorists over the years, to do two things: neither allow the terrorists to dictate the agenda, nor take away from the Government, Parliament and the Leader of the Opposition, with his welcome support on behalf of his party, the determination to continue the fight for peace? All people of good will throughout the island of Ireland, as well as the British Isles, will support my right hon. Friend in his continuing and brave determination to work to that end.
The Prime Minister: My right hon. Friend was Secretary of State for Northern Ireland and knows the opportunities and the difficulties as well as any Member, so I am grateful for his support. He is entirely right in the premises that he sets out and I see no particular reason why I should add to his points, except to say that I agree with them.
The reaction and the courage of the people of London who were involved after the bomb the other day is also well worthy of mention in the House. There was a great deal of quiet bravery on that occasion, and I am delighted to have the opportunity to acknowledge it.
Mr. John D. Taylor: On behalf of Ulster Unionist Members, I thank the Prime Minister for his statement. We join him in his total condemnation of the IRA atrocity in London—an incident that has not been condemned by Sinn Fein. On behalf of most people in Northern Ireland, and I might add the overwhelming number of people in the Republic of Ireland, we extend our sympathy to the families who have been bereaved and those who have been injured. We thank the Prime Minister, the Leader of Her Majesty's Opposition and the leader of the Liberal Democrats for maintaining a bipartisan approach to Northern Ireland. This is a very bad day for Northern Ireland, Great Britain and the Republic of Ireland, and we appreciate their united front.
Does the Prime Minister agree that some of those who were involved in the peace process were under the self-delusion that democratic procedures could attract those who are solely committed to violence? That seemed to be an error in the approach of some people. Does he agree that the inevitability of another terrorist attack was increasing as Sinn Fein steadily went through certain procedures: rejecting the Downing Street declaration, not approving the six principles recommended in the Mitchell report, and—strangely enough—refusing to reach agreement with all other Irish nationalists at the Dublin forum for peace and reconciliation, on the forum's report on Friday? Sinn Fein was totally isolating itself.
Does the Prime Minister agree that one of the benefits that we may derive from the terrible incident at the weekend is the mobilisation of the people of Northern Ireland towards lasting peace? There is great abhorrence of what happened and we can use that to our advantage, by isolating the terrorists and instead involving the people in the democratic process. That is why we believe that an election is the one way in which to open up an opportunity. Does the Prime Minister agree that those who have misrepresented the elected forum and given the IRA the impression that it was to be a parliament with legislative and administrative powers in a way fuelled the IRA to do what it did this weekend?
662
The Ulster Unionists will make their contribution to the peace process. We shall talk to all constitutional parties in Northern Ireland and leaders of all Irish political parties, but to meet them in Dublin will be increasingly difficult following the letter sent out last week by the RUC to all judges and politicians in Northern Ireland, saying that their police protection is to be withdrawn from 4 March this year.
The Prime Minister: I am grateful to the right hon. Gentleman for what he had to say about the victims. He speaks, of course, as someone who has himself suffered from terrorist violence in the past. I think he was right to say that Sinn Fein was finding itself increasingly isolated and that that was indicated by the fact that it was the only party not to agree with the final documentation of the forum for peace in Dublin.
Above all, I agree with the right hon. Gentleman about the desirability of mobilising the people of Northern Ireland for the peace process. They are the most powerful advocates for the peace process and have been since the onset of the process. I think that, with the support of their elected politicians in the House, they can again be mobilised to make it clear to that tiny minority who believe that they can live beyond the law and by terrorism that they are isolated and that they have no friends and no comforters in the democratic House of Commons or among the people of Northern Ireland, whether they be Catholic or Protestant.
As the right hon. Gentleman said, there have been misunderstandings about the nature of the elected forum that I propose. I hope now that those misunderstandings are behind us and laid to rest. I hope that it is now clear what nature of election we propose, what we propose would occur after the election and, in particular, that we seek all-party negotiations speedily thereafter. That is what all parties in the House have sought a way to find. I believe that we may have a route that will reach it. I hope that, in the discussions that my right hon. and learned Friend the Secretary of State and I will have with the parties in the days and weeks that lie ahead, we might find the route through to those elections speedily.
Mr. John Hume: May I say that I am absolutely confident in standing here that I speak for the vast mass of the people of both parts of our island, in utterly condemning the terrible atrocity that took place on Friday in London and in expressing the deep sympathy to the families who suffered? No one understands more—especially not more than the people of the north of Ireland—what those people have suffered.
I should also like to say that that event has naturally caused a great many strong feelings in me and my party, given what we have been through in recent times, but I shall keep those to myself today, concentrate on what the Prime Minister was saying positively, and say that I agree with him. We have to concentrate our minds on getting all people together, because the objective has to be what we have never had in Northern Ireland—lasting stability. The worst symptom of the absence of that stability is violence, and it is the duty of all the people to do everything in their power to get everyone to the table.
I also agree that the people of Northern Ireland—and of Ireland as a whole—have recently shown strongly their massive will for peace. I think that one of the best ways

663
forward now is to let the people speak and to let them speak very clearly. If they do, neither the IRA nor anyone else will be able to ignore them. How do I ask the Prime Minister to let them speak? Let us have a referendum in Northern Ireland before the end of this month and ask John Bruton to do the same. There should be two questions. Question No. 1: "Do you totally and absolutely and unequivocally disapprove of violence for any purpose whatsoever on this island?" Question No. 2: "Do you want to see all parties brought to the table to be given a process of dialogue to create lasting stability?"
The Prime Minister: I think that the sympathy expressed from Northern Ireland for the people of London will be very well received, not only by those who suffered directly from the bomb, and their families, but by other Londoners. Clearly, it is right to try to bring people together. The hon. Gentleman is entirely accurate to say that there is a massive will for peace. That has been evident throughout the past three or four years. We are looking at a range of different options on how we might proceed in the future. More than one option lies before us at the moment and we are examining them. Of course, I shall also take account of what the hon. Gentleman had to say.
Mr. Andrew Hunter: As bombs cannot destroy the yearning in Northern Ireland for permanent peace and as the search for that peace must continue, will my right hon. Friend make a priority of promoting meaningful dialogue at this stage between the constitutional parties of Northern Ireland and the Irish Government in the political track of twin-track? Will he above all make it absolutely clear that there can be no reward for violence?
The Prime Minister: I can assure my hon. Friend upon the latter point. We are certainly keen to encourage dialogue—the former point that he makes—and will continue to do so.
Mr. Paddy Ashdown: I wish to be associated with the words of the Prime Minister and the leader of Labour party, in sending condolences and best wishes to the victims and thanks to the emergency services. Is it not the case that it is simply impossible for the atrocity on Friday night to have been a spontaneous act, and that it must have been carefully and deliberately planned during the past few weeks while the rest of us were trying to find ways to peace? Is it not also the case that the aim of that act was not just to maim innocent bodies, but to make a casualty of peace itself? Is not that a reason why those who will not condemn must be regarded as condoning? Is not this a moment when Sinn Fein must decide whether it will be a democratic party committed to peace, or a prisoner of every callous and arbitrary decision made by the IRA Provisional Army Council?
The Prime Minister knows that we have supported him in his patient and courageous search for peace with the Irish Prime Minister in the past years, and we shall continue to support him in every act that he takes that seeks to reinvigorate the peace process on the basis of a consensus agreement between the democratic parties. Is it not, however, an iron law in those matters that, when the Irish and British Governments agree, they can have success, but when they disagree, they give the terrorists a chance?
664
Surely, therefore, the first priority must now be to restore the trust and unanimity of voice and action between Dublin and London. If that requires compromise on the favourite solutions put forward by both sides, surely that is a small price to pay. Surely those who represent the people of Northern Ireland—who will listen, as the hon. Member for Foyle (Mr. Hume) suggested, to the cry of the people of Northern Ireland to let them have the peace back—will recognise that a new spirit of compromise is the only way to ensure that peace itself is not added to the long list of casualties from Canary wharf.
The Prime Minister: The right hon. Gentleman is undoubtedly right that the bomb last Friday was not spontaneous, and that it must have been planned, prepared and sanctioned over a substantial period. It did not happen miraculously within a few short hours or days. That is undoubtedly the case, and he is entirely right to draw the attention of the House to that. He is also entirely right to make the point that those who are unwilling to condemn may be seen to condone what has happened, and I hope that that point is taken where it is aimed.
With regard to the situation between the British and Irish Governments, our objectives have been and remain the same—to try to bring all parties together so that a democratic agreement can be reached. We have not always agreed on every aspect throughout the past three years, and we have had to compromise between ourselves many times on the right approach to take. We have done so and we have reached agreements, and I am confident that we shall be able to reach agreements again in future.
I look forward to meeting the Taoiseach shortly, although that meeting will probably not take place this week. It may take place next week, but a date has not yet been determined. I have no doubt that we shall both look at the options that lie ahead, to see whether we can find a way forward that we both agree is the best option to deliver the outcome that we both seek.
Rev. Ian Paisley: May I say to the Prime Minister today that he has the support of all right-thinking and law-abiding people in Northern Ireland at this time? Some of us have come through this for almost a quarter of a century, and we know exactly how the bereaved ones and their families feel. We know the agony and the pain of those who have been injured and of those who will probably never enjoy the fullness of life again. All right-thinking people on both sides of the religious and political divides in Northern Ireland are at one in their sympathy. The House has heard from representatives from all the parties in Northern Ireland, all of whom have said the same in regard to that pain and anguish.
I find it very strange indeed that many commentators and many nationalist leaders, having condemned what IRA-Sinn Fein had done in the heart of the capital city of this United Kingdom, in their next breath repeated the propaganda line that was in the statement—that the people to be blamed for this terrible atrocity were the Prime Minister and the Unionist leaders. While they were prepared to condemn what had been done, those people were also prepared to parrot the lying propaganda of IRA-Sinn Fein. I find that very strange and dangerous.
Dr. Joe Hendron: On a point of order, Madam Speaker.
Madam Speaker: Order. Points of order come later.
Rev. Ian Paisley: The leader of the Liberal Democrats was absolutely right when he said that this had not happened overnight. The police in Northern Ireland have discovered that, three weeks ago, a registered tax disc on a lorry registered in England was stolen. That tax disc was on the lorry that did the damage. New number plates were made, and the lorry was brought across, via Lame and Stranraer, to do the damage. That has been confirmed to the owner of the tax disc, who is one of my constituents.
Three weeks ago, then, the planning was going on, and the premeditation of this terrible carnage. How could any democratically elected leader in the House of Commons be asked to sit down and negotiate with people who would do that while they were talking peace?
There is only one way in which the matter can be settled, and that is to pass it over to the people of Northern Ireland. Let them have their say—not in any referendum on chosen questions, but on who speaks for whom at the negotiating table.
The Prime Minister: Let me pick up the points that the hon. Gentleman made. First, his words of understanding to the bereaved will be very well received; I am grateful to him for what he said. He is, of course, right to support what the right hon. Member for Yeovil (Mr. Ashdown) had to say, and I note with interest what he said about the tax disc. That is very strong corroborating evidence.
There is one obstacle to negotiations, above all—the lack of confidence. It is that lack of confidence that we are to address if we are to have everyone seated down together, which is the objective that all of us seek. Often, in emotion, hot words are spoken that cannot easily be recalled, and lie on the record to cause difficulties in the future. As the hon. Gentleman knows, they may not easily be recalled; but I think that, with the greater issue in mind, they can be forgotten, forgiven and put to one side.
I am concerned to look towards the future: not to erect any barriers, but—as we have sought to do with the hon. Gentleman and the other hon. Members who lead political parties in the House—to bring people together to see whether we can find some common ground on which we can all stand against the terrorists whom none of us in the House can or do support. That is what I am seeking to do, and I am grateful for the constructive response that I have had from all the political parties in recent weeks. I shall look forward to continuing those discussions in the days ahead.
Mr. Peter Shore: May I also express my sympathies for the many victims of this hideous act of violence, and my thanks to the emergency services, particularly the police and the medical services based in the London hospital in my constituency?
As to the future, of course I welcome the Prime Minister's resolution to continue with the peace process. I know that he will readily accept this, but may I urge him to put particular stress upon gaining the full, open, wholehearted commitment of Sinn Fein to the six principles laid down in the Mitchell report? Will he ask the Irish Prime Minister, whom he is to meet shortly, to join him in urging upon Sinn Fein the acceptance of those six principles?
The Prime Minister: The right hon. Gentleman is right to draw attention to the six principles. They are clearly
666
important, although, as I said a moment ago, there is a seventh principle missing—which is already acceptable to all the other democratic political parties in the north—that would still need to be accepted by Sinn Fein, and that is the principle of consent. One of the great gains that we have made in the past three or four years is the general acceptance of the principle of consent by all parties in the north and by the Government of the Republic of Ireland as well. I will certainly make the points to the Irish Prime Minister that the right hon. Gentleman, has made, and I know that he will consider them carefully.
Mr. Michael Mates: While the response from some people to my right hon. Friend's suggestion that an election to a forum might be a way out of the impasse was completely predictable, because they are not interested in the democratic way forward, does my right hon. Friend accept that there were others who were not sure what was meant, and that that has been fed by the propaganda that this was simply a stalling device or a way to get back to the old ways of politics in Northern Ireland? As that is the case—and I believe that there are some people who are still unsure, although they would be perfectly happy to go forward to a reasonable way of testing the electorate—will my right hon. Friend, now or later today, and my right hon. and learned Friend the Secretary of State for Northern Ireland, spell out much more clearly what they have in mind? I believe that the Government have some very constructive thoughts that would be acceptable to democrats from both sides of the political divide.
The Prime Minister: My hon. Friend is quite right to draw the distinction between those who deliberately sought to pervert the message and those who misunderstand the message in the absence of further information. I hope that some of the things that I have said over the past few days and what I have had to say to the House this afternoon will remove many of the misunderstandings.
I hope, first in the private discussions that I am having with the political parties, to remove any other misunderstandings that there may be. I would like to see how far in those private discussions I may be able to iron out the areas of difficulty before I publish a paper setting out what the outcome would be. If that is done, before agreement is reached in the back room, it may make it even more difficult to reach an agreement, because people will take an instant view of whether they are in favour of something, and that does make the difficulties rather more intense. I shall certainly take on board what my hon. Friend has had to say, but, with the House's permission, I would prefer to take it on board first in private discussions with the political parties. When a concordat is reached, clearly it will need to be known by all the people in Northern Ireland as well.
Mr. Robert McCartney: I would like to join other hon. Members in offering sincere sympathy on behalf of my constituents in North Down to those who have been bereaved and injured. I also endorse entirely the Prime Minister's commitment to an on-going search for peace, but we must address the methods that are to be pursued in that search.
The Prime Minister will be aware that the pro-Union people of Northern Ireland had considerable reservations and reluctance about entering into negotiations with those

667
who retained the latent threat of un-decommissioned weapons. That latent threat has, through the incident at Canary wharf, been translated into an horrific act of violence. In those circumstances, how can the confidence that is so necessary be created?
Does the right hon. Gentleman also accept that, while there is a necessity to restore in some form the ceasefire, such a restoration and entering into further negotiations with Sinn Fein-IRA begs the question about whether further down the line, when it meets with another impasse, or some situation that does not meet with its approval, it will simply blast it out of the way in the manner of Canary wharf?
The Prime Minister: The hon. and learned Gentleman is right to draw attention to the fact that many people in Northern Ireland had great reluctance, and still are very reluctant, to enter into talks and discussions with paramilitaries who retain weapons. That is entirely right. The purpose that we have in mind is to try and see whether we can proceed by broad all-party agreement, through an election process, through all-party negotiations, during which, in accordance with the Mitchell report, there would be a parallel decommissioning of weapons as the talks proceeded.
What I know the hon. and learned Gentleman will not wish to happen—neither would any hon. Member—is to see barriers erected over which no one can clamber, so that the whole process simply gets bogged down in the sand. In outright war, one can go only for victory. In circumstances such as those we face, there will be areas where people will have to look to see whether the end justifies the means.
If we can get through to an election process with parallel decommissioning, the end is clear—the end that the hon. and learned Gentleman and all sensible people wish to see, which is the beginning, the continuation and the completion of the decommissioning of weapons. What we are seeking is the mechanism. Here is a way in which I believe that we can achieve it.
Sir Michael Spicer: Has my right hon. Friend received any requests from the Irish Government for assistance from the British security forces in routing out terrorists and their arms dumps south of the border?
The Prime Minister: No, we have Snot, but I can tell my hon. Friend that we have very close co-operation with the Irish Government and, on security matters, with the Garda. That has improved dramatically in recent years and has made a considerable contribution to the efforts that we and the Irish Government have sought to make against terrorism in the past few years.
Ms Mildred Gordon: May I say how tragic it is that my constituency, many of whose residents bore the brunt of bombing during the war and many of whom are of Irish descent. should have been the target of this evil act of terrorism? I had intended to raise only matters connected with my constituents, but the Prime Minister's statement has raised two worrying questions in my mind. First, if the leadership of Sinn Fein is undermined, with whom will the Government negotiate? Secondly, has the Prime Minister taken sufficient note of the strong criticism made by the Prime Minister of Ireland of the electoral proposals?
668
To return to my constituents, I thank the Prime Minister, the Leader of the Opposition and all those who have expressed their sympathy with the victims and who sent their congratulations to the emergency services on the speedy and efficient way in which they responded. I must also express my admiration for the council workers who have worked night and day to board up apartments whose windows were blown out, to make them wind and weather proof.
I do not know whether the Prime Minister is aware that, in addition to the devastation in Marsh Wall, about 1,000 windows have been blown out in the Barkantine estate, which has four tower blocks, which will cost hundreds of thousands of pounds to repair. At this very moment, surveyors are examining the worst-hit tower block—Top Mast Point—to find out whether there is structural damage. If there is, it will cost many millions. Will Government money be forthcoming to help Tower Hamlets council to do the repairs and clearing-up? We want that question answered. We also want to know who will pay for the repairs to the docklands light railway. There was traffic chaos today and the railway must be repaired speedily. I know that the privatisation process has begun.
Finally, is the Prime Minister aware that there has been some talk today of a fund being set up to help victims and their relatives, and householders whose house contents have been damaged by the blast and who are not covered by insurance? If such a fund was set up, would we have Government assistance in publicising it?
The Prime Minister: I hope that the hon. Lady will take back to her constituents the sympathy of the whole House for the difficulties that they have faced. She is right to draw attention to the fact that that part of London suffered grievously on previous occasions, and on this occasion the people have again responded as we would have expected.
The hon. Lady asked a series of specific questions. She asked with whom we shall negotiate. It is clear that we cannot negotiate with Sinn Fein while a campaign of violence is taking place. That is the position of the British Government and of the Irish Government. We are at one on that point. We can negotiate, of course, once there is a verifiable ceasefire back in place, because that is the practical way for us to proceed and that is what we shall seek to do. On the question of elections, that is a matter under discussion between the British and Irish Governments, and I think that we shall be able to reach an amicable agreement.
The hon. Lady raised a number of questions about costs. As far as I can give her answers now, I shall attempt to do so. With regard to Tower Hamlets, the financial implications for the local authorities are not yet clear. That is being examined, but my right hon. Friend the Secretary of State for the Environment will consider applications under the Bellwin scheme as soon as the position becomes clearer. I cannot tell the hon. Lady what that will amount to at this stage, but we are examining the position. I shall write to the hon. Lady about the docklands light railway as soon as I have further information. I have asked the same questions, but I am not yet in a position to give her the answers.
The hon. Lady mentioned that both businesses and individuals will face difficulties. Of course, any victim who was injured in Friday's terrorist outrage will, almost

669
certainly, be eligible to apply for compensation under the criminal injuries compensation scheme. For businesses and other individuals, the matter is complex, but if the hon. Lady will be content I shall write to her.
Mr. David Wilshire: In echoing the words of sympathy and thanks, may I ask my right hon. Friend whether he agrees that the effect of Friday night will make the search for a permanent and lasting peace, and progress towards all-party talks, even more important and urgent than before? In the light of comments made by other people, does my right hon. Friend accept that some suggestions—that all Sinn Fein has to do is to say sorry and then we can get back to how things were on Thursday and pretend that nothing has happened—are quite impossible to accept? Does he also agree that, if the bomb that went off on Friday results in an end to the proposals for elections, terrorism will have won and freedom and democracy will have been defeated?
The Prime Minister: We certainly do not wish to see any rewards for terrorism of the sort that we saw on Friday. My hon. Friend is right to say that Friday night makes the search for peace more important and more urgent. On the subject of Sinn Fein, I reiterate the point that I made earlier and, as my hon. Friend put it, sorry will not do. Of course it will not. We would need the clear-cut reinstatement of the ceasefire before we or the Irish Government would be able to re-enter discussions with Sinn Fein.
Mr. Tony Benn: Everyone will share the Prime Minister's expressions of horror at the atrocity in docklands. Does the Prime Minister also recognise that the ceasefire has brought new life to Northern Ireland and that the ceasefire was the result of work done by my hon. Friend the Member for Foyle (Mr. Hume), Mr. Adams and Albert Reynolds? In one sense, there has been no peace process. There has been a ceasefire, but a peace process must mean talks.
I am sure that the Prime Minister is aware—if he is not, I wish to draw his attention to the point—that the breach between London and Dublin, and between London and Washington, has certainly made a peace process more difficult. John Bruton was told on the telephone about the election proposal, and he was never consulted. The Mitchell report, which suggested all-party talks and simultaneous decommissioning, was set aside.
The Prime Minister indicated dissent.
Mr. Benn: It was set aside by the proposal for an election in the north that had never been the subject of proper discussion with Dublin. If we are to have a new ceasefire, are we going to have a peace process following, or will the Government continue to prevaricate on the all-party talks that are absolutely essential if we are to have a long-term settlement in the north?
The Prime Minister: I am sorry that the right hon. Gentleman did not urge acceptance upon Sinn Fein either of the six principles or of the consent principle. I am sorry that he neglected to make that point, which I think would be accepted by the whole House. I am not sure that I
670
agree with the right hon. Gentleman's version of history, because it seems to me to be lamentably inaccurate in every respect.
It was nearly three years ago—I do not remember the words precisely—when a message landed on my desk one evening from the IRA saying, "The armed struggle is over. We need your British help to bring it to a conclusion." It realised where it needed to turn, and we have done what we can in the interim to try, first, to bring the ceasefire into operation and, secondly, to move from that ceasefire to a permanent settlement.
The right hon. Gentleman is quite wrong in his assessment of why we have not been able to move forward to a permanent settlement and all-party negotiations. I can tell him that we have not done so because, first, Sinn Fein-IRA refused to decommission any arms whatsoever. They were not asked by the British Government or the Unionist parties to decommission every weapon that they had, although majority opinion both in the north and in the south felt that they should have been.
They were asked to do some decommissioning in order to instil confidence, so that the Unionist parties could sit down with them without the threat of a gun held to their head the moment that Sinn Fein-IRA did not get precisely what they wanted in negotiations. I am not sure whether it was the hon. Member for Foyle (Mr. Hume) who said it—he will nod or shake his head—but the view in common currency in Northern Ireland is that talks cannot take place with guns
"on the table, under the table or outside the door."
That is generally accepted in Northern Ireland.
Mr. Hume indicated assent.
The Prime Minister: The hon. Gentleman nods—I thought he said so.
That view has held throughout the process. It is Sinn Fein's refusal to decommission that prevented us, some time ago, from going forward to all-party talks. That was not due to the stubbornness of the British Government, the stubbornness of the Unionist parties or the stubbornness of the people of Northern Ireland, but it was due to the fact that Sinn Fein would not decommission. When it would not do so, an alternative mechanism was found through patient negotiation and agreement, so that all the parties could sit down with a proper mandate to discuss, and decommissioning could take place in parallel with those discussions. The moment that that proposition became apparent, the reward for finding an alternative method was the bomb that murdered people just the other day in London.
I know that the right hon. Member for Chesterfield (Mr. Benn) feels deeply about this, but he is wrong: plain, common-or-garden wrong.
Mr. Barry Porter: We have used the phrase "IRA-Sinn Fein" many times in the House, as if the two parts were part of the same entity. Is it correct to treat them in that way now, because I was never sure whether the IRA controlled Sinn Fein or the other way round, or a combination of both? Certainly the events of the past few days would suggest that the IRA Provisional Army Council has ignored Sinn Fein, and, in the current circumstances, Sinn Fein could not now deliver

671
decommissioning if it were asked. Is not this a chance for Sinn Fein now to take its democratic opportunity, not merely to say that it condemns violence, although that is important, but to take part in whatever democratic process is necessary to determine who comes to the negotiating table?
The Prime Minister: As for the relationship between Sinn Fein and the IRA, I think that they are both members one of another. That is the position, and has been so for a very long time. Were that not the case, perhaps Sinn Fein would be more prepared to condemn openly activities that no civilised person could possibly condone.
Mrs. Bridget Prentice: The Prime Minister will be aware that one of the people murdered on Friday was my constituent, John Jefferies. John was a talented young musician, and extremely popular in his local community. I know that the Prime Minister will join me in sending our condolences to his family. Does he agree that we must ensure that John's life is not lost in vain and that everyone in the House and those parties that might want to be part of it must do all in their power to ensure that the peace process gets back on track?
The Prime Minister: I am grateful to the hon. Lady for raising that issue and I agree entirely with every word she said. I hope that she expresses my personal sympathy to Mr. Jefferies's family. In a sense, the death of Mr. Jefferies, and the death and the injury of others, is a stark commentary on what we have seen for a long time in the dispute in Northern Ireland. They were innocent victims; they had no connection whatsoever with the ancient feuds that light these hatreds and have kept them burning for so long. The hon. Lady is entirely right: the best memorial to Mr. Jefferies and to the other people who have been murdered over the past 30 years would be for us to bend all our will to find a proper, full-term solution.
Mr. Nicholas Budgen: Does my right hon. Friend agree that it seems highly likely that in the end we shall be confronted by the old, hard choices in Ulster? Will he remind the democratic nationalists in the Province that they would have a secure and honoured position in a united and integrated United Kingdom? Will he also remind them that they would be able to exercise real power in some areas if we were to restore a proper measure of local government in Ulster?
The Prime Minister: As my hon. Friend is aware, for he knows Northern Ireland well, most of the choices in terms of how to carry this matter forward are hard choices—there are very few easy choices in the matter. I pray that we shall not come to the old, hard choices that my hon. Friend has in mind, for that would mean that violence and terrorism had taken full root and were flourishing again.
My hon. Friend is right to draw attention to the fact that a whole generation of politicians in Northern Ireland have aptitudes and skills not yet fully utilised in the way that they could be and should be in their constituencies. I hope that we shall be able to reach a position, by agreement, where those politicians can use their talents in that respect once again.
Mr. Clive Soley: Does the right hon. Gentleman accept that his desire for negotiations as a
672
gateway to inclusive talks is not mutually exclusive to the Irish Government's desire for proximity talks? Proximity talks could address some of the fears, anxieties and uncertainties about the nature of such elections, which would be necessary for them to be successful, which is what the right hon. Gentleman seeks to achieve.
The Prime Minister: The Irish Government seek proximity talks to clarify, essentially, what would be the position during elections and after elections. I am discussing, bilaterally, exactly the same points with the democratic political parties. The difficulty with proximity talks—I hope that the hon. Gentleman does not think that I put the point flippantly—is that we would need to have people in proximity, and there is a certain disinclination to do that at the moment. I have never denied the underlying need for discussions prior to the elections—indeed, I embarked upon those discussions from the moment that I set out to the House the possible electoral route forward.
Several hon. Members rose—
Madam Speaker: Thank you. I now draw questions on the statement to a close.
Mr. Benn: On a point of order, Madam Speaker. This matter is of great importance and a number of hon. Members have been rising in an attempt to participate in the statement. Have the Government indicated that they will allocate time for a debate on this issue? Many hon. Members were excluded from today's debate and this is a very big issue. My hon. Friend the Member for Foyle (Mr. Hume) reminded me that we have not had a debate on Northern Ireland since the ceasefire—something has had to occur to trigger this statement. May we try, through you, Madam Speaker, to persuade the Government to make time available for a debate?
Madam Speaker: As the right hon. Gentleman is aware, that is normally done through the usual channels. He is quite right: we have not had a debate on these matters for some time. Many hon. Members always stand to put a question as there is a lot of interest in these matters. I regret very much that it is not always possible to call all hon. Members who are standing. I have kept the Prime Minister at the Dispatch Box for more than an hour. I have a list of all the hon. Members who have been standing—I always keep a list of such hon. Members and I try to call them alternately. I shall at least try to give hon. Members who have not been called an opportunity to put a question either to the Secretary of State for Northern Ireland or to the Prime Minister during subsequent statements. I will bear in mind what the right hon. Gentleman has said, but it is a matter for the usual channels.
Mr. Jeremy Corbyn: Further to that point of order, Madam Speaker. It is obviously your decision to terminate questions at this point, but you must recognise that all those hon. Members who still want to ask a question would seek to be called in a debate on Northern Ireland, in which, we would hope, speeches would be time-limited so that those of us who wanted to

673
contribute were not talked out by ex-Ministers or Privy Councillors, who always seem to get priority when debates are held on any subject.
Madam Speaker: I have just made it clear to the House that, every time there is a statement or a debate, I keep a list and I put stars against the names of the Members who have been called once, twice or three times—or not at all.

Opposition Day
[5TH ALLOTTED DAY]

Ministerial Responsibility
Madam Speaker: I have selected the amendment standing in the name of the Prime Minister.
4.37 pm
Mr. Menzies Campbell: I beg to move,
That this House deplores the erosion by Her Majesty's Government of the principle of ministerial responsibility.
It is often said that the United Kingdom has no written constitution, which is technically inaccurate, although it may be substantially correct. It undoubtedly conveys the message that much of the practice and many of the principles of our constitution depend on convention, and one such convention is that of ministerial responsibility.
What are conventions? They are merely habits and practices that do not have the force of law. If a convention is broken, no law is broken. Conventions are habits and practices that depend on their observance for their validity. A breach of a convention may, however, do serious damage to the integrity of the constitution, and it may do intense—even immeasurable—damage to the reputation of the Government and of Parliament.
The observance of some conventions is exclusively the responsibility of the Government; self-evidently, ministerial responsibility is one. Ultimately, enforcement of the convention of ministerial responsibility is a matter for the Prime Minister. He leads the Government; he selects his Ministers.
It follows that, when a breach of convention is tolerated, that breach is the Prime Minister's responsibility. He alone has the right to determine who should be in his Government and who should continue to be his Ministers. If, by a breach of the convention of ministerial responsibility, the reputation of Parliament is damaged, the Prime Minister is liable for that, too.
We should ask ourselves how far ministerial responsibility extends. It has been the subject of some dispute in the past three years, in an inquiry the results of which we may shortly hear, but I start with a proposition to which there can be no objection—that the personal actions of a Minister must be his own responsibility.
If a Minister knowingly deceived Parliament or Members of Parliament about a secret change in Government policy, that would be his personal responsibility, and I have no doubt that such a Minister should resign. A Prime Minister who did not require him to do so would be culpable in the extreme because, jointly and severally, they would be guilty of a gross breach of the convention of ministerial responsibility. Together, they would damage the reputation of Parliament.
Let us take another example. If, by his actions, a Minister knowingly created circumstances in which a person facing serious criminal charges was denied information necessary for his defence, would that not be his personal responsibility, and should not that also require resignation? Indeed, if, in either of the examples

675
that I have offered merely as hypotheses, resignation did not follow, the doctrine of ministerial responsibility would have been seriously eroded.
We must ask ourselves, how do we predict that the present Government might respond to either of those two hypotheses? We shall have to wait to know precisely, but we can obtain a clue to their future behaviour by examining their past behaviour—for they are a Government who have already been party to a substantial erosion of the doctrine of ministerial responsibility.
Sir Robin Butler, in a written statement to the Scott inquiry, appeared to absolve both Ministers and Whitehall permanent secretaries—of which he is, by some distance, the most senior—from almost any mistake, misdemeanour or malpractice in the government machine. In his written statement, he said:
"While ministerial heads of department must always be accountable for the actions of their departments and its staff, neither they nor senior officials can justly be criticised for shortcomings of which they are not aware, and which could not reasonably have been expected to be discovered, or which do not occur as a foreseeable result of their own actions. Ministers and senior officials can only be criticised personally for deficiencies in the organisation if those deficiencies occur as a foreseeable result of their instructions, or they could reasonably be expected to have known about them or discovered such deficiencies and taken action to amend them. While ministerial heads of department must always be accountable for the actions of their department and its staff, neither they, nor senior officials, can justly be criticised in a personal sense for shortcomings of which they are not aware."
I fancy that, in a report to be made public later this week, issue may be taken with some of the propositions in that statement.
Let us take the statement at its face value, however. Let us take what I understand to be perhaps an updating of the Maxwell-Fyfe propositions, but which essentially is the assertion that, where personal responsibility is concerned and where personal knowledge is available, a Minister is likely—indeed, bound—to be held to be responsible. Let us test that modern statement of ministerial responsibility against two recent examples, the first of which is the Pergau dam affair.
The Minister with responsibility, the Foreign and Commonwealth Secretary, the right hon. Member for Witney (Mr. Hurd), against the advice of the permanent secretary of the Overseas Development Administration, expressly authorised the commitment of aid for the Pergau dam. He did so as his personal responsibility; as I understand it, that formed part of the submissions made on his behalf when the matter reached court. Notwithstanding that, he was found by the court to have acted illegally. In a decision in which he overruled the advice of the most senior civil servant in the Department and for which he took personal responsibility, he was found by the court to have acted illegally.
Did resignation follow? Did remorse follow? Was there even an apology? There was none of those—the Foreign Secretary no doubt possessing all the Christian virtues except resignation—yet the circumstances that I have just described fall fairly and squarely within the Butler definition. The failure to resign or to accept responsibility unquestionably eroded the convention of ministerial responsibility.
If being found to have acted illegally were grounds for resignation, the Home Secretary, who has a somewhat feline character, can be regarded only as possessing nine
676
lives. For a while, hardly a week passed without a court holding that the right hon. and learned Gentleman had exceeded his powers.
It is worth reminding ourselves that, when the High Court, or the Court of Session in Scotland, finds that a Minister has acted ultra vires—has acted outwith his powers—that is not an assertion of the supremacy of the court, but rather an assertion of the supremacy of Parliament. To the Minister involved, the court is saying, "You have sought to exercise a power that Parliament has not conferred upon you." Hon. Members should not be critical when members of the Executive are held by the courts to have acted illegally. By doing so, the courts are asserting the sovereignty of Parliament over the Executive.
Mr. Graham Riddick: Would not the Liberal Democrats' policies of weakening the veto and handing more power to the European Parliament undermine ministerial responsibility and accountability to the House?
Mr. Campbell: I think that I am correct in saying that the hon. Gentleman takes an interest in defence matters. He will be aware that, under article V of the north Atlantic treaty, the United Kingdom is bound to go to the defence of any one of the 15 members of NATO, including, for example, Greece or Turkey, and that we are bound to do so using nuclear weapons, if necessary. That shows that a sovereign Parliament can, by treaty, cede certain of its responsibilities. What was the Single European Act if it was not a formal cession of sovereignty from the House to Europe? If we choose to do that, we do so in the exercise of the responsibility that has been conferred on us by the electorate.
As we sign treaties, we can abrogate them—the sovereignty of Parliament is not affected. The suggestion that qualified majority voting, which already exists in certain areas, is somehow an abrogation of the doctrine of ministerial responsibility, as it applies to the obligation on Ministers to take responsibility for their own actions is, if the hon. Gentleman will forgive me, somewhat constitutionally inept.
Dr. Norman A. Godman: The Chancellor of the Exchequer said not so long ago that, were he to be found guilty of what I might term conduct unbecoming of a Cabinet Minister, he would resign forthwith. Surely his Cabinet colleagues hold to the same code of honour.
Mr. Campbell: It is not for me to lay down a code of honour for the Cabinet. That is an issue on which members of the Cabinet must satisfy themselves and the electorate. In a sense, I think that the hon. Gentleman seeks to anticipate the Scott report. I have studiously tried to avoid doing so; I have merely put forward some hypotheses that I think might legitimately test the argument and the extent to which the doctrine and convention of ministerial responsibility can he applied.
What matters is not only the form of responsibility but its substance. The House will recall that the Home Secretary told us that the chief executive of the Prison Service was dismissed because of operational shortcomings in the service. The right hon. and learned Gentleman said that he took no responsibility for operational matters. We were told that policy was for him alone and that operations were for the chief executive.

677
If we are to believe the chief executive, however, he met the Home Secretary almost every day to discuss the Prison Service. Are we to believe that in the course of an extensive relationship only issues of policy were discussed? I do not believe it. Allegations have been made that on occasion the Home Secretary made recommendations, as it were, to the director about the way in which certain prisoners should be dealt with. If that is not involvement in operational matters, what is it?
Did the Home Secretary go to his party conference and receive a standing ovation on the understanding that he took no responsibility for operational matters? When the blue-rinsed matrons of Surbiton rose to Lord Archer's invocation that "Michael should stand and deliver"—the noble Lord has much style, but not much originality—did they do so on the understanding that the right hon. and learned Gentleman would maintain an Olympian detachment from operational matters? Of course they did not. They did so because they were led to believe that, in terms of the Prison Service, the Home Secretary would be a hands-on Minister.
There was then the legendary failure of the shadow Home Secretary, the hon. Member for Blackburn (Mr. Straw), either to anticipate or to answer the question whether Mr. Lewis should have been sacked. The logical position is that, if Mr. Lewis and the Home Secretary were both engaged in operational matters and there was a failure in that regard, both of them should have gone. It is a pity that the quick wit of the shadow Home Secretary did not permit him at least to anticipate that question and to give that answer.
What does the erosion of ministerial responsibility tell us about government? It tells us, first, that there is a great deal of arrogance in government. It tells us that there is an unwillingness to be held accountable. It perhaps tells us that there is a great deal of self-satisfaction in government.
What are the consequences of the erosion of ministerial responsibility? They include a deep cynicism among the electorate about the governance of Britain. It is clear beyond any question that the political system has never been held in less respect than it is now.
Above all, the erosion of ministerial responsibility tells us of the weakness of a Government who dare not apply a doctrine that lies at the very heart of constitutional government in the United Kingdom. They dare not do so, because the political consequences would be so damaging to their survival. That is the final indictment of the Government. In their weakness they damage not only themselves but the fabric of the constitution. It is time that we saw the back of them.
4.57 pm
The Chancellor of the Duchy of Lancaster (Mr. Roger Freeman): I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
"welcomes the Government's policies for discharging Ministerial accountability to Parliament, for improving the management and delivery of public services, for maintaining high standards in public bodies, and for improving the openness and responsiveness of the public sector, thus creating a framework for good Government.".
678
To claim that there has been an erosion of ministerial responsibility is contradicted by the facts. The Government have not only adhered to the principle; we have clarified it, sharpened it and taken care to explain it to a wide public audience. I shall respond to the motion by considering how Ministers have discharged their responsibilities in five broad areas.
First, I shall deal with Ministers' responsibility to their own civil servants. Secondly, I shall deal with their responsibilities to next steps agencies. Thirdly, there are Ministers' responsibilities for non-departmental public bodies. Fourthly, I shall refer to ministerial accountability to Parliament. Finally, I shall take up Ministers' responsibilities to the public at large.
First, there is ministerial responsibility for the civil service. Any examination of the subject would be incomplete without dealing with the role of the civil service. The Government regard the civil service as a precious asset that other countries have good reason to envy. In our view, the responsibility of Ministers is not confined to accounting for the actions of the civil service. We have a responsibility for the civil service and to it. We are determined to take such steps as are necessary to maintain its essential character, which is based upon integrity, political impartiality, selection and promotion on merit and accountability, through Ministers, to Parliament.
That is the background to our introduction of the new civil service code. The code provides a succinct statement of the constitutional framework of the civil service and the values that every civil servant is expected to uphold. It restates that civil servants owe their loyalty to Ministers and that Ministers must account to Parliament. We are indebted to the Select Committee on the Treasury and Civil Service, whose original draft provided the model to which we stayed very close.
The code restates the established constitutional framework of accountability to which the Government are committed, but it also contains an important innovation. It provides a right of appeal to the independent civil service commissioners for any civil servant who believes that he or she is being required to act in a way that is illegal, improper or unethical; that breaches constitutional convention or a professional code; that may involve maladministration; or that otherwise breaches the code or raises a fundamental issue of conscience.
The code came into force on 1 January and it deserved more attention than it got. Not only does the concise code apply to every civil servant, but, more importantly, there has been wide consensus on its substance. The House will agree that it is of the utmost importance that the civil service should command the confidence of both present and alternative Administrations. We welcome the view that was expressed in the fifth report 1993–94 by the Select Committee on the Treasury and Civil Service on "The Role of the Civil Service". It stated that there was little doubt that civil servants would be able to demonstrate a high level of commitment to any incoming Government.
Secondly, the report stated that the commitment by the overwhelming majority of civil servants to the principle and practice of a politically impartial civil service is undiminished. Thirdly, it said that the next steps reforms were in principle compatible with the maintenance of the traditional values of the civil service.
Mr. A. J. Beith: Was not this relationship between Ministers, civil servants and Parliament fatally and permanently undermined when Mrs. Thatcher did not take responsibility for authorising the leak of the letter of the Solicitor-General in the Westland case and did not see it as necessary to dismiss any civil servant for giving that authorisation without her permission?
Mr. Freeman: The right hon. Gentleman has been in the House for longer than I have, and he will remember the debate and the explanations that were given at the time. I have affirmed the principles of the new civil service code, the great advantage of which is that it sets out, perhaps for the first time, in crystal clear language the obligations of Ministers and civil servants one to the other.
I shall now deal with ministerial responsibility for agencies. The introduction of the civil service code represents an important element of continuity in the Government's policy for continuity and change in the civil service. At the heart of the programme for change is the next steps project to improve management in Government. Under next steps, since 1988 we have established executive agencies within the public service to deliver services to the public either directly or indirectly. The next steps project has affected practically every part of the civil service, and that covers a wide spectrum of activity. It has made significant management improvements. Currently there are 110 executive agencies, and two civil servants in three are working under next steps arrangements. I expect that proportion to rise to three quarters by the end of next year.
The introduction of next steps executive agencies does not change the usual framework of ministerial accountability to Parliament. Civil servants report to Ministers and Ministers account to Parliament for all the activities of their Departments, including their agencies. The next steps concept introduces a great deal more clarity into the definition of respective roles and responsibilities.
In particular, it makes clearer the aims and objectives of civil service organisations, the tasks and performance targets that Ministers set each agency to achieve, and the amount of resources that are allocated to agencies. The greater separation of roles within the civil service and the introduction of performance targets to areas where previously there were none have been catalysts for change and for improvement in the management and provision of services.
Dr. Godman: Two Benefits Agency offices in my constituency are staffed by highly competent and professional people. However, would the Minister agree that some problems that are brought to us by constituents who are on social security incomes require a response from a Minister in addition to the usual letter from the chief executive?
Mr. Freeman: I entirely agree with the hon. Gentleman. My brief contains comments on agencies, and if he will bear with me I shall deal with his point.
The next steps initiative does not change conventional relationships between Ministers and those carrying out the executive functions of Government. Agencies are within the civil service, and next steps arrangements provide for the clear delegation of operational responsibilities. The chief executive of each agency is personally responsible to
680
the Minister for its management and performance. The form and extent of the delegation is determined case by case in the agency framework document, which is published. Each document sets out the range of tasks that the agency is to perform. That does not mean that, in delegating operational responsibility to the chief executive via the framework document, the Minister washes his hands of any interest other than in output and outcomes.
As I have said, the Minister remains accountable to Parliament for the agency. If he is to provide an adequate account, he needs to keep in touch and to retain the right to look and question and even to intervene in the operations of the agency if public or parliamentary concerns justify it. He may need to give fresh directions or to take other action if he or Parliament is not satisfied with what is being done. The Minister must be able, if necessary, to examine in depth and detail every part of the activities of the agency. That does not cut across the principle of next steps agencies.
Framework documents may require certain decisions or events to be referred or brought to the attention of Ministers, and the basis on which hon. Members have accepted the arrangements under which their inquiries about operational matters are handled by chief executives is the knowledge that, ultimately, if it becomes necessary, they can take up the matter directly with the Minister. The Select Committee on the Treasury and Civil Service strongly endorsed that.
I agree with the hon. Member for Greenock and Port Glasgow (Dr. Godman) that constituents of any hon. Member have recourse to Ministers either in writing or through their Member of Parliament at the Dispatch Box. The establishment of agencies in no way seeks to cut across that principle.
Mr. Derek Foster: I have a question for the Minister before he leaves the topic of the next steps agencies. The Prison Service has been mentioned. Does he agree that continual interference by a Minister in what are described as operational matters undermines the authority of the chief executive, and makes it almost impossible for him to run the agency? Is the next steps agency structure incapable of dealing with the problems in the few agencies that are continually surrounded by controversy?
Mr. Freeman: I have defended the right—indeed, the responsibility—of Ministers to inquire, nay to intervene, in the activities of any agency so as to discharge their accountability to Parliament. That is the difference between the public and private sectors. The analogy being drawn by some that an agency is like a subsidiary company of a large group holding company is false. A Minister is accountable to Parliament and must be able to call to account the chief executive and other officers of an agency. He must also be able to examine and inquire into every nook and cranny of its activities.
We are still developing our experience with the agencies. We have 110 of them, and perhaps in certain cases those who sit on the advisory committees of agencies are unclear about their responsibilities. Are they confused about their responsibility to advise the Minister, or do they think that somehow they are non-executive directors of an operating company? They are not the latter. The Minister is responsible at all times, and is accountable to Parliament.

681
He delegates day-to-day responsibility but does not forgo the right to intervene in the affairs of the agency or in the responsibility of the chief executive.
Mr. Beith: I am grateful to the Minister for accepting a further intervention. Is it not the case that the frequency of intervention that he has described and for which there may be the most compelling political and public interest justification, necessarily results in actions at operational level that have been determined by what the Minister has said or by what he is expected to think? Does the Minister accept that the consequence of that is that Ministers must accept that in some circumstances they may have to resign because of operational failures within the agency?
Mr. Freeman: If the right hon. Gentleman will allow me, I shall deal with that point in the concluding part of my remarks, when I come to ministerial responsibility to Parliament. However, he must be right in principle. If it is the responsibility of a Minister in discharging his accountability to Parliament to look into the affairs of an agency, the distinction between policy and operations—which I have defined more clearly in this debate for the benefit of the House—means that, if he intervenes and directs because of pressure brought by Parliament or because of a collective judgment by Parliament that the operations of an agency may need to change, that will become his responsibility and not the chief executive's.
Some people, including some members of the Treasury and Civil Service Committee, have proposed that chief executives should account directly to Select Committees about their annual performance. However, that could not be reconciled with their position as agency staff or, therefore, in relation to civil servants who report to their Minister. That would also not fit in with the Committee's acknowledgement that it is for the Minister to account to Parliament. However, agency chief executives regularly appear before Select Committees to explain the factual position in relation to the agency without prejudicing normal ministerial accountability.
An essential part of the next steps arrangements is that the framework document should in each case spell out as clearly as possible the division of responsibilities between the Minister and the chief executive. Such clarification does not mean that independent advice to Ministers and agencies should be excluded. Agency arrangements often provide for an advisory board or an adviser to the Minister to serve as a source of outside expertise that is relevant to the business of the agency. That may be mirrored by outside advice which the chief executive requires.
The story of next steps is one of success, and there is no doubt that standards of service and performance have improved. Later this month, we shall publish the 1995 "Next Steps Review", an annual White Paper which summarises progress in all the agencies. The review will show that agencies, overall, met 83 per cent. of the key targets that were set by Ministers in 1994–95, which compares favourably with the 80 per cent. that were met in the previous year.
The 1995 review will be the sixth in a series. However, it is significantly different from earlier ones because it has developed from being a report on the next steps project to one which focuses on agency performance. It will show
682
that, in different spheres and in different ways, many next steps agencies are delivering services to improved standards with increased efficiency and effectiveness.
I should like to remind the House of the Treasury and Civil Service Select Committee's conclusion, in its most recent report on the role of the civil service. It reported that agencies represented
"a significant improvement in the organisation of Government … any future Government will want to maintain them in order to implement its objectives for the delivery of services to the public."
I shall now examine the question of ministerial responsibility for non-departmental public bodies, commonly called quangos. The Opposition's arguments in relation to quangos lack common sense because, first, they accuse the Government of eroding the principle of ministerial responsibility and, secondly, they accuse us of the opposite—of having strengthened ministerial control through quangos in spheres that were once the responsibility of local government, thus creating the so-called democratic deficit. The Opposition cannot have it both ways at once—indeed, I am showing that they are wrong twice over.
We have not created some sort of quango state. The evidence for that is published annually in a booklet called "Public Bodies", which is a continuous public record that, significantly, did not exist before this Government created it in the early 1980s. The booklet is available to hon. Members in the Library. It shows that, far from running out of control, non-departmental public bodies—the real quangos—decreased from 2,167, in 1979, to 1,227, in 1995, which is a 43 per cent. reduction. Likewise, the number of staff who are employed by those bodies decreased from 217,000, in 1979, to 109,200, in 1995. That is a 45 per cent. reduction.
The Liberal Democrats, at the last count, had proposed the creation of almost 900 new quangos, including an office of utility regulation—to regulate the regulators—an animal protection commission, an arms conversion agency, and both a local enterprise agency and a local housing arbitration agency for every local authority.
The function of NDPBs is regularly reviewed in a continuous programme. Once they are no longer needed in their existing form, the bodies are abolished, merged or privatised. Even so, we have recently undertaken a further series of initiatives to improve their efficiency, standards and responsiveness. First, we are implementing virtually every one of the recommendations on quangos made in the first report of the Nolan committee. Those recommendations deal not only with public appointments but with proprietary issues. We expect to issue a consultation paper in the next few weeks, following a review of the legal framework of propriety and audit in public bodies, as Nolan recommended.
Secondly, my right hon. Friend the Chief Secretary to the Treasury is reviewing the way in which the administrative costs of NDPBs are controlled. Thirdly, my right hon. Friend the Chief Secretary is examining the scope for rationalising the function of NDPBs in certain policy areas in order to minimise any overlap or spheres of unnecessary regulation. Finally, the efficiency unit in my Department is carrying out a study which is designed to ensure that NDPBs with executive responsibilities have a clear concept of their objectives and effective systems to measure whether they have been achieved.
We are therefore strengthening the accountability of NDPBs to Ministers. At the same time, we are strengthening those bodies' accountability outwards—to

683
the people who use them. Our work on public appointments is a clear example of ensuring the maintenance of the highest standards through greater openness and public accountability.
The first report of the Nolan committee, to which I have referred, covered public appointments. It found nothing seriously wrong with the system, but it made a number of recommendations that were designed to demonstrate publicly that clean bill of health. We welcome those recommendations and have implemented them.
One key recommendation was the establishment of an independent commissioner for public appointments. Sir Len Peach, formerly chairman of the Police Complaints Authority and a man with an outstanding personal record in both the public and private sectors, started work on 18 December last year. His job is to monitor, regulate and audit the processes for all appointments to executive NDPBs and NHS bodies. To that end, he is currently drafting guidance on public appointments.
The guidance will incorporate a code of practice that is built around seven key principles: ministerial responsibility, as Nolan recommended; appointment on merit; independent scrutiny; equal opportunity; probity; openness and transparency; and proportionality. Sir Len will be consulting with all bodies that have a direct interest in the guidance, including the House, through a draft that will be issued in the week beginning 26 February. He intends to publish the final version in April. He will then publish a preliminary report on his work, towards the end of this year, and a first substantive report in the summer of 1997.
I believe that those reports, together with Departments' public announcements of appointments, will bring full transparency and a great degree of accountability into that aspect of our public life. At the same time, the reports will endorse ministerial responsibility for public appointments and, by showing that that responsibility is open and fully justifiable in the way in which it works, will strengthen that responsibility.
Mr. Tom King: In relation to the Nolan committee's first report, the Chancellor has not yet made any reference to the work that is being done on the second report, which of course is extremely germane to the issues that he is speaking about.
Mr. Freeman: My understanding from the chairman of the committee is that work is progressing on its report into local public bodies, such as the training and enterprise councils. I should expect that the committee will reach a conclusion and publish a report, possibly in the late spring. As and when that report is available, I am sure that my right hon. Friend, the Lord President will say what form—
Mr. King: It goes much wider than TECs. It covers the very important spheres into which—it is policy that I certainly support—substantial sums of public money go, such as further and higher education, TECs, universities and colleges of higher education. It covers all the housing associations and the housing corporations. It will cover a wide ambit, which will be of considerable interest to the House.
Mr. Freeman: I am grateful to my right hon. Friend. The report is an important piece of work, and it is being carried out with typical thoroughness. The House and the other place eagerly await its publication.
Dr. Godman: The Minister will have to forgive me for my parochialism, but does Sir Len Peach have a United Kingdom-wide role, or will he have counterparts in Edinburgh and Belfast?
Mr. Freeman: His role extends throughout Great Britain, and he has a similar role in Northern Ireland. He is therefore, effectively, covering the whole of the United Kingdom.
I shall now deal with the issue of ministerial accountability to Parliament, which has been raised by the Liberal Democrats. In the previous sections of my speech, I have said where progress has been made during the past decade, especially in the past few years, in clarifying responsibility in other aspects of public life. The Minister in charge of a Department is the only person who may be said to be ultimately accountable for the work of his Department. Parliament has usually conferred powers on the Secretary of State or the Minister, and Parliament calls on Ministers to be accountable for the policy, actions and resources of their Departments in the use of those powers.
However, while a Minister has full constitutional accountability to Parliament for everything that the Department does, it is manifestly impossible for him to take all decisions, or be personally involved in every action of his Department. It cannot, therefore, be sensibly suggested that a Minister is personally responsible for every action of his Department. It is worth stressing that distinction, because the terms "ministerial accountability" and "ministerial responsibility" have tended to be used interchangeably.
The mistaken inference that is sometimes drawn is that a Minister must personally take the blame—or the credit—for every action of his Department. It is equally mistaken to think, as some on the Opposition Benches do, that, in clarifying that well-established distinction, the Government are attempting to redefine those things for which Ministers may properly be held both accountable and personally responsible.
For the benefit of the House, I should like to spell out briefly the Government's position. Ministers take personal responsibility for five fundamental areas: the policies of their Departments; the framework within which those policies are delivered; the resources allocated; such implementation decisions as the framework documents for agencies may require to be referred to them or agreed with them; and their response to major failures or expressions of parliamentary or public concern, in the sense of demonstrating what action they have taken to correct a mistake and prevent its recurrence.
The Government's position is fully in accord with the classic statement on the subject made in the House more than 40 years ago in the debate on the Crichel Down affair by Sir David Maxwell-Fyfe. He said at the time:
"The Minister is not bound to defend action of which he did not know, or of which he disapproves. But … he remains constitutionally responsible to Parliament for the fact that something has gone wrong, and he alone can tell Parliament what has occurred and render an account of his stewardship."—[Official Report, 20 July 1954; Vol. 530, c.1286–87.]
I am aware that some people contend that the establishment of next steps agencies represents a breach of that orthodoxy. That is not the case.
Next steps agencies are part of ministerial Departments and a few are Departments in their own right. The Minister remains accountable to Parliament, whether the civil

685
servants who carry out the departmental functions in question are in an agency or not. Indeed, the delegation of public clarification of roles in the framework documents serves, if anything, to enhance accountability by increasing transparency.
The focus of what I have said so far has been on the accountability of Ministers to Parliament for their Departments. Ministers also have a responsibility to justify their conduct to Parliament. In that respect, too, the Government's position is perfectly clear. It is only a few months since we made it clear that we agreed with the Nolan committee that the principles of conduct which applied to Ministers could helpfully be set out in one place in clear and comprehensible form.
On 2 November, I told the House that the new first paragraph of "Questions of Procedure for Ministers" was taking immediate effect. I shall not detain the House by rehearsing all seven principles of ministerial conduct set out there in full, but it is worth reminding hon. Members of the opening sentence, from which the others follow and which puts the matter in a nutshell. It states:
"Ministers of the Crown are expected to behave according to the highest standards of constitutional and personal conduct in the performance of their duties."
I also remind the House of the great care and wide consultation that we undertook before finalising the revision of "Questions of Procedure for Ministers" in the light of the first report from Lord Nolan's committee. The third principle, on not misleading Parliament, attracted particular interest in this place and beyond. Let me remind the House of the version approved by my right hon. Friend the Prime Minister, which I announced on 2 November:
"Ministers must not knowingly mislead Parliament and the public and should correct any inadvertent errors at the earliest opportunity. They must be as open as possible with Parliament and the public, withholding information only when disclosure would not be in the public interest, which should be decided in accordance with established Parliamentary convention, the law, and any relevant Government Code of Practice."
It is important to emphasise that the principle is deliberately in the public domain, having been carefully debated in the light of Lord Nolan's report. The opening up and clarification of "Questions of Procedure for Ministers" is an achievement of the Government. Until 1992, the document was not publicly available. There is no surer confirmation of the Government's willingness to be held to account and to be seen to be held to account.
Some have argued that the word "knowingly" provides some sort of escape clause for rendering account to Parliament. That is not so. Indeed, in retaining that word, we embodied a valuable and long-recognised distinction between intentionally and inadvertently misleading Parliament.
By releasing "Questions of Procedure for Ministers", by recasting it so that the opening paragraph brings together a code of ministerial conduct, by openly discussing the terms of the principles in that code, the Government have demonstrated their clear commitment to upholding the principle of ministerial accountability and responsibility to Parliament.
I hope that I have assisted the House in response to the debate by stating clearly what the Government's successful and clear record has been.
5.24 pm
Mr. Derek Foster: This is a short debate. It is in Liberal Opposition time, so hon. Members from all parties will be relieved to know that I intend to be brief.
I congratulate the hon. and learned Member for Fife, North-East (Mr. Campbell) on the authoritative way in which he advanced his case. The Minister was helpful in setting out the Government's position. May I remind the Minister that there would have been no civil service code but for the report by the Treasury and Civil Service Select Committee. The Government set their face against the code at the beginning. It was only after that code was published that work was done to achieve a consensus and the code was finally approved.
The Government have been dragged kicking and screaming through the Nolan committee. Fundamental changes have resulted from the Nolan committee and its recommendations both in the way in which the House proceeds and in the way in which Ministers proceed. The committee's recommendations have also resulted in amendments to "Questions of Procedure for Ministers". So the Minister cannot assume all virtue in recounting what is now the Government's position. The Government have been dragged to that position by the effectiveness of the Treasury and Civil Service Select Committee and the power of the Nolan committee recommendations.
It is fitting that the House is debating ministerial responsibility today, in what might prove to be a crucial week for British democracy and the future of the Tory party. The test for the Tory party is not whether it can react to Scott in a disciplined manner to save Ministers' skins. The test is whether it can rise above short-term party interests to examine the health of British democracy.
The risk for the Tories is that the Prime Minister may even misjudge the interest of his party, as he seriously misjudged the mood of the nation on Nolan. How ironic it would be if the interests of the Tory party and those of British democracy coalesced in the need for ministerial resignations, yet the Prime Minister proved too short-sighted to rise to challenge. Perhaps the Government's position is so parlous that they cannot survive the shock of ministerial resignations in the run-up to a crucial by-election and the local elections in May.
We read that the Prime Minister is so determined to protect his Ministers that he is prepared to threaten an early general election to frighten the rebels into line. Does that mean that no one is to carry the can following Scott? After three years of work and 1,800 pages, and after a Cabinet unit has been set up which has probably spent more on monitoring Scott than was spent on the Scott inquiry, that would be remarkable. Or does it mean only that no Minister will carry the can?
I warn the Prime Minister that if civil servants are to bear the full responsibility and Ministers are to escape scot free, he will seriously misjudge the public mood and he may ill serve his party, his Government and the country.
This is an important debate, first, because the trust between the Government and the people has broken down. This is not a narrow, party political point. There is ample polling evidence, both private and public, to testify to the cynicism with which politicians and Government are now regarded. That may not be surprising in view of the broken promises. Before the general election, the

687
Government promised reductions in taxation and no increase in value added tax. After the general election, they did something entirely different. They said one thing before the election but did another after it. The Conservative party is governing in the interests of the few rather than the many, which is undermining trust between the Government and the people.
The story of the fat cats is the most graphic illustration of how the Government now govern in the interests of only the few. In contradiction to what the Chancellor of the Duchy claimed, it is my perception that the people feel that they have no influence over the services for which they pay, which they use and in which they work. The right hon. Gentleman claimed that the Government had done a great deal. He should talk to people in the health service, even the consultants and the people on the NHS trust boards, who often feel that they have no influence over the shape of the services that they have been appointed by Ministers to administer.
The right hon. Gentleman touched on the quango state and said that by centralising power he was increasing ministerial responsibility, so the whole argument about the quango state and the democratic deficit was bogus. He claimed that the Government had reduced the number of quangos. That may be true if we accept the Government's definition of a quango—which excludes NHS trusts and other bodies such as training and enterprise councils.
I do not think that even the right hon. Gentleman would deny that many of the services that are now administered through quangos were once within the influence of local government and therefore democratically accountable to the electorate. That accountability has been removed. The quango state accounts for some £34 billion or more of public expenditure, but few of the quangos bear any real relation to the people who use the services and in whose areas those services are administered.
The right hon. Gentleman claimed some virtue in the imposition of the Nolan recommendations on appointments. I welcome what Nolan said—that appointments to quangos should be open, transparent and on merit, rather than on party position. The Labour party is committed to embracing those recommendations. It is rather rich of the Government to claim virtue in Nolan's recommendations; it is no wonder that Members of Parliament and Ministers are less popular than journalists and estate agents. The Tories have become a "Not me, guy" Government. They love the language of individual responsibility—and as an unreconstructed Protestant I do not object to that—yet they disclaim all responsibility.
The Government claim that unemployment is nothing to do with them. There was a time, for some 25 years or more after the war, when a high and stable level of employment was the objective of Governments of all complexions. Now, unemployment is nothing to do with the Government, but that does not prevent them from claiming credit for falling unemployment.
What about the two recessions during the past decade—the longest and deepest recessions since the war? Once again, they were nothing to do with the Government. They were all to do with an international recession. Yet the Government all too readily claim the credit for Britain being the leading economy in Europe.
Let us think back to Black Wednesday. Once again, that was nothing to do with the Government. No one resigned, even though we are now told that at the time the
688
Chancellor wanted to resign, but the Prime Minister pleaded with him not to do so. That is hardly surprising, because the man who took the country into the exchange rate mechanism at the wrong rate, at the wrong time, for the wrong reasons, was the previous Chancellor—who then became the Prime Minister. Black Wednesday was nothing to do with the Government, yet they love to claim the credit for the half-competent economic strategy they stumbled into when their policy was blown out of the water.
Crime has doubled since the Government came to power—but that, they say, has nothing to do with them. Yet the Prime Minister claims the credit for the recent drop in the crime statistics. What about schools? It may be thought that there is currently something of a crisis in state school standards. The Government have been in power for 17 years, yet apparently this crisis is nothing to do with them, but much more to do with Labour or Liberal Democrat-controlled local education authorities and the education establishment. It is nothing to do with the Government.
Mr. Jacques Arnold: I have been listening intently to the right hon. Gentleman's speech. He said that the responsibility for education standards lay with Labour councils. Can he explain why a parent in the Labour-controlled borough of Southwark feels she has to put her child in a school in Conservative-controlled Bromley? Why does he think that another parent in the Labour borough of Lewisham feels that he has to put his child in private education? What are the Labour councils in those two boroughs and elsewhere throughout the country doing about that? They are responsible for the delivery of education.
Mr. Foster: The hon. Gentleman misheard me. I did not say that standards in schools were the responsibility of Labour-controlled councils; I said that that is what the Government are claiming. After 17 years in control of the nation's education, all they can do is blame others. They say that it is nothing to do with the Government and everything to do with other people.
The Government claim that all those matters are nothing to do with them. When the voters' heavy hand is felt on their collar, they say, "It's not us, guy. Don't blame us, we're only the Government." So those who are quick to apportion individual responsibility in and to others deny all individual and collective ministerial responsibility. Yet it was the Prime Minister, in a frank interview in the United States not long ago, who admitted that, after so many years of Conservative government, there was no one left to blame.
The case for ministerial responsibility is constitutionally at the very heart of this debate about trust in the political process. I strongly agree with what the hon. and learned Member for Fife, North-East said.
Ministerial responsibility is at the heart of our bringing the Executive to account. It has long been my view that the Executive is far too powerful in our system of government, and that the House of Commons is ill equipped to bring the Executive to account. The best development of recent years has been in the Select Committees, which have gone a long way to improving the way in which we can bring the Executive to account, but there is still a very long way to go.

689
I should have thought that ministerial resignations would have given us some idea of how effective the House is in bringing Ministers to account. A long list of Ministers and parliamentary private secretaries have resigned since 1992. Although all kinds of reasons have been given for those resignations, which I shall not go into, as far as I can tell not one of them resigned because they admitted some deficiency in the policy, operations or activities of their Departments or any of the agencies for which they were responsible. Indeed, a former Minister felt that so deeply that he said:
"no one ever resigns for anything these days".
According to "Questions of Procedure for Ministers", Ministers are accountable to Parliament for the actions of their Departments and agencies. They must be as open as possible with Parliament and the public and must not knowingly mislead Parliament. If they do so, they should resign, according to a letter from the Prime Minister to my hon. Friend the Member for North Durham (Mr. Radice) that was dated 15 April 1994. So Ministers, and only Ministers, are accountable to Parliament, yet, according to the Government, Ministers are not responsible for all actions in the sense of being blameworthy.
The House would not want me to enter into a comprehensive analysis of the concepts of accountability and responsibility, suffice it to refer Members to paragraphs 118 to 138 of the Treasury and Civil Service Select Committee fifth report. I concurred with the Select Committee when it said in its report:
"We find the government's attempt to draw a sharp distinction between accountability, which cannot be delegated by Ministers, and responsibility which can, unconvincing."
The debate has become crucial with the fragmentation of the civil service under next steps agencies and privatisation. Ministers are able to claim the credit for all that is good in their Departments and agencies and delegate the blame to others. The Chancellor of the Duchy of Lancaster seemed to suggest that claiming credit for what was going on in the Department was as reprehensible as delegating blame. I just do not recognise that behaviour in the Government—or, indeed, in any other Government. Ministers are all too ready to claim the credit and delegate the blame to others. Indeed, next steps agencies and privatisation have encouraged that.
On the exchange across the Floor of the House on the Prison Service, which was mentioned by the hon. and learned Member for Fife, North-East and the right hon. Member for Berwick-upon-Tweed (Mr. Beith), I simply ask whether the Home Secretary would have escaped resignation if the Prison Service had been part of his Department rather than a next steps agency? That serious question deserves serious consideration.
If the House accepts my submission that there is a serious problem over trust between the governed and the governors, Parliament should be addressing it. Indeed, my right hon. Friend the Leader of the Opposition has outlined an ambitious programme of constitutional and democratic renewal, including a freedom of information Act to address the issue. The Government have dismissed it—not as inadequate but as positively dangerous—yet they have advanced no alternative. Their alarmingly self-congratulatory and complacent amendment shows that they do not even recognise the problem.
690
Sooner or later, someone in the Government must accept responsibility for something. The Scott report will present an opportunity for the Government to show whether they govern in the interests of all the people or whether everything is to be judged in terms of their own survival.
5.45 pm
Mr. Jacques Arnold: When I looked at today's Order Paper, I must admit that I was extremely puzzled as to what the debate was to be about. The motion refers to
"the principle of ministerial responsibility".
I could not help thinking that, on such a busy day, the Prime Minister's extremely important statement could have been followed by a debate on important, relevant matters. After all, there are few enough days on which the Liberal Democrats can choose the subject. We could have discussed the very important matter of education, which was mentioned earlier, or the national health service, or perhaps have risen higher, to a debate on European or foreign affairs. But not a bit of it—the debate is on ministerial responsibility.
With great enthusiasm, therefore, I came to the Chamber to listen to the speech of the Liberal Democrat spokesman, the hon. and learned Member for Fife, North-East (Mr. Campbell). To my surprise, I heard a speech on the Scott report. I thought that the Scott report was to be published on Thursday, when a statement will be made on it, after which we shall carry—or stagger away with—the vast volumes of the report, wrap towels around our heads and consider it very carefully over the weekend and the days ahead. We know that we are to have a full debate on the Scott report, although I am sure that I shall not have the opportunity to catch Madam Speaker's eye during that debate as the good and the great will tend to be called before me—including the hon. and learned Member for Fife, North-East, who will no doubt have something to say on the subject.
Why is today's debate clearly aimed at the Scott report? Could it be a soundbite trailer for the learned words of the Liberal Democrats? It is not clear. The subject that has been selected for debate for half a day refers to either cynicism or incompetence. If we are to debate ministerial responsibility, which is in many ways academic and at the heart of the British constitution, it could have been dealt with much more thoroughly. We had to wait for my right hon. Friend the Chancellor of the Duchy of Lancaster to address the substance of this somewhat dull yet important and complex constitutional matter.
The rather dull speeches from the previous Front-Bench spokesmen were surpassed by that of the right hon. Member for Bishop Auckland (Mr. Foster), which was even duller. I happened to note that, during the speech of the hon. and learned Member for Fife, North-East, his Liberal Democrat colleagues yawned. In fact, most were absent, and only two are present now. I for one—
Mr. Deputy Speaker (Sir Geoffrey Lofthouse): Order. The occupant of the Chair will be yawning if we do not get back to the topic in question.
Mr. Arnold: For my own education, I shall be listening carefully to other contributions to the debate, and I will

691
listen with great enthusiasm to the speeches that we shall no doubt hear from numerous Liberal Democrat Back Benchers on their chosen subject.
Yes, ministerial responsibility is a matter of great importance. We expect Ministers to come to the House and take responsibility for their decisions. Given the subject of the motion, I find it odd that, in their soundbites the Liberal Democrats frequently promise all kinds of constitutional reforms under which they would arbitrarily hand the powers of this House to other, far less established institutions. The leader of the Liberal Democrats has gone on many a rural ramble around the country to give his views on how the House's responsibility for various matters should be delegated. Indeed, I heard him say on television in May 1994:
"I don't believe in the sovereignty of Parliament".
Ministerial responsibility is a wonderful thing and Ministers should be responsible to Parliament, but how can the Liberal Democrats take that approach if their leader claims not to believe in the sovereignty of Parliament?
Many is the time the House has sat late at night to consider motions relating to European Community legislation. I sometimes wonder what good it would do if we took a differing view. The House should be sovereign, but so many of its powers have already been delegated to European institutions, and things could only get worse if we followed Liberal Democrat policy. We know that the Liberal Democrats would abandon the veto on European decisions and grant the European Parliament responsibilities that would reduce the power of this House. How could Ministers come to the House and take responsibility for actions if sovereignty over those actions no longer rested with them? In that sense, it is perhaps appropriate that the motion refers to
"erosion … of the principle of ministerial responsibility".
One of Ministers' most important responsibilities is to answer to the House for the spending of taxpayers' money. An increasingly large amount of the money raised by British taxpayers—it can now be counted in billions of pounds—is being passed to the European Union to spend. How the spending of that money is accounted for is extremely important. I cannot help thinking that, if Ministers were exposed to Liberal Democrat proposals for the extension of qualified majority voting in Europe, they would be overruled time and again on vital British interests. They would then have to come to the House and say that, because of Liberal Democrat policy, they could not answer to the House for decisions with which they may well have disagreed, so Liberal Democrat policies are hardly the solution. [Interruption.] I hear the hon. and learned Member for Fife, North-East say from a sedentary position, "Like fishing".
In the example of fishing, the threat comes from the European Union to which the Liberal Democrats would sacrifice all powers, so fishing is not an especially sensible matter to raise.
Mr. Menzies Campbell: The House is lost in admiration at the depth of the hon. Gentleman's grasp of the important constitutional doctrine of ministerial responsibility. As he is so exercised about such matters, he must surely recognise that, in relation to fishing, for example, majority voting rules. That concession was made by Parliament and, indeed, by the Government he supports—no doubt because they believed that it was in the best interests of Great Britain.
Mr. Arnold: The hon. and learned Gentleman refers to the concession to Europe. I am suggesting that the road down which the Liberal Democrats would lead us, were the country to allow them, would end in still more qualified majority voting. British interests could not then be defended, but that does not seem to worry the hon. and learned Gentleman, not least because his party is a federalist party. It would pass much more power up the way—perhaps "across the way" is a better phrase—to Brussels and various European Community institutions. What price ministerial responsibility then?
Under their federalist policies, the Liberals support regional government, which would be a further abrogation of the powers of this House. Whatever the Scots may want, I assure the hon. and learned Gentleman that my constituents would certainly have no truck with regional government, which would mean yet another layer of politicians and bureaucrats, and no doubt more heavy spending and the imposition of further taxes. From my constituents' point of view, the idea of regional government for the south-east, from Reading in Berkshire around the other side of London, would be especially disastrous. My constituents would far rather that I come here as their representative and try to hold Ministers to account. That is far more effective.
In a slight digression, the hon. and learned Member for Fife, North-East referred to the Home Secretary's accountability to the House. In the European context, I wonder how any Home Secretary could be answerable to the House, or the country, for Liberal Democrat proposals on, for instance, the dispersal of refugees. How could any Home Secretary answer for the Liberal Democrats' favourite policies, which were passed at their conference, on the decriminalisation of prostitution and the possession of cannabis? I doubt whether any of those would go down very well.
The hon. and learned Gentleman made much of quangos. As my right hon. Friend the Chancellor of the Duchy of Lancaster rightly pointed out, although the Liberal Democrats claim not to believe in quangos, they would, given the chance, create them. Indeed, at the last count they had proposed almost 900 new ones. They include such wonderful things as an office of utility regulation to regulate the regulators, an animal protection commission, an arms conversion agency and, in every local authority across the country—not least in my constituency—a local enterprise agency. Every district would also have a local housing arbitration agency. I am not sure what that means, but it is Liberal Democrat policy. No doubt the Liberal Democrats would place their defeated candidates on such quangos.
I firmly believe that one of the greatest strengths of our constitution is the fact that Members of Parliament are solely responsible for separate constituencies on whose behalf they come to the House to obtain from the relevant Ministers detailed answers on matters of concern to their constituents. I am sure that the constituents of the hon. and learned Member for Fife, North-East appreciate having a sole Member of Parliament responsible to them and fighting their corner here in Westminster. The hon. and learned Gentleman cannot pass the buck; he has to take up all the issues—or clearly be seen not to take up issues—and hold Ministers responsible for their actions, particularly those affecting his constituents. That is something that I try to do. Yet the very mechanism for

693
holding Ministers responsible would be undermined by the Liberal Democrats' policy of proportional representation.
I am one of seven Members representing west Kent. Under proportional representation, west Kent would still have seven Members, but to which constituents would they be responsible? Those Members could pick and choose. They could tell a constituent to go to a Member of Parliament from the party for which the constituent voted, and they might or might not hold Ministers responsible for some issues. It is important that constituents have an individual Member of Parliament who answers to them and who comes to Parliament to fight for them, wherever they may be.
Proportional representation would mean not only that individual Members who were solely responsible for their constituencies would no longer be able to hold Ministers responsible; the very mechanism for forming a Government would damage that ministerial responsibility. Whereas our constituents now know when Members are returned at a general election which party is likely to form a Government, under the Liberal Democrat proposal they would not know. The formation of the Government, and therefore ministerial responsibility to this House, would depend on backroom deals, smoke-filled rooms, unsatisfactory compromises and the like.
We do not need the type of reform touched on by the Leader of the Opposition, who suggested a referendum on proportional representation, or the undemocratic imposition of PR proposed by the Liberal Democrats. We would end up with a hung Parliament, in which one or two Liberal Democrats—it remains to be seen whether they would be here in the Chamber—would take a minor part in forming a Government.
Then again, would they support the Government? If one is to support the Government and allow Ministers to carry out their responsibilities properly, one has to turn up to vote in support of the Government. Yet only last week the hon. Members for North Devon (Mr. Harvey) and for Truro (Mr. Taylor) voted against their leader's and their party's policy on a motion relating to GP fundholders, while the hon. Member for Torridge and West Devon (Ms Nicholson) is not in the habit of turning up, and certainly did not vote in support of the previous Liberal Democrat motion before the House.
In conclusion, we had a magnificent opportunity today to have a debate that was not subject to the decisions and programme-planning of the Government. All Back Benchers could have looked forward to a motion from a minority party, the Liberal Democrats, on a subject of great relevance and interest to our constituents. Instead, we got a motion on a subject so boring that it has attracted only two Liberal Democrat Members into the Chamber, while most of our colleagues have gone out to attend to their constituency duties.
6.3 pm
Dr. Norman A. Godman: I heard the whole of the speech of the hon. Member for Gravesham (Mr. Arnold). Unfortunately, he missed the first 15 minutes of the speech of the hon. and learned Member for Fife, North-East (Mr. Campbell), who began speaking at 4.40 pm. The hon. Gentleman came in at 4.55 pm, although he may have been listening to the speech outwith the Chamber.
Mr. Jacques Arnold: On a point of order, Mr. Deputy Speaker. As I am sure you recall, I was in the Chamber. I had to leave for five minutes to check Hansard, but I can assure you that I was here for the overwhelming majority of the hon. and learned Gentleman's speech.
Dr. Godman: Naturally, I accept the hon. Gentleman's word, although his absence was noticeable.
I agree about the need for a debate in the near future on the Government's handling of Northern Ireland and on reaction to the dreadful event in London on Friday. I heard the explosion from my apartment in the Barbican, and I said to my wife that I could not believe that yet again it was the foul work of the IRA. We also heard the explosion at the Baltic Exchange a few years ago.
I disagree completely with the hon. Member for Gravesham about electoral reform, which would make for much better governance. I am not happy with the system of proportional representation advocated by the Liberal Democrats, but I think that we need a new system. We shall have such a system when we introduce the Scottish parliament. I much prefer the added Member system to that of proportional representation.
I can well understand why the hon. Member for Gravesham's constituents have no taste for regional government, but the overwhelming majority of my constituents desire that radical change. Their desire is reflected in electors' votes in local and national elections, in which Conservative candidates invariably finish in fourth position, a long way behind—I regret to say, in some respects—candidates of the Scottish National party.
The hon. and learned Member for Fife, North-East was anxious to emphasise that a number of issues on which he sought answers were prompted by hypothetical questions, and he chided me for daring to refer—however tangentially—to the Scott report. I was simply making an observation on what the Chancellor of the Exchequer has said about ministerial responsibility and the code of ministerial conduct. The hon. and learned Gentleman made a powerful speech, and I offer my compliments to him.
I did not share the Chancellor of the Duchy's sanguine view of quangos, of which many of my constituents are deeply suspicious, especially their membership. In Scotland, members of quangos have been appointed over the years on a party political basis. No matter what party is in power, it is a disgrace if the governance of Scotland is carried out in that way. It is a disgraceful state of affairs when people are chosen on the basis of party allegiance, rather than—as my right hon. Friend the Member for Bishop Auckland (Mr. Foster) said—on the basis of their qualifications and capability for the post concerned.
The Chancellor of the Duchy made a number of points about the market testing of public resources and agencies. Where do the Government stand on the market testing of the Royal Maritime Auxiliary Service? The Minister may not be able to answer today, but I know that he will, with characteristic courtesy, write to me on the matter. The RMAS is being tested, and it is a very important issue to constituents of mine who are employed by the service in Greenock. They give, in my view, valuable and loyal service to the RMAS. They deserve to be kept fully informed about their future; given the fine work that they do in the Firth of Clyde and elsewhere, they should not be treated callously and thoughtlessly. I should be grateful for a ministerial response to that serious constituency point.

695
There are points to be made about other agencies. Why do Home Office Ministers treat those awaiting deportation in Scotland differently from people caught up in similar circumstances south of the border? We are discussing ministerial responsibility, and Ministers' treatment of individuals. Surely, whatever the circumstances, there should be some uniformity throughout the United Kingdom. I know that the Minister is not responsible for such matters, but males awaiting deportation in Scotland are invariably incarcerated in Greenock prison. That is unfair to those involved, and not very conducive to the good management of the prison. It would be far better for men awaiting deportation to be detained in a holding centre at Glasgow airport.
Let me point out, with respect to hon. Members representing constituencies south of the border, that such holding centres exist at their main airports. Governor Gunn and his first-class staff should not have to look after detainees in Greenock prison, which is often overcrowded at the best of times. Could not the Home Office, the Scottish Office and the Scottish Prison Service persuade the BAA to make a site available at Glasgow airport? That would be an example of good ministerial management. If Home Office Ministers have United Kingdomwide responsibility for such matters, they should ensure that there is more uniformity on both sides of the border.
I seem to be skipping around in my references to Departments, but I believe that the Minister said that there were 110 agencies. Is it feasible for Sir Len Peach to investigate the implications of the severe cut in the action for community employment budget in Northern Ireland? Is that one of his responsibilities? Ministerial responsibility is of prime importance in the context of that savage cut: Northern Ireland Ministers have been grossly irresponsible. ACE provides employment in both traditions, and has helped to unite the two communities in the provision of assistance for people of all ages.
Such initiatives—introduced by the present Government in a principled way—help to diminish some of the hostility and alienation that are experienced in both communities. I feel, especially in the light of Friday's dreadful incident, that such initiatives make for a more tolerable society in Northern Ireland. I hope that Northern Ireland Ministers will be honest enough to admit that they have made a mistake, and that they should reverse their decision forthwith in the interests of those directly concerned. A cut of £12.5 million in ACE's budget may seem an insignificant aspect of ministerial decision making, but it has an important effect on the voluntary organisations involved and on both communities in Northern Ireland.
I appreciate that an immensely difficult task faces Northern Ireland Ministers. I travel to Northern Ireland fairly frequently, as I do to the Republic—I shall be going to Northern Ireland next week—and I recognise the difficulties involved in governing the Six Counties, given the hostility and resentment that exist in both communities; but a brutal fact will determine what takes place over the next few months, or even the next two or three years. The IRA and Sinn Fein are remorselessly pursuing the goal of a united Ireland. That cannot be achieved while the nationalists in the north are in a minority, but the community of two communities can be made a more tolerable place in which to live, and that can be achieved through ministerial responsibility.
696
Let me add, at a much less serious level, that there is widespread dissatisfaction with the way in which Ministers govern Scotland, and it is shared by the overwhelming majority of my constituents. Major changes will have to be made in the governance of Scotland, whichever Minister is in a position to make them. The status quo is now acceptable to less than 12 per cent. of the population.
6.17 pm
Mr. Robert G. Hughes: I shall not follow the interesting speech of the hon. Member for Greenock and Port Glasgow (Dr. Godman), which consisted mostly of constituency points. I want to refer directly to the motion, which not many hon. Members have done.
The speech of the hon. and learned Member for Fife, North-East (Mr. Campbell) was based on a popular myth. Although that myth enjoys great currency, I do the hon. and learned Gentleman the credit of saying that I believe him to know that it is a myth. The myth is that a Minister can and should take immediate responsibility for the smallest action that emanates from his Department, and for what happens at the furthest outpost.
As I have done before in the House, I illustrate that with the story of the man who hammered the table at my advice bureau and asked why John Major had not bothered to send his benefit cheque that week. One understands what he meant, but did he seriously believe that John Major had a bit of a down on him, and that the Government were simply being mean to him? Apparently he did. That may seem a silly story, but it characterises the way in which people view what Ministers should be doing. A Minister should "know" what is happening to transactions that, although small, are important to individuals, but that simply is not the case. Not only is the move to executive agencies in line with what is happening in the rest of the world; it must be the right course.
My right hon. Friend the Chancellor of the Duchy of Lancaster spoke about the framework. It is always going to be difficult to get the framework right. Almost everybody understands that we need to make a division between policy and operational matters, but getting it right is difficult. Some cases are easier than others—sometimes it is clear what is policy and what is operational. I accept that in the Prison Service, for example, it is difficult to define what is policy and what is operational.
Some dividing lines have been drawn more successfully than others. The establishment of a board to advise the chief executive and the Minister is crucial. When I had responsibility for some agencies, the advice that I received from an independent adviser from the business community was invaluable not only in understanding what was going on but in being able to have some control over what the agency was doing.
Ministers should not be discouraged by the fact that there are teething troubles. Some of the problems may not be teething troubles but matters in respect of which we will always argue—for example, whether they are operational or policy and whether we have got the dividing line right. That should not discourage them from a ploughing on with this course because it is right. When the management structure is right, it becomes clearer what people should do. If people who work in an arm of

697
government know that if they make a complete Horlicks of something, the Minister will get the blame, what is there to make them take the responsibility that they should? It is there that the charters play such a key role.
The charters are best described as a 10-year project of process management. People should examine what they do. The person at the sharp end, the person who is organising at the sharp end and the person who organises a variety of sharp ends—if I can put it that way—should take responsibility for delivering that service. They should not blame the Government or say that it is the Minister's fault. They should say, "I am managing," or, "I am working on this counter. I am taking responsibility for that action." That is process management. There can be no doubt that it has worked.
The combination of the executive agencies and, to an extent, the charters has not only improved the Benefits Agency but transformed it. The service that my constituents get from the Benefits Agency is not perfect. We do not live in a perfect world and mistakes are made. It is a complicated business to administer, but the service that is delivered to my constituents has been transformed.
It is important to be able to identify areas in which performance can be improved. It is not enough only to measure the success. Analysis of public perceptions is crucial. Unless a service is responsive to those perceptions, there can be no real improvement. That is true across the public sector. Service providers increasingly accept that they have to set standards for services and achieve measurable improvements in service delivery. Those who carry out regular customer satisfaction surveys, market research, focus groups and customer panels are much more likely to identify the failings in the service that they provide. The outcomes of such activities inevitably lead to change.
For example, the relatively new patients charter sets challenging targets based on the results of surveys and market research on what users expect and want from our national health service. Thanks to the original charter, nobody waits two years for treatment, and all hip, knee and cataract operations are performed within 18 months. Today, we have had the welcome news that the 18-month deadline guarantee for in-patients that was set in the new patients charter has been met in almost all circumstances, and that soon we should be able to meet it in full.
Why did the Government move from a two-year guarantee to an 18-month one? It was not just the whim of a Minister or because somebody was trying to get publicity. It was because consultation showed that that was what the public expected and wanted from their national health service. They wanted the 18-month guarantee, they wanted nine out of 10 out-patients to be seen within 13 weeks, they wanted new standards for GPs and they wanted the charter to cover the service given by pharmacists and opticians as well as dentists. They wanted choice and information.
There are other examples that I do not have time to go into, but the core of the matter is information. Opposition Members have spoken as though all information has always been available and it has always been reasonable to expect to know what is going on. That is simply not true. Before the Government instituted citizens charters, much of the information on which public service delivery
698
is now based was not available. It is all very well for the Opposition to talk about standards in education, but how do they know what the standards are? How do they know what service was delivered before?
When, a long time ago, I was the Conservative candidate in the old constituency of Stepney and Poplar, there was a school with new buildings and good facilities that had an interesting record. For two years running, it did not have a single examination pass. There were many schools of that sort, especially in working-class areas. People were being let down, but nobody was collecting the information. Nobody knew what was expected from those schools or what the schools were delivering. Thanks to the opening up of government and the availability of information, one service after another is being opened for public inspection.
We know precisely what our railways are delivering, so we will know precisely what improvements are made—and we believe firmly that there will be improvements—by the privatised service. We know what the courts are delivering and what the Benefits Agency is doing because they have to publish targets and people know how they are performing against them.
For the past four years, the examination results of every school and college have been published annually. As a parent with children in school, I believe that it is helpful to have the data necessary to be able to choose the best possible school for one's, children; otherwise, decisions are based on hearsay. I know what the schools in my area were like 10 or 20 years ago but I would not know now without examination results on which to base and inform my opinion.
The Government have done a great deal to open up government. The right hon. Member for Bishop Auckland (Mr. Foster) mentioned the Select Committees as if they were part of the background and always had been. A Conservative Government introduced departmental Select Committees, which have transformed the way in which the House works. They have enhanced the House's ability to hold the Executive to account. I do not think that one will find any Minister in the Conservative Administration since 1979 who does not take Select Committees seriously. An appearance before a Select Committee is terrifying for a Minister. I am pleased to say that I never had to do it, but I know that Ministers spend a great deal of time briefing themselves and that they take very seriously what is said by the Select Committees.
Select Committees do a valuable job and they are a welcome part of the checks and balances of democracy, but I question whether too much credence is sometimes given to a Select Committee report when it has perhaps been based on a transitory look at a problem with substantially less information, back-up and research than is available to any Minister.
The right hon. Member for Bishop Auckland mentioned "Questions of Procedure for Ministers" and said that there was something deficient in it. He is lucky to be able to do so. This Prime Minister published it; no one would have been able to talk about it before. Nor would anyone have been able to refer to Cabinet Committees, and I do not merely mean their composition, as it was a long-standing convention under successive Governments of different colours that one did not mention them. It was not admitted that the Government had them. Now we can discuss what they do, we know who is on them and influence can be brought to bear on them.

699
The work done by my right hon. and hon. Friends in the Office of Public Service to make quangos more accountable, cut down their numbers, publish public bodies and improve the public appointments system is very welcome indeed. Those are not simply things that have been forced on them, but part of a long-term trend for this Government, who believe in open government.
The civil service cannot be a sacred or static entity. It has to evolve and change with a changing background. It has to change with circumstances. Civil servants are often disgracefully smeared by the Opposition and sneered at as being on the side of the Government. That is partly because they cannot answer back. My experience is that, almost without exception, civil servants are loyal to the Government. They are discreet and are committed to good government and to the Government in power. They are keen to engage in intelligent and private debate.
But that is the point—the civil servants who engage in private debate with this Government and who are loyal to this Government would be equally loyal to any Government elected. Indeed, many of the senior civil servants around today served Labour Ministers, often as private or assistant private secretaries. Undoubtedly, as I know from friends in the Labour party, they were 100 per cent. loyal to them, just as they are 100 per cent. loyal to the Government and would be loyal to any future Government. I had no idea what the politics of the civil servants with whom I worked were and I did not want to know; it was not relevant.
Some Opposition Members should tone down some of their criticism of civil servants. I know they think that they are making a point against the Government, but they are sneering at civil servants who are doing their best.
Mr. Derek Foster: Nothing has been said on that subject throughout the debate. I wonder what point the hon. Gentleman is making.
Mr. Hughes: I am talking about remarks that I have repeatedly heard in the House. I have never heard the right hon. Gentleman do so, but Opposition Members, including Labour Front Benchers, have made insinuations against the integrity of the civil service. We should understand where civil servants stand. We need to be proud of the legacy of our civil service and to understand that its daily achievements are important to our nation and to good government and that we should not do anything that would jeopardise it. The changes that my right hon and hon. Friends are bringing about in the civil service will enhance rather than damage it.
6.34 pm
Mr. Hartley Booth: I shall be speedy, as realise that Front-Bench Members and the Liberal Democrat spokesman wish to reply to the debate.
I will not take this point too far, but my hon. Friend the Member for Gravesham (Mr. Arnold) said that the debate was boring. I have listened and found it extremely interesting, although it has obviously not ignited the interest of the whole House.
The noteworthy part of the introduction to this debate was doubtless the source of the discussion on ministerial responsibility. Without wanting to criticise them, the Liberal Democrats can stand on Olympian heights, as theirs is the party that is furthest from real ministerial
700
responsibility—so one notes what they say. Yet the debate was introduced by a very learned member of that party—the hon. and learned Member for Fife, North-East (Mr. Campbell). His principle—it is the principle that one needs to take apart—was that breach of a convention damages the constitution. Certainly that is true. Doubtless he based that on the Maxwell-Fyfe principles. My right hon. Friend the Chancellor of the Duchy of Lancaster alluded to that.
Indeed, enlarging the point made by my hon. Friend the Member for Harrow, West (Mr. Hughes), one has to understand that there has been a huge expansion of responsibility and of day-to-day operations in the administration of Government. At the time of the Crichel Down case, only 3 million people were employed by the public sector. Even after 17 years of Conservative government and of shedding responsibilities and manpower, we still employ 5 million in that sector.
A Front-Bench Member with responsibility for the health service and for a million staff told me that he was responsible—nonsense as it was—for the swab left inside a patient in Carlisle. He employed a million people. Each day, his Department took trillions of decisions, yet, in some people's eyes, he was responsible for every single one of those decisions.
Miss Emma Nicholson: May I ask my good friend from the Government side how he squares that comment with the knowledge—which he might not have at his fingertips—that, according to a Treasury decision taken by a Treasury QC, as a result of parliamentary questions that I asked, a Secretary of State for Health has personal ownership of every NHS patient's health record?
Mr. Booth: I am grateful for that intervention because it underlines the necessity to make those opaque waters clear. The debate gives us the opportunity to look at those opaque waters. We had illumination passed on them last week by Sir Robin Butler. I was about to say as I was interrupted that Sir Robin, head of the civil service, gave an example, which was germane and which will illuminate the rest of this debate. He explained the difference between accountability and responsibility, and said that, as the head of the civil service, he might go into the Cabinet Office and meet a security guard who was drunk. He said that he had never met a drunken security guard and he hoped he never would, but, if he did, the security guard would be responsible for his drunken behaviour whereas Sir Robin himself, as head of the Cabinet Office, would be accountable for it. That analogy makes the difference and it gives the lie to, and points to the mistake behind, the motion tabled by the Liberal Democrats.
I hope that the House will support the Government because, alone among the parties, the Conservative party may be trusted with ministerial responsibility.
6.40 pm
Mr. Robert Maclennan: The hon. Member for Finchley (Mr. Booth) put his finger on at least one important facet of the debate when he drew attention to the recent remarks by Sir Robin Butler, the Cabinet Secretary. Sir Robin sought to draw a distinction between ministerial accountability and ministerial

701
responsibility. It is a fashionable distinction, but in fact it is rather a new one. I believe that it is one that the Government are seeking to elaborate with a view to diminishing the central core pillar of our parliamentary democracy.
The distinction is reflected in many documents for which the Government have been responsible, most recently in their supplementary White Paper about the civil service code. The distinction was reflected in the debate on the prison escapes by the Home Secretary, who sought to evade criticism altogether on the grounds that, although the escapes fell within the responsibility of the Prison Service and were so grave that they ultimately led to him to dismiss the director of the Prison Service, they were not a matter for which he as Minister had responsibility.
One has only to recall those facts to recognise how the doctrine is being changed. I do not suggest that that is part of a systematic rewriting of our unwritten constitution. I suggest rather that it is a consequence, and not altogether a happy consequence, of the changes in the form and structure of government, which have been directed more to efficiency and effectiveness than to the sustaining of the doctrines that have made our constitutional arrangements highly regarded in other parts of the world.
A statement was made some years ago which I prefer to the doctrine of the division of accountability and responsibility. The statement shows how quickly the Government have managed to alter public perceptions, or have sought to do so, and it was made by Sir Ian Bancroft, the former head of the home civil service. When he gave evidence to the Treasury and Civil Service Select Committee in 1982, he said:
"The Minister in charge of a department … is responsible, and accountable to Parliament, for the effectiveness of his department's policies and the efficient and economical use of the resources allocated to it. It is part of that responsibility to ensure that his department has the systems, procedures, organisation and staffing necessary to promote efficient management."
I suggest that Sir Ian did not attempt to draw a clear distinction between responsibility and accountability, as the Chancellor of the Duchy of Lancaster did when he spoke earlier. The Minister expressed a narrow, confining view of accountability, under which Ministers would not take responsibility for the mistakes of which they had no personal knowledge or for the misjudgments that had led to maladministration. If we accepted that view, it would not merely become conventional for the House of Commons to excuse Ministers on the grounds of lack of knowledge—that has certainly been the case in the past—but be argued that it was even improper for the House of Commons to inquire into the mistakes. That we have moved some way in that direction seems to me to be the almost ineluctable consequence of the establishment of the next steps agencies.
The Treasury and Civil Service Select Committee has argued strongly that civil servants themselves, certainly the heads of the next steps agencies, should be accountable to the House and should come to answer questions about the discharge of their responsibilities. That is a debatable and important point, but I am bound to say that that would stand our constitution entirely on its head. I am not wholly persuaded that the Treasury and Civil Service Select Committee is right to recommend
702
such a new approach to the responsibilities of civil servants. Our country has benefited from having an independent civil service that is non-partisan and non-political.
We need to hold someone responsible and to be able to call someone to account. Conventionally, that person has been the Minister, but if that has changed, we must seriously consider the politicisation of the civil service and all that flows from it. I find that a very disturbing trend, and a much more serious issue than the Minister seemed to allow.
The debate has been brief, but valuable. I was surprised that the hon. Member for Gravesham (Mr. Arnold) called the debate trivial and yet at the same time, slightly contradictorily, he said that it touched on the core of our constitution. He should decide the issue for himself before he comes to the House to make a speech. The other contributions were rather more serious. I have a very brief time available to speak and I hope that those who contributed so thoughtfully to the debate will forgive me if I do not mention all their speeches.
I was pleased to hear the hon. Member for Greenock and Port Glasgow (Dr. Godman) mention his support for a system of proportional representation, albeit not that which my party advocates. I was especially impressed by the speech of the hon. Member for Harrow, West (Mr. Hughes), which was very considered and thoughtful, and much less partisan than his speeches on some occasions.
The importance of the debate, and of the subject matter with which we have wrestled, is enhanced by the fact that a very important report—one which has been three years in preparation—will be published on Thursday. The subject matter of that report is utterly germane to the debate. I know that some people will believe that that report cannot be dealt with adequately in questions and answers following its publication on Thursday. I hope that we shall have a proper opportunity to consider the implications for ministerial responsibility to which it may give rise.
I must tell those on the Government Front Bench that I have been disturbed by evidence of systematic attempts to criticise and devalue the report even before it has been published. The inquiry's procedures have been questioned, but I considered them robust but fair because they allowed the fullest possible comment on allegations by all against whom they have been made. I take the profoundest issue with Lord Howe, who has suggested that the inquiry should have been conducted in an adversarial manner. Such a method is quite unsuited to getting at the truth.
The Government may argue that the Scott report fortifies the Government's commitment to the doctrine of ministerial responsibility, and that, by appointing an inquiry, the Government were giving strength to that. I would simply say that the inquiry was not the only way in which the Government could have proceeded. At least one Minister—the Attorney-General—was highly familiar with all the facets of the affair. That was made plain by the extent to which he sought to suppress evidence that might have been of value to the defence in the Matrix Churchill case.
Instead of setting up the expensive and thorough Scott inquiry, it would have been open to Ministers simply to make a clean breast of the affair to the House. That would have been a discharge of responsibility that the country

703
would have understood. That would have strengthened the Government's claim to care for the doctrine of ministerial responsibility.
6.51 pm
The Parliamentary Secretary, Office of Public Service (Mr. David Willetts): The right hon. Member for Bishop Auckland (Mr. Foster) invited hon. Members to rise above party politics, but that may have been a rather optimistic thought, faced with the winding-up speech in a Supply day debate. We have been particularly urged to rise up above party politics and not to prejudge the Scott report. I have not read it, and I will not comment on it today, save to say that in the past three years we have experienced conspicuous attempts to prejudge that report led by, for example, the hon. Member for Livingston (Mr. Cook). I must say that I thought that the hon. Member for Caithness and Sutherland (Mr. Maclennan) seemed to prejudge the way in which the Government had set up that inquiry.
Some questions have been asked about accountability and responsibility. The right hon. Member for Bishop Auckland and the hon. Member for Caithness and Sutherland asked about the distinction between the two. Perhaps it will help the House if I try to explain the distinction that we are making. The terminology may or may not be new, but the terminology is not the point; the thought behind the terminology is an old and well-established one.
The thought is that a Minister is accountable to Parliament for everything that goes on within his or her Department, in the sense that Parliament can call the Minister to account for it. The Minister, however, is responsible for the policies of the Department, including its agencies; for the framework within which those policies are delivered; for the resources allocated; for such decisions as the framework document held by next steps agency heads may require to be referred to him; and for responding to major failures or expressions of parliamentary or public concern.
A Minister cannot, however, be sensibly held to be responsible for everything that goes on in his Department in the sense of having personal knowledge and control of every action taken, and being personally blameworthy when tasks in relation to which he has no personal involvement are carried out incompetently.
Mr. Beith: If a Minister has intervened in a way that does not fit within the list of principles that the Minister has just given, is he then responsible for the consequences of his intervention?
Mr. Willetts: The right hon. Gentleman may have in mind the Prison Service, which I shall consider in a moment.
The explanation is that accountability is exercised for everything that goes on in the Department, and responsibility for matters for which the Minister can legitimately be held personally responsible. If one tries to extend personal responsibility to everything that goes on within a Department, the doctrine in effect becomes meaningless and incredible.
Miss Emma Nicholson: The Minister has properly pointed out that it is the thinking behind his remarks that
704
counts. Is not the law, however, forcing Ministers into the position that the motion decries? For example, a recent ruling states that children are the property of the Crown. Ministers are, of course, Ministers of the Crown. A recent Queen's Counsel ruling to which I have already referred states that ownership of health records rests solely with the Secretary of State for Health. Surely such decisions on property and ownership give the lie to the statement that accountability and responsibility do not lie with Ministers. Property and ownership mean that one is responsible and accountable for those things that one owns.
Mr. Willetts: That is a rather eccentric point, but one which we should expect from a member of the Liberal Democrats.
I am trying to address the fundamental doctrine about ministerial accountability and responsibility. The Prison Service offers a clear example of how that doctrine applies in practice. The Home Secretary is accountable to Parliament for the Prison Service, and it is his responsibility to lay down its policies. He is accountable and responsible to Parliament for those policies, but responsibility for day-to-day management has been delegated to the director general of the Prison Service. In his report, Sir John Learmont made no criticism of the Home Secretary's policies, but made serious criticisms about the way in which the Prison Service had been run.
Mr. Derek Foster: If the Home Secretary continually interferes in operational matters within the Prison Service—I do not necessarily blame him for doing so if political issues arise in the House or in the tabloids—and makes the operation of the service impossible, what is the position on responsibility and accountability?
Mr. Willetts: Ministers are, of course, entitled to intervene in specific operational matters. Should information come to Ministers' attention that policy is not being properly implemented or that an operational matter is causing concern, they would be failing in their duty to Parliament and to the public if they ignored such information and did nothing.
In the few minutes left to me, I should like to make a small number of simple points that have been lost in the elaborate arguments of the debate. First, many claims were made about membership of quangos and appointments to them. I have done some research on such appointments, and I discovered that, in 1979, the last year of the previous Labour Government, there were 39 members of the Trades Union Congress general council. I invite hon. Members to consider how many appointments to public bodies those 39 members may have held. [HON. MEMBERS: "Twenty."] I hear 20, but no, not even 50. [HON. MEMBERS: "A hundred."] No, the answer is more than 100. [HON. MEMBERS: "One hundred and fifty."] The answer is more than that. Those 39 members of the TUC general council had between them 180 public appointments. That is an average of four and a half each.
That approach to appointments to quangos quite understandably brought that Labour Government into disrepute. It is in striking contrast to our approach—I address in particular the remarks of the hon. Member for Greenock and Port Glasgow (Dr. Godman)—with the appointment of Sir Len Peach. In his role of scrutinising

705
public appointments, he ensures that they are all proper and correct. If there is any known political background to someone who receives a public appointment, that is made publicly known.
My hon. Friend the Member for Gravesham (Mr. Arnold) made some important points about the policies of the Liberal Democrats. Today the Liberal Democrats have talked a lot about accountability to Parliament. However, they believe in a massive extension of qualified majority voting—so that a Minister will have a clear responsibility to the House, will have a clear position on which he should be negotiating in Europe, and will have lost the power to deliver the policy for which he was responsible to the House. That is the biggest single threat to ministerial accountability.
The Liberal Democrats also referred to quangos—in fact, they proposed 892 new quangos: new Ministries, new levels of regional government, an industrial partnership agency, a judicial services commission, a national statistical commission, an animal protection commission, a fruit commission, a drugs commission, a national qualification council, a general teaching council, a humanities research council—I could go on. The creation of 892 new quangos would completely undermine the ability of the House to hold Ministers to account for their policies. Therefore, it is clear that the House should reject the motion tabled by the Liberal Democrats and instead support the amendment in the name of the Government.
Question put, That the original words stand part of the Question:—
The House divided: Ayes 39, Noes 247.

Division No. 49]

[7.00 pm

AYES

Alton, David

Jones, Nigel (Cheltenham)

Ashdown, Rt Hon Paddy

Kennedy, Charles (Ross,C&S)

Barnes, Harry

Lynne, Ms Liz

Beith, Rt Hon A J

Maclennan, Robert

Bennett, Andrew F

Maddock, Diana

Bruce, Malcolm (Gordon)

Mahon, Alice

Campbell, Menzies (Fife NE)

Michie, Mrs Ray (Argyll & Bute)

Campbell-Savours, D N

Nicholson, Emma (Devon West)

Canavan, Dennis

Paisley, The Reverend Ian

Chidgey, David

Rendel, David

Clapham, Michael

Salmond, Alex

Clwyd, Mrs Ann

Skinner, Dennis

Corbyn, Jeremy

Spearing, Nigel

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

Steel, Rt Hon Sir David

Taylor, Matthew (Truro)

Ewing, Mrs Margaret

Tyler, Paul

Faulds, Andrew

Wallace, James

Godman, Dr Norman A

Wareing, Robert N

Harvey, Nick

Hughes, Simon (Southwark)

Tellers for the Ayes:

Johnston, Sir Russell

Mr Archy Kirkwood and

Jones, Lynne (B'ham S O)

Mr Don Foster.

NOES

Ainsworth, Peter (East Surrey)

Atkins, Rt Hon Robert

Alexander, Richard

Atkinson, David (Bour'mouth E)

Alison, Rt Hon Michael (Selby)

Baker, Rt Hon Kenneth (Mole V)

Amess, David

Baker, Nicholas (North Dorset)

Ancram, Rt Hon Michael

Baldry, Tony

Arbuthnot, James

Bates, Michael

Arnold, Jacques (Gravesham)

Bellingham, Henry

Arnold, Sir Thomas (Hazel Grv)

Bendall, Vivian

706

Beresford, Sir Paul

Gorst, Sir John

Body, Sir Richard

Grant, Sir A (SW Cambs)

Bonsor, Sir Nicholas

Greenway, Harry (Ealing N)

Booth, Hartley

Griffiths, Peter (Portsmouth, N)

Boswell, Tim

Grylls, Sir Michael

Bottomley, Peter (Eltham)

Gummer, Rt Hon John Selwyn

Bottomley, Rt Hon Virginia

Hague, Rt Hon William

Bowden, Sir Andrew

Hamilton, Neil (Tatton)

Bowis, John

Hampson, Dr Keith

Boyson, Rt Hon Sir Rhodes

Hanley, Rt Hon Jeremy

Brandreth, Gyles

Hannam, Sir John

Brazier, Julian

Hargreaves, Andrew

Bright, Sir Graham

Harris, David

Brooke, Rt Hon Peter

Hawkins, Nick

Brown, M (Brigg & Cl'thorpes)

Hawksley, Warren

Browning, Mrs Angela

Hayes, Jerry

Bruce, Ian (Dorset)

Heald, Oliver

Budgen, Nicholas

Heathcoat-Amory, Rt Hon David

Burt, Alistair

Hendry, Charles

Butler, Peter

Heseltine, Rt Hon Michael

Carlisle, John (Luton North)

Higgins, Rt Hon Sir Terence

Carlisle, Sir Kenneth (Lincoln)

Hill, James (Southampton Test)

Carrington, Matthew

Hogg, Rt Hon Douglas (G'tham)

Cash, William

Horam, John

Chapman, Sir Sydney

Howell, Rt Hon David (G'dford)

Clappison. James

Howell, Sir Ralph (N Norfolk)

Clark, Dr Michael (Rochford)

Hughes, Robert G (Harrow W)

Clarke, Rt Hon Kenneth (Ru'clif)

Hunt, Sir John (Ravensbourne)

Clifton-Brown, Geoffrey

Hurd, Rt Hon Douglas

Coe, Sebastian

Jack, Michael

Colvin, Michael

Jackson, Robert (Wantage)

Congdon, David

Jenkin, Bernard

Coombs, Anthony (Wyre For'st)

Jessel, Toby

Coombs, Simon (Swindon)

Johnson Smith, Sir Geoffrey

Cope, Rt Hon Sir John

Jones, Robert B (W Hertfdshr)

Cormack, Sir Patrick

Kellett-Bowman, Dame Elaine

Couchman, James

Key, Robert

Cran, James

King, Rt Hon Tom

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

Kirkhope, Timothy

Curry, David (Skipton & Ripon)

Knapman, Roger

Davies, Quentin (Stamford)

Knight, Mrs Angela (Erewash)

Day, Stephen

Knight, Rt Hon Greg (Derby N)

Deva, Nirj Joseph

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

Devlin, Tim

Kynoch, George (Kincardine)

Douglas-Hamilton, Lord James

Lait, Mrs Jacqui

Dover, Den

Lawrence, Sir Ivan

Duncan, Alan

Legg, Barry

Duncan-Smith, Iain

Leigh, Edward

Dunn, Bob

Lennox-Boyd, Sir Mark

Durant, Sir Anthony

Lidington, David

Dykes, Hugh

Lilley, Rt Hon Peter

Eggar, Rt Hon Tim

Lloyd, Rt Hon Sir Peter (Fareham)

Elletson, Harold

Lord, Michael

Emery, Rt Hon Sir Peter

Luff, Peter

Evans, Jonathan (Brecon)

MacGregor, Rt Hon John

Evans, Nigel (Ribble Valley)

MacKay, Andrew

Evans, Roger (Monmouth)

Maclean, Rt Hon David

Faber, David

McLoughlin, Patrick

Fabricant, Michael

Maitland, Lady Olga

Fenner, Dame Peggy

Malone, Gerald

Fishburn, Dudley

Mans, Keith

Forman, Nigel

Marland, Paul

Forsyth, Rt Hon Michael (Stirling)

Marlow, Tony

Forth, Eric

Marshall, John (Hendon S)

Fox, Dr Liam (Woodspring)

Marshall, Sir Michael (Arundel)

Freeman, Rt Hon Roger

Martin, David (Portsmouth S)

French, Douglas

Merchant, Piers

Gale, Roger

Mills, Iain

Gardiner, Sir George

Mitchell, Andrew (Gedling)

Garel-Jones, Rt Hon Tristan

Mitchell, Sir David (NW Hants)

Garnier, Edward

Moate, Sir Roger

Gill, Christopher

Molyneaux, Rt Hon Sir James

Gillan, Cheryl

Monro, Rt Hon Sir Hector

Goodlad, Rt Hon Alastair

Needham, Rt Hon Richard

Goodson-Wickes, Dr Charles

Nelson, Anthony

Gorman, Mrs Teresa

Neubert, Sir Michael

707

Newton, Rt Hon Tony

Stern, Michael

Nicholls, Patrick

Streeter, Gary

Nicholson, David (Taunton)

Sweeney, Walter

Norris, Steve

Sykes, John

Onslow, Rt Hon Sir Cranley

Taylor, Ian (Esher)

Ottaway, Richard

Taylor, John M (Solihull)

Page, Richard

Temple-Morris, Peter

Paice, James

Thomason, Roy

Patnick, Sir Irvine

Thompson, Sir Donald (C'er V)

Pattie, Rt Hon Sir Geoffrey

Thompson, Patrick (Norwich N)

Pawsey, James

Thurnham, Peter

Peacock, Mrs Elizabeth

Townend, John (Bridlington)

Porter, David (Waveney)

Townsend, Cyril D (Bexl'yh'th)

Rathbone, Tim

Tredinnick, David

Redwood, Rt Hon John

Trend, Michael

Renton, Rt Hon Tim

Trotter, Neville

Richards, Rod

Twinn, Dr Ian

Riddick, Graham

Vaughan, Sir Gerard

Rifkind, Rt Hon Malcolm

Viggers, Peter

Robathan, Andrew

Walden, George

Roberts, Rt Hon Sir Wyn

Waller, Gary

Robertson, Raymond (Ab'd'n S)

Wardle, Charles (Bexhill)

Robinson, Mark (Somerton)

Waterson Nigel

Roe, Mrs Marion (Broxbourne)

Watts, John

Sainsbury, Rt Hon Sir Timothy

Wells, Bowen

Scott, Rt Hon Sir Nicholas

Shaw, David (Dover)

Whitney, Ray

Shaw, Sir Giles (Pudsey)

Whittingdale, John

Shephard, Rt Hon Gillian

Widdecombe, Ann

Shepherd, Sir Colin (Hereford)

Wiggin, Sir Jerry

Shersby, Sir Michael

Wilkinson, John

Sims, Roger

Willetts, David

Skeet, Sir Trevor

Wilshire, David

Smith, Sir Dudley (Warwick)

Winterton, Mrs Ann (Congleton)

Smith, Tim (Beaconsfield)

Winterton, Nicholas (Macc'f'ld)

Spencer, Sir Derek

Wolfson, Mark

Spicer, Sir Michael (S Worcs)

Wood, Timothy

Spink, Dr Robert

Yeo, Tim

Spring, Richard

Sproat, Iain

Tellers for the Noes:

Squire, Robin (Hornchurch)

Mr. Derek Conway and

Stanley, Rt Hon Sir John

Mr. Simon Burns.

Question accordingly negatived.
Question, That the proposed words be there added, put forthwith, pursuant to Standing Order No. 30 (Questions on amendments), and agreed to.
MR. DEPUTY SPEAKER forthwith declared the main Question, as amended, to be agreed to.
Resolved,
That this House welcomes the Government's policies for discharging Ministerial accountability to Parliament, for improving the management and delivery of public services, for maintaining high standards in public bodies, and for improving the openness and responsiveness of the public sector, thus creating a framework for good Government.

Local Government Services
Mr. Deputy Speaker (Mr. Michael Morris): Madam Speaker has selected the amendment in the name of the Prime Minister.
7.13 pm
Mr. David Rendel: I beg to move,
That this House calls for reform of the financing of local councils so that they can realistically meet needs within the communities they serve; condemns the Government's financial priorities which are leading directly to the imposition of higher council taxes and cuts in local services; and believes that the Government's assault on local authorities, which continues year after year, is directly related to the massive reduction in Conservative representation at a local level.
I wish to make it clear at the start that I hope that the debate will not descend into the trading of insults about whose councils are worse than others. Many debates on local government in the House have been degraded in that way, and I hope that it will not happen tonight. If we chose, Liberal Democrat Members might use our time to attack Westminster or Lambeth, just as Labour spokesmen might do nothing but attack Wandsworth, or perhaps Tower Hamlets as it was under the Liberal Democrat administration, while Conservative spokesmen might do nothing but discuss Cornwall or Walsall.
If we do that, however, we shall merely succeed in losing what little esteem Members of Parliament are left with in the eyes of the public. Nothing makes politicians lose the respect of the public so fast as Members of the House using valuable debating time merely to criticise one another's councils. The public believe that instead we should consider positive ways in which all local authorities might be helped to provide better services at a lower cost.
People may say—and many do—that local government is on the brink of crisis, but a crisis is usually short-lived, whereas, sadly, the problems of local government are of long standing. Local government now faces a challenge from central Government that is perhaps greater than at any time in history. For the past 15 years, local government has been attacked by a Conservative Government who are keen to centralise as much power as they can. Even before that, there was always an imbalance in the relationship between local and central Government.
For too long, local government has been regarded as the property of central Government, its powers and responsibilities relating not to the public, but to Ministers and bureaucrats in Whitehall. Under the past three Conservative Administrations, local authorities have been regarded as the localised implementers of the philosophy and politics of the new right Conservative Government in Whitehall.
Mr. Nigel Evans: I hope that the hon. Gentleman will be constructive and not use the debate merely as an opportunity to knock the Government.
Mr. Rendel: I am happy to be constructive, as the hon. Gentleman will find if he will be patient. I said that it was important to use the debate to consider the whole of local government, not just to criticise individual councils.
For far too long, local government has been the property of central Government. We must change all that. From May 1996, the Conservatives will be left in control

709
of no more than a small handful of local authorities. As their losses in local government have increased, so their determination to control local government from their Whitehall bastion has also increased. Every year, our local authorities find it harder to cope with the financial burden placed on them by central Government. They do so under a dead weight of bureaucracy and over-regulation.
Mr. David Nicholson: The hon. Gentleman talks about the powers and restrictions that central Government place on local authorities, and I believe that we can have a reasonable debate on that. Nevertheless, I draw his attention to the specific case of Taunton Deane borough council, held by the Liberals since 1991, which has never been capped. Two years ago, the council was awarded an extra grant of £1.3 million from central Government—the Minister for Local Government, Housing and Urban Regeneration, my hon. Friend the Member for Skipton and Ripon (Mr. Curry), knows my opinion about that—which was far more than any other council in Somerset or Devon, and the grant has not been significantly reduced since. This year, the council proposes to increase its precept by 158 per cent., resulting in a
"huge increase in council tax",
as the Somerset County Gazette reports. What has the hon. Gentleman to say about that?
Mr. Rendel: I have already made it plain that I hope that the debate will not be degraded by that type of intervention, and I shall not even honour the hon. Gentleman with an answer in that respect. I hope that no other hon. Member will seek to degrade the debate in the way that the hon. Gentleman has done.
Every year, our local authorities find it harder to cope. As the Conservatives have been driven from town halls throughout the country, the Government have wreaked their revenge. To ease the burden on central Government—largely to pay for reductions in income tax—the Government have increased the burdens placed on local authorities. At the same time as local authorities have had their resources pulled from under them by central Government, increasing statutory responsibilities are being passed on to them from central Government.
One need only think of the nightmare represented by care in the community or the endless red tape of compulsory competitive tendering. It is fair to sum up the problem which confronts local authorities of all political complexions as that of having a wide range of responsibilities dictated by central Government, without the resources needed to meet them or the freedom to secure those resources.
Let us consider some recent financial settlements. Last year, the Government at least had the honesty to admit that the settlement was very tough. They could hardly do otherwise when their own press release confirmed that, bearing in mind the new burdens in respect of community care, the contribution from central Government had decreased in cash terms. It meant a cut in Government funds of well over 3 per cent.
This year, unfortunately, there has been rather less honesty from Ministers. In November, the Chancellor of the Exchequer pledged that an additional £878 million would be made available for investment in education for
710
1996–97. Of that, £770 million was to be channelled through local government. As I asked in the debate on the local government settlement, where is the extra £770 million? Funding from central Government for local authorities has not risen in real terms.
Mr. Nigel Waterson: Will the hon. Gentleman confirm that his party's alternative Budget at the end of last year showed no extra money for local councils? Does that mean that the extra money that Liberals wanted for education—equivalent to 1p on income tax—would not be spent under their plans, or does it mean that new taxes would be imposed? Or does it mean that money would be taken from some local councils and given to others?
Mr. Rendel: The hon. Gentleman is wrong in his description of our alternative Budget. It is clear that the extra money from income tax would be spent on education. That is a local authority service. That money would have gone to local authorities for that reason.
This year, the Government have increased the standard spending assessment for education by only 4.5 per cent. Yet local authorities are already spending more this year on education than the Government suggest they should spend next year. If local authorities are to fulfil the Government's pledge of an increase in spending on education of 4.5 per cent., the reality is that the Government are, in effect, pressing local authorities to increase council tax by an average of 8 or 9 per cent., and to cut other services to the bone.
Even then it will not be possible for many authorities to boost spending on education by the amount that the Government suggest. I remind the House of the report produced by the Select Committee on the Treasury and Civil Service, which was published on 15 January. One section read:
"This increase in spending does not, however, have quite the substance that the Chancellor claimed for it. There seems little doubt that some local authorities will be unable to pass on any increase in spending, and that some schools may neither perceive nor receive any increase in resources."
In Cambridgeshire, for example, the education SSA for the current year was £226.1 million. Next year, it is due to rise to £237.3 million, an increase of 4.9 per cent.
Mr. David Wilshire: I am fascinated by the hon. Gentleman's argument. My hon. Friend the Member for Taunton (Mr. Nicholson) was told off for using a specific case—presumably one which did not suit the Liberal party's purposes—but we are now being treated to a specific case from the hon. Gentleman. What are the Liberals up to? Do they understand the case that they are putting, or are they merely making it up on the hoof as they go along?
Mr. Rendel: The interventions are becoming more and more futile. I referred to the need not to make foolish interventions merely to describe where certain councils had gone wrong in order to make cheap party political points. I am talking about the way in which the Government's financing of local government has affected certain councils. That is a very different matter.
Cambridgeshire has already decided to spend £241.1 million on education this year because the authority places a greater value on education than do the Government.

711
That pattern is repeated in a range of county councils from Northumberland to Cornwall. Indeed, it covers the length and breadth of England. As my hon. Friend the Member for Gordon (Mr. Bruce) will no doubt confirm when he replies to the debate, exactly the same pattern is repeated in Scotland and Wales.
The Conservative party controls only a tiny handful of education authorities. No doubt that is why the counties place a greater emphasis on education.
Mr. Jacques Arnold: Will the hon. Gentleman give way?
Mr. Rendel: No. I have already given way enough.
The Government's position no doubt helps to explain why they treat counties and local education authorities in general with such contempt. Even in Buckinghamshire—the last county left in Conservative hands—the council has made it clear that the settlement for 1996–97 is a disaster. It has calculated that it will need to make budget cuts of £12 million to contain expenditure within the capping limit. Yet that limit already assumes an increase in council tax of almost 7 per cent. Any additional Government funding for education will clearly be too little, too late.
In keeping with this evening's theme, what new money there may be will not cover rising costs that are beyond local authority control, such as the £191 million needed for rising pupil numbers or the £131 million required for special needs education. Nor does it take into account the 8 per cent. reduction in schools' capital grants and credit approvals. Vital repairs and maintenance for schools can be delayed for only so long: there comes a time when investment must be made in the infrastructure of our education system.
How can children be expected to learn in damp, decaying classrooms? How can teachers be expected to teach in Dickensian conditions where school buildings are a threat to health and where books are outdated and bedraggled? Conservative Ministers have raised the hopes of parents throughout the country, who thought that at last their children would receive the quality of education that they need, but it is clear already that those hopes were falsely raised.
The Government are guilty of deliberately misleading the public. Their strategy is obvious. They promise new money that will go through to local authorities. When that money does not materialise in schools, Ministers and Conservative Back-Bench Members berate local authorities for not passing it on. How callous can the Government be in toying with parents' concerns for their children's future in that way? How low can their regard for local government be when they seek deliberately to discredit local authorities throughout the country with a campaign that is based on deceit and misinformation?
We are not here merely to talk about what is wrong with local government funding. We must talk also about what we can do to improve it. The solution to the problem of local government funding lies in a change in approach by central Government. The Government must decentralise power. They must allow local authorities to have freedom properly to manage their own affairs. That means giving local authorities greater freedom in raising revenue and in setting spending priorities. It means also raising a larger proportion of funding locally.
712
At the most recent Conservative party conference, it was decided to end capping. The Conservatives were right to do so. Unfortunately, the Government are now so deaf to good advice that they do not listen to it even when it comes from their supporters. Capping is an unacceptable infringement of the principle of local decision making and local accountability. In addition, the constraints introduced by council tax precepts have had the unfortunate effect of pushing up local authority charges. When leisure facilities and the cost of meals on wheels soar above the rate of inflation, it is obvious who suffers the additional burdens. We know that they are faced by those who can least afford them.
In Northumberland, for example, the exceptionally tight budget will mean that the school uniform allowance will be halved. Voluntary groups will be charged to use school premises when they have never had to face such charges before. Discretionary transport provision will come to an end. A further 120 families in the county will be hit by the introduction of charges for respite care. There will be substantial increases in the cost of home help.
The Minister for Local Government, Housing and Urban Regeneration (Mr. David Curry): I am anxious to have a clear idea of what the hon. Gentleman's party is proposing. When he says that capping must come to an end, is he proposing not to apply capping, or to repeal the legislation that makes it possible for the Government to cap? There is a great difference between the two.
Mr. Rendel: In a few moments, I shall be introducing a completely different system, which will not require the Minister's question to be answered.
Releasing capping in isolation presents its own problems, especially if accompanied by a stingy financial settlement which leaves authorities with no choice but substantially to increase council tax. The problem is that council tax was not designed to bear the weight of being a major source of local tax revenue. It is not suitable for that purpose, because it is simply not fair. It is unfair essentially because it has many of the elements of a simple charge rather than being a really progressive tax. There will be great resistance this year to the Government's proposed council tax increases. Whether they like it or not, Labour and Conservative Members alike will have to address that issue.
If local authorities are to raise a larger proportion of their own revenue and if the council tax is inherently unfair, what is the alternative? The Minister will be glad to hear that I am coming to that. The Liberal Democrats have had a policy on that for many years. We have argued consistently that the right way to raise local taxation is not by taxing personal property but by taxing personal income. It is one of the most basic principles of the modern liberal state that people contribute taxes according to their ability to pay. Our support for a local income tax is not new, nor is the idea confined to our party.
The Layfield report in 1976 took the view that a local income tax is the only form of taxation that warrants serious investigation for the raising of substantial extra council revenue. Furthermore, in a comprehensive new report for the Rowntree Foundation, Sir Charles Carter is due to show his support for a local income tax. I cannot see why the other parties are so resistant to this idea. I hope that it is not simply because they did not think of it

713
first and therefore will not endorse it. Whatever the reason, I suggest that there is now a new impetus for local income tax and that they can no longer avoid giving it serious consideration.
Mr. Malcolm Bruce: Does my hon. Friend recall that, when the Deputy Prime Minister was charged with getting the Government out of the mess of the poll tax, he admitted that local income tax was a viable alternative but that he was not prepared to support it because it was Liberal Democrat policy?
Mr. Rendel: I thank my hon. Friend for that helpful intervention.
Mr. Robert Key: Will the hon. Gentleman give way?
Mr. Rendel: No, I have given way to many Conservative Members.
Other changes to local authority funding are required and some of them can be introduced fairly quickly and easily. It is imperative that central Government release local government capital receipts, which are estimated to be about £5 billion. Those funds should be invested in Britain's infrastructure, and not left languishing in accounts at the behest of Whitehall. That investment is desperately needed. With so many people suffering the indignity of homelessness, how can the Government stand by their line that the money must stay where it is in the banks? When will they learn that homelessness will not be solved by market forces alone?
The area cost adjustment still needs reform and the formulae used to allocate funding according to need have had their shortcomings embarrassingly exposed. One small but important example of that was passed to me recently by the London borough of Kingston. According to central Government estimates that were used to calculate Kingston's grant, Kingston has 224 children in care. In reality, it has 616 children for whom it is statutorily responsible. Making these changes to the funding system will no doubt sharpen the accountability of local government. Local authorities must have the flexibility to respond to local need.
Of course, with the enhanced revenue raising powers goes greater and more transparent responsibility. As a Liberal Democrat, I naturally favour improving the democratic process to match the improvements made to the funding system. There would be no need for capping in any of its forms if people could be made properly accountable through a democratic system of local government.
Mr. Tom King: The hon. Gentleman proposes two substantial increases in public expenditure. He proposes a substantial increase in revenue-raising powers. He has said that local income tax would substantially increase the revenue available to local government and that he would remove capping. That would lead to an increase in public expenditure and, as he knows, if substantial capital receipts are released, that would also increase public expenditure. [Interruption.] I
714
am surprised that I am being barracked. I assumed that we were getting a clear statement of Liberal Democrat policy and I thought that I was following it.
Does the hon. Gentleman's call for increased public expenditure in two areas mean that there would be an overall increase in public expenditure by the Exchequer? If that is not the case, where would the savings come from?
Mr. Rendel: It is clear that the right hon. Gentleman has not understood the local income tax system that we would introduce. Perhaps that is why he does not favour it. Under the system, as local income tax increases and more and more funding is raised by local authorities, an equivalent decrease will occur in national income tax, which means that income tax as a whole will not increase. However, there will be an increase in local fund raising compared with national fund raising.
I realise that some hon. Members may not share the Liberal Democrat enthusiasm for representative voting. I warn hon. Members that, if local authorities are to have greater freedom to respond to local need, we must accept that the political process must be effective enough to ensure that they do so respond. I commend that point to Labour Members as well as to Conservative Members. This year's financial settlement was a disgrace in its deceitful conception, and it needs to be condemned by the House, but it was the direct product of a funding system which sees local government merely as the whipping boy of Whitehall. That relationship needs to be broken.
We must move from local government to local democracy. That requires Westminster-based politicians to let go of some of the reins of power and to trust the public to set their own priorities and govern their own communities. That may not be easy for the Conservatives, who have lost nearly all their influence in local communities, and it may also not be easy for the Labour party, which becomes more centralist the higher its opinion poll ratings go, but it is essential if we are collectively to win back the trust of the public of large. There is no better way for the House to prove that it is packed with public servants who have the interests of others at heart.
Education, transport, care in the community, and the environment—many of the most important aspects of our society—are dealt with by local government. If those services are to be run successfully, a proper system of funding local government is not just an option but a necessity. All those who care about local government recognise that, and I hope that all hon. Members will recognise it in the vote tonight.
7.36 pm
The Minister for Local Government, Housing and Urban Regeneration (Mr. David Curry): I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
"congratulates the Government on the priority they have given to education and the police in the 1996–97 settlement for local government; approves the rigorous approach that Government takes towards all public expenditure, including that of local government; commends the flexibility they have given to local authorities to respond to local priorities; and urges local authorities to make the most efficient use of the resources available and to use their freedom responsibly in providing local services.".

715
The hon. Member for Newbury (Mr. Rendel) asked for a debate on principles rather than on the performance of individual councils. I am happy to oblige him. This is an important issue, and I shall seek to demonstrate that the Conservative approach to local government in no way resembles the hon. Gentleman's epigrammatic description. It is part of a much more constructive approach and has a clear vision of the job that local government is there to do. That job must always move with the times, must be developing and must be organic, because circumstances change.
I should like to set out three propositions. First, Governments must have a view of the total volume of public expenditure that is acceptable in the economy. I cannot think of a Government who would not be willing to accept that starting proposition. The second proposition is that as local government spends about 25 per cent. of total public expenditure, Governments need to take a view about what is a desirable level of local authority spending. However attractive it might be to those in the town hall or to whoever occupies the Opposition Benches at any moment to ignore that, it is inescapable that Government have to come to that view.
I noted with interest an interview with the hon. Member for North-West Durham (Ms Armstrong) in the "Parliamentary Monitor", a journal that I noticed only because one of its representatives came to interview me today. The headline over this little chunk is "Reserving the right to cap". I shall quote the hon. Lady faithfully. She said:
"We have found that too many Labour councils are fed up with being labelled by the extreme activities of two or three councils. We have said therefore that we will reserve capping powers to make sure that no council thinks it can act above and beyond the needs of the country."
I commend the hon. Lady for that because it is common sense. Governments must take that view. At some stage, they may have to say, "The national interest has determined that we must limit the total volume of expenditure, and local government must be a part of that constrict."
Mr. Robert Maclennan: How long is the Minister's memory of history? When was capping introduced for the first time? He speaks as though it is like the laws of the Medes and the Persians and is utterly unalterable.
Mr. Curry: My memory does not necessarily extend to the Medes and the Persians, although I am currently reading John Julian Norwich's excellent book on the history of the Byzantine empire. I have noted that capping took place rather frequently under those regimes, although perhaps with rather more dire consequences than those which the hon. Gentleman has mentioned.
The third proposition is that Governments must set priorities in public expenditure, and that spending by local authorities and through local authorities is necessarily in competition with other public spending. That is the reality of the situation, whether in relation to health, community care, foreign aid, social services or the police service. In the modern state, those three propositions are inescapable. According to the Liberal Democrats, it appears that none of those choices must be made. That is what separates us, right at the beginning.
716
If the money available to local authorities is inadequate, it can come from only two places: in the form of more grant from central Government, or from the local taxpayer. Ultimately, the money will come from the taxpayer; it must come from the taxpayer wherever it comes from. The right hon. Member for Berwick-upon-Tweed (Mr. Beith) has more sense than most people in his party, because he has acknowledged that simple truth.
There are three components to local government—[Interruption.] I am trying to oblige the hon. Member for Newbury by focusing the debate on the central issues, rather than doing a Cook's tour of the local authorities.
Mr. Toby Jessel: In relation to the central issue, to which the hon. Member for Newbury (Mr. Rendel) referred, did my hon. Friend notice that he suggested not only no capping of local authority taxes, but that there should be a locally imposed income tax? The hon. Gentleman did not mention his party's policy to restore the Greater London council and other regional councils, which presumably would, if they had their way, have the power to impose a local income tax without any parliamentary or central Government capping. That would be a double whammy. How on earth does the hon. Gentleman imagine that people with families to support, and young executive and professional people in places such as Twickenham and Richmond, will possibly manage if two lots of income tax were imposed without any kind of capping?
Mr. Deputy Speaker: That was a very long intervention.
Mr. Curry: My hon. Friend is right. One thing I noticed in the remarks by the hon. Member for Newbury—because it was not there—was a definition of what is local. At what level will the tax be raised? Will it be raised by one of the new, super-duper regional assemblies which the Liberal party would impose on us? Another thing I noticed was the hon. Gentleman's statement that it would all net out to be the same because, if one raises more tax locally, one could raise less tax centrally. I can only say: would that that would happen. All my experience tells me that I can believe it when I see it. As I do not expect to see it, I see no need to suspend my disbelief.
Local authority finance has three basic components: the revenue support grant, the redistributed business rate and council tax. There are various grants and other finance, but the current expenditure of local government essentially comes from those three sources. What are the options for changing that? Let us examine the options, both within the structure and outside it.
The hon. Member for Newbury, and the hon. Member for North-West Durham, too, espouse the idea of the locally raised and retained business rate. Perhaps they forget—I may speak about the hon. Gentleman's memory—that local business rates were completely discredited by the time we scrapped them, that rate poundages varied enormously from place to place and from year to year, that business had no idea what bills it would be called on to pay in the next year or subsequently, that the less responsible councils viewed local commerce and industry largely as a convenient milch cow, and that relations were often very poor.

717
Hugely complicated grant arrangements were needed to compensate for the very uneven distribution of rateable resources across the country. Is it therefore necessary or helpful to introduce that change in those circumstances?
Another option for changing local authority finance, as the hon. Member for Newbury suggested, is to get rid of capping. He said that the argument over whether we must get rid of it in statute or merely not apply it is irrelevant, because they will do something else in any case. That was the heart of his argument. I acknowledge that there are two points of view on that argument. Considered from the local authorities' point of view, I can quite understand people there who say, "We would like to get rid of capping. We want to be able to take the decisions".
That is a natural and understandable reaction. However, there is the wider view, which has caused the hon. Member for North-West Durham, who has left the Chamber to find some crucial piece of evidence—for reasons which I completely understand—[Laughter.] I must defend the hon. Lady. She has left for a reason with which I sympathise entirely, which has nothing to do with this debate. In her circumstances, I should have done the same thing. I shall explain to Liberal Members what those entirely honourable reasons are, should they be overwhelmed with curiosity on this matter.
There is a wider, national view—which has led the hon. Member for North-West Durham to retain in her proposals the power to cap, even if she would not wish to use it on every occasion—in relation to what can be afforded. That point of view is just as legitimate. We have, if one likes, two legitimacies that are in conflict. I accept that there is bound to be a conflict, depending on one's perspective. In government, one must take the wider view, which has consequences for what one is willing to permit local government to spend. This year, there has been more generous capping criteria to allow education funding to pass through to schools—I shall come to the point made by the hon. Member for Newbury in relation to that in a moment—if that is the decision of the local authority.
One can equally amend the revenue support grant formula and its principles. It is an organic system that must be upgraded and brought up to date—for example, by new census data. From time to time, it is reasonable to test parts of the system to discover whether it is resilient, robust and providing the best possible answers. I do not defend the system as some sort of crystal structure, every aspect of which must be defended. However, it is a well worked out and sophisticated system, and we must strike a balance between what is understandable and what is comprehensive so that it is accessible.
We share with local authorities and take part in those discussions. I think no one accuses us of not wanting to maintain the genuine debate on the mechanisms for distribution of the grant. That is why this year—which is of great interest to many hon. Members—the examination of area cost adjustment and the sparsity factor of the children's element in the personal social services will have a crucial impact on the way in which the grant is distributed. However, we cannot satisfy everyone.
When people come to talk to me and my hon. Friends about those matters, I notice that the system which they regard as the most objective that could be devised almost
718
invariably coincides with a system that would redirect the most resources towards that local authority. I do not blame local authorities for that because it is natural. However, we can never satisfy everyone because there are bound to be natural conflicts, and a balance must be struck between them.
The hon. Member for Newbury said that he would get rid of the council tax. I pose the question whether, with the turbulence that I accept local government has been through, now is the time to tear up by the root a taxation system that has been there effectively for only a couple of years and to start all over again.
Mr. Rendel: Is not that precisely what the Government did with the poll tax, which was quickly thrown out?
Mr. Curry: That is precisely what we did, because the community charge did not deliver what we demanded of it. The council tax, on the other hand, is delivering a very high rate of collection—much higher than any previous system. The system is accessible and readily understandable. It is easily perceptible. It conforms with Adam Smith's definition of a good tax. The council tax works effectively and it is a stable tax. Therefore, in those circumstances, would it be sensible to start again and tear up the existing structure that is settling down well?
I said earlier that I would not cite local authorities simply to denigrate them. However, I shall this once cite an authority, but with a hint of praise. Lambeth is now beginning to collect a far higher proportion of the council tax that it should be collecting than it ever has before. Collection is a crucial element in local government finance. Councils need to collect as much tax as is legitimately due to them—just as they should fill voids and collect local authority rents. All that is part of the essential management tool of delivering efficient local government.
Mr. Key: I want to underline and endorse everything that my hon. Friend has said about the reform of local government taxation. I was previously a local government finance Minister, and I can only say that what the hon. Member for Newbury (Mr. Rendel) said is absolute nonsense. My right hon. Friend who is now the Deputy Prime Minister looked at the whole question of local income tax in great detail. It is not true to say that we did not look at that, together with every other system.
One of the disadvantages of local income tax is that economically poor areas would have a very low tax base, while all the rich areas that currently seem to return Liberal Democrat authorities would have massive, overflowing coffers. That would necessitate very substantial transfers from one to the other, and we would not end up with a better system.
Mr. Deputy Speaker: Order. These interventions are too long.
Mr. Curry: I am grateful to my hon. Friend the Member for Salisbury (Mr. Key), who speaks from experience.
I come now to more fundamental changes. The Liberal Democrats are still, I think, saying that they would raise an additional 1 p on national income tax and direct it specifically to education. However, there is only one way

719
that that could happen under the present structure—it would have to be wrapped up into a specific grant and its use limited to the education sector. If the hon. Member for Newbury did that, he would hypothecate it—yet the whole tenor of his remarks was that he wanted to give more freedom to local authorities.
If he delivers that 1 p to local authorities through the standard spending assessment system, he cannot hypothecate it, and therefore cannot guarantee that it would go to education. Any council—whether Labour, Liberal Democrat or Conservative—that wished to spend that money on building roads, or building pyramids for that matter, would be legally entitled to do so, even if it would not be wise. Therefore, the hon. Gentleman cannot guarantee that that money would go to education unless he is prepared to eat his own words and deny local authority competence and decision making.
Mr. Malcolm Bruce: In a sense, the Minister is correct—but is he not showing the dishonesty of the Chancellor of the Exchequer, who claimed in his Budget that he was giving £878 million extra to education? He cannot deliver, either.
Mr. Curry: There is no contradiction—[Interruption.] The hon. Member for Gordon (Mr. Bruce) should listen. There is no contradiction either in what my right hon. and learned Friend the Chancellor said or in what the hon. Member for Newbury said. My right hon. and learned Friend may find £700-odd million for education, just as the hon. Gentleman may find the product of a 1p income tax for education—and earnestly wish that money to go through to education, adjusting the capping criteria to try to ensure that it does. What my right hon. and learned Friend, the hon. Gentleman and I cannot do is to require in any statutory or legal sense that that money should go to education.
Mr. King: The hon. Member for Gordon (Mr. Bruce) is completely wrong. My right hon. and learned Friend the Chancellor made it clear that he could not compel that money to go to education, but said that he looked to local authorities to ensure that it did. Liberal Democrat Somerset, having made the biggest complaint about education and having said that its top priority is education, did not put the money into education when it had the funds to do so, but put it into other services instead.
Mr. Curry: I have never made the claim that that money must, in some quasi-statutory sense, go through to education. Last year there was a major campaign—in some cases orchestrated by local authorities—protesting against the settlement and focusing on education. Therefore, it would be extraordinary if those local authorities, having been given the extra resources, did not spend them on education—the very thing that they highlighted as the chief priority.
My first objection to a local income tax is that it would be wrong to get rid of the council tax. It is working, it is effective and I know of no one in local government who wishes to pull it up by the roots and start again. Secondly, local income tax means differential rates of tax. There would be a real threat to some of the inner-city areas and attempts to regenerate life there. It would also be a
720
difficult match with the benefits system. I do not buy the idea of local income tax. Council tax is doing the job better—
Mr. Nigel Waterson: Has my hon. Friend seen the internal research document "Towards 1996", produced by the Liberal Democrats? [Interruption.] Perhaps "Towards Oblivion" would be a more apt title. The document states:
"Under the Lib-Dems local income tax you would pay income tax twice."
Mr. Curry: Knowing that the hon. Member for Newbury wished to conduct this debate in a high-minded manner, I wrestled with my conscience over whether I should use that excellent Liberal Democrat document, which I understand was drawn up by someone described as a political warfare officer. I decided not to use it. I can only deprecate my hon. Friend's decision to introduce that sort of note into this debate.
I do not know what has happened to site value rating. When the hon. Member for Newbury was chided with having dropped it in the rate support grant last year, he wrote a letter to us protesting that it was still on the Liberal Democrat agenda. However, it has not appeared in today's discussion, so I do not know whether it is still there.
Let us be clear about the education settlement, against the background of statutory powers that I have described. In cash terms, comparing like with like and SSA with SSA, the figures are up—an increase of £74 million. Just under £200 million accounts for pupil numbers, while £322 million accounts for teachers' pay. The remainder covers other sources of inflation.
Ms Hilary Armstrong: Does the Minister agree that comparing, like with like—cash that was spent last year against cash that will be available this year—there is nothing like a 4.4 per cent. increase?
Mr. Curry: But that is not comparing like with like. Last year's outcome cannot be compared with the money that the Government are making available this year. That is comparing things that are not alike. Every year, local authorities spend more than their SSA and they will continue to do so. The capping criteria allow that additional money to come through. I use the word "money" advisedly because in education everybody talks about resources, as though that is something much grander than money. In fact, most of the time we are talking about money, and it is important to remember that.
Ms Armstrong: Will the Minister explain how much councils will have to spend above SSA this year to meet the education budget in real terms as opposed to last year, given the rise in pay, the rise in pupil numbers and other commitments? How much does he estimate council tax will have to rise to cover that?
Mr. Curry: The hon. Lady is asking the same question in a different way. The only thing that we can compare is what the Government make available to local authorities one year with what they make available the next year. If councils choose to spend other resources—for example, from reserves—that is entirely a matter for them
Ms Armstrong rose—
Mr. Curry: I am not giving way again; I have already given way to the hon. Lady twice.

721
There is a tendency to discuss education as if the only issue which matters is money, whereas many recent events have suggested that the method and quality of teaching also have a great deal to do with educational performance. We do ourselves a disservice if we discuss education purely in terms of money.
The hon. Member for Newbury talked about capital receipts, which I know are very beloved of the Opposition. The deputy Leader of the Opposition, the right hon. Member for Kingston upon Hull, East (Mr. Prescott) was—I think—on "Today" a week ago talking about capital receipts lying idle. They are not lying idle; it is the Opposition's great and frightfully convenient myth. Capital receipts are in fact used to finance local government activities. For example, the interest from them replaces borrowing. Such capital receipts are not where they are needed in many circumstances, so there would have to be clear compensation for the way in which capital is allocated.
The Opposition are clutching at a great straw in thinking that they would be able to be frightfully prudent about public expenditure and at the same time give local authorities so much extra money. They will find that the straw turns out to be rather feeble when they try to float on it.
In a debate that I have tried to keep free from indulgence in any unnecessary invective, I rather resented the hon. Member for Newbury saying that homelessness cannot be addressed purely by market forces. Nobody is trying to address homelessness by market forces. The rough sleepers initiative introduced by the Government—we are now considering a successor programme to it—is a very deliberate programme of co-operation with the voluntary sector, using public money specifically to help people, and has nothing whatever to do with market forces. It is entirely designed to find effective ways to help people who desperately need that help.
I do not care what sort of flags people want to fly on it. I am concerned simply with being able to meet the dramatic needs that we encounter. Indeed, voluntary organisations would also resent the implication that somehow they were lending themselves to some exercise in the application of market forces in areas that do not lend themselves to such application.
I remind the House of the state in which we found local government in 1979. Not universally, but in many cases, we found a monolithic local government, divorced from the private sector. It was not used to working with the private sector and there was barely any contact between public and private sectors. Local government was corporatist and dominated by the trade unions which worked for it. There was a closed shop; there was no competition for services or service delivery. In many respects it was wasteful, due to levels of unnecessary management.
We have sought to transform local government. We have introduced efficiency—yes, by public expenditure restraints. That is one of the classic means by which one introduces efficiency. I would not want to pretend that that has not happened. Local government has experienced what is known in jargon as delayering. It has seen more professional management, which—I think—has been accepted.
722
The establishment of partnership with the private sector, has been dramatic and effective. That partnership has occurred through such practices as compulsory competitive tendering, although many local authorities are still extremely resentful of that process. Partnership with the private sector has been especially noticeable in regeneration schemes such as city challenge and single regeneration budgets, where public resources have been used alongside private resources in order to get value for money as well as more money to get value out of. That has been crucial in bringing about what has often been a mind change in many local authorities, which now consider partnership instinctively instead of having to be—almost—dragged, kicking and screaming, to accept that the concept is valid.
We have seen a new culture of partnership, the development of value for money through the Audit Commission value-for-money studies, and performance indicators, which were intended as a tool for punishment and found to be useful by local authorities. Incidentally, such performance indicators have also given the electorate a great deal more power and information than ever before. Accountability must start with information. We have developed the enabling concept of local authorities that has been widely accepted in local government. Indeed, the most intelligent parts of local government have sought to develop it. That does not comprise a minimalist, static view of local government. It is positive, creative and dynamic.
Of course, we must continue to make efficiencies and implement vigorous cost control. We are approaching the end of the structural review, we have a settled tax in the form of council tax, a widely accepted concept of enabling, and a concept of partnership regarded as necessary and desirable.
Local government next needs to combine a period of stability with measured change and development. There are three essential roles for local government. First, it must play the necessary role of regulator on behalf of central Government and on its own behalf. Trading standards and environmental health officers are doing a necessary job as regulators. That role should have as light a touch and be as user-friendly as possible.
Secondly, local government plays the role of enabler in the way in which services are provided. Thirdly, it has the role of regenerator; the local authority at the heart of its community trying to bring about regeneration, renewal and economic development, which it should develop. We will be introducing a trial scheme—capital challenge—whereby local authorities compete for capital. That idea has a lot of sense to it. I would like local authorities, for example, to consider bidding for capital challenge money to extend and get better value for existing SRB or estate action schemes.
We are introducing the estates renewal programme to tackle some of the most difficult problems on the most deprived estates. Would it not make sense to make those bids alongside SRB bids and estate action programmes? That would also enable better and more extensive value for people. Thinking creatively in such terms is one of the essential functions of local government that I hope they will undertake.
There is a new culture, although one cannot be certain how long it will last and whether it is really imbedded. Some of the Opposition policies such as the end of

723
compulsory competitive tendering, the end of capping with the most meagre safeguards, wholesale changes in, for example, the financial basis of local government, and changes in business rates are what local government does not need.
Local government has found a new role; the Government have endowed it with a new role. I have enjoyed the warmest and most friendly relations with all people in local government, irrespective of political party. I could justify that and the people who come to see me would also argue that that is so. That is because I esteem what it does. Its role is essential. A new role for it, at the heart of its local community in partnership, is emerging and I hope to continue to promote it from the Government Benches.
8.6 pm
Mr. Thomas McAvoy: The Minister was right about the Government's attitude to local government. There is no doubt that local government has been the whipping boy of the Conservative Government in the past 17 years. The Government have repeatedly attacked local government, constrained its powers and functions and struck at its financial basis. I shall not respond in too much detail to what the Minister said, because he was obviously dealing only with English local authorities. I await the speech of the Under-Secretary of State for Scotland, the hon. Member for Kincardine and Deeside (Mr. Kynoch), to hear the Government's response to the debate from a Scottish perspective.
I heard the hon. Member for Newbury (Mr. Rendel) appeal for a high-minded approach to the debate and criticise deceit and misinformation. Deceit and misinformation immediately call to mind the most recent "Focus" leaflets in my area. I have never seen more consistent deceit and information than that in Liberal Democrats' focus leaflets. People who live in glasshouses should not throw stones.
I want to address issues in my local area, which I am elected first and foremost to do. I am especially pleased that the Under-Secretary of State for Scotland is present. On behalf of the Government, he certainly has a lot to answer for. The Conservative base in Scottish local government has all but vanished. The Conservatives do not control a single new unitary council. Indeed, there has not been a Conservative councillor in the Cambuslang area of my constituency since 1982.
The Scottish revulsion for the Conservative Government, driven on by Thatcherism, led many middle-of-the-road, decent Conservative voters to start voting Liberal, and they have continued to do so. They would not go the whole way and vote Labour, but what will happen in the coming year when those Tory-Liberal voters find out that the leader of the Liberal party has declared that he will support not the Conservative party but a Labour Government? I do not know, but I shall await the outcome with interest. The Conservative base in Scotland has been destroyed despite the Government's attempts at gerrymandering through the unwanted and uncalled-for reorganisation of Scottish local government.
As a former Strathclyde regional councillor, I know that the council has done a first-class job. For the benefit of the Under-Secretary, who is a new boy in this regard, I should point out that Strathclyde regional council was
724
repeatedly praised by Conservative Secretaries of State for Scotland for its responsible attitude to the organisation of its services and the raising of money for those services.
The previous Secretary of State for Scotland, the right hon. Member for Galloway and Upper Nithsdale (Mr. Lang), denied that there would be any job losses because of the reorganisation of Scottish local government. He then said that there would be losses, but only at the edges, and that they would amount to about 1,000, if that. On Friday, I attended a meeting at the city chambers in Glasgow, where I was shown figures that 8,000 jobs will be lost in Scottish local government, and the number is rising.
My constituency is divided between two local authorities: South Lanarkshire, covering Cambuslang, Halfway and Rutherglen, and the new Glasgow city council, covering Toryglen. South Lanarkshire new council is under pressure because the grant settlement from the Government completely ignores any pay awards for local authority staff, including teachers. If the Minister wishes to deny that, he is welcome to intervene. It means that any nationally agreed pay awards have to be met in full by each local authority from whatever resources it can find or, more likely, from the cuts imposed to finance them. It is a cumulative problem, because, according to the figures that I have, no allowance has been made in the grant for the past three years for pay awards.
One opinion put forward at the meeting in the city chambers in Glasgow was that English authorities had received allowances in their grants to deal with a 4.5 per cent. increase, yet there is no comparable increase for Scottish local authorities. I should like the Minister to respond to that point.
There is also pressure on local authority services because of additional works and costs undertaken by local authorities that are not reflected in the grant. The Convention of Scottish Local Authorities produced an extensive list of works and costs that were ignored by the Government when they arrived at the grant settlement. One example is the landfill tax that local authorities will have to pay from October 1996, which the Scottish Office has completely ignored.
The Government have retained capping and, in some ways, reinforced the capping of local authority expenditure. In simple terms, in the coming financial year, if a local authority can increase expenditure by only 1 per cent. on that for 1995–96 before being capped, extensive cuts are inevitable. Local authorities in Scotland are being forced to cut services to reach the Government capping limit and thereby avoid action by the Secretary of State for Scotland.
Local authorities, including South Lanarkshire, are, in effect, experiencing another round of cuts, and face service reductions as a result of vacancies not being filled. They also face extra charges on the community, redundancies and the closure of facilities. At the end of the exercise, they are still looking for significant increases in council tax because of the relatively small increase in grant.
South Lanarkshire is a new council for Cambuslang, Halfway and Rutherglen. Twenty years ago, we were incorporated into Glasgow district council, which, in the eyes of many folk, was not a success. We are now part of South Lanarkshire. Despite that council's difficulties, it has recognised the special needs of Cambuslang,

725
Halfway and Rutherglen through special measures in the forthcoming year. With great difficulty, it has managed to keep the increase in council rents down to about £2 a week, which, although still high for council tenants, is comparatively low—life is all about comparisons, and the increase is certainly less than the going rate of council increases in Scotland.
In addition, councillors in the rest of South Lanarkshire have taken the wider view and allowed extra capital spending on the housing programme in the Cambuslang and Rutherglen area. That displays a degree of tolerance and good will towards our area that we very much appreciate.
In many ways, all councils in Scotland are in trouble but the figures that I received on Friday for the new Glasgow city council are frightening. Conservatives and others will say that Labour is always crying disaster, that it is merely going through the motions and that, after we have had a little panic and cried wolf, things will settle down and everything will be fine. Only in the longer term will we be able to establish whether there is any credibility in that view.
It is a matter of fact, not opinion, that it costs the new Glasgow city council £874 million to provide its current services. That is what it cost last year, with no expansion of the council budget. For the coming year, grant-aided expenditure results in only £807 million being available. Glasgow city council therefore faces a £67 million shortfall. Surely that must be recognised as a special case.
I am not arguing that the cake should be redistributed in Glasgow's favour but, as someone whose constituency covers two different councils under the new system, I am already on record as saying, and have no hesitation in repeating, that whichever council covers the city of Glasgow will need special help. There is possibly more need in that area than anywhere else in Scotland. With the disaggregation of Strathclyde regional council services, Glasgow city council faces a desperate situation. A deficit of £67 million is equivalent to a cut of almost 8 per cent. in its budget. Various measures have been suggested that would reduce the amount required, through departmental cuts, to £45 million or just 5 per cent., but such cuts are draconian.
Examples of the measures that Glasgow council needs to take include increasing charges for school meals and milk, home helps, recreational facilities, burials and cremations, community education and letting fees. In addition, charges would need to be extended to a wider range of home care and social services, and charges would be introduced for under-five nursery provision and for entry into museums.
Dr. Norman A. Godman: Does my hon. Friend agree that the problems that he is outlining are exacerbated by the fact that the new councils have literally no experience of, for example, social work policies, procedures and practice? The same is true of education, so the new authorities face a difficult future.
Mr. McAvoy: I am grateful to my hon. Friend for that intervention, which reinforces a point that I intended to make later. There will be a learning curve for the new
726
Glasgow city council, which is to be a unitary authority. The Government expect the council to acquire the necessary expertise and knowledge without providing the expenses for training. The training needed to ensure that services are kept to the present high standard will be expensive for the council, and I am grateful to my hon. Friend for reinforcing that.
The closures of services to which I have referred are not in my imagination, as there is a £67 million shortfall to be met. The options for the council include closing primary and secondary schools, but Strathclyde has tried hard to deal with the problem of surplus school places. The council is considering closing community education facilities and residential schools. These include, for instance, the Carnbooth school, the only school in the area that caters for deaf and blind children. Councillors were so desperate at one stage that they even considered closing that school, although I now believe that they have decided to look at other measures. That is the sort of desperate attitude that the Government have forced on councillors who are trying to balance the budget.
Other facilities considered for closure included elderly people's homes, local authority day centres and hostels, libraries, museums, public halls and the district court. Only last week, the Secretary of State criticised Glasgow district council following the cancellation of a whole day's court cases at the district court, which resulted in many cases not being fully processed. The Government are forcing such situations on councils, and are then criticising them. Despite all these potential cuts, a massive increase in council tax faces Glasgow residents if no help comes from the Government.
On social work, Glasgow district council benefited from the fact that Strathclyde regional council was able to draw resources from a wider area to spend on areas of need—many of which, unfortunately, were in Glasgow. That meant that a disproportionate share of Strathclyde's budget was spent in the city of Glasgow—rightly, as that was where the need was. Strathclyde spent 40 per cent. of its social work budget in the Glasgow area because of the level of need, but only about 30 per cent. will come to Glasgow in grand-aided expenditure. More account should have been taken of the fact that the disaggregation of staff will leave Glasgow in a terrible position.
I maintain that Glasgow needs special help, as the position that it faces is far more critical than anyone could have foreseen. All the factors that I mentioned relating to the local government reorganisation of Strathclyde and the disaggregation show the pressure that is on Glasgow.
The Parliamentary Under-Secretary of State for Scotland (Mr. George Kynoch): The hon. Gentleman has argued strongly for extra money for Glasgow, and has talked about not wanting a redistribution—a matter that I may return to when I respond to the debate. As he is reaching the end of his speech, may I ask him where he expects to get the extra funding? Will he follow his hon. Friend the Member for Dundee, East (Mr. McAllion), who, in a slip on BBC television, indicated that he would take it from the health budget?
Mr. McAvoy: I would recommend that we do not follow the example of the former Secretary of State for Scotland—the current President of the Board of Trade—who wasted £30 million of taxpayers' money on a private

727
hospital. I ask the Minister—who may not have experience of the matter—to check the figures that show how much money was wasted in Scotland, never mind the United Kingdom, on the poll tax debacle. The Minister should not preach to us when there are examples of disgraceful waste in his own backyard.
Mr. Kynoch: I should be grateful if the hon. Gentleman answered the question. He has given an example of a one-off cost, when what he is referring to is an on-going situation. How would he fund it year on year? Would the money come from health, as the hon. Member for Dundee, East said?
Mr. McAvoy: We will make sure that there are no more of these "one-off costs", as the Minister calls them. I can tell him that £30 million would keep Glasgow and Scottish local government going for a wee while.
8.24 pm
Mr. Nigel Evans: I am grateful for the opportunity to take part in the debate. I shall make a short speech, to allow other hon. Members to speak.
I was amazed by the introductory speech by the hon. Member for Newbury (Mr. Rendel), who pleaded with us not to pick on any Liberal Democrat councils and use them as examples of authorities in which there is either flagrant waste or services are not up to scratch. He went on to criticise Government expenditure and Government policy and tried to use the debate simply as a political ploy. I do not accept that. I have a list of Liberal Democrat-controlled local authorities and, if the hon. Gentleman is not careful, I shall start to read them out and describe some of the problems suffered by local people in those areas.
The hon. Gentleman said that we need better services at a lower cost. There was nothing in what he went on to say that led me to believe that his party's proposals would provide better services, and certainly not at a lower cost. The hon. Gentleman, who obviously lives in a Liberal Democrat dreamland, added that we need extra expenditure on a number of services, but gave the impression that nobody would have to pay for that extra expenditure. That is absolute and complete tosh. If there is to be extra expenditure on education, social services or any of the areas to which the hon. Gentleman referred, somebody somewhere must pick up the tab. He was dishonest, in that he was not prepared to say how much that tab would be and who would have to pick it up.
I am fortunate that I live in Ribble Valley, one of the most beautiful areas in the United Kingdom. I am also fortunate, in that Ribble Valley is a Conservative-controlled local authority. Our only problem is that we have the vast-spending Lancashire county council above us, and we must pay the brunt of our local authority council tax to that county council. I have no doubt that more will be said about that in the House on Wednesday morning.
The Liberal Democrats demand extra expenditure nationally, with the party's alternative Budget last year stating that its expenditure plans amounted to about £10 billion. That expenditure will have to be found through higher income tax. I know that the Liberal Democrats have grandiose plans, and that they want to
728
introduce punitive rates of tax for those earning more than £100,000. Those rates of tax, however, will find their way down to those earning less than that amount.
We also have the delights of the local income tax to look forward to. I did not understand the hon. Gentleman's comment that the Liberal Democrats would be raising a lot from the local income tax, so that tax would come down nationally as one tax balanced with the other. I assume that, under the party's proposals, the council tax will be abolished and that the Liberal Democrats will not run the council tax alongside the local income tax. Therefore, all that extra money will have to be found.
I live in an affluent area, and local people would have to pay the local income tax. Some of the money raised in my area would have to be siphoned off to pay for expenditure in some of the poorer areas of the north-west, where there are specific problems and where extra money is needed. The Government ensure through the current system that money reaches the areas that need it. One can only imagine what sort of system the hon. Gentleman has in mind following the introduction of a local income tax.
Some people would argue that one Chancellor of the Exchequer is bad enough. But can one imagine what it would be like if we had a local Chancellor of the Exchequer in every town hall throughout the country? He would have to respond to Liberal Democrat councillors, who would be dreaming up grandiose plans for where they wanted to see tax income spent. That local Chancellor would then raise tax locally. I assume that that system would be an absolute nightmare.
Not only would we have a local income tax and other grandiose plans, but the cap that currently protects people from these technicalities would be removed. Councils could then go on a massive spending spree without any intervention from central Government, who would tell them, "Hold on. Local people need protection from those spending plans." That system would be an absolute nightmare.
Mr. Rendel: The hon. Gentleman clearly did not listen to what I said about the need for greater accountability in local authorities. If local accountability is increased by means of a proper voting system, there will be no need for capping.
Mr. Evans: Good grief—are not talking about proportional representation, are we? That would enable councils to shunt off their spending responsibilities. No doubt they would try to make out that central Government were to blame—obviously, the Liberal Democrats would never be in control of central Government—while hiking up local spending. They would hide behind proportional representation, trying to gain power that was disproportionate to the votes that they were securing. It would be a nightmare.
On top of that, the Liberal Democrats would impose regional government, while signing away much of the power that we have at Westminster to Brussels. They are, of course, a federal party: they believe in a United States of Europe. That would be an absolute disaster. There would be tier upon tier of local government, hiding behind the word "democratic". The people would have to pick up the bill for all those tiers of bureaucracy, and there would be no improvement in services.

729
I was rather surprised that the hon. Member for Newbury did not mention businesses. For six years, I was a member of West Glamorgan county council. Before the introduction of the uniform business rate, local businesses used to trot along to the council year after year and beg it to take account of their spending plans so that the burden did not fall on them. They were trying to plan for the next 12 months without having the faintest idea how much they would have to find to pay their rates.
Many business people knew that the process was no more than a facade: they would make their pleas, and be ignored. It was like talking to a brick wall. Up would go the council and business rates—and it was particularly difficult for small businesses working on the margins to find the extra money from their profits or, if they were not making profits that year, from some other source.
The hon. Member for Newbury did not say what he would do to help small businesses. One thing that the Government have done is ensure that businesses can plan for the future: they know how much they will be charged. We must ensure that that system of rating is retained.
We know that the Liberal Democrats are big on bureaucracy. In Richmond, for instance, there are a good many extra committees: it seems to be thought that, just because meetings continue until 9 pm, 10 pm or 11 pm, people in the area are being given a better deal, but we are aware that that is not the case.
Mr. Chris Davies: Has the hon. Gentleman read the auditor's letter to Richmond council? Does he accept that what he has said is simply not true, and that the council was highly praised by the auditor?
Mr. Evans: I have also discovered that, according to the Audit Commission's January 1995 paper "Paying the Piper", £500 million of extra money could be found through savings if only best practice were followed.
Mr. Wilshire: Is my hon. Friend aware that Richmond council is pouring tens of thousands of pounds into opposing the construction of a fifth terminal at Heathrow airport, although all independent local surveys show that the majority of people support it?
Mr. Evans: I did not know that, but I am delighted that my hon. Friend has been able to share the news with the House and the nation.
The Liberal Democrats keep banging on about education. They tell the country that they will put a penny on income tax to pay for extra education services, but, as has been pointed out, they cannot guarantee that the money will be spent on education, just as we cannot guarantee that the extra £700 million or £800 million that is going to local authorities will be spent on it. On Wednesday morning I shall make an impassioned plea to Lancashire county council, asking it to follow the Chancellor's guidance, and I hope that as a result it will spend its budget on education.
The Liberal Democrats cannot even do their sums right. We need only add up all Littleborough and Saddleworth's education spending plans. Their education spokesman had to admit that the accumulated spending plans meant an increase of 2.5p, not 1p.
Mr. Chris Davies: Would the hon. Gentleman care to tell me where the local authority called Littleborough and Saddleworth is?
Mr. Evans: The hon. Gentleman represents the area.
Mr. Davies: There is no such local authority.
Mr. Evans: The Liberal Democrats' education spokesman visited the constituency during the by-election—I was there throughout—and had to admit that their expenditure plans amounted to 2.5p on income tax, rather than 1p. I am amazed that, given the opportunity to comment on that, the hon. Gentleman chose to make a pedantic point about the name of the constituency.
It is also a great shame that the Liberal Democrats confuse education spending with the delivery of the service. That does not add up either. We know that, in some parts of the United Kingdom where twice as much is spent on education as in other parts, the outturn is not as much as it is in those other areas. Money is not all that matters.
Since 1979, the amount spent on education has risen by more than 50 per cent. The Government are keeping their commitment, but we need to ensure that other provision remains, such as grant-maintained schooling. I understand that the Liberal Democrats, along with their friends in the Labour party, do not believe in that. My parents could not afford to send me to an independent school, but, thanks to the assisted places scheme, the parents of 60,000 young people will be able to ensure that their children enjoy the education that they consider best for them: the Government are providing the money to make the extra places available. The Liberal Democrats do not want that, however. The same applies to the national curriculum and to testing, which ensures that standards continue to rise.
We must keep an eye on how Liberal Democrats behave within their areas. They say one thing and do another. They say that they are looking after the people, that they want services to be financed properly and that the council tax should be kept as low as possible. A couple of weeks ago, the Clitheroe Advertiser and Times reported that the Liberal Democrat councillor on Ribble Valley council had suggested that we introduce car-parking charges in Clitheroe for the first time. Goodness knows at what level the charges would be introduced, but, according to the newspaper, the aim is to raise some £400,000.
I cannot think of such a devious way of introducing a new tax. Not only would local residents have to find the extra money to park their cars in Clitheroe; the charge would harm small businesses in Clitheroe. There are many small businesses in the area—not the major chain stores that operate in such villages, but smaller stores, mostly family-owned, working from early in the morning until late at night. Along with local Conservatives, I shall fight hard against the introduction of such charges.
The hon. Member for Newbury had a wonderful opportunity to say how the Liberal Democrats would improve local services with the money that was available. It is a great shame that he did not do so. There were several interventions on his speech, but he failed to give an honest answer. There is one thing that the Liberal

731
Democrats have in common with Labour nowadays: they simply do not answer the questions that they are asked, because they dare not do so.
8.38 pm
Ms Hilary Armstrong: I was interested in the remarks of the hon. Member for Ribble Valley (Mr. Evans). The problem is that he does not know his Government's policy. The car park charging policy comes from the Department of the Environment. It is part of the manner in which the Government expect local authorities—
Mr. Nigel Evans indicated dissent.
Ms Armstrong: The hon. Gentleman should learn about the policy.
Mr. Evans: I am not having that.
Ms Armstrong: The hon. Gentleman may not be having it, but that is the guidance—the virtual instruction—from his Government. Perhaps he should talk to the Secretary of State.
Several Conservative Members misunderstood local government finance, either deliberately or because it is difficult to understand. I am reminded of the words of Lord Ferrers, the Minister for the Environment and Countryside, who is responsible in the other place for local government. Last Thursday, in answering a question on the current revenue support grant settlement, he said:
"My Lords, it is a fact that some council taxes in London may rise. Given that the total standard support, commonly known as the TSS,"—
I do not think that that is what TSS is, but never mind—
"has increased by more than the AEF and that SSAs in inner London are falling due to changes in the ACA brought about by changes in the NES, with consequent reductions in RSG and NDR, it is not surprising that council taxes in London may rise."
In response to that, my noble Friend Lord Stallard said:
"My Lords, I nearly said that the Minister's replies so far were NBG."
Several hon. Members would concur. Lord Ferrers later said:
"My Lords, it is a complicated subject."—[Official Report, House of Lords, 8 February 1996; Vol. 569, c. 330.]
I suspect that the hon. Member for Ribble Valley is in much the same position as Lord Ferrers. He clearly does not understand that more than 80 per cent. of the money that local government is able to spend is from central coffers. Changing the balance between the amount of money spent and raised locally and the amount raised centrally is of critical importance to the balance between central and local government.
I argued in a similar debate less than two weeks ago that this has been the most centralising Government this century and that there is more power in Whitehall and No. 10 Downing street than ever before. Part of our argument is that we need to change the balance. Conservative Members and the Minister refuse to address that issue.
I agree with the Minister that the council tax works better than did its predecessor, the poll tax, on which billions of pounds were wasted, but it is also true that
732
there is now so much central Government control that the amount that local government can raise through council tax is very limited. The gearing effect caused by the amount spent by central Government is so huge in some areas that to raise spending even to present capping levels would be impractical. Local people could not afford that amount of money. The problem is that the Government have controlled local government spending to a degree that means that it is not possible for council tax to be used even in the way in which the Government initially intended it to be used.
Mr. Rendel: I appreciate the hon. Lady's attack on centralisation by the Conservative Government, but it is fair to bring to her attention a recent notice sent to every member of the Labour group in Bedfordshire, which states:
"This letter is to give you notice that the decision taken at the Labour Group on 31st January 1996 'not to set a budget' is null and void and that we will be reconstituting the Labour group."
It goes on to show that the central Labour party is taking firm control of the Bedfordshire county Labour group. It is not only the Conservative but the Labour party which is keen to centralise control of local government.
Ms Armstrong: I do not accept that.
I argued strongly in my previous speech that there must be an honest working relationship between the centre and the localities. I have never tried to give the impression from the Dispatch Box or anywhere else that that means that central Government should abdicate any responsibility.
Some things are not acceptable. Corruption is not acceptable and central Government should do something it. Malpractice is not acceptable and central Government must have reserve powers to take action against it. We argued for that consistently through proceedings on the Audit (Miscellaneous Provisions) Bill, and I shall continue to argue it. Having a relationship does not mean that one side should abdicate responsibility. That is precisely what the Government have done. They have so tried to control local government that they have stifled any opportunity for local differentiation and determination. We want a proper working relationship that is much more balanced than at present, but we will not abdicate responsibility from the centre.
I want to deal with the problems of the current settlement and its dishonesty. We covered some of that ground during the Minister's speech. It is not honest for the Government to say that they are giving 4.4 per cent. more to education, when they know that education budgets last year were higher than the level at which they have set SSAs this year. The Minister kept saying that we have to compare like with like. He went on to say that authorities could use balances and that there were other ways—such as charges, which the hon. Member for Ribble Valley seems to think are not Government policy—through which local government could raise the difference.
The Minister seems not to have read the reports from the Treasury and Civil Service and the Education Select Committees. The Education Select Committee stated:
"We believe that it would not be possible for all local authorities and schools to draw upon reserves in future years in a way that a number of authorities managed in 1995–96".

733
The Secretary of State for Education and Employment, in her submission to the teachers' pay review body, said:
"some schools and authorities drew heavily on their reserves to meet the cost of the 1995 teachers' pay award … the Review Body should consider whether reserves in some schools and authorities have dropped below prudent levels".
She would not have said that if she did not know it to be the case. The opportunity to draw on reserves is not there in the way that it was last year. The Treasury and Civil Service Select Committee made the same point.
It is dishonest of the Government to pretend that there is money floating around in the system that can be used to meet their priority of more spending on education. Local authorities last year spent substantially more than the level at which Government have set SSAs this year. Even if expenditure were at the capping levels, it would not meet the 4.4 per cent. that the Government are talking about.
Mr. Wilshire: Will the hon. Lady confirm that I heard her correctly? Is she saying that SSAs for education should be increased to existing levels of expenditure, and is she committing the Labour party to funding local authorities up to that new level?
Ms Armstrong: I really am beginning to worry about Conservative Members. They do not seem to be able to listen. I am saying that the Government are playing a con trick on people. Conservative Members have written to schools to say that the Government have given their authorities more money to spend on education—I have copies of letters from almost every authority—which means that the schools should not need to make cuts. That is simply not true.
The Government have not given authorities more money, nor have they enabled them to meet increases. The Government know and admit that the reserves have fallen and that they were fully drawn in some places last year. There is no additional money in the system for school budgets to be increased by that amount in those authorities.
That is not the full extent of the dishonesty, however, because the Government have also admitted that there will be 86,000 more pupils in the system this year. They have approved a pay rise that is above the rise assumed when they set the standard spending assessment. They have legislated for all school transport to be fitted with new seat belts. Those changes alone—with inflation—more than outstrip the additional amount in the SSA, so it is a dishonest con trick to tell schools that there is extra money. There is not, and the Government know it.
They are undermining their credibility, but more than that, they are trying to undermine the credibility of schools, which will have to deal with all those issues because they have a legal responsibility to do so. Whether the Government are prepared to behave responsibly or not, governors need to and will do so. They know that they are being conned.
Mr. Kynoch: By implication, the hon. Lady is saying that she and the Labour party would put more funding into education. Would she answer my hon. Friend the Member for Spelthorne (Mr. Wilshire), who asked a
734
sensible and reasonable question. How much extra is she pledging, and where would she get it? Would she take it from health, for example?
Ms Armstrong: I am talking about the Government's honesty. They have made pledges and commitments that they know do not stand up. It is no good trying to brush that off by asking what the Opposition would do. We are talking about the Government's revenue support grant settlement this year and about letters that Conservative Members have sent to schools, saying that this is the money that is there. Yet the Government continue with their pretence. They continue to try to blame anyone else, including people who have not had responsibility for any of the actions of the past 17 years. It is convenient to blame them, because the Government refuse to accept responsibility for anything that they do.
This Tory trick—
Mr. Nigel Evans: How much extra money?
Ms Armstrong: I did not know that we were in government. Would the Minister like to swap sides, so that I can take responsibility for this year's revenue support grant settlement? Then I would be in government. If they want to swap sides, let them do so. Let them call a general election. Then we will take responsibility. I am not going to take responsibility for Government mismanagement and waste this year, or for Government cons about what is going on.
Mr. Jessel: Bring back Ernest.
Ms Armstrong: I will not rise to that, because I might have to tell the hon. Gentleman what he would say to him.
The reality is that the Government have perpetrated that con and pretended that they have given more money when they have not. That is not the only con. We also heard from the hon. Member for Ribble Valley all that business about what it would cost in extra tax and so forth. He accused the Liberals of taking with one hand and giving away with the other in their local income tax plan. That is even more proof that he does not know or understand what has happened this year.
The Government cut income tax by 1 p in the Budget. They have said that, at the most modest levels, they expect council tax to rise this year by the equivalent of 0.5p on income tax. In the Red Book, they said that, in the next three years, they expect the equivalent of 2p on income tax to be raised through the council tax. So the Government cannot tell the House that there is no balance between income tax and council tax. Given their assumptions for the development of council tax in the next three years, they know that the amount raised will be the equivalent of 2p on income tax.
We know very well that the Government are giving with one hand and taking away with the other. They are perpetrating the dishonesty that councils can raise more in tax, which will put more money into the budget. Councils will have to raise more in tax, but that is because the Government have deliberately pushed down their contribution this year and pushed councils into putting the tax up, which will be more unpopular. Once again, the Government are saying, pay more locally and get less.

735
The gearing effect means that councils will have to raise much more money to make up for the money that is not coming from central taxation.
The way in which the Government have approached the issue is totally dishonest. Education spending is already above SSA. To spend at SSA in the next year would mean reducing spending by the equivalent of £41 per pupil. The Chief Secretary to the Treasury has admitted that council taxes will have to rise by an average of 8 per cent. to meet the Government's targets. The Treasury and Civil Service Select Committee questioned the ability of some local authorities to pass on additional educational provision to schools, and observed:
"This increase in spending does not, however, have quite the substance the Chancellor claimed for it".
As usual, the Select Committee expresses things in rather modest terms, but it is an important view. The Government have been dishonest in so many ways in the settlement, and that is a consequence of the Government's wish to do down local government and of their feeling that there is no room for local government.
I noted with interest the earlier words of the Minister for Local Government, Housing and Urban Regeneration. He claimed success in working with local government. That is true, and he has won the respect of many people in local government, but he has done so because he is seen as out on a limb. The Minister is seen as someone who is not at one with the rest of the Government in their approach to local government. When we remember that the Government contemplated getting rid of local government altogether soon after the Prime Minister became leader and sought ways to get rid of the poll tax, we know just how far out of touch with the rest of the Government the Minister is.
It is critical that local government is able to act in the interests of local people. That is the aim and the whole essence of local government, and that is what the next Government will seek to enable local government to do. However, we cannot allow the Government to get away with such dishonesty, and local taxpayers know that they will pay more and get less. Local taxpayers know that the extra money that they will be asked to pay in council tax is simply a device that allows the Government to pretend that they are reducing taxation by cutting income tax rates. The Government need to pretend that to go into the next election, but we will ensure that people know that taxation has not been reduced—it has increased and will continue to increase.
9 pm
Mr. Nigel Waterson: I am pleased to have the opportunity to take part in this serious debate. We all owe a considerable debt to the hon. Member for Newbury (Mr. Rendel) for introducing the debate, as it has given us an unprecedented opportunity to consider the roots of the Liberal Democrats' failure in local government. I wish to develop my personal theory as to why that failure has been so obvious and comprehensive.
Mr. Malcolm Bruce: That is why we control so many councils.
Mr. Waterson: If the hon. Gentleman will have a little patience, I may be able to explain some of his party's present woes.
736
The fundamental problem is that the Liberal Democrats are a natural party of opposition. We all know that they would do anything for a vote, and all too often they take two sides of the argument on the same issue. That approach, coupled with some quite vicious campaigning techniques, means that the Liberal Democrats run, or have a part in running, a number of local authorities. Unfortunately, fantasy has now collided with reality, and making promises has collided with the need to make decisions.
A document called "Towards 1996" has been much quoted in recent weeks in the Chamber. It was produced by researchers working for the Liberal Democrat Whips Office and contains the following poignant remark:
"Obviously this document will have a very limited circulation."
Life never turns out quite as one plans. However, the document contains some especially interesting comments about local government. It makes the following fair point:
"Due to our strong base it is imperative that Local Government is seen as an unmitigated triumph for the Liberal Democrats."
That is a high test to set, and we should examine to what extent the Liberal Democrats have lived up to it.
Let us take the Liberal Democrats' own words on the subject. The document continues:
"Some of the councillors are new, politically inexperienced and potentially a liability."
Those of us who suffer with Liberal Democrat-controlled councils can agree with that. It also states:
"Our local government power base means that we may get blamed for some of the shortcomings of local government."
That sounds as though the shortcomings of local government were an act of God and nothing to do with those who run it.
The sad truth is that all too often the Liberal Democrats behave as though they were still in opposition. There are three distinct features to that approach. First, they blame everything on the wicked Government, even when the blame lies clearly on a failure in the local authority. In my area, the Liberal Democrats used to blame the county council for all their woes. That is a little more difficult now that the county council is run by a Lib-Lab pact. The second feature is an apparent inability or unwillingness to make decisions about anything really important. The third feature is an abdication of decision making to the general public. The Liberal Democrats will do anything to distance themselves from the possible unpopularity and the responsibilities that flow from actually making a decision.
All those factors, I submit, can be seen at work in the recent behaviour of the Liberal Democrats in East Sussex. Some months ago, the Liberal Democrats began by trailing stories of enormous cuts in spending, long before any realistic notion of actual funding levels could possibly be ascertained. Week by week, drip by drip, they issued press releases to the local media: they spoke of cuts to the fire service; then, a week later, there was a release about cuts in the library service; then there was one about cuts in social services and old peoples' homes being shut down. They also spoke about cuts in policing and, above all, in education. The latter was perhaps the most serious scare story of all, because, next to their own health and that of their families, parents most worry about the future of their children and their children's education.

737
The Liberal Democrats in East Sussex set up what they grandly described as a strategic forum to produce a document of some length establishing how the massive cuts were to be apportioned between the different sectors of education. That consultation drew in teachers, governors and parents, as well as local councillors, and played cynically on the emotions and expectations of parents, teachers and governors.
The Liberal Democrats went further. They demonstrated how they were abdicating responsibility by asking the public to tick various boxes to express an option as to whether French lessons or perhaps music lessons should be cut. That exercise not only showed the inability of elected councillors, acting on the advice of professional officers, to make decisions, but—
Mr. Malcom Bruce: What about the views of the public?
Mr. Waterson: The problem with that approach is that, if a child happens to be doing rather well at music, the last box that his parents will tick is that calling for a cut in music lessons, while the parents of a child who is miserably poor at French are unlikely to call for French lessons to be maintained.
Mr. Wilshire: The hon. Member for Gordon (Mr. Bruce) has asked about the views of the public. Perhaps my hon. Friend would care to comment on the tactic adopted by the Liberal Democrats in Waverley. When they consulted the public, 63 per cent. said that they wanted a standstill budget and 11 per cent. said that they wanted a reduced budget. The listening Liberal Democrats, having consulted the public, put the council tax up by 7 per cent. Is that what they mean by listening to the public?
Mr. Waterson: I am grateful to my hon. Friend for yet another example of such tactics. I learned of a further example from the television at the weekend, which revealed that another Liberal-controlled council in Surrey consulted the public but proceeded to ignore what they said. One of the excuses for doing so was that an unduly large proportion of the respondents were older than the average age of the population. That was somehow supposed to be a reason for dismissing the public's view. In my type of constituency, we are fairly familiar with that kind of fake consultation process of which the Liberals are so fond.
The results of the public spending round on education have been very different from how they were described by the Liberal Democrats in their various documents. I apologise to the Opposition spokeswoman, the hon. Member for North-West Durham (Ms Armstrong), for quoting some of the points that I have made to parents, governors and teachers in an attempt to put the record straight about spending on education.
In East Sussex, despite all the gloom and doom-laden predictions, the education standard spending assessment has been increased by £7.264 million or 3.4 per cent. over the previous year. Just as important, by relaxing the capping criteria, the county council can, if it so chooses,
738
increase its budget by no less than 3 per cent. That goes to the heart of the issue so eloquently described by my hon. Friend the Minister.
Ms Armstrong: How much money was raised in addition to what the council already spends on education?
Mr. Waterson: The reality, and the line taken by the Conservatives on the county council, is that, if that money is transmitted straight into education and schools, there is absolutely no reason for any cuts in school budgets.
Ms Armstrong: There is no extra money for schools.
Mr. Waterson: There is no reason for such cuts, and certainly not of the order trailed by the Liberal Democrats and some of their fellow travellers. I have sought assurances—as have many governors, teachers and parents—that the extra funding will be passed straight on to our schools.
We have heard very little recently from the Liberal Democrats about the alleged cuts in education funding. We also heard about cuts in police funding. That scare story was somewhat exploded by the following headline, which appeared in my local paper at the beginning of January: "£5m Christmas boost for Sussex police force". The Sussex police chief constable was said to welcome a Christmas present of £5.5 million to recruit more bobbies on the beat and to improve technology. The £5.5 million will provide for an extra 110 officers on the beat. That increase is over and above the large increase the previous year. More recently, the various committees have been asked to indicate what are called exemplary cuts of 1.5 per cent. of their budget. Again, a series of local media stories suggested that these were, in fact, the real cuts to be made.
The strategy now emerging, apparently, is that no real decision has been made about any budgeting in East Sussex as we near the end of the budgetary process. At the last meeting of the committee which considered these matters, the Liberal Democrats refused to discuss specifics and sought to rule out of order Conservative councillors who tried to initiate debate on the budget. The truth is that they are currently wallowing in indecision as to how to allocate money in the budget for East Sussex.
We know the problems involved in one of the solutions put forward by the hon. Member for Newbury—the freeing of the proceeds of council house sales. The hon. Gentleman's document states that the policy
"is worthy but no longer stands up".
His document continues:
"The freeing up of council house receipts should be kept as a front line policy as it is easily understood by the masses, however, detailed research should be carried out so that we know how much money still remains from the sale of council houses."
That strikes me as a cynical policy, cynically set out in a cynical document produced by a deeply cynical party.
Mr. Rendel: The hon. Gentleman has ranted on for some time about the inefficiencies and inadequacies of councils run by the Liberal Democrats. Perhaps he will tell the House why, whenever Liberal Democrat-run

739
councils take over from Tory-run councils, the Liberal Democrats tend to increase their majority at the following election.
Mr. Waterson: I do not know whether there is such a rule. However, I assure the hon. Gentleman that that trend will shortly be reversed. It takes a little while—even in Liberal Democrat land—for the chickens to come home to roost, but coming home to roost they are.
I commended the hon. Gentleman earlier on his choice of subject for the debate, but in fact it was an unfortunate choice for the Liberal Democrats, as it has given us the opportunity to direct a piercing shaft of light on their party's policies on local government and thus to throw into sharp relief the hypocrisy at the heart of so many of those policies. It is local government by scaremongering and it shows, time and again, that there is absolutely no point in voting for the Liberal Democrats in local government because, if they win power, they do not have a clue what to do with it.
9.13 pm
Mr. Chris Davies: Few things show more clearly the extent of the problems that local councils face than a letter which I received only last week from the governors of Fir Bank county primary school, in which the governors stated:
"Over the last few years the school has seen the loss of two teachers, one by non renewal of contract, the second by redundancy. This has caused massive upheaval in teaching practice.
The budget allocated to the school has been well monitored but the school has to run on a shoe string. There are not sufficient text books and other resources are scarce. The position places a very committed teaching staff under great strain, a situation which cannot be good for them or the school in general."
I endorse those sentiments.
I am sure that hon. Members of all parties have received similar letters. That school is in the metropolitan borough of Oldham. Oldham is not unique among local authorities in difficult financial circumstances. It is not a low-spending education authority, but the position has become worse in recent years. In last year's Budget, cuts of £900,000 were imposed on the education budget, and this year it looks as though the position will get worse. A similar cut seems likely as the council increases its charges for supply teacher cover.
In their letter, the governors entreat me as their Member of Parliament
"to give the funding of primary education your urgent attention".
No doubt the two Labour Members who also represent the borough of Oldham receive similar letters. Given the stand that they took on income tax—"stand" is perhaps the wrong word; I should perhaps refer rather to the sit that they took—when they had the opportunity, I can only suppose that they answer such letters with pious platitudes. In that division, the Liberal Democrats made it clear that we believe that quality public services and, above all, the provision of a good education system are among the hallmarks of a civilised society, and we did not seek to avoid the fact that there is a price to be paid for those services. Conservative Members have tried to criticise us for that tonight.
It is not the Labour party but the Government who must shoulder prime responsibility for the financial problems of local authorities and the cuts that they are being forced
740
to make in services throughout the country. The Government must bear responsibility because they directly control four fifths of local government finance and limit local authorities' freedom of action with what is left to spend. For years, the Conservatives have systematically undermined local government, stripped it of powers and authority to work for the community, robbed it of financial independence and reduced its status to no more than that of a Government agency, and it is obvious why they have done so—why they have repeatedly curbed the powers of local authorities to act on behalf of the best interests of their communities. The reason is that the Conservative party, which used to boast of being a party that supported decentralisation, has become a party of centralisation—a party which supports the concentration of power.
In recent years, far too many decisions have been taken by small groups of Ministers meeting in Cabinet Sub-Committees, and no true challenge has been posed to their decisions in any of the legislative processes through which their decisions passed. Power that used to be dispersed throughout the country has been centralised and locally elected representatives have little chance to influence it.
Over the years, local authorities have been repeatedly described by the Conservatives as profligate, inefficient and even financially irresponsible. I would never defend financial inefficiency in local government—people deserve value for money from their public representatives and public organisations—but for the Government to talk about financial responsibility is the pot calling the kettle black.
In the past 15 years, local government spending has increased by 21 per cent. and central Government spending has increased by exactly three times that amount—63 per cent. Perhaps that is not surprising, considering the way in which some of that money has gone—the disaster of the poll tax, the amount being paid to consultants advising the railway privatisers and the cost of paying for the privatisation of the Property Services Agency.
Central Government is capable of making enormous mistakes and the Government have made them, to the taxpayers' cost. Meanwhile, their policies have put local authorities of every political composition between a rock and a hard place when making financial decisions each year: they have no room for manoeuvre—no opportunity to take local needs into account.
Let us take some examples of local authorities which could hardly be described as run by wild-eyed fanatics. Wokingham district council—a Conservative council, run with the support of some independents—is already spending up to its capping limit, and expects to have to cut 5 per cent. this year. So much for the Government's generosity. Penwith district council in Cornwall, run by independents and Conservatives, is spending up to its capping limit, and cuts this year appear inevitable. Rutland district council, a mixture of Conservatives, independents and Liberal Democrats, is spending up to its capping limit and expects to make cuts of 7 per cent. this year.
I am not knocking the councils that I have mentioned: I merely draw attention to the difficulties they face. Councils of all political compositions face the same problems. The settlement that Ministers have described as

741
generous is far from that. The income tax policy announced by the Chancellor of the Exchequer in the autumn of last year is leading to council tax increases and service cuts in the spring of this year. The conclusion is inescapable that in its desire to centralise power the Conservative party's thinking is linked directly to the loss of Conservative influence at local level.
We had a rather predictable attack from the hon. Member for Eastbourne (Mr. Waterson) on Liberal Democrat control in the area that he represents. That is not a new phenomenon. Over the past 15 or so years, the number of Conservative councillors has dropped markedly, from 12,100 in 1979 to 4,800 now. For all the hon. Gentleman's criticisms, the Liberal Democrats have overtaken Conservatives in local government: we have become the second party, while the Conservatives have been relegated to third place. In some authorities, Conservatives are desperate to see the introduction of proportional representation to ensure that there is some Conservative representation left.
The process will continue. In May, not many elections will take place. Again, however, the Conservative party can expect to lose seats. Indeed, they will probably lose 300 or more, while at the same time the position of the Liberal Democrats, the second party in local government, will be duly strengthened.
Liberal Democrats are not acting irresponsibly. Three quarters of my party's councillors either run councils or are part of administrations where there is no overall control. Three quarters of our councillors have influence over the decision-making process within local authorities. Only one quarter of Conservatives left in local government have such influence. Despite what the hon. Member for Eastbourne said, the electors are likely to give their support and endorsement to Liberal Democrat-run authorities in greater numbers in May.
Mr. Waterson: The hon. Gentleman may have misunderstood what I said. I did not contest for a moment that in many local councils, including Eastbourne, Liberal Democrats have control over the decision-making process. I said that they either make the wrong decisions or refuse to make any decisions.
Mr. Davies: I take the point that the hon. Gentleman is trying to make. It does not conflict with my argument.
As we look towards the May elections and as we reflect on the Government's record over the past 15 or 16 years, with declining representation in local government, it is clear that the Conservative party is facing oblivion at local level. It is rotting at its grass roots. It must concern Conservative Members, many of whom have been in this place for many years, that they return to their constituencies and find themselves at civic functions surrounded by Liberal Democrat councillors, their opponents, rather than the Conservative brethren of old.
Mr. Nicholas Winterton: I have been listening closely to the hon. Gentleman's argument. Macclesfield is a Conservative-controlled authority. It is in the north-west and it has overall Conservative control. Does he agree that in some councils where there is Conservative control, Liberal and Labour councillors will
742
work closely with the controlling group, as they do in Macclesfield? The responsible Liberals in my borough, like responsible Labour people, appreciate that the borough council must live within its means. They understand that they cannot blame central Government for all the problems that face local Government. Will the hon. Gentleman seek to present a balance while advancing his argument? Will he accept that there are good Conservative authorities and good Conservative councillors, who are to be found in my borough and who work closely with representatives of his party?
Mr. Davies: I am pleased to hear what the hon. Gentleman says, and I fully endorse his view about members of different parties working together for the common good of the community. That is at the heart of my party's belief in local democracy. Parties and politics should not always dominate in local decision taking.
I hope that it is a cause for some regret among hard-working Conservative councillors who have lost their seats over the years that, when they had the opportunity, they did not put up more resistance to the transfer of local government powers to central Government. It has certainly been a cause for regret among members of my party who strongly support the principle of local democracy that those Conservative councillors were not heard shouting from the rooftops about what was happening to the authority of local councils over the years.
Britain has a well-established local government base, but it is demoralised, undervalued and confined in its ability to tackle local problems and meet local needs. We need a new constitutional balance, with a clear separation of powers and duties between central and local government. Local authorities must have freedom and must be encouraged to become more innovative, entrepreneurial and dynamic. The Liberal Democrats want local government that is efficient and effective, and which not only provides services such as those specified by the Government but seeks out new ways to meet the needs and aspirations of its communities.
The reform of the financing of local government is essential to that. We seek the establishment of a local income tax because we believe that it would be the most effective means of giving local councils greater freedom and greater flexibility. Of course, it must be matched by commensurate initial reductions in levels of central Government taxation.
As I have said, there must be a clear separation of powers. Instead of curbing the authority of local democracy, the Government should be seeking to build on it, encouraging it to new endeavours and giving local people the opportunity to deal with the problems they face in their own communities in their own way, through the work of their locally elected representatives.
9.26 pm
Mr. David Wilshire: I was told earlier that my right hon. and hon. Friends on the Front Bench warm to the idea of me speaking on local government, probably because they recall that I spent 11 years in it. I hope that they will not be too put out when I say that I agree with the first 12 words in the Liberal Democrat motion. However, I suppose I should hasten to say before somebody on the Front Bench writes something

743
particularly uncomplimentary about me in the little blue book that those are the only 12 words of the motion with which I agree, and that the remainder of the motion contains some of the worst rubbish that has come before the House in a long time.
From my perspective, the greatest amount of rubbish is contained in the final 14 words of the motion, because they relate to the loss of Conservative local government seats. That is the greatest amount of rubbish I have heard in the context of my constituency, because in May, despite the words of the motion and what we have heard in the debate, my Conservative group kept overall control of Spelthorne borough council. That is splendid, but it gets better.
In May, this great Liberal Democrat party was on the march, on the rampage. That month, it started out with three seats out of 40 and ended up with three seats out of 40—a great Liberal Democrat triumph. The story gets better still, because there was a county council by-election in my constituency in December, and instead of the Liberal Democrat party standing still as it did in May, it went backwards. That was because by December my electors had had the chance to see the Liberal Democrats in action in Surrey and they did not like what they saw.
So much for the last 14 words of the motion; but some earlier parts are not much better. Perhaps in the few moments that are available to me I can give a few examples. First, the motion suggests that reforming local government finance will mean that, somehow or other, there will be a magical ability realistically to meet needs. That is what the motion says, but it is bland claptrap. The hon. Member for Newbury's speech made it crystal clear that the Liberal Democrats are not intent on reforming the local government finance system: they are intent on embarking on a spending spree with local government finance.
We were told about a new system. We were told that the Liberal Democrats want to raise more money locally—I believe that I am quoting—as well as raising more money through income tax to spend on local government.
Mr. Rendel indicated dissent.
Mr. Wilshire: The hon. Gentleman shakes his head, but he said that his party wants to raise more money locally—I wrote it down. The Liberal Democrats' most recent manifesto said that they wanted to put 1 p on national income tax to spend on local education. That is what they said; I am not inventing it. Liberal Members have also said in this debate that they want to end capping, so that they can go on a real local spending spree.
Mr. Malcolm Bruce indicated dissent.
Mr Wiltshire: The hon. Member for Gordon (Mr. Bruce) shakes his head, but I heard them say that. That is exactly what they intend to do.
Let us see if Liberal Members shake their heads and try to deny that, earlier in the debate, they said that they want to release capital receipts, so that they can have another type of spending spree. They are not denying that, which is quite helpful. Liberal Members have not proposed the reform of local government finance in this debate, but a disaster for local government finance and for local citizens.
Mr. Nicholas Winterton: Although I have not been in the Chamber for all the debate, the one advantage of the
744
new technology that we have in our offices is that one can follow the debate verbatim, and see the Speaker's face, from one's office. Does my hon. Friend accept that, if the Liberals were to introduce the type of policy that they have outlined tonight, it would be the most devastating form of hara-kiri and political suicide that any party could ever dream up and implement?
Mr. Wilshire: My hon. Friend is absolutely right. His local electors and my local electors are very sensible and do not intend to do that—they continue to elect Conservative councillors.
Let us take another example from the Liberal Democrats' motion which illustrates the truth of the issue. The motion suggests that we should condemn the Government's financial priorities for local government. What are the Government's priorities for local government? As I understand it, having been a practitioner before I was elected to the House and having taken a close interest since, the Government's first priority is to live within our means, nationally and locally. If we do not do that, we will go bankrupt and have no services at all.
The Government's second priority is to focus local government attention on core services, such as education and care in the community. The Government's third priority is to ensure that local government delivers real value for money. I know that the Liberal Democrats do not much like competitive tendering, because they do not believe in providing real value for money.
Let us compare the Liberal Democrats' priorities against those priorities. I shall use as an example my own county council, Surrey county council, which is Labour and Liberal Democrat-controlled. What are the Liberal Democrats' priorities there? They are fascinating, and more people should know about them. The Liberal Democrats on the Surrey county council are quite determined to close fire stations, which even the Labour party does not want to do. The Liberal Democrats on that council have managed to organise the rejection of a £1 million grant for more nursery education in Surrey. That is one of their priorities in Surrey.
The Liberal Democrats on that council have some positive policies, one of which was absolutely magnificent. While trying to cut spending on education, they wanted to spend £20,000 to provide showers for staff who cycle to work. We should all be aware of that Liberal Democrat policy. The Liberal Democrats in Surrey also seem to be very keen on blocking the provision of adequate funds for the proper inspection of nurseries and old people's homes, which is nothing short of a disgrace.
The motion also contains the suggestion that Government action causes cuts in services. Coming from the Liberal Democrats, that is really rich. Since last December, I have heard the Liberal Democrats in my constituency telling my electors that they will have to face £15 million worth of cuts in county council services. I heard it all winter, until a few days ago, when they announced that they would not have to face £15 million of cuts now that they had seen the Government's settlement. But there was not a word of apology to my constituents for those scaremongering tactics. I have nothing but contempt for those in politics who are willing to frighten the elderly, worry parents and upset county council staff, all in the name of cheap and dirty party politics.

745
I said that I supported the first 12 words of the motion, which are:
"That this House calls for reform of the financing of local councils".
Two things are wrong with the financing of local government. They are not the things that the Liberal Democrats suggest. The first is the use of a formula to distribute money. The second is the passing of funds from the person who puts up the money to the person who spends it, via two or three other people.
We all know the problem of formulae. They are nonsense; they do not work. They are either too simple, and we all complain about them, or too complicated, and we do not understand them. I cannot understand why the money made available for services in my constituency should depend on the number of foreigners spending nights in hotels in London. If that is what a formula means, it demonstrates that formulae simply do not work.
The other thing about local government finance that worries me is the indirect funding mechanism we use. We all know what happens. Let us use education as an example. The Department for Education and Employment decides what the standards will be and how much money will be made available. It then passes the money to the Department of the Environment, which lumps it together with lots of other things, concocts a formula that depends on nights spent by foreigners in beds in hotels in London and many other things, and then passes it on to the councils.
The councils then ask themselves whether to spend the money on what they were given it for. The money has now gone through another pair of hands. The result is the sort of thing that Liberal Democrat Somerset has just done. The Department for Education and Employment set out to provide Somerset with an additional £7 million for education, but by the time it had gone through the Department of the Environment and Somerset county council, the schools in Somerset received only an additional £4 million. That is what is wrong with indirect funding.
Mr. Patrick Thompson: I am grateful to my hon. Friend for giving way, particularly at this late hour and as I have not been present for all the debate. In his reform of local government, will my hon. Friend seriously consider a reform of the way in which we fund education? The funding is not transparent now, as my hon. Friend has said. Would he go further down that road?
Mr. Wilshire: That is exactly where I would go. As the public hold the Government responsible for education and the Government carry the can, they should fund all of it, set the standards and use local education authorities or grant-maintained schools as contractors.
I have confessed that I agree with part of the motion. It falls to me only to work out how I should vote. There are two simple reasons why I will not support the Liberal Democrat motion. First, I have explained that, of all the words in the motion, I agree with just 16 per cent. I hope that even the Liberal Democrats, the great exponents of proportional representation, will accept that, when someone is against 84 per cent. of a motion, that is an
746
absolute majority, and proportional representation becomes bunkum. That is really rather like my majority in my constituency, so they should not get too enthusiastic.
The Liberal Democrats should also understand that I will not support them because I am against a local income tax, which is what they say their motion implies, and I am against frittering away balances and abolishing constraints. It is really rather simple. I am perfectly willing to support the amendment in the name of my right hon. and hon. Friends. I accept that it does not go as far as I would like, but not everything is perfect in this world. It makes a great deal of sense to me, and I commend it to the House.
9.38 pm
Mr. Malcolm Bruce: It has been a lively and interesting debate. The Minister engaged in a very fair discussion of all the points at issue. He acknowledged that there were different ways in which local government could be organised and financed and said that perhaps it was a matter of opinion and judgment which way one chose. Obviously, the hon. Gentleman prefers to support Government practice, but at least he acknowledged the opportunity for a different point of view.
The hon. Member for Spelthorne (Mr. Wilshire) implied that he was against giving local authorities more freedom to determine their own priorities because they would misuse it. The fundamental problem is that currently between 80 and 85 per cent. of funding for local authorities is controlled by central Government, with the consequence that local government does not have genuine freedom to respond to the different needs of different electorates across the country.
The hon. Gentleman knows, as the Government do—despite their spurious claims about putting money into education when all they are doing is allowing spending assessments to rise—that every 1 per cent. increase in expenditure requires a 6 per cent. increase in the council tax to fund it because of the gearing.
Mr. Wilshire: Will the hon. Gentleman give way?
Mr. Bruce: I cannot, because time is limited.
The fundamental problem is that, if we are to ensure that local authorities have genuine responsibility, accountability and discretion, a substantially larger proportion of their budgets should come from their own resources and from an ability to raise revenue from their own communities.
Everyone accepts that there is variation across the country that requires some central Government equalisation. There are considerable difficulties in working out the formula for that. However, the gearing is now completely out of kilter and far worse than it used to be. It is creating real difficulties for local authorities.
A point frequently made is that the Government say that they are increasing the standard spending assessment for local authorities. In other words, they are saying that local authorities can spend more money. However, they are not giving them that money through grants or allowing them to raise it in extra council tax—partly because the gearing is wrong, but also because of the existence of capping. The simple abolition of capping without reforming the system would not solve the fundamental problem.

747
The Government are deliberately and knowingly misrepresenting the position that they are imposing upon local authorities. The reality is that the amount of Government money going into education is under £100 million—about £80 million, I think. The remainder is simply the Government saying that authorities can spend money—although they have cut their grant and been capped. Of course, no one expects authorities to increase council tax by 30, 40 or 50 per cent. to raise the extra money, so the Government know that they cannot find that money other than through cutting services in other areas. The Government want to claim credit for supposedly putting in additional money while ensuring that the authorities get the blame for not delivering the services. That is what the Government are doing.
The Under-Secretary of State for Scotland, the hon. Member for Kincardine and Deeside (Mr. Kynoch), is to respond to the debate. He would be disappointed if I did not refer to the position north of the border. Scotland is about to embark upon a completely new system of local government. With effect from 1 April, there will be 32 unitary authorities instead of the current mix of district, regional and islands councils. All those local authorities are facing real difficulties before they are even up and running.
I have made some attempt to discover what difficulties are arising in different parts of Scotland. For example, in Dumfries and Galloway—part of the constituency of the former Secretary of State for Scotland, the right hon. Member for Galloway and Upper Nithsdale (Mr. Lang)—which is administered by Liberal Democrats and independents, there is some agreement that, for the first time, the council should spend up to its capping limit. Even so, that represents a 5 per cent. cut in overall spending.
In Perth and Kinross, which is controlled by the Scottish Nationalists, a 10 per cent. cut across the board is expected before the council is even up and running. Highland, which is independent-controlled, is looking at a 10 per cent. cut, as are several other authorities in that area. The hon. Member for Glasgow, Rutherglen (Mr. McAvoy) said that the city of Glasgow is looking to a 10 per cent. cut. Those are real difficulties for local authorities.
The Under-Secretary, like me, represents the new council area of Aberdeenshire. It would be much more welcome to his constituents and to mine if he spent less time attacking a council that has not yet even come into existence and more time trying to work with his constituency to ensure the best possible quality of services and value for money. Although I have pointed out to him that his constituents voted overwhelmingly for the councillors who share the administration—Liberal Democrats and independents—he rejoices in his constituency being the sole repository of the four Conservative councillors in Aberdeenshire.
I shall give the Under-Secretary one specific example, which I agree involves an estimate. Aberdeenshire council estimates that the expenditure requirement to meet the housing capital plan for 1996–97 will be £16.5 million. Council officers estimate that capital receipts will total £6.2 million. Even if the Minister disputes the £16.5 million expenditure requirement, he must surely acknowledge that there is a massive disparity, and that local authorities consistently face the biggest increase in homelessness anywhere in Scotland and probably the
748
United Kingdom. He knows too that Aberdeenshire calculates that his estimate of what it should spend is about £24 million adrift of what it will have to spend if it is simply to maintain existing services.
The current administration and officials are looking right across the board for substantial savings, and I know that they will do their best to find those savings, but if the Under-Secretary continues to insist that the spending assessments determined by the Scottish Office bear any relationship to reality, he will find that there will be no budget for clearing the roads of snow or for road repairs and there will be severe cuts in all other areas. He must accept that his constituents would suffer as a result, especially since those service cuts would be accompanied by substantial increases in council tax. He ought to work with us to try to get the best services for his constituents, rather than work against what they have voted for: to deliver that balance of priorities.
As my hon. Friend the Member for Littleborough and Saddleworth (Mr. Davies) pointed out, one of the fundamental areas in which we take issue with the Government is the extent to which they are trying to squeeze local government to make up for their own failures to budget effectively at national level. In order to fund their own priorities and try to find a shred of credibility in their central budgeting, the Government are squeezing local services so that they can blame the Opposition, which run those councils because the Government cannot win seats on them. That simply will not work.
The Government talk about extravagance, yet they spend £865 million a year on consultants to save—according to independent internal assessments—a few hundred thousand pounds. They spend £250 million a year on advertising and publicity—a 400 per cent. increase since 1979. They are wasting £200 million a year on empty properties—double the figure of two years ago. That is a hell of a lot of waste in central Government that is not being addressed.
I am sick and tired of the Government telling local government about empty properties when 15 per cent. of Government property is sitting empty. Indeed, the Government have a £30 billion borrowing deficit and had an £8 billion overrun on last year's forecast. That is the extent to which they have failed to get their own house in order, and it costs extra money—£2.5 billion a year in interest on the increased deficit.
It is also worth pointing out that, since 1979, Government domestic fuel consumption has risen by 25 per cent. The equivalent figure for local government is an increase of 14 per cent. It is pretty clear which level of government is a good housekeeper. It is not central Government. The conspiracy between the two major parties—in this context, the Labour party's position is deeply disappointing—in their desire to centralise control of all spending and deny local democracy, local accountability and genuine buoyancy of revenues that would enable local councils to do the job that they are much better equipped to do than central Government is deeply offensive. Local councils deliver much better services and provide much better value for money.
In those circumstances, I believe that the motion commends itself to the House, although I have not the slightest doubt that it will not receive the House's support. It is because of the fundamental difference between us

749
and the other two main parties that increasingly people are turning to the Liberal Democrats in local government. They know that we are prepared to fight hard for local services and for a system that will work—something that the Government cannot do.
The Under-Secretary of State for Scotland knows that his party tried to gerrymander the local boundaries to ensure that there would be a Conservative-controlled authority somewhere in Scotland. I listened with envy to Conservative and Labour Members talking about the difficulties of Conservative-controlled councils. We Scottish Members will never be able to testify to that, because there will not be any such councils after 1 April.
Nowhere in Scotland do the Conservatives have any power in local government, because, despite their attempts at gerrymandering, no council supports them. It is sheer vindictiveness that is making them put the squeeze on local government in Scotland and try to blame the Liberal Democrat, Labour, nationalist and independent parties that run the councils, but it simply will not wash.
9.50 pm
The Parliamentary Under-Secretary of State for Scotland (Mr. George Kynoch): We have had a full and interesting debate. I shall try to deal with as many of the detailed points that have been raised as I can in the short time available, but I begin with some general comments about next year's local government financial settlement, north and south of the border.
The impression given, certainly by the hon. Member for Gordon (Mr. Bruce) and other Opposition Members, is that local government has been singled out for attack by the Government. The motion refers to an
"assault on local authorities, which continues year after year".
[Horn. MEMBERS: "Hear, hear."] I hear some hon. Members shout "Hear, hear," but that is typical of their mental arithmetic and financial controls, because nothing could be further from the truth.
Expenditure by Scottish local authorities, for example, has increased by 20 per cent. in real terms in the past 10 years. As for next year's settlements, local government has been treated very favourably despite the need to constrain public expenditure in order to sustain the economic recovery. In Scotland, the increase in aggregate external finance for local authorities is no less than £148 million. That is 2.9 per cent. up, or £26.5 million more than the Scottish block formula consequences of the English settlement.
Despite all the talk of expenditure cuts, every one of the new Scottish authorities will next year have scope to increase spending by at least 2 per cent. For the majority of councils, the increase is more than 3 per cent. If authorities improve efficiency and effectiveness, as the private sector and the rest of the public sector are having to do, there should be no need for any cuts in front-line services.
Mr. McAvoy: Will the Minister give way?
Mr. Kynoch: No; I shall deal with the points that the hon. Gentleman raised in a minute.
750
Within the Scottish settlement, my right hon. Friend the Secretary of State has given particular priority to the police and fire services. The police grant-aided expenditure assessment has been increased by some £44 million, or nearly 8 per cent., and the fire GAE has been increased by £13 million, or nearly 10 per cent. I hope that in, budgeting for next year, Scottish authorities will give the same priority to the police and fire services, which are of such great importance. I look to the authorities to take a responsible attitude.
The debate has covered a lot of ground. There has been much talk about the level of Government funding as opposed to local funding. There was talk of 85 per cent. coming from central Government and only 15 per cent. being raised through the council tax. The one fact that all Opposition Members failed to point out was that there is flexibility for local councillors to take decisions locally and to decide how to spend the funds.
As I said, the funds for Scotland next year are some 2.9 per cent. up on the current year, and, in a year of local government reorganisation, there will be an opportunity for local authorities to examine how they deliver services, look afresh at them and build on their experience, to try to find ways of doing things more cost-effectively.
The hon. Member for Newbury (Mr. Rendel) began by saying that he wanted to do away with capping and to move to a local income tax. The hon. Gentleman and all his Liberal Democrat colleagues are really saying that they want to raise extra funds to spend on local government. That is where the Government and the Opposition parties differ. We believe in trying to get a more cost-effective delivery of services with taxpayers' money. It does not matter whether the funds come from central or local sources—it is taxpayers' money, first and foremost. The difference between us is that the Government believe in trying to give good value for money for taxpayers.
The hon. Gentleman said that compulsory competitive tendering involved endless red tape. He should tell his constituents that a process of competitive tendering to ensure that they get the best possible value for money is endless red tape. They would not agree with him.
Mr. Rendel: My local authority has found that—because of the way in which the system was set up—every time it has gone in for CCT, it has had to go for a higher tender than would have been the case had it been allowed under the rules to go for its own people doing the same job.
Mr. Kynoch: I should have thought that the hon. Gentleman would want his authority to go for the lowest tender to deliver the services to the specifications as drawn up.
The hon. Member for North-West Durham (Ms Armstrong) seemed to get in rather a muddle as to what she wanted to do. The moment my hon. Friend the Member for Spelthorne (Mr. Wilshire) mentioned the word "pledge"—an horrific word for Labour Front Benchers—she ran in fright and was unable to say what she would do on local government expenditure. She says that more money is needed in education, but she does not accept that local authorities have the flexibility to spend. The long and the short of it is that significant amounts of extra spending have gone into local government this year, both north and south of the border.

751
My hon. Friends the Members for Ribble Valley (Mr. Evans), for Spelthorne and for Eastbourne (Mr. Waterson) made valuable contributions on local government expenditure. My hon. Friend the Member for Ribble Valley in particular drew attention to the fact that the extra expenditure advocated by Opposition parties would have to be paid for by somebody—the question was, by whom. He talked about two new or extra taxes that are proposed by the Liberal Democrats. The first is national—a higher income tax—while the other is the local income tax. I have a message for my hon. Friend—in Scotland, we would have a third new tax. The Opposition want a tartan tax and a tax-raising Scottish Parliament that would make us less competitive and would cause major problems for the Scottish people.
The hon. Member for Glasgow, Rutherglen (Mr. McAvoy) talked about the situation in Glasgow, and South Lanarkshire in particular. Of course, he has a problem. The allocation that is given to local authorities in AEF comes as a result of a formula that was proposed not by the Government, as was suggested by some Opposition Members—
Mr. McAvoy indicated assent.
Mr. Kynoch: I see that the hon. Gentleman acknowledges that fact. The formula is well tried, and was drawn up in its present form in 1985 by the Convention of Scottish Local Authorities in conjunction with the Scottish Office. The formula was discussed in great detail by the distribution committee, and that was the body that decided on the distribution.
The hon. Gentleman said that he did not want the funding to be redistributed within Strathclyde, and I can understand why. While Glasgow may be regarded as a "loser" in this situation, there are many local authorities in the old Strathclyde region—East Ayrshire, East Dunbartonshire, East Renfrewshire, North Ayrshire, North Lanarkshire, Renfrewshire, South Ayrshire and South Lanarkshire—that are "gainers". He will know that there is a transition scheme to take account of the mismatch. That scheme has been agreed by COSLA and was, in fact, its proposal.
The hon. Gentleman referred to Glasgow and the capping limit. Glasgow will be able to increase its expenditure by 4.9 per cent. compared with its notional budget. While the council needs to reduce expenditure to come within the capping limit, it would clearly like to increase expenditure at present by no less than 13.4 per cent.
The hon. Member for Gordon talked about Aberdeenshire, but he has a distinct problem. The notional budget for Aberdeenshire is made up by disaggregating the old Grampian regional budget. That was decided on not by the Scottish Office, but by Grampian regional council which, if memory serves me correctly, was a Liberal Democrat-Scottish National party administration. That administration must be responsible for the existing notional budget of £202 million, while the wish-list budget for the new Aberdeenshire council—a Liberal Democrat council—is some £240 million, a 19 per cent. increase.
The Government believe in good value for money while, I am afraid, the Opposition believe in increased taxation and increased expenditure.
Question put, That the original words stand part of the Question:—
The House divided: Ayes 28, Noes 179.

Division No. 50]

[10.00 pm

AYES

Alton, David

Lynne, Ms Liz

Ashdown, Rt Hon Paddy

Maclennan, Robert

Barnes, Harry

Maddock, Diana

Beith, Rt Hon A J

Michie, Mrs Ray (Argyll & Bute)

Bruce, Malcolm (Gordon)

Nicholson, Emma (Devon West)

Campbell, Menzies (Fife NE)

Paisley, The Reverend Ian

Chidgey, David

Rendel, David

Dafis, Cynog

Skinner, Dennis

Spearing, Nigel

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

Steel, Rt Hon Sir David

Godman, Dr Norman A

Taylor, Matthew (Truro)

Harvey, Nick

Tyler, Paul

Hughes, Simon (Southwark)

Wallace, James

Johnston, Sir Russell

Jones, Lynne (B'ham S O)

Tellers for the Ayes:

Jones, Nigel (Cheltenham)

Mr. Archy Kirkwood and

Kennedy, Charles (Ross,C&S)

Mr. Don Foster.

NOES

Ainsworth, Peter (East Surrey)

Duncan-Smith, Iain

Alexander, Richard

Durant, Sir Anthony

Ancram, Rt Hon Michael

Elletson, Harold

Arnold, Jacques (Gravesham)

Evans, Jonathan (Brecon)

Arnold, Sir Thomas (Hazel Grv)

Evans, Nigel (Ribble Valley)

Atkins, Rt Hon Robert

Evans, Roger (Monmouth)

Atkinson, David (Bour'mouth E)

Faber, David

Baker, Nicholas (North Dorset)

Fabricant, Michael

Baldry, Tony

Fenner, Dame Peggy

Bates, Michael

Fishburn, Dudley

Body, Sir Richard

Forsyth, Rt Hon Michael (Stirling)

Booth, Hartley

Forth, Eric

Boswell, Tim

Fox, Dr Liam (Woodspring)

Bottomley, Peter (Eltham)

Fox, Rt Hon Sir Marcus (Shipley)

Bottomley, Rt Hon Virginia

French, Douglas

Bowis, John

Gale, Roger

Brandreth, Gyles

Garel-Jones, Rt Hon Tristan

Bright, Sir Graham

Gill, Christopher

Brooke, Rt Hon Peter

Gillan, Cheryl

Browning, Mrs Angela

Goodlad, Rt Hon Alastair

Budgen, Nicholas

Goodson-Wickes, Dr Charles

Burns, Simon

Gorst, Sir John

Burt, Alistair

Greenway, Harry (Ealing N)

Butler, Peter

Griffiths, Peter (Portsmouth, N)

Carlisle, John (Luton North)

Grylls, Sir Michael

Carlisle, Sir Kenneth (Lincoln)

Hague, Rt Hon William

Carrington, Matthew

Hamilton, Neil (Tatton)

Carttiss, Michael

Hampson, Dr Keith

Cash, William

Hannam, Sir John

Chapman, Sir Sydney

Hargreaves, Andrew

Clappison, James

Harris, David

Clark, Dr Michael (Rochford)

Hawkins, Nick

Clarke, Rt Hon Kenneth (Ru'clif)

Hawksley, Warren

Clifton-Brown, Geoffrey

Heald, Oliver

Coe, Sebastian

Heathcoat-Amory, David

Colvin, Michael

Hendry, Charles

Congdon, David

Higgins, Rt Hon Sir Terence

Conway, Derek

Hill, James (Southampton Test)

Coombs, Simon (Swindon)

Horam, John

Cope, Rt Hon Sir John

Hughes, Robert G (Harrow W)

Cran, James

Hunter, Andrew

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

Hurd, Rt Hon Douglas

Curry, David (Skipton & Ripon)

Jack, Michael

Davies, Quentin (Stamford)

Jackson, Robert (Wantage)

Devlin, Tim

Jenkin, Bernard

Dorrell, Rt Hon Stephen

Jessel, Toby

Douglas-Hamilton, Lord James

Kellett-Bowman, Dame Elaine

Dover, Den

Key, Robert

Duncan, Alan

Knapman, Roger

753

Knight, Mrs Angela (Erewash)

Roe, Mrs Marion (Broxbourne)

Knight, Rt Hon Greg (Derby N)

Shaw, David (Dover)

Kynoch, George (Kincardine)

Shaw, Sir Giles (Pudsey)

Lawrence, Sir Ivan

Shephard, Rt Hon Gillian

Legg, Barry

Shepherd, Sir Colin (Hereford)

Lidington, David

Sims, Roger

Lilley, Rt Hon Peter

Smith, Sir Dudley (Warwick)

Lloyd, Rt Hon Sir Peter (Fareham)

Smith, Tim (Beaconsfield)

Lord, Michael

Spencer, Sir Derek

Luff, Peter

Spink, Dr Robert

MacGregor, Rt Hon John

Sproat, Iain

MacKay, Andrew

Squire, Robin (Hornchurch)

Maclean, Rt Hon David

Stanley, Rt Hon Sir John

McLoughlin, Patrick

Stem, Michael

Malone, Gerald

Streeter, Gary

Mans, Keith

Sweeney, Walter

Marland, Paul

Sykes, John

Marlow, Tony

Tapsell, Sir Peter

Marshall, John (Hendon S)

Taylor, Ian (Esher)

Marshall, Sir Michael (Arundel)

Taylor, John M (Solihull)

Martin, David (Portsmouth S)

Thomason, Roy

Merchant, Piers

Thompson, Patrick (Norwich N)

Mitchell, Andrew (Gedling)

Townsend, Cyril D (Bexl'yh'th)

Moate, Sir Roger

Molyneaux, Rt Hon Sir James

Tredinnick, David

Needham, Rt Hon Richard

Trotter, Neville

Nelson, Anthony

Twinn, Dr Ian

Neubert, Sir Michael

Walden, George

Nicholls, Patrick

Waller, Gary

Nicholson, David (Taunton)

Wardle, Charles (Bexhill)

Norris, Steve

Waterson, Nigel

Oppenheim, Phillip

Watts, John

Ottaway, Richard

Whittingdale, John

Page, Richard

Widdecombe, Ann

Paice, James

Wiggin, Sir Jerry

Pattie, Rt Hon Sir Geoffrey

Wilshire, David

Peacock, Mrs Elizabeth

Winterton, Mrs Ann (Congleton)

Porter, David (Waveney)

Winterton, Nicholas (Macc'f'ld)

Powell, William (Corby)

Wolfson, Mark

Rathbone, Tim

Redwood, Rt Hon John

Tellers for the Noes:

Riddick, Graham

Mr. Timothy Wood and

Robathan, Andrew

Mr. Bowen Wells.

Question accordingly negatived.
Question, That the proposed words be there added, put forthwith, pursuant to Standing Order No. 30 (Questions on amendments), and agreed to.
MADAM SPEAKER forthwith declared the main Question, as amended, to be agreed to.
Resolved,
That this House congratulates the Government on the priority they have given to education and the police in the 1996–97 settlement for local government; approves the rigorous approach that Government takes towards all public expenditure, including that of local government; commends the flexibility they have given to local authorities to respond to local priorities; and urges local authorities to make the most efficient use of the resources available and to use their freedom responsibly in providing local services.

European Communities (Amendment) Act
10.12 pm
The Paymaster General (Mr. David Heathcoat-Amory): I beg to move,
That this House takes note with approval of the Government's assessment as set out in the Finance Statement and Budget Report 1996–97 for the purposes of section 5 of the European Communities (Amendment) Act 1993.
The purpose of the debate and the motion is to satisfy section 5 of the European Communities (Amendment) Act 1993, which is sometimes called the Maastricht Act. It requires Parliament to approve the assessment of Britain's economic and budget provisions, which the Government then send to the European Commission. The information required is contained in the "Financial Statement and Budget Report", which the House will know as the Red Book. Since the introduction of the unified Budget, that report has contained the Government's tax and spending plans and has described how they are related to our economic and political objectives. Chapter 1 of the Red Book states that the report "will form the basis" of the report required under section 5.
In the past, the Opposition have had difficulty understanding that section 5 debates are not held to approve the Government's economic strategy. That strategy was debated after the Budget statement and continues as part of the Finance Bill proceedings.
My hon. Friends will take pride in the figures in the Red Book and in the stable macro-economic framework, sustainable growth, low inflation, falling unemployment and the firm grip on public expenditure demonstrated in those tables and pages. Those factors were all central to the Budget strategy and have already been approved by the House.
This evening's debate is about the transmission of that information to the European Commission in order to comply with our treaty obligations, and I invite the House to approve the figures.
Mr. William Cash: Will my right hon. Friend give way?
Madam Speaker: Order. The Minister is apparently not giving way.
10.14 pm
Mr. Peter Shore: According to the motion, the House is invited to take note "with approval" of the Government's assessment as set out in the "Financial Statement and Budget Report". I must say two things straight away. First, I do not approve of the figures and forecasts in the Red Book; secondly, still less do I approve of the treaty obligations under the Maastricht treaty that we have entered into and to which the motion is related.
I do not think that the House and the country have fully understood that, while the Government—in my view, properly—at least negotiated an opt-out from the full acceptance of stage 3 of economic and monetary union and the single currency, they did not opt out of stages 1 and 2 of economic and monetary union. This evening, we are debating our obligations to economic and monetary union under stages 1 and 2.

755
I wish to draw attention to the obligations that are placed on us by our acceptance of stages 1 and 2 of the treaty. First, and this is the reason for the debate tonight, article 103 states:
"For the purpose of this multi-lateral surveillance, Member States shall forward information to the Commission about important measures taken by them in the field of their economic policy".
It further states:
"the Council shall, on the basis of reports submitted by the Commission, monitor economic developments in each of the Member States".
If the Commission does not like what it sees and if the figures do not conform to what has been agreed, it can put proposals to the Council that may
"acting by a qualified majority on a recommendation from the Commission, make the necessary recommendations to the Member State concerned. The Council may, acting by a qualified majority on a proposal from the Commission, decide to make its recommendations public."
Straight away, we have a bit of coercion in stage 2 of economic and monetary union.
The obligations on us go far beyond the obligation to make reports about our economic policy and to have them monitored and invigilated, because we also come under the terms of article 104c, which, as the House knows, deals with the subject of "excessive government deficits". That article states that the Commission
"shall examine compliance with budgetary discipline on the basis of … two criteria".
I think we are all familiar with those criteria—that the public sector borrowing requirement should not be more than 3 per cent. of gross domestic product, and that the ratio between national debt and GDP should not be higher than 60 per cent.
Article 104c also contains a formidable arsenal of coercive measures that are available to the Commission and the Council if in their judgment our progress towards the 3 per cent. borrowing requirement for GDP is inadequate. If it is inadequate, the Council may make recommendations by qualified majority vote and, furthermore, it can make public its recommendations if the member state does not comply.
Mr. Tony Marlow: Will the right hon. Gentleman give way?
Mr. Shore: I hesitate to give way, because I realise that the House will have many demands on the limited time available.
Article 109m, which the House has never properly considered, applies now, and it states:
"Until the beginning of the third stage"
that is, during stages 1 and 2—
"each Member State shall treat its exchange-rate policy as a matter of common interest."
The Government are making a report to the Council of Ministers, and presumably they made a similar report last year. What communication have the Government had with the Commission on progress towards economic union? What observations has the Commission made on the fact that the Government's public sector borrowing requirement, standing this year at 4.75 per cent., is well in excess of the reference figure of 3 per cent. contained in the treaty? What have the Government done to treat their exchange rate policy as
756
"a matter of common interest"?
Have they deliberately, as it were, operated on the exchange rate so that it is not a floating exchange rate, but a managed one shadowing the ecu and the currencies of the European Community?
Those are important matters, because they directly affect not only the macro-economic policy, our competitiveness through the exchange rate and our interest rates, because we are also pledged to price stability, but the crucial balance between public expenditure and taxation. The idea that that decision, which has belonged to Chancellors of the Exchequer ever since we have been an independent country, should be in thrall to the opinions of the Commission and the majority of the Council of Ministers is unacceptable to us.
Is that not why we have seen not merely cuts in public expenditure and increases in taxation in the past two years, but why the Government, whatever the immediate argument might be about the size of our PSBR last year, this year and the next, are hellbent on conforming with the criteria in the Maastricht treaty so that they will be able to join the third stage of economic and monetary union just as soon as the decision is made in 1998?
The Chancellor said in a reply to a question that I put to him on Thursday:
"I am a strong advocate of getting down towards a balanced budget and of low inflation. They happen to be the Maastricht criteria as well"—
happen to be—
"but as we move towards achieving them it is doing no harm to this country's economy."—[Official Report, 8 February 1996; Vol. 271, c. 452.]
That may be true this year, but what about the next two or three years? What about the circumstances in which, once we are caught within the frame, we have to keep our borrowing requirements below 3 per cent.?
My objection is not only to the effect that is having on British policy but to the general deflationary effects that the constraints of economic and monetary union are having on the economic policies of virtually all our European neighbour states. Two months ago, Paris was in a state of riot as Parisians objected to the growing deflation to which President Chirac has unfortunately agreed in his arrangements with Chancellor Kohl. Just a week ago, Germany announced its highest unemployment figure for more than 50 years at 4.1 million. It is desperately worried about the problem of having to face the challenge of the competitiveness of countries whose currencies are free or floating and not pegged.
I remind the House, in case hon. Members have not seen it, of the interesting statement made by the former socialist Finance Minister of Spain, Miguel Boyer, as reported in The Times on 9 February. He said:
"Never has so much damage been done to so many by so few fanatics".
He summed up by saying:
"I do not share the dream of many technocrats and certain elite politicians of maintaining to the death a fiction about dates and conditions of convergence, hoping to catch nations by surprise with economic and monetary union, the significance and costs of which they do not know."
It is clear that a new mood is developing across Europe—a recognition of the nonsense, the madness and the unacceptability of adopting rules that will govern our economic lives and that have been conceived by arbitrary

757
decisions in Brussels and elsewhere in Europe. I believe that options are available to the Government and that we must set our ambitions much higher than simply keeping out of an economic and monetary union and a single currency. We should do all in our power—we have the opportunity to do so—to veto the wretched business throughout Europe.
10.25 pm
Mr. Barry Legg: This is a timely debate upon the issues of convergence and the monetary union. Paragraph 4.10 of the Red Book, which sets out the Government's policies on the matter, states:
"The general government financial deficit—which is also the measure used to monitor budget deficits under the European Union excessive deficits procedure—is forecast at £33½ billion for 1995–96, 4¾ per cent. of GDP. By 1996–97, it is forecast to be close to the 3 per cent. reference level for deficits used in the excessive deficit procedure."
That policy sounds fairly innocuous, but it contains economic, political and democratic perils. If we look a little further than the United Kingdom, we find that those perils are manifesting themselves even more strongly in France and in Germany.
Mr. Nicholas Budgen: Does my hon. Friend agree that he is being most ungenerous? The Chancellor, during his Budget speech, particularly commended his Budget on the basis that it would conform to the convergence criteria. Those of us who have known the Chancellor for a long time know that, for at least 30 years, he has been in favour of further integration into the European Community. His Budget was but a step in that direction. I think my hon. Friend ought to be more generous to my right hon. and learned Friend.
Mr. Legg: My hon. Friend has certainly known my right hon. and learned Friend the Chancellor of the Exchequer much longer than I. I would not seek to quarrel with him on those points. I believe that there are no automatic pilots with respect to economic policy; there are no two or three criteria that one can follow in economic policy to produce economic success. The world is not like that. If we look to continental Europe and, in particular, to what is happening in France and Germany, we see the follies of blindly attempting to follow convergence criteria.
We see the folly of following deflationary policies—both in fiscal and monetary terms. In continental Europe, fiscal conservatism, fiscal consolidation and inflation competition are all taking place at the same time. The terms of the convergence criteria on inflation require member states to be in the top three countries—or as close as possible to the top three countries—in inflation terms. France and Germany have suffered from overtight monetary policies over the past few years.
Mr. Cash: Does my hon. Friend agree that the reply that the right hon. Member for Bethnal Green and Stepney (Mr. Shore) received from the Chancellor of the Exchequer shows that it may be, by chance, that we will comply with those criteria, but that overlooks the fundamental fact that this is a legal framework which is
758
binding upon all the member states under articles 2, 103 and 104c? As a result, we are bound to comply with these criteria, irrespective of whether we want to do so. That is the greatest problem. If we are to retain our determination to achieve our own objectives, we should do so on our own terms and not because it is imposed upon us.
Mr. Legg: My hon. Friend is absolutely right when he says that those are legal obligations that we willingly placed on ourselves—legal obligations under British and European law. I know that my hon. Friend spent some time studying the treaty when we debated it in the House. If we closely examine our legal obligations, specifically article 104c, we find that there is considerable flexibility for interpretation in the excess budget deficit procedure.
Most hon. Members probably believe that there is a 3 per cent. limit to budget deficits, and that countries that enter the single currency will have to meet the 3 per cent. deficit criteria, but that is not the position. A country does not need to have a deficit within 3 per cent. to achieve economic convergence and move to a single currency.
Article 104c says, about the definition of the Government deficit requirement, 3 per cent.
"or, alternatively, the excess over the reference value is only exceptional and temporary and the ratio remains close to the reference value".
Under the Maastricht treaty, that is the definition on which a group of politicians will decide whether we move to a single currency. They will sit in judgment and decide whether Europe's economies have converged sufficiently. They do not have to consider 3 per cent. They need only ask, "Is it close? Is the excess over 3 per cent. only exceptional and temporary?"
Several hon. Members rose—
Mr. Legg: I give way to my hon. Friend the Member for Northampton, North (Mr. Marlow).
Mr. Marlow: I think my hon. Friend can put his nightmare on one side, because I believe that it will not happen. No Conservative Government will take Britain into European monetary union. The economies of France and Germany are so destroyed and distorted that the political will would not endure a sufficient time to take them into economic and monetary union.
Perhaps my hon. Friend would go one further and look at Italy. Does he realise that the debt in Italy is such that to pay the annual interest on that debt costs Italy more than paying for defence, education, social security and health put together? Is there any chance that Italy will be able to join monetary union?
Mr. Legg: I am grateful to my hon. Friend for those points. I know that he is a close follower of European affairs, and I am sure that it will not have escaped his notice that Mr. Weigel, the German Finance Minister, commented clearly on Italy's financial position in the autumn; it is obvious that the Germans do not want the Italians in the single currency. They accept the argument that my hon. Friend has made, that Italian debt is far too high. I am sure that, when the decision is made in 1998, Italy will not be part of the single currency.
Mr. Budgen: I am sure that my hon. Friend responds most politely to my hon. Friend the Member for

759
Northampton, North (Mr. Marlow), who, of course, is well known as an intellectual with a detailed interest in the minutiae of European politics, but many of us who take a more relaxed and ill-informed view of European politics approach those things with a certain amount of diffidence and say that it is difficult enough to understand the politics of our country without necessarily understanding the politics of what are now the great multitude of members of the European Union.
Is it not possible for us to say, "Perhaps they do want to join a single currency. Perhaps, for reasons of their history and their economies, it is right for them to join a single currency. We rather doubt that it will be in their long-term interests, but it is not for us, in our diffidence and uncertainty, to express an opinion about what is good for them"? Is it not important for us to express an opinion about what is right for our country, and is it not right for us to say—
Mr. Deputy Speaker (Mr. Michael Morris): Order. Interventions should be short.
Mr. Legg: I am grateful to my hon. Friend for those comments. We cannot altogether forget those countries and their economic affairs because, in 1998, the Prime Minister of this country must sit down with the other Heads of Government and make a judgment about the Italian economy. He has to make a judgment.
Mr. Budgen: Why?
Mr. Legg: It is a requirement under the terms of the Maastricht treaty, which is the law of the land. I should have thought that my hon. Friend would appreciate that by now. The Prime Minister of the United Kingdom will have to make a judgment about the Italian economy in 1998, and he will have to cast a vote when it comes to deciding whether Italy should join the single currency. I suspect, that if the Government cast a vote, it will not be in favour of Italy joining the single currency. That, however, is the procedure that we have agreed. In that sense, the Maastricht treaty has brought Europe closer together.
Convergency criteria are creating deflationary pressures on the continent. Unemployment in France is over 12 per cent. The figures from Germany last week were extremely worrying and disturbing. More than 4 million are unemployed in Germany. These two countries are trying to achieve the criteria, including a budget deficit of 3 per cent. At the same time, however, they are pursuing restrictive monetary policies that are impeding growth in their economies. In having overshot their deficit levels, their growth is much lower than expected—it is only about 1.5 per cent.
The required criteria cannot blithely be followed. If monetary policy is overtight, unemployment increases and the budget deficit rises steadily. The process then becomes self-defeating.
Mr. Nigel Spearing: I happen to agree with the hon. Gentleman's most recent point. Earlier, however, he suggested that there was a degree of flexibility. Does he agree that article 104c(2)(b) sets out two criteria? The hon. Gentleman quoted the first, which is to some degree an exception. The second, which is to some extent in parallel, states:
760
"whether the ratio of government debt to gross domestic product exceeds a reference value, unless the ratio is sufficiently diminishing and approaching the reference value at a satisfactory pace."
Is that not also a constraint that adds to the difficulties that the hon. Gentleman has mentioned?
Mr. Legg: I do not think that it is that strong a constraint. Again, it is a matter of judgment. The ratio is sufficiently diminishing and approaching the reference level at a satisfactory pace. There is tremendous scope for judgment over such phraseology.
If the hon. Gentleman doubts that, I suggest that he talks to German politicians about the prospects for Belgium joining the single currency. German politicians say, "Of course, the Benelux will have to join the single currency." Belgium's debt level is about 130 per cent., but that is not considered to be an impediment. Luxembourg, the only country meeting the criteria, has the same currency as Belgium. In that context, the politicians will not see an impediment in 1998 in bringing in the countries that they believe have sufficiently converged.
So we have deflationary policies on the continent. At the same time, we have the franc fort policy. We all know that it is an extremely damaging policy for the French economy. It is dragging down economic growth in France and driving up unemployment. Why does France continue to pursue such crazy economic policies? Why do the French not look over the continent? Why do they not look to the United Kingdom, where we have a floating exchange rate?
Why do they not recognise that, when the UK came out of the exchange rate mechanism, unemployment started to fall, exports started to increase and there were no worries about the exchange rate with the dollar? Why does France not say, "Floating is the right way to go. Let us abandon the franc fort policy and get our interest rates down"? The base rate is 7 per cent., and inflation is less than 2 per cent. Why does it continue to inflict such punishment on the economy and on the French people? The answer is political: there is a political will in France and Germany to have monetary union.
An objective analysis of the economic criteria and their consequences would lead to a rejection of the whole concept. There is no such analysis because of the political will behind the concept. When French or German politicians are challenged on the subject, they accept that there is economic nonsense in the system, but they then say, "But of course there must be political union as well." The German Chancellor and the President of the Bundesbank are completely frank about it.
We have had the message loud and clear from continental politicians, so why do not we hear it, and say, "Not only is economic and monetary union bad economically, it is not the right course for Britain politically; we do not want further political integration and a European super-state"?
Mr. Cash: My hon. Friend makes a fundamental point. Therefore, does he agree that the only way that we can get out of the situation is not merely to wait for a collapse and the disorder that would follow, but to take the opportunity of the intergovernmental conference to

761
renegotiate the treaty and lead Europe back to common sense? We should do that to get away from the madness that is now infecting the whole of the European Union.
Mr. Legg: My hon. Friend makes a valuable point.
Mr. Budgen: Will my hon. Friend give way?
Mr. Legg: Perhaps I may be allowed to deal with the intervention by my hon. Friend the Member for Stafford (Mr. Cash). It is time for Britain to take a lead on this important issue. That would not only help our partners to abandon the economic nonsense upon which they are engaged, but enable them to look more closely at the political consequences of their action.
The French Government still believe that there is a good prospect of Britain joining the single currency. From the British and French points of view, there would be nothing better than to make our position clear and say no to a single currency. The French would then understand that, if they wanted to go into a single currency, they would be going in with Germany.
Mr. Bernard Jenkin: Perhaps my hon. Friend would clarify one matter. Some of my colleagues suggest that this problem will go away because the convergence criteria cannot be satisfied and that, at the very least, France and Germany will probably seek a delayed start date to economic and monetary union. Does my hon. Friend share that opinion, or does he think that, because of their political objectives, France and Germany will drive ahead, come what may?
Mr. Legg: I think that France and Germany will drive ahead because of their political motives.
Mr. Budgen: Will my hon. Friend give way?
Mr. Legg: Perhaps I could finish dealing with the point before giving way.
Many times in the past, this project seemed to have been derailed. In the Danish referendum, the Danish people voted against the whole project, but it was afterwards put back on the rails. We thought we saw the break-up of the exchange rate mechanism in August 1993, but the ERM was reconstructed with 15 per cent. bands and the project went on. As I have said, political will and legal obligations are driving this project and I cannot see it being derailed unless Britain explains the economic and political disadvantages.
Mr. Budgen: Why do we have to keep waiting for it to be derailed in Europe? Many people concede that it may be right for some European countries. It would be a great impertinence for us to tell them what was right for them. Surely it is the role of political leaders in this country to decide what is right for Britain and simply to say, diffidently and kindly, "It may be right for you but it is wrong for us."
Mr. Legg: My hon. Friend makes a good point. The British Government should certainly say that they consider that the single currency is wrong for Britain and
762
for the British people. However, we cannot look at ourselves as an economic island. Many of our exports go to France and Germany. In the Red Book, my right hon. and learned Friend the Chancellor has forecast that we will have 3 per cent. economic growth this year. I believe that that is extremely unlikely. One of the reasons is that economic growth in France and Germany is so poor because those countries are following their current policies. I see no harm in Her Majesty's Government talking about not only the constitutional but the political aspects.
Economic and monetary union would be damaging economically. I do not believe that the idea of a single currency will work, even between Germany and France. Last week, we had an extremely serious development in the concept of the single currency. The Bundestag acted to reduce the mobility of labour in Europe. It passed a law ensuring that foreign workers could not be paid less than German national workers. That will impede the mobility of labour in Europe.
When one is committed to the concept of a single currency, to take measures to reduce mobility of labour is highly irresponsible in economic terms. It is particularly so, given that the German Government and people do not want to raise their taxes to make higher levels of fiscal transfer payments around the single currency area.
Mr. David Shaw: My hon. Friend has suggested that the mechanism is being driven by a political, not an economic, agenda. He and I are both accountants. Does he suggest that the only way in which economic and monetary union between France and Germany is likely to come about, especially if it is to involve some other countries, is if the convergence criteria are fiddled? A number of countries cannot meet the criteria in the next five, 10, 15 or possibly 20 years. If that is the case, the only way in which economic and monetary union can come about is by fiddling the books.
Mr. Legg: Like my hon. Friend, I am extremely reluctant to predict precisely economic conditions in the coming few years; to predict deficits or inflation levels for any country. However, I think that he has grasped the point that the only way in which the criteria are likely to be followed and monetary union is likely to take place is if there is flexibility and, in my hon. Friend's terms, the figures are fiddled and countries do not stick to the letter of the legislation. That is a great danger.
If the treaty were inspired by a desire to achieve true economic and monetary union, we would not have these odd convergence criteria. We would look at all sorts of convergence criteria within the real economy. We would look at levels of unemployment, how financial markets worked in different countries, trade flows and so on if the desire was genuinely economic. If it were genuinely economic, would we need the criteria? If countries are coming together, markets will produce convergence. If we trade more and more with Germany or with France, convergence will take place naturally. It is not for states to enforce convergence on themselves and other states.
I believe that the EMU project is political. It is politically damaging. It is damaging for democracy. In France, President Chirac was elected on a manifesto that involved promises of lower taxes and a pledge to cut unemployment. Within six months of taking office, he has

763
reverted to the disastrous policies of Francois Mitterrand. He has put at the forefront of his policies the reduction of the budget deficit and adherence to the franc fort. Those are dangers for democracy, with politicians having the same agenda, and an agenda in France which is not in the interests of the French people.
Pursuit of the convergence criteria is economically damaging across Europe and politically dangerous for Europe. If we are to avoid what I believe to be the catastrophe of a single currency, we need to exercise a countervailing political will. My hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) made a good point—that Britain must be firm and exercise countervailing political will to save Britain from the single currency and to help our partners to realise the dangers they face.
10.50 pm
Mr. Denzil Davies: The hon. Member for Milton Keynes, South-West (Mr. Legg) referred to Germany. I do not know to which German politicians he has been speaking, but certainly Mr. Waigel wishes to lay down a law that, once we get to 3 per cent., we find another peak ahead and have to get to 1 per cent. If we cannot get to 1 per cent., we are denied regional development grants and payments out of the budget.
Mr. Legg: That perfectly illustrates my point about political union. It cannot stop at monetary union. The Waigel proposals are an example of the political union that will have to follow. There will have to be central direction of fiscal policy following on from a single monetary policy.
Mr. Davies: That may be the case. I merely make the point that it is in the interests of many in Germany, and certainly of business men, to devalue the deutschmark. For years, the German economy has benefited from a slightly undervalued mark. Once unification took place, interest rates had to rise and, if one can talk about undervaluation or overvaluation in a free market, the mark is now probably overvalued. That is something that the Bundesbank has tried to avoid over the years.
With an overvalued mark, German exports to the economic area of Europe will suffer. There is a certain schizophrenia—if I may use that word—in Germany as German business men wish for a weaker currency. There is no doubt that the euro, if it happens, will be weaker than the current value of the mark.
To some extent, this debate is about paragraph 4.10 of the Red Book. It refers to
"The general government financial deficit".
In a curious phrase, written carefully by the Treasury, there is then a dash and the paragraph continues,
"which is also the measure used to monitor budget deficits under the European Union".
Perhaps even when I was at the Treasury many years ago there was something called the general Government financial deficit, but it certainly was not computed in accordance with a European system of accounts. We get the feeling that the Treasury is a little worried about suggesting that paragraph 4.10 exists because of the Maastricht treaty, but it is there for no other reason. There is no need to compute those figures according to something called the general Government financial deficit.
764
I want to make a pedantic point to the Paymaster General. We do not have the figures for the calendar year 1995. With the Maastricht treaty, the final hurdle to be overcome will be the figures for the calendar year 1997, which will come out some time in 1998. We are on calendar years. According to the Commission, its estimate of Britain's general Government financial deficit for 1995 is 5.1 per cent. of gross domestic product. In paragraph 4.10, we are told that for 1995–96—which goes into the fiscal year—the Government's deficit will be 4.75 per cent. It then says that it is forecast to be close to 3 per cent. in 1997.
As 1995 is over, and it is not terribly difficult to work out the figures, could we have tonight, if possible, the figures for the general Government financial deficit for the calendar year 1995? On the Commission's figures, which were forecast before the end of the year, the average for the 15 countries of the European Community for 1995 was 4.7 per cent. of gross domestic product. The British figure was 5.1 per cent. slightly higher than the 5 per cent. forecast for France. Will the Minister tell us the present position? Those ridiculous figures are to be entrenched—indeed, are entrenched—in law. I do not know what the deficit in Britain should be this year or next year. Perhaps it is correct to estimate 3 per cent., 1 per cent. or 8 per cent. Nobody can judge what the figure should be. Nobody wants to borrow too much if possible. Why entrench such figures in law?
I believe that there was an attempt in the United States by Mr. Newt Gingrich and others to try to entrench the concept of a balanced budget into the American constitution of all places. The attempt was thrown out because the Americans could not possibly stomach the concept that economic fashion and figures for it should be entrenched in their marvellous constitution. Yet that is what we are doing. We are entrenching figures that have been plucked out of the air by fanatics, as my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) said, in a fundamental law—a kind of natural law—of the European Community. Not only will they be law; they cannot really be changed—they can be changed only after 15 countries agree that they should be changed.
Mr. Cash: Does the right hon. Gentleman accept that, if the arrangements are met for entering stage 3—if the Maastricht criteria are fully complied with—a central bank will be created, the governors of which will not be allowed to seek or take instructions from their member states? Does that not add a great deal to what he is saying?
Mr. Davies: As the hon. Gentleman and the House will be well aware, the whole premise is that the power is reserved for the European central bank. A few weeks ago, I read a rather pompous editorial—I think that it was in The Independent—which suggested that it would be marvellous if the European central bank fixed interest rates for the whole economic community. How on earth can one fix one rate of interest for that whole area with its diverse economies? Presumably that is what the bank would have to do. Otherwise, it might have to set different rates for different areas.
Mr. Marlow: The right hon. Gentleman talks about fanatics fixing the figures in law. Is it not a cause of great chagrin to him that among those fanatics are his own Front-Bench team?
Mr. Davies: Certainly not—I would never suggest such a thing of either my hon. Friend the Member for North

765
Warwickshire (Mr. O'Brien) or, indeed, my hon. Friend the Member for Neath (Mr. Hain), who could never be described as a fanatic in any capacity. I repudiate that charge completely.
Mr. Budgen: On the general problems of how excessive deficits might work out, let us suppose for the sake of argument that we were in the single currency and we had a war—over the Falklands, for instance—which initially did not turn out very well, cost us a great deal of money and we had to run a very large deficit for two or three years. Let us also suppose for the sake of argument that many of the Latin countries in the European Union disapproved of the war.
Would we not find ourselves exposed to very considerable pressure from people who disapproved of that war to change our national policies so as to conform with their idea of what happened to be a reasonable deficit? Am I wrong in thinking that that could be a major infringement—
Mr. Deputy Speaker: Order. The hon. Gentleman is wrong to make interventions lasting well over a minute.
Mr. Davies: I shall not answer the hon. Gentleman's intervention in detail, but I should have thought that, once one had transferred levers of economic policy and economic power from one's own Government, one's capacity to wage war must be extremely limited. I do not believe that one can divorce economic matters from matters of defence and foreign policy.
Mr. Spearing: A few moments ago, my right hon. Friend talked fantastically and ridiculed the idea of setting a single interest rate for the whole Community. Does he agree that people who insist on the beneficial effect of a single market will probably insist that that may well be the aim? They will claim that without it there will not be the great level playing field for competition that they crave.
Mr. Davies: That may indeed be the case. I am not clear in my own mind whether the European central bank will fix one interest rate or more than one. I presume that it will fix one for the whole area. We talk about a single currency, but if we get to 1999 and only two or three countries—France, Germany and Luxembourg—have met the necessary criteria, we shall not have a single currency. We may have something called the euro, which is merely one currency in a very large area. That, too, creates problems.
My right hon. Friend the Member for Bethnal Green and Stepney has been in correspondence with the Prime Minister and the President of the Commission regarding one of the other convergence criteria—membership of something called the European monetary system. Clearly, my right hon. Friend will deal with the matter in another debate and I do not want to steal his thunder, even if I could. I simply ask the Paymaster General what is happening to that criterion.
Mr. lain Duncan-Smith: It has disappeared.
Mr. Davies: It has not disappeared, because it is mentioned in the treaty. I am a pedantic lawyer, and I believe in law, words and treaties. I do not think that treaties should be torn up. Article 109j refers to
766
"the observance of the normal fluctuation margins provided by the exchange-rate mechanism of the European Monetary System, for at least two years, without devaluing against the currency of any other Member State".
In reply to my right hon. Friend, the Prime Minister said that he did not know what had happened to it. Jacques Santer does not seem to know either.
Mr. Duncan-Smith: It has gone.
Mr. Davies: It cannot have gone; it is in the treaty. We can make it go if we wish, but only by amending the treaty. The Commission does not know what to do. Presumably, the embryo bank does not know either, but it has to produce reports on the basis of those criteria.
Articles about the European Union tell me that it is based on the rule of law. Indeed, in Luxembourg a splendid building—the European Court of Justice—was built to the rule of law. It has an Advocate General, judges, rapporteur judges, registrars and a legal secretariat. It is a veritable empire of the rule of law.
There is clearly a problem, because in 1988 neither the Commission nor anyone else will know what to do about this criterion.
Mr. Legg: That is what they want.
Mr. Davies: That cannot be so, because the treaty must be based on the rule of law. Treaties have to be interpreted, and the only body that can tell us whether a criterion has been met must be the European Court of Justice. When the European Union sought to come to an agreement with the European Free Trade Association, the first agreement was thrown out by the European Court of Justice. In fact, the Commission asked the court to give a declaratory judgment. I am sure that in the continental system it is perfectly possible to get a declaratory judgment. I suggest to the Paymaster General that the Government would be doing everyone a favour by sending the matter to the European Court of Justice for a declaratory judgment as to whether this criterion is in or out.
Mr. Legg: The point that the right hon. Gentleman is making adds to my argument that politicians will seek to interpret the criteria as flexibly as possible. They are not supposed to, but that is what they will want to do. What sort of judgment does the right hon. Gentleman think is likely from the European Court of Justice, when part of its objective is to achieve ever closer union?
Mr. Davies: I do not know—perhaps we should reserve that matter for another occasion. I understand what the hon. Gentleman is saying, but I am merely trying to be helpful to the Government. The poor Prime Minister does not know, Jacques Santer does not know—nobody knows. The people who should know, however, are the judges in the European Court of Justice.
Dr. Norman A. Godman: Is my right hon. Friend aware that the judges in the European Court of Justice frequently disagree among themselves? In a recent case, Advocate General Karl-Otto Lenz offered a 23-page opinion that was totally rejected by his fellow judges. That is not all that uncommon.
Mr. Davies: My hon. Friend is not a lawyer, and I can see that he is not an expert on European law. If he were,

767
he would know that the judges are separate from the Advocate General. The Advocate General is a concept imported from the French system; I believe the French translation of Advocate General in the conseil d'état is "the Government commissar". From time to time, the court overturns decisions from the Advocate General, but the contrary has mainly been the case in the past 20 years.
Let us not digress, however. All I am saying is that we should give these guys a chance, as it is their job to tell us whether the criteria apply or not.
Mr. Marlow: The convergence criteria are set out in a protocol. The right hon. Gentleman will be aware of protocol 6, which says:
"The Council shall, acting unanimously … lay down the details of the convergence criteria … which shall then replace this Protocol."
How does the right hon. Gentleman react to that?
Mr. Davies: I do not understand that very well, either. Perhaps that is a subsidiary question that we could send at the same time to the Court of Justice for the judges to answer. The Paymaster General should consider that the only body within this troika of institutions—the Council of Ministers, the Commission and the Parliament—that can adjudicate is the court.
Finally, I find it quite extraordinary that, in an age when the slogan very often is "Power to the people", when politicians are held in considerable disrespect, when people feel that they are losing power and when we have a global economy, we are debating proposals that would entrench undemocratic power in various institutions. I should have thought that, as politicians, our concern should be that there is a gap developing between us and the public. This proposal would merely make it worse, as it removes all hope from general elections and all possibility of democratic change. I do not know what the Paymaster General can do on the matter, because it is law already. Perhaps he could send that to the European Court as well.
11.7 pm
Sir Teddy Taylor: The time is late, and I apologise to you, Mr. Deputy Speaker, for keeping you up late, as I know how hard you work. On the other hand, I usually turn up at this time, first because Governments usually do nasty things after 10 pm, and secondly because I find that the gentlemen of the press who often report these matters have all gone home, despite the fact that something rather devious is happening.
It is always a pleasure to follow the right hon. Member for Llanelli (Mr. Davies). He is an optimist, whereas I, as he knows, am very much a pessimist. The issue he raised is fundamental—what happens in 1998 if we have to find new criteria? If we look at the treaty, we see that every member state that wanted to join apparently had to have fixed exchange rates for two years. We were told that that was irreversible, but we know now that it has been totally scrapped.
Article 6 of the protocol on page 218 of the treaty states that if we want to create new criteria, we must do it by unanimity. To that extent, it would appear that Britain has some kind of veto. But I can honestly say to the right hon.
768
Gentleman—whose attendance and commitment I never doubt—that Members who think that that is the case can forget it.
I received a letter this morning from the Economic Secretary to the Treasury, whom I asked a question on that point in a debate that we had some weeks ago. I asked what will happen when we come to consider the issue of new criteria, and my hon. Friend replied in her letter that the
"Heads of Government will decide in spring 1998"
which countries qualify. Basically, she said that as the exchange rate mechanism no longer operates within the same bands as it did when the treaty was drafted, it is not clear how the criteria may be interpreted, but the Government do not believe that we need an interpretation now.
When 1998 comes, it will not be a case of unanimity for new criteria. Member states will sit around and decide. Britain will not have a veto: no country will have a veto. As happens time after time, hon. Members think that they have been given assurances. They think that something is in writing, and that they can go to the courts, but basically it is all a dead loss.
I am sorry that the Chancellor of the Exchequer is not present. We had a debate on economic and monetary union on a Wednesday morning—we talked of nothing else—but, sadly, the Chancellor was unable to attend. I am told that he is busy in the mornings. Now we are having another debate on a vital issue. I should have thought that the Chancellor could be present. While I have immense respect for the Paymaster General, I feel that the House deserves some factual guidance on issues such as this.
My constituents thought that they were voting for someone who would support Conservative policies. No doubt people who voted for Opposition Members—respected Members, when they stood for election—thought that they were voting for Labour economic policies.
Mr. Jenkin: And the same applies to Liberal Democrats.
Sir Teddy Taylor: I am sure it does. They have some policies on this, as on everything else.
Article 103 shows us the position in regard to economic policy. Broad guidelines for all member states are laid down, on advice from the Commission, by the majority of the Council of Ministers. The purpose is to check on whether Britain is following the guidelines. Nothing could be clearer: if we do not do so, we shall get a rocket from the Commission. That is set out clearly in paragraph 4.
I am sure that the Minister will not say this, because he is one of the honest guys, but other Ministers might say, "Do not worry about it. It is just guidance." However, whether people vote Conservative, Labour, Liberal Democrat, Scottish National party, Communist, Trotskyite or anything else, the economic policy of the UK Government must be in accordance with broad guidelines laid down by the Council on the advice of the Commission. People should be told what is happening.
I wish to blazes that, instead of sending the Commission this ridiculous Red Book, the Government would give some idea of the damage being done to the

769
United Kingdom by European Union policies. What has happened to our trade as a result of EU membership? Is it or is it not true that, since we joined the EU, where we used to have a positive balance of trade, our accumulated deficit is now £100,000 million? That is a vast amount, and great damage has been done to the UK economy, not through our fault but because of the burdens that we have had to incur.
When will the Government tell us the truth about the common agricultural policy? They have put lovely words in the Red Book, saying that expenditure is up this year and they are sorry about it, but there are balancing items. Is it or is it not true that the cost of the CAP this year—1996—is £9,000 million more than it was in 1994? That is a massive increase. Time and again, stupid Agriculture Ministers—along with people speaking at party meetings, and even Liberal Democrats at their conferences—say that reform is upon us and the cost is falling. The plain fact is that it is going up and up.
I was appalled to see in the Red Book—I do not think that we can possibly send this to the Commission—that contributions this year will unfortunately be higher, although they will be lower thereafter. I have seen Red Books for about 31 years. Every year in which we have been in the EU people have said, "Unfortunately, the position is worse this year, but do not worry—it will be better next year." It is like the Bob Marley song: "Don't you worry about anything baby, because everything's going to be all right."
This year, the figure will be £2.89 billion—£5 every week for every family. If the Government send the Red Book without revealing the damage that the EU is doing to Britain, they will not be giving an honest assessment.
My last point concerns the massive burden on Britain of all the directives. I am honestly sick—and I have been here for 31 years—of hearing Ministers say that the burden of EU administration is going down, that it is less this year than it was the year before and it is going to be even less next year. We know the facts. We have seen the superb pamphlet produced by some of my hon. Friends, which points out the dangers to the economy of that mass of legislation.
I wish that the Labour party, most of whose members I honestly respect as good, hard-working people, and the Conservatives—who are indeed waking up—would start to ask themselves, "What the blazes are we doing to our people?" What about the poor people of France, where extra unemployment is being created every day because of a mad policy of artificial exchange rates?
If only we had more Ministers like my right hon. Friend the Paymaster General—who, in all sincerity, is one of the good guys—instead of some of the twits on both sides of the House, who would tell people the truth. Is it true that our economic policy is now guided by Europe, no matter who people vote for? Is the cost of the common agricultural policy going through the roof? Is it true that our country is being damaged and that our poor friends in Europe are suffering? Is it true that, no matter what hon. Members think, they can control, when 1998 comes, a little group of Ministers will decide who goes forward to economic and monetary union? It is time we played straight and told the truth and it is time that the nation woke up.
11.15 pm
Mr. Mike O'Brien: This debate has been worth attending if only to hear the hon. Member for Southend, East (Sir T. Taylor) quote Bob Marley.
I shall deal first with the domestic economy and then monetary union and convergence. Whatever the Minister says, Britain is foundering a long way from the economic miracle proclaimed by the Government and of which the Paymaster General invited us to be proud. Inward investment last year was only 40 per cent. of its 1989 peak. The tiger economies are growing by 8 per cent. while Britain averaged 7.1 per cent. in non-oil growth between 1979 and 1993—the worst growth record of any post-war Government.
When the Tories say that we have never had it so good, the trouble is that many of our competitors are having it much better. Our growth is lower than was predicted last year; business investment is half what was predicted last year; borrowing is higher than was predicted last year and tax revenues are falling.
Mr. Jenkin: Why is it that, whenever Labour spokesmen get the opportunity to discuss the real issues of economic and monetary union, they want to talk about something else?
Mr. O'Brien: As I said, I will come to Labour's position on EMU in some detail. I realise that the hon. Gentleman will not be interested in the damage that has been done to the British economy—the loss of jobs and businesses, the way in which our economy has been undermined by the Government—because he does not have a fundamental concern for the British people or the economy.
Let us consider the claim by the Conservatives that Britain is the enterprise capital of Europe. There are 15 countries in the EC. How well does the UK measure up to its competitors?
Mr. Budgen: Will the hon. Gentleman give way?
Mr. O'Brien: I shall give way after I have told the House how Britain fares. On growth, Tory Britain is the third slowest-growing economy in Europe. On inflation, Tory Britain has the fifth highest figure after Portugal, Spain, Italy and Greece. On long-term interest rates, Tory Britain has the sixth highest in the EC, which reflects our weak economy and lack of investment. Tory Britain has a trade deficit in manufacturing—a tragedy for a manufacturing economy.
Tory Britain has the lowest proportion of young people aged between 15 and 24 in education in Europe. On unemployment, Tory Britain has the seventh highest unemployment level overall and the fourth highest for men. On job growth, Tory Britain has the fifth lowest over the period 1979 to 1994. On investment, in Tory Britain investment per head is the fourth lowest in the European Union. On prosperity, GDP per capita is the ninth lowest in Europe. Britain in the wider world has fallen from 13th to 18th place in the international prosperity league.
Mr Budgen rose
Mr O'Brien: I give way to the hon. Member for Wolverhampton, South-West (Mr. Budgen) so that he can deal with that indictment of the Tory Government and their record in Europe.
Mr. Budgen: Would the hon. Gentleman concede that there has been a clear division in the Government's economic policy between what happened before 16 September 1992 and what has happened since? For about two years, there was an extremely harsh squeeze, when the money supply dived down to a very low level and a great number of businesses went to the wall. Things have looked up enormously since then. The economy has expanded and the money supply has been allowed to expand somewhat—some would argue, too much—recently. But we have had a period of sustained growth and falling unemployment and most people make a clear division between those two periods.
Mr. Deputy Speaker: Order. I am not sure whether the hon. Gentleman is making his third speech this evening.
Mr. O'Brien: I accept what the hon. Member says. There are divisions in the Government and in Government policy. After all, the Prime Minister, as Chancellor, brought Britain into the exchange rate mechanism, presumably a policy that the hon. Gentleman would condemn. Consider the way in which the Prime Minister has been running the economy, with 1 million fewer people in employment since he became Prime Minister.
The Red Book discloses Britain's economic recovery. It was so precarious that the Chancellor had little room for manoeuvre on tax cuts in the Budget. He ended up with a combination of a penny off income tax and putting £9.5 billion on borrowing next year. The public sector borrowing requirement forecast for 1995–96 has been revised upwards from £23.5 billion in the Treasury summer forecast and from £21.5 billion in the Budget before last. It is now £6.5 billion higher than expected in 1995–96, at £29 billion. It will be £9.5 billion higher than expected in 1996–97, and £10 billion higher in 1997–98.
The reason that the economy is in such difficulties is clear. Throughout the past 16 years, the Conservatives have neglected investment, squandered the proceeds of North sea oil and, in a display of boom and bust economics, put us into the two worst recessions since the war. That in turn has damaged the ability of industry to respond to recovery.
The Budget forecast for investment growth in 1995 is now 1 per cent. The recovery—such as it was—is in danger. It was based upon an export-led drive, fuelled by a—
Several hon. Members rose—
Mr. Deputy Speaker: Order. It is clear that the hon. Gentleman at the Dispatch Box is not giving way.
Mr. O'Brien: I may give way a little later, but not at the moment.
The recovery was fuelled by a 20 per cent. devaluation of the pound, following our ignominious withdrawal from the ERM, but there is still a limit to how long we can run an economy on devaluing our currency.
772
The Government have not dealt with some of the long-term problems of the British economy. They have just put off resolving them until after the next election, when Labour will have to deal with them. It is the ordinary families of Britain that the Government have really let down—the workers on the assembly line or in the office. For them, right-wing economics has too often meant few or no wage rises in the name of competitiveness, job insecurity to make labour flexible and the fraying of the safety net. Middle and lower-income people are spending more hours working, less time with their children and bringing home an income inadequate to meet housing and other costs. They saw the Government impose the biggest tax hike this century in the year after the 1992 elections, beating even Geoffrey Howe's 1981 Budget when personal allowances were not indexed.
The overall tax burden will be 36.5 per cent. next year, up from 34.75 per cent. in 1992—more than when Labour left office. It is forecast to rise each year until the end of the century, reaching 37.5 per cent. by 2000. That is the burden of Tory failure paid by the British people.
Mr. Marlow: I wonder whether we could get back to the topic of the debate. This is a major constitutional debate about economic and monetary union.
Could the hon. Gentleman say why his party, which is going to turn the constitution of the United Kingdom upside down, totally ignores the major constitutional issue of the day, which is the powers that we have already transferred to Brussels and the powers that would be transferred to Brussels if those on the Labour Front Bench had their way and transferred our currency, sovereignty, control over our exchange rates and interest rates and control over taxation? Will the hon. Member come to the point and tell us what he thinks about it, what he would do about it and why his party is going down a narrow road on constitutional issues and missing out that major constitutional point? It will not be missed out when the election comes.
Mr. O'Brien: I wished to rise before the hon. Member completely lost his cool. The position of the Labour party on European economic and monetary union is quite clear. We approve the principle of economic and monetary union, but we have questions about the practicalities which still need to be resolved. In principle, Labour believes that in the longer term a move towards economic and monetary union through the creation of a single currency will produce significant benefits for the people of Britain and Europe.
In particular, a single currency would remove the cost of currency transactions, which have been variously estimated. It is hoped that it would boost inward investment by reducing exchange rate risks and, in the longer term, would create a more stable economic environment for industry by reducing currency speculation.
Several hon. Members rose—
Mr. O'Brien: Unlike the Government, the Labour party has a clear principle to guide it when it assesses the criteria for and practicalities of entry into a single currency. We must get the circumstances right, and that is

773
what is important for us. Labour will take a hard-headed, businesslike view of the costs and benefits of a single currency. Wrongly approached, a single currency could damage the British economy.
Several hon. Members rose—
Mr. Deputy Speaker: Order.
Mr. Cash: What a sham.
Mr. Deputy Speaker: Order. If the hon. Gentleman does not like what he is listening to, he can go outside and have a rest. In the Chamber, hon. Members will listen to any contribution from any hon. Member. Those who do not like it can go elsewhere.
Mr. O'Brien: I am grateful, Mr. Deputy Speaker.
Hon. Members: Give way.
Mr. Deputy Speaker: Order. We should not have this catcall of "Give way." The hon. Gentleman has told the House that he will give way a little later. I suggest that hon. Members wait until that point.
Mr. O'Brien: Labour's criteria for judging the issue are clear. We believe that convergence of the real economic performance of member states is a vital precondition of economic and monetary union. Convergence must be based on improved levels of growth, jobs and productivity, and not just on monetary objectives alone. That is why we have long argued that the Maastricht convergence criteria need to be applied flexibly and that real economic convergence is of primary importance.
Labour also believes that, on entry, we should be confident that British industry will be able to compete effectively in a single currency. Further, Labour wants the Economic and Finance Council of Ministers to be developed as the political counterpart of the proposed European central bank to give the public a voice in shaping economic policies.
We also say that the move towards a single currency must be based on the consent of the British people, whether that consent be given by referendum or by general election. What is necessary is to ensure that popular consent is present. A referendum is one means of obtaining consent, but it is not a substitute for government. The Government must lead, and they must have a principled view on that issue. The Government lack a view and clear principles on that issue and, as a result of the divisions in the Government, they are becoming isolated and marginalised in Europe.
Labour's first commitment in Europe is to jobs for our people. We back the Swedish proposal to write into the Maastricht treaty a clearer commitment to full employment. Labour's vision is not of a Europe just for bureaucrats or politicians. Our view is of a Europe that is a community for ordinary people. We want workers to have better rights at work., and that is why we will sign the social chapter and join our European partners in introducing a minimum wage. We are proud of that
774
policy. We want the unemployed to have jobs, and that is why we put economic convergence before monetary criteria for joining the EMU.
Labour has a clear vision of the sort of Europe that we want to create. We oppose any unitary, federalist or centralised European state. We seek co-operation between member states in a common enterprise. We want power decentralised through subsidiarity, and we reject the idea that the European Union is a threat to our culture, language or character.
Several hon. Members rose
Mr. O'Brien: We have a firm belief that Britain will not only hold its own in the European Union—
Sir Peter Tapsell: On a point of order, Mr. Deputy Speaker. You assured us a few minutes ago that, as a consequence of a pledge given earlier by the hon. Member for North Warwickshire (Mr. O'Brien), he would give way. He is obviously approaching the end of his speech and he has not yet honoured that pledge. Do you think that you could encourage him to give way at least once?
Mr. Deputy Speaker: I assure the hon. Gentleman that I did not assure anyone that there was any promise of the hon. Member for North Warwickshire (Mr. O'Brien) giving way. I said that the hon. Gentleman might give way later. It is entirely up to the hon. Gentleman whether he chooses to give way, and to whom.
Sir Peter Tapsell: I invite the hon. Gentleman to give way just once.
Mr. O'Brien: I gave way to the hon. Member for Northampton, North (Mr. Marlow), but as the hon. Member for East Lindsey (Sir P. Tapsell) is so persistent, and I am generous, I will give way to him.
Sir Peter Tapsell: I am most grateful. The hon. Gentleman has made an interesting speech and he said that the Labour party was in favour, in principle, of economic and monetary union, but had many difficulties about the practicalities. He went on to spell out some of those difficulties. It is perfectly clear from what he said that those difficulties could be overcome only if the Maastricht treaty was substantially renegotiated. Is he saying that a future Labour Government would seek to renegotiate substantially that treaty?
Mr. O'Brien: Our position relates to the criteria on which we will judge moving forward on European economic and monetary union. The hon. Gentleman should heed the following words:
"There is no more important issue facing the European Community than the path we choose towards economic and monetary union. We are all committed to this goal."
That is what the Prime Minister said. The hon. Member for East Lindsey should also take note of the following words:
"No truly unified market can exist without a single currency. A close association of monetary policies will be needed if the single market itself is not to be put at risk."

775
That is what the Deputy Prime Minister said. Is that Conservative policy? Hon. Members may shake their heads, so let me put five clear questions to the Government and the Paymaster General, which he can consider in the White Paper that he is trying to put together.
First, do the Government agree with the Chancellor, who said that a single currency is not
"a threat to the nation state"?
Secondly, do they think, like the Deputy Prime Minister, that a single market needs a single currency? Thirdly, can they say whether, in the unlikely event of them being re-elected, a single currency will be a possibility in the next Parliament, given that the economic conditions are right? Fourthly, if the economic conditions were right, would they in principle be in favour of persuading the country that it was right to join a single currency? Fifthly, are they prepared to agree with the following statement:
"Some observers hope—and others fear—that economic and monetary union as set out in the Maastricht Treaty will be a step in the direction of a federal Europe … I believe that such … fears are unrealistic."
Do they agree with that statement by the Prime Minister? I do not think they do. I do not think that they know what they want. I do not think they know where they are going.
The country needs principle and direction. It will get it from a Labour Government, and it will not get it until we have one.
11.32 pm
Mr. Heathcoat-Amory: The hon. Member for North Warwickshire (Mr. O'Brien) has asked me five questions. I will answer all of them if he will give me a clear answer to any one of them in return. As those on the Opposition Front Bench are in the biggest muddle about their approach to economic and monetary union, I will instead endeavour to answer the points raised earlier in the debate.
All we had from the hon. Member for North Warwickshire was a Budget speech, which he read out at great speed, interlaced with some highly dubious international comparisons. Any responsible international comparisons use dates that are comparable in the economic cycle, as my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) said. If one takes the years 1981 to 1993, a complete economic cycle, the United Kingdom grew almost as fast as Germany and faster than France, Italy and the European Union average.
My main purpose in the few minutes remaining to me is to endeavour to answer the points raised. The right hon. Member for Bethnal Green and Stepney (Mr. Shore) asked a few questions that have been echoed elsewhere in the House. In particular, he asked whether the information that we are providing to the European Commission could be used against us to require policy changes. He asked whether the fact that European economic policy is a matter of concern between member states imposes an obligation on us.
For many years, the economic policies of the constituent parts of the common market—now the single market—were a matter of concern. That concern dates back to the days when the right hon. Gentleman was a member of the previous Labour Government. Indeed, a council decision of 1974 provided a mechanism to strengthen economic convergence, and it has been developed over the years.
776
In fact, the Single European Act added an article with respect to economic and monetary co-operation. In turn, that led to the multilateral surveillance arrangements, about which I think the right hon. Gentleman was complaining. It is true that these can, and do, result in recommendations from the Council of Ministers to the United Kingdom. If my hon. Friend the Member for Southend, East (Sir T. Taylor) objects to that, I am afraid that I cannot meet his objection.
However, I assure my hon. Friend and the House that the recommendations do not tie the Government, as is made clear in the treaty. Article 189 of the treaty states:
"Recommendations and opinions shall have no binding force."
That is an important distinction. Of course, that is true only of stage 2 of the economic and monetary union. It is also true that if we were to move to stage 3, the recommendations become binding in the way that they are set out in the treaty.
Mr. Shore: With respect, I believe that there is a distinction which the hon. Gentleman has not got quite right. It is true that severe penalties could be imposed upon us in stage 3 if we break the rules of the Community. In stage 2, there is provision for the Commission and the Council to recommend by a qualified majority vote to take a number of actions which could be to the disadvantage of the member states, particularly the United Kingdom. For example, they could make it plain that they condemn different aspects of Government policy, when they know very well what effect that would have on the international financial markets.
Mr. Heathcoat-Amory: These communications have not exceeded that status of a recommendation, and as such they are not binding upon us. I draw the hon. Gentleman's attention to such a recommendation, which related to the excessive deficit procedure, and which was received in July of last year. We can accept the recommendation because it simply stated that the United Kingdom should adhere firmly to its current budgetary policies. The council also took note of the policy of strict control of public expenditure and stressed that this should continue to be implemented. These recommendations are not binding, but they are to be welcomed.
My hon. Friend the Member for Milton Keynes, South-West (Mr. Legg) complained about the rigour with which the convergence criteria were being applied, and the damage which he said was being caused to the economies of Germany and France. He also complained about the laxity with which the criteria were being applied and interpreted elsewhere. Indeed, he would not have been pleased to hear from the hon. Member for North Warwickshire (Mr. O'Brien) that the Labour party believes in a lax and liberal interpretation of those criteria.
The main point I wish to make is that the four listed criteria—inflation, long-term interest rates, deficits and exchange rate stability—are set out in the treaty. The treaty also refers to other factors which may be taken into account, such as the balance of payments, the development of unit labour costs and the development of a single market.
Mr. Malcolm Bruce: Will the Minister give way?
Mr. Heathcoat-Amory: If the hon. Gentleman will forgive me, I have only three minutes in which to complete the debate.

777
There is an important point there because Conservative Members know that labour market flexibility, which is not specifically laid out in the treaty but is a subject of growing interest to those who debate those matters, is a crucial ingredient in, and possibly an impediment to, the introduction of stage 3 of economic and monetary union.
In a single currency zone, the adjustment mechanisms of exchange rates and interest rates are removed or would be given up by the participating member states, so the strain of adjusting for different rates of development in different parts of the single currency area must be taken by the wage-price mechanism unless there are to be compensatory flows of structural funds, which undoubtedly would be beyond the scope of the present European budget to finance. It follows that the flexibility and responsiveness of markets is an important element in any decision that might be taken by this or any other Government whether to move to stage 3 of EMU.
The crucial fact to bear in mind is that we have an opt-out. We are not committed; we can watch the development and the unfolding of the implications without being committed.
Mr. John Redwood: Will my right hon. Friend give way?
Mr. Heathcoat-Amory: I do respect my right hon. Friend's interest in the subject, but he must forgive me because of shortage of time.
I shall try to reply briefly to a couple of arguments made by the right hon. Member for Llanelli (Mr. Davies). There is nothing sinister about the fact that the general Government financial deficit is included in the Red Book. That is a widely used international measure, and it is included not simply at the behest of the European Commission. As regards the outturn for 1995, it is true that our accounting is on a financial year basis and most of the European Union accounts on a calendar year basis. In fact the figures are available, and the one that the right hon. Gentleman seeks will be published by the Central Statistical Office next month.
The right hon. Gentleman asked whether the fact that we are not members of the exchange rate mechanism alters the criteria that we or any other member state must fulfil to move to stage 3. It is true that the exchange rate mechanism no longer operates in the way foreseen when the treaty—
It being one and a half hours after the commencement of proceedings on the motion, MR. DEPUTY SPEAKER put the Question, pursuant to Standing Order No. 14B (Proceedings under an Act or on European Community documents).
The House divided: Ayes 75, Noes 11.

Division No. 51]

[11.42 pm

AYES

Alexander, Richard

Arnold, Jacques (Gravesham)

Amess, David

Baker, Nicholas (North Dorset)

778

Baldry, Tony

Knight, Rt Hon Greg (Derby N)

Boswell, Tim

Lawrence, Sir Ivan

Bottomley, Peter (Eltham)

Legg, Barry

Bowis, John

Lidington, David

Brandreth, Gyles

Luff, Peter

Bright, Sir Graham

MacGregor, Rt Hon John

Brooke, Rt Hon Peter

MacKay, Andrew

Browning, Mrs Angela

McLoughlin, Patrick

Budgen, Nicholas

Malone, Gerald

Burt, Alistair

Marland, Paul

Cash, William

Merchant, Piers

Clifton-Brown, Geoffrey

Neubert, Sir Michael

Congdon, David

Ottaway, Richard

Conway, Derek

Paice, James

Coombs, Simon (Swindon)

Pattie, Rt Hon Sir Geoffrey

Cope, Rt Hon Sir John

Shaw, David (Dover)

Cran, James

Spencer, Sir Derek

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

Spink, Dr Robert

Davies, Quentin (Stamford)

Sproat, Iain

Devlin, Tim

Stanley, Rt Hon Sir John

Duncan, Alan

Sweeney, Walter

Elletson, Harold

Tapsell, Sir Peter

Evans, Nigel (Ribble Valley)

Taylor, John M (Solihull)

Evans, Roger (Monmouth)

Thomason, Roy

Fabricant, Michael

Thompson, Patrick (Norwich N)

Fox, Dr Liam (Woodspring)

Townsend, Cyril D (Bexl'yh'th)

French, Douglas

Waller, Gary

Goodlad, Rt Hon Alastair

Watts, John

Griffiths, Peter (Portsmouth, N)

Wells, Bowen

Harris, David

Whittingdale, John

Hawkins, Nick

Widdecombe, Ann

Heald, Oliver

Wolfson, Mark

Heathcoat-Amory, David

Wood, Timothy

Hendry, Charles

Hughes, Robert G (Harrow W)

Tellers for the Ayes:

Hunt, Rt Hon David (Wirral W)

Mr. Michael Bates and

Jenkin, Bernard

Mr. Gary Streeter.

Knight, Mrs Angela (Erewash)

NOES

Bruce, Malcolm (Gordon)

Shore, Rt Hon Peter

Chidgey, David

Skinner, Dennis

Davies, Rt Hon Denzil (Llanelli)

Smith, Andrew (Oxford E)

Godman, Dr Norman A

Hughes, Simon (Southwark)

O'Brien, Mike (N W'kshire)

Tellers for the Noes:

Rendel, David

Mr. Nigel Spearing and

Salmond, Alex

Mr. Harry Barnes.

Question accordingly agreed to.
Resolved,
That this House takes note with approval of the Government's assessment as set out in the Finance Statement and Budget Report 1996–97 for the purposes of section 5 of the European Communities (Amendment) Act 1993.

TRADING SCHEMES BILL [MONEY]
Queen's recommendation having been signified—
Resolved,
That, for the purposes of any Act resulting from the Trading Schemes Bill, it is expedient to authorise the payment out of money provided by Parliament of any increase attributable to that Act in the sums payable out of money so provided under the Fair Trading Act 1973.—[Mr. Wood.]

M5 Widening (Whittington)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Wood.]
11.53 pm
Mr. Peter Luff: I am glad to have the opportunity to raise this subject, which is of great importance to my constituents, who are directly affected by it.
Since its widening near junction 7, noise levels from the M5 have often been intolerable at the village of Whittington. They are also a problem for other Worcestershire residents. For example, at Harvington, similar noise problems have resulted from the construction of a bypass. I am aware of the keen interest of my hon. Friend the Member for South Worcestershire (Sir M. Spicer) in that issue. The House may understand why I am closely following events at Harvington.
The systematic failure of the Highways Agency to act on the issue of noise, which is apparent at Whittington and Harvington, must not be repeated in other road-building projects. We need new roads and road widening, but the case for those roads will be weakened if events at Whittington and Harvington are repeated.
Often it is only complaints that come to the Floor of the House, so I shall begin with tributes. My first is to the Minister and to those in his private office for their close personal interest in the matter. I am sorry that the Minister's only reward is to be dragged here tonight at this uncivilised hour, but that is politics.
Secondly, I pay tribute to the chief executive of the Highways Agency, Mr. Lawrie Haynes, who recently visited Whittington to see the situation for himself. As luck would have it, he chose the quietest day for about a year. Thirdly, to be fair to the Highways Agency, I pay tribute to it for the spectacular success of the widening project, the side effects of which we are discussing tonight.
What genius originally designed the M5 through my constituency as a two-lane highway, I do not know. Holidaymakers and business traffic from the south-west to the midlands and the north, and vice versa, came to regard the two-lane section as one of the worst experiences known to drivers in the United Kingdom. Increasing congestion and tailbacks made the widening project essential. It has transformed journeys for the better. It was completed ahead of schedule and significantly below budget—an important point for my hon. Friend the Minister to consider. The congestion that obtained on the M5 deterred use of the motorway, as other routes were found by those who had to make the journey from north to south, and reduced speeds. It is logical that widening has increased use and speeds, with serious consequences for my constituents who live near the motorway.
Tonight I intend to concentrate on issues for the Highways Agency, not the issue of cash compensation for the loss in property values that resulted from the noise, which is a matter for the district valuers. However, it is fair to record in parenthesis the dissatisfaction of the people of Whittington with the approach of the district valuer. He seems—I realise that this may be an uncharitable interpretation—to have sought to pick off those whom he could get to settle for low sums first and
780
use them as precedents for future settlements. I believe that some people have settled for ridiculously low sums as a result.
I hope that my hon. Friend the Minister will bear that aspect in mind. The many tenants of the local housing association who live in Whittington are, of course, not eligible for compensation and neither cash compensation nor secondary glazing can insulate a garden or restore the semi-rural calm of a village.
Tonight I want to do two things—to describe what has happened and to seek an undertaking from the Minister to settle the facts of the resultant noise increase by persuading the Highways Agency to measure the noise over a sustained period. We shall then know who is right and who is wrong. To me, it is a simple matter of common sense that the villagers are right, but I accept the need for proof, which the agency has so far been unable or unwilling to provide.
I have been able to pursue this case only because two particularly diligent residents have procured and used their own noise meters, which have consistently proved the Highways Agency wrong. The story of the noise impact on Whittington village is a catalogue of errors and omissions by the agency. For example—there are shades here of British Rail's handling of the early channel tunnel rail link plans—when it did its initial work, the agency did not include on its plans houses that were already built.
The motorway was widened using the so-called parallel widening technique. The need for some noise mitigation measures was always recognised, and the original plans allowed for an intermittent small mound on the old carriageway, which was made redundant as a result of the widening technique used.
The calculation method used by the agency led its noise consultants to conclude that the measures would dramatically reduce noise levels at Whittington from the pre-widening level of about 60 dB to a post-widening level of about 56 dB. In a letter to one of my constituents written on 8 July 1992, during the construction of the widened motorway, the agency stated:
"when the motorway widening is complete the traffic will be further away from your property and a noise reduction mound will have been built along the end of Berkeley Close. Although the amount of traffic will increase, the effect will be a reduction in noise".
How wrong can one be?
During construction, residents expressed concerns about the likely effectiveness of the proposed measures and the agency agreed to use spare rubble to make the proposed intermittent mound, into a continuous one from the A422 to 80 m from the so-called Church farm overbridge, where there was no room for a mound as there was no redundant carriageway.
In fact, a letter from the agency dated 30 September 1993 suggested that this extension was undertaken at the request of the Department. If so, I am grateful for its early interest. It also said—this is an important point to bear in mind in my later remarks—that any further extension
"would be too remote … to make any further difference to noise levels."
Thousands of tons of rubble were generated by the works, which sadly were often dumped where there were no houses to protect. That could all too easily have been used to protect Whittington with a much more effective bund at little or no extra cost, but that opportunity has

781
been lost. As I drove along the widened section of the M5 on Saturday night, I looked at what seemed to be much higher bunds protecting much smaller communities than Whittington.
After the opening of the widened motorway, noise levels in Whittington went up sharply. The response of the agency was simply to refuse to believe my constituents. The 80 m gap that it said would be left was in fact 200 m—a huge miscalculation that the agency could not explain.
Months of lobbying got the agency to come back to measure noise levels for the first time. That was finally agreed at a site meeting on 17 December 1993. Representatives of the agency who came to the meeting were visibly surprised by the level of noise in Whittington. The meeting enabled us to settle a number of important misunderstandings—for example, that the road is in a cutting at this point, which it is not. The agency also accepted that the road surface was considerably higher than it was pre-widening, which it had consistently denied. In my view, that increased height is a major factor in the increased noise levels.
The promised monitoring took place between 20 and 26 January 1994. It happened only because two of my constituents—Barrie Redding and Stuart Cottam—borrowed a crude noise meter and did the agency's work for it, hanging from bedroom windows and touring the village with the meter.
Over a week—once again, sadly and inevitably, a quiet week because of weather conditions—the metering survey was conducted. The Highways Agency at last accepted that its original predictions were grossly inaccurate. One official said: "Off the record, we made a horrible mistake." That mistake was discovered only because of the diligence and perseverance of my constituents.
A decision was rightly taken to mitigate retrospectively rather than to undertake wholesale insulation of the village. Obviously, that was the preferable solution. Gardens cannot be insulated. Reducing the noise levels overall is the preferred solution for my constituents.
On 15 April 1994, the agency wrote:
"The result of these calculations is that in the Church Lane-Berkeley Close area noise levels can be returned to their pre-widening levels (or better) by the erection of a 3 metre high noise fence for 250 metres northwards from the overbridge and this is what we now propose."
At this point, the agency formally apologised for its errors, and gave this undertaking:
"We shall seek to rectify the situation as indicated as soon as we can."
The House will understand the fury of local residents when they read in the Worcester Evening News on Tuesday 6 February, when news of this Adjournment debate became public, that a spokesman for the Highways Agency had said to that newspaper the previous day:
"We remain to be convinced the noise levels are worse than prewidening. The motorway was widened away from the village."
From what I have already said, the House will know that the agency has conceded that noise levels are higher than pre-widening, both in writing and at private meetings. It would not have done the inadequate things it has done if that spokesman was right.
782
In a letter to me on 16 June 1995, my hon. Friend the Minister said:
"The Highways Agency has accepted that the original noise calculations were an under-estimate".
What on earth, or who on earth, did that spokesman consult? How incompetent can an agency get? It has formally conceded that noise levels are at or around 66 dB, and that pre-widening levels were around 60 dB. My constituents maintain, with good evidence, that noise levels are actually much higher. Is it any wonder that my constituents are so cynical about the agency's intentions?
The agency has since proposed merely to fill in the gap with fencing at the point where it originally said that there was no room for a mound and that a mound would have no effect. It said that that would reduce noise levels in the whole village to pre-widening levels or better. That conflicting advice came from the same individual in the agency. Confronting the agency with its conflicting advice led it to accept that the new proposal would be inadequate. Residents of Whittington came to the conclusion that the agency was trying to fob them off, and who can blame them?
Eventually, the agency settled on a further proposal: an extra fence on top of the 2 m bund and the 3 m noise fence in the gap. That measure was installed only after much and totally unacceptable delay. The reasons for the delay are well documented, and as they are not central to the debate I shall not labour them. The Minister will understand, however, how the delay has infuriated my constituents.
Although the villagers felt that the new proposal would also be inadequate, the agency said that it would assess its efficacy. At a meeting, the director of the motorway widening unit promised that more work would be done if the fence was ineffective. My hon. Friend the Minister said in a letter to me on 23 August:
"The best way forward now is for the Agency to erect the additional noise fence and wait to see its efficacy."
On 18 October 1994, almost a year earlier, Mr. Oddy of the Highways Agency, had written:
"Let us get the mitigation in place"—
it took a year to get it in place—
"if there is doubt after that about the extent of immediate and future noise reduction we can consider repeating the noise metering we did before, and further mitigation if that seems justified"
Only one inference can be drawn from those statements: if the measures are inadequate, more will be done.
The villagers wanted a 5 m fence throughout, but were restricted to 3 m because of the agency's concern not to spoil their view. If only the agency were as concerned about noise as it is about my constituents' view. The fence has finally been erected, many months late. Not surprisingly, there has been no reduction in noise levels.
The final straw is the new refusal of the agency to honour previous commitments to monitor the situation, which were clearly implied in meetings and ministerial correspondence. On 1 November, my hon. Friend the Minister, presumably on the advice of the agency, wrote to me to say that the result of the work would not be monitored. He said:
"The Noise Insulation regulations require that predicted noise levels are assessed (by calculation) … not by noise measurement."
In other words, not only will previous commitments not be honoured by the agency, but the methodology that will settle the whole matter is the one that failed to predict

783
noise levels accurately in the first place. Since the amelioration measures were put in place, further noise measurements with more sophisticated noise meters conducted by my constituents have found very high noise levels—often reaching 70 dB and higher.
I recently attended a special meeting at Whittington village hall organised by the parish council, which was attended by 50 people from 40 households. Many apologies for absence were made. As the total number of residents on the electoral roll is 427, that is an extremely high turnout for a Saturday morning. The summary of a note read to that meeting says it all:
"we are the victims of a horrible mistake by the highways agency. They have now had two attempts at effective noise mitigation measures and have failed miserably both times."
My constituents are no longer prepared to settle for the promise of further amelioration measures. They require—I hope that the Minister can promise it in his speech—a sustained measurement of the noise levels in their village to prove who is right and who is wrong. A return to pre-widening noise levels across their village remains their ambition, and rightly so. All I ask is for a repeat of the January 1994 exercise, but for rather more than a week. I would suggest a month, and in varying meteorological conditions—relating to both wind direction and atmospheric pressure. After all my constituents have been through, I also hope that there will a reasonably generous interpretation of any results.
I hope that the agency will then act on the spirit of the findings and not necessarily the letter of the law. Involving in advance the parish council with the methodology will be crucial to its eventual acceptance by my constituents. They want to know that the chances of the monitoring being done during a freak quiet period are minimised.
My hon. Friend the Minister and his office have been consistently helpful to me throughout the whole sorry episode. I very much regret the fact that he has been called to the House tonight to answer for the errors of the Highways Agency, which has failed completely in its duty to my constituents. Such failures will lead to more resistance to bypasses and to widening schemes. It is essential to sort out this mess once and for all.
12.9 am
The Minister for Railways and Roads (Mr. John Watts): I thank, or at least congratulate, my hon. Friend the Member for Worcester (Mr. Luff) for raising this issue and for his kind words about my private office. I am aware that my hon. Friend has taken a keen interest in the matter since the widening of the M5 was completed. He has with his usual diligence taken up the case on behalf of his constituents at Whittington.
His constituents are concerned that the volume of traffic noise has increased since the completion of the widening of the M5 between Warndon and Strensham in 1993. I sympathise greatly with the concerns of local people because I know that excessive traffic noise can be intrusive, although it has to be said that we can never fully eliminate it.
The motorway was widened from two to three lanes between 1991 and 1993 to relieve congestion and enhance road safety along the 13-mile section between Warndon and Strensham. My hon. Friend confirmed how necessary that widening was. As he explained, the widening was
784
carried out by the innovative parallel widening method, whereby one completely new carriageway is built without affecting traffic on the existing motorway. The original carriageway is then converted into the other carriageway of the newly widened motorway. As he said, the new carriageway was built further away from the village, so that, under normal circumstances and assumptions, one would have expected some reduction in noise intrusion. Part of the old carriageway was broken up for an earth mound to be constructed on it.
There was wide consultation with members of the public before the scheme was implemented, and a public inquiry was held. Objections and representations were considered fully and a number of measures were incorporated into the scheme to try to reduce its impact on the environment. We took particular care to try to reduce the impact from noise on the communities by providing earth mounds and fencing and by offering noise insulation. The objective was to limit noise levels as far as possible to the level prevailing before the widening took place, despite the growth in traffic.
To help assess the need for those measures, our consultants calculate the noise likely to be generated by traffic using the widened motorway at a future date, usually 15 years after the road has been opened. This was done by taking the known traffic levels and increasing them to take account of forecast traffic growth. Account is taken of topography and any other barriers to sound that would reduce the noise before calculating the level at, for example, a house close to the road.
The detailed methods used in the calculations are laid down by the noise insulation regulations. Those calculations showed that noise from the new road would be around 56 to 57 dB in the design year of 2008 at the facades of buildings in Church lane, assuming that the mound was built. However, I acknowledge that there was inconsistency in the figures, although the broad range was considered a reasonable indicator. Based on those figures, we provided various noise mounds and fencing, including a noise mound to screen properties in Church lane and Berkeley close near Whittington. We also offered noise insulation to 13 properties in the Whittington area, although some of the offers were declined.
Following the opening of the widened motorway, a number of complaints were made by people living nearby. Officials from the Highways Agency visited the area, and it was clear to them that the actual noise levels were higher than expected. They therefore arranged for measurements to be made, which confirmed that the noise levels were, at around 63 to 66 dB, substantially higher than those calculated, and were expected to increase further by about 1.5 dB 15 years after opening.
It became clear that mistakes had been made in calculating the noise impact of the scheme. Clearly, I regret that. We are pursuing that matter separately with our consultants. Given those new facts, we agreed to increase the length and height of the screening for Church lane and Berkeley close to provide a barrier aimed at screening the properties in Church lane against noise.
The screen now runs for a distance of 733 yd northwards from Church farm overbridge along the motorway. Through a combination of fencing and earth mounding, it is now 3 m—or, as I prefer to say, almost 10 ft—high. The residents had asked for a 6 m, or 19.5 ft, high fence, but I am afraid we could not agree to this,

785
because the cost would have been disproportionate to the benefits that it was predicted to provide. It did take a while to put the work in hand, partly because of the need to obtain planning permission. The work itself was not straightforward. There were delays in obtaining materials of the specified quality. Nevertheless, the work was eventually completed in accordance with the design.
I know that the residents of Whittington remain sceptical about the effects of the noise mitigation measures, in particular the noise fence already provided. In view of the history, one can quite understand why they should be so sceptical. They maintain that, if we had had more accurate noise assessments before construction, we would have increased the height of the bund. At this stage, that has to be regarded as speculative.
However, in view of their continuing concerns, I have—as my hon. Friend has asked in the debate—told
786
the Highways Agency to appoint a firm of independent consultants to carry out a fresh noise survey and to take further noise measurements over a period of four to five weeks. My hon. Friend's request for a one-month survey will be met by that. The survey will establish what the actual noise levels are, and will also honour the undertakings that he said were given previously.
I recognise that the local residents are genuinely concerned that we have not done enough, but I hope that the further work will prove to my hon. Friend and his constituents that we take this seriously. Once the survey results are available, we shall look at all the issues again and decide whether any further action is justified. We shall, of course, let him and the local residents know the outcome of the further surveys.
Question put and agreed to.
Adjourned accordingly at sixteen minutes past Twelve midnight.