Commons Sitting of 11 January 1996

Preamble
The House met at half-past Two o'clock
PRAYERS
[MADAM SPEAKER in the Chair]
PRIVATE BUSINESS

  CITY OF WESTMINSTER BILL [Lords]
  Motion made, and Question proposed,
  That the Promoters of the City of Westminster Bill [Lords] may, notwithstanding anything in the Standing Orders or practice of this House, proceed with the Bill in the present Session; and the Petition for the Bill shall be deemed to have been deposited and all Standing Orders applicable thereto shall be deemed to have been complied with;
  That if the Bill is brought from the Lords in the present Session, the Agents for the Bill shall deposit in the Private Bill Office a declaration signed by them stating that the Bill is the same, in every respect, as the Bill which was brought from the Lords in the last Session;
  That, as soon as a certificate by one of the Clerks in the Private Bill Office, that such a declaration has been so deposited, has been laid upon the Table of the House, the Bill shall be read the first and second time and committed (and shall be recorded in the Journal of this House as having been so read and committed) and shall be committed to the Chairman of Ways and Means, who shall make such Amendments thereto as were made by him in the last Session, and shall report the Bill as amended to the House forthwith, and the Bill, so amended, shall be ordered to lie upon the Table;
  That no further Fees shall be charged in respect of any proceedings on the Bill in respect of which Fees have already been incurred during any previous Session.
  Hon. Members: Object.
  To be considered on Thursday 18 January.

Oral Answers to Questions
  TREASURY

    Alcoholic Drinks and Tobacco (Smuggling)
    Sir Fergus Montgomery: To ask the Chancellor of the Exchequer what priority he attaches to tackling the smuggling of alcoholic drinks. [7076]
    Mr. Hawkins: To ask the Chancellor of the Exchequer what steps he is taking to counter the smuggling of tobacco and alcoholic drinks. [7078]
    The Paymaster General (Mr. David Heathcoat-Amory): The Government take a serious view of smugglers, who seek to evade payment of revenue duties and undermine legitimate trade. Customs and Excise has about 250 single market excise staff specifically engaged in countering smuggling of alcohol
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    and tobacco. Additionally, other Customs staff involved in audit and investigation work make an important contribution.
    In the 12 months to 30 September last year, Customs and Excise made more than 3,500 detections related to alcohol and tobacco with a revenue value of £7.6 million. Smugglers run the risk of losing the imported goods and the vehicle used to transport them, and of a prison sentence of up to seven years.
    Sir Fergus Montgomery: Is my right hon. Friend working with the honest traders in cracking down on smugglers? Is he aware of the effect of smuggling on the businesses of honest traders, who play by the rules and are penalised for their honesty?
    Mr. Heathcoat-Amory: Yes, I take seriously the fact that smuggling is not only anti-social and illegal but undermines legitimate traders. That is why, last November, Customs and Excise formed an excise alliance with trade groups representing those who make, transport, distribute and sell alcoholic drinks and tobacco, to exchange information about smuggling and to co-ordinate action to stop that traffic.
    Mr. Hawkins: What my right hon. Friend has said will be welcome to tobacconists and those in the licensed trade in my constituency, who have been concerned about the problem for a long time. I pay tribute to my right hon. Friend for the active steps that he has always taken to meet groups of people involved in the trade from my constituency and from many other constituencies. Has there been any opportunity to employ additional staff to deal with the important and serious problem of smuggling. Was it possible to introduce any particular measure in the latter part of last year, or will it be possible for the future?
    Mr. Heathcoat-Amory: Yes, I can give that assurance. In the present financial year, Customs and Excise has deployed additional staff where there is a particular risk. I am pleased to say that 20 additional excise verification officers have been allocated to work against smuggling during the coming financial year. We take the threat seriously, and deploy resources accordingly.
    Mr. Skinner: I think the Government have a cheek to talk about controlling smuggling of any kind, because when I met the customs officers in Southend last year, their biggest complaint was not about 20 new workers but about the fact that thousands of them had been given the sack and sent to the dole queue. What they are concerned about—
    Madam Speaker: Order. I should like to hear a question from the hon. Gentleman. He has not yet put a question to the Minister.
    Mr. Skinner: If the Minister is really concerned about dealing with smuggling, what he ought to do—
    Madam Speaker: Order. The hon. Gentleman is a long-standing Member of the House, and he knows that it is Question Time. He may have a perfectly genuine question to put to the Minister, but he must put it in the form of a question, not make a statement.
    Mr. Skinner: Why does the Minister not get off the backs of the customs officers and allow them to do the job that they are intended for—dealing with all those problems? Instead of talking about 20 staff being added, why does he not ensure that the thousands who have been sacked get their jobs back?
    Mr. Heathcoat-Amory: It is good to know that old Labour has survived into the new year, and still believes that public services require ever-more staff at ever-higher public cost. We believe in deploying staff effectively—where the risk and threat arise. I explained in answer to my hon. Friend the Member for Blackpool, South (Mr. Hawkins) that we are deploying extra excise verification officers to deal with the smuggling risk in the areas affected.
    Ms Primarolo: Is the Minister aware of the significant discrepancy between the amount of beer supposedly exported to France from the United Kingdom and the amount of beer that the French imported from us? According to official statistics, some 107,000 barrels of beer disappeared into thin air in 1994, whereas previously the two sets of figures were approximately balanced. We must assume that not all of that beer was drunk on a booze cruise somewhere. Will the Minister confirm that he is aware of, and concerned about, the damage being done to revenue into the Treasury, the growth of illegal duty scams and criminal activity and the threat to jobs in this country? Could he explain to the House the Government's strategy for tackling this growing criminal activity?
    Mr. Heathcoat-Amory: I do not know whether the hon. Lady wrote her question before she heard my earlier reply, but I have outlined the additional staff and resources that we are deploying. The hon. Lady has reminded the House of something that is at least partly true—that cross-border shopping is only a part of the trade and smuggling is only a part of the problem. There is also a threat caused by the diversion of exports back on to the home market having received the repayment of excise duty. It is to counter all of those threats and illegalities that we have formed the excise alliance with the trade and deployed additional staff. In his Budget, my right hon. and learned Friend—recognising that specific problems affected certain excise items—either froze or reduced duty in some cases.
    Mr. John Townend: May I congratulate my right hon. Friend on the successes of Customs, but may I remind him that hundreds of millions of pounds of smuggled goods are coming over? If we could only take the simple precaution of having a customs officer open the doors of the dozens of transit vans which come over on the cross-channel ferries, we could stop this. However, I am told that that is against European Union regulations. If French industry was being damaged, can one imagine that the French would take any notice of the regulations? If we cannot open the doors of vans at the port, why can we not have a road block 50 yd down the road?
    Mr. Heathcoat-Amory: As I think that my hon. Friend recognises, the single market in Europe means that a port is no longer a routine fiscal frontier. However, that does not mean that we cannot open doors and examine cargoes where excise duty fraud is suspected. When I visited Dover last year, I saw the excise verification officers carrying out effective checks to counter the menace.

    Economic and Monetary Union
    Mr. Spearing: To ask the Chancellor of the Exchequer what criteria, other than those specified in the treaty of European Union, Her Majesty's Government apply as relevant to successful monetary convergence within the European Economic Community. [7077]
    Mr. Purchase: To ask the Chancellor of the Exchequer what are his conditions for deciding whether Britain should use its opt-out in respect of proceeding towards economic and monetary union. [7082]
    Mr. Renton: To ask the Chancellor of the Exchequer what assessment he has made of the permanence of the convergence criteria in the Maastricht treaty for countries wishing to join the single currency. [7087]
    The Chief Secretary to the Treasury (Mr. William Waldegrave): The convergence criteria are set out in the Maastricht treaty. We regard differences in productivity growth and flexibility of labour markets as also being relevant. The opt-out negotiated by my right hon. Friend the Prime Minister means that we are not committed to join a single currency. We would seek to join only if it were in our national interest at the time.
    Mr. Spearing: Does the Minister agree that the criteria would have knock-on effects for the criteria used for determining Treasury policy? Is the Minister aware that article 109.j.1. and protocol 6 article 3 state that a country must operate successfully inside the exchange rate mechanism—in whatever band—for two years before 1 July 1998? Would not that criterion produce problems for the Government's policy and for the country? Will the Minister list those problems? Would they include some of the difficulties being faced by Mr. Juppé and President Chirac?
    Mr. Waldegrave: On the first part of the hon. Gentleman's question, all those matters will have to be judged at the time a country decides to go in or not. On his second point, which related to ERM membership before a country can join any single currency, the Prime Minister has made it perfectly clear that we would not be rejoining the ERM in this Parliament, and that we would not be going back into an ERM comparable to the old one in any Parliament in the future. Therefore, it will be for the Heads of Government at the time to judge whether the exchange rate economic criteria have been met.
    Mr. Purchase: Would it not be a much easier decision for the Government to take if only they attended to the weakness and the lack of competitiveness of our leading companies—factors that have been exemplified by the appalling trade figures that have been announced? Would it not be better for the Government to spend their time attending to that so that we became a more prosperous nation, on the back of wealth-creating industries, than to trouble themselves over the niceties of convergence policy, which will eventually strangle us in any event?
    Mr. Waldegrave: The hon. Member is a little confused. If one looks at the list of the most profitable companies in Europe, one finds that the lion's share of them are British companies. The hon. Gentleman is also unwise to go on one month's trade figures. The Labour party suffered from that mistake back in 1970. He might like to wait for the next month's trade figures, because the overall position on trade is not at all bad.

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    The hon. Gentleman would be unwise to wish to mimic some of the conditions that exist in Europe, particularly in the socialist countries. Although it gives me no pleasure to say it, as our unemployment rate steadily declines towards 2 million, it is sad to see German unemployment rising towards 4 million.
    Mr. Renton: Does my right hon. Friend agree that there are two different views about the convergence criteria in the Maastricht treaty? One view is that they could be regarded as shackles which will lead to higher unemployment in some of the weaker European economies; the other is that they are a totally necessary discipline to ensure that any country joining the European single currency has been exercising proper budgetary control, and control over its budgetary deficit. To which of those views does my right hon. Friend subscribe?
    Mr. Waldegrave: My view is that the disciplines that we have accepted are disciplines that we would have been happy to accept, whether or not Maastricht or convergence criteria existed. It is sensible to manage the economy in order to reduce debt and to have low inflation. It is sensible for the whole continent of Europe to manage its economy so that there is the minimum disruption and movement.
    Sir Peter Tapsell: While I am much heartened to hear my right hon. Friend re-affirm the Prime Minister's statement that a Conservative Government will never allow this country to rejoin an exchange rate mechanism, how is that to be reconciled with the fact, if I am correct, that the machinery for joining a single European currency at any time requires re-entry into the ERM 12 months beforehand?
    Mr. Waldegrave: That question is related to the one asked by the hon. Member for Newham, South (Mr. Spearing). It will be for the Heads of Government at any future summit to judge whether any exchange rate criteria have been met. As the Prime Minister has said to the House, the exchange rate mechanism, with its narrow bands, that existed at the time of the Maastricht treaty cannot be said truly to exist at all now. The problems for the Heads of Government will be interesting.
    Mr. Shore: Following the Minister's interesting replies and his confirmation of what the Prime Minister previously told the House about not joining the ERM in this Parliament or any other Parliament—if the Government are re-elected—can he say clearly whether membership of the ERM is still a condition for joining a single currency? It is not just a matter of interpretation, because the condition that we are a member for at least two years before the operation date is written into the treaty itself. Is the Minister saying that provisions written into the treaty are just a matter for interpretation and consideration, or is he saying that the treaty has no real validity?
    Mr. Waldegrave: The right hon. Member makes a fair and interesting point. I think that the Heads of Government will find themselves in some difficulty, because the ERM which existed at the time of the Maastricht treaty does not now, according to most interpretations, exist.
    Mr. Yeo: Does my right hon. Friend agree that the key criteria for judging whether we should join a single currency is whether it will be in the national interest to do so? Does he further agree that, in order to preserve that freedom, the vital consideration at that time—indeed during the whole of the intervening period—is neither to rule out the possibility of joining within any specified time frame nor to enter into any commitment to join until we can judge whether it is in our interest?
    Mr. Waldegrave: I entirely agree with my hon. Friend. It is the achievement of my right hon. Friend the Prime Minister to have put this country, uniquely in Europe, in that position. It is odd that the Labour party, and especially the Leader of the Opposition—who now describes himself as a born-again Thatcherite, which is a surprising description—apparently see no constitutional issues at all, according to the quotations that I have read, in joining the European monetary union. It is for that reason that my right hon. Friend the Member for Watford (Mr. Garel-Jones) was right to put that point to the Leader of the Opposition the last time the House discussed these matters. As the Leader of the Opposition sees no constitutional or other implications, we must take it that, if we have met the convergence criteria, he regards whether we join as merely a technical matter. That is not the position on the Conservative side of the House.
    Mr. Malcolm Bruce: Given that the Prime Minister has failed to persuade the Italian Government to co-operate in delaying the start of the potential EMU, in spite of the Italian Government's difficulties in meeting the criteria—a meeting perhaps of the unwilling and the unready—will the right hon. Gentleman assure the House that it remains Government policy to validate their opt-out by ensuring that they are capable of meeting the time scale, because otherwise he must accept that the opt-out will have no validity, in or out?
    Mr. Waldegrave: The United Kingdom will meet the criteria. A large number of other countries—most surprisingly, even Germany itself at the moment—do not meet the criteria. The situation that was foreseen at Maastricht is, in any case, not going to come about. It was then foreseen that all the countries of Europe, with the exception of the United Kingdom, which had negotiated an opt-out, were going to move smoothly into a single currency. It is clear that, whatever happens, a large part of the European Union is not going to join a single currency—at least, not at the first available date.
    Mr. Nicholls: Given that my right hon. Friend has a powerful and inventive mind, what conceivable circumstances could come about which would make it in this country's best interest to surrender for ever its fiscal independence, which would be the inevitable consequence of going into a European single currency?
    Mr. Waldegrave: It was a saying of the previous Prime Minister, my right hon. and noble Friend Lady Thatcher, that it is unwise to take decisions until one has to take them. It is the strength of this country's position, negotiated by my right hon. Friend the Prime Minister, that, if we want to, we can consider those issues at the right time. At the moment, they are entirely hypothetical.
    Mr. Mike O'Brien: What is the Government's policy on the use of the opt-out? Will the right hon. Gentleman

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    set out the criteria for determining the national interest? Are they summed up by the former Chief Secretary to the Treasury, who said:
    "I don't want to see a single currency—period",
    or by the Deputy Prime Minister, who said that there can be
    "no truly unified market without a single currency…A close association of monetary policies will be needed if the Single Market is not to be put at risk"?
    Will the right hon. Gentleman end the confusion on Government policy on the opt-out?
    Mr. Waldegrave: There is no confusion on the Conservative side of the House. It is a little unwise of the Labour Front Bench, half of whom were elected on a platform of leaving the European Community altogether and now regard whether we go into a single currency as merely a technical matter, to accuse us of confusion on this matter. I could read out quotations, to the embarrassment of members of the Labour Front-Bench team, about their position of conscience on how important it was to leave the European Community. Some of their right hon. and hon. Friends have stuck to that; they have thrown it all overboard.
    Mr. Jenkin: Is my right hon. Friend aware that some people argue that the opt-out from the single currency has damaged the country's interest? Is he aware that that argument is advanced by Opposition Front-Bench Members? Does that not seem extraordinary when they may well support us using the opt-out if it is not in our economic interest to join a single currency?
    Mr. Waldegrave: My hon. Friend is exactly right. The Leader of the Opposition on this, as on many other matters, has tucked himself in behind my right hon. Friend the Prime Minister and takes—as far as I can tell, because the position changes from day to day—more or less the same position. He would be very unwise not to, because for any party to say that it would not look at the issue at the time in the interests of this country seems to me unwise.

    Economic Confidence
    Mr. Mackinlay: To ask the Chancellor of the Exchequer what proposals he has to promote and encourage economic confidence. [7079]
    The Financial Secretary to the Treasury (Mr. Michael Jack): The Government's policies are increasing confidence by creating the right conditions for sustainable growth through low inflation, sound public finances and a continuing programme of structural reform.
    Mr. Mackinlay: That is all very interesting, but does the Minister not realise that his complacent attitude will be received with dismay and anger by the millions of people who are languishing in the frustration of negative equity, who cannot sell their homes to take jobs elsewhere in the country because no one is prepared to purchase their homes? Many of them are people who have not got jobs and people who are not sure about their employment prospects. People are not prepared to invest in homes because they have no confidence. What is the Minister going to do about the great burden of negative equity that faces many of the constituents of my hon. Friends, and
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    many of the constituents of Conservative Members—people who voted for them at the last general election, especially in the south-east of England?
    Mr. Jack: I hope that the hon. Gentleman will calm down for a moment so that I can give him some useful information on this subject. He may recall that, over Christmas, the Halifax building society issued an excellent report, which pointed out—
    Mr. Mackinlay: What did it say last year?
    Mr. Jack: Wait for it. The best news comes a little later in my presentation. The Halifax building society's report said that it saw a recovery in the housing market and increasing prices. On our part, my right hon. and learned Friend the Chancellor announced a reduction in interest rates, creating the lowest mortgage level for 30 years. In case the hon. Gentleman was half asleep at Christmas, that was good news for those who want movement in the housing market.
    Mr. Nicholas Winterton: Although I accept much of what my hon. Friend has just said, does he accept that, to regenerate economic confidence, it is important to regenerate the housing market? Although he was right to say that the Halifax building society sees a modest rise in house prices and anticipates an increase in house prices next year, last year's figures show that house prices decreased by 1 per cent. on the previous year. Will he therefore press the Chancellor yet again to ignore Mr. Eddie George, the Governor of the Bank of England, and further reduce interest rates, which would bring about confidence not only in the housing market but industrially?
    Mr. Jack: My hon. Friend advocates some important points. He will have noted that, at the last meeting between the Chancellor and the Governor of the Bank of England, when they jointly appeared at a press conference, they were in accord on a reduction in interest rates. I hope that my hon. Friend will not be entirely seduced by the Opposition, thinking that confidence is a single-club issue—that of the housing market. Important though it is, our economic policies are creating low inflation and the prospect of 3 per cent. growth next year, and unemployment is already down by more than 700,000. Those clear indicators of growing confidence in the British economy will cause business investment to grow by a further 9 per cent. this year.
    Sir James Molyneaux: Does the Minister agree that confidence could be further restored by simplifying the methods of supplying grant assistance to relatively small companies, particularly those that employ fewer than 20 people? Might one of the instruments to do that be the enterprise investment scheme?
    Mr. Jack: I am glad that the hon. Member—[HON. MEMBERS: "The right hon. Member."] I apologise to the right hon. Member. He mentioned the enterprise investment scheme, which is important as it enables those who wish to advance venture capital and seek an involvement in small, growing companies to realise the dream of growth in the small company sector. If the right hon. Gentleman has points that he would like to discuss, I should be happy to hear from him, because that important scheme is working well.
    Mr. Forman: Is it not clear that economic confidence will be revived further and sustained provided that the

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    Government follow their current prudent fiscal policy and a cautious monetary policy? Is not the clearest evidence of the success so far the vote of confidence given by all the inward investors in this country, both direct and portfolio?
    Mr. Jack: My hon. Friend is right. The Opposition have chastised us in recent months on league tables but they do not like to talk about the fact that the United Kingdom is top of the league table for inward investment. We are confident of our economic policies because we can answer questions about interest rates, growth and employment. The hon. Member for Thurrock (Mr. Mackinlay) should consider the fact that his party is incapable of answering any economic question on any aspect.
    Mr. Andrew Smith: The Financial Secretary and his right hon. and hon. Friends should turn their minds to the reason why there are 1 million fewer people in jobs than there were when his right hon. Friend became Prime Minister. At a time when one in five households of working age have no one bringing in a wage, what effect will it have on confidence now to abolish the community action programme, denying help to long-term unemployed youngsters, who need it most? Is that not typical of the Conservative party, creating a divided Britain and denying the long-term unemployed a stake in society?
    Mr. Jack: The hon. Gentleman has failed to notice the many efforts that the Government have made to help people, such as jobseekers' programmes and education, to equip them for the world of work, and the fact that, under our economic policies, 700,000 people have left the unemployment register. It is about time that the hon. Gentleman considered his constituency and the success of the Rover car company in Cowley. That company has been recruiting about 4,000 new employees and is making about £200 million of new investment. That is the key to lasting prosperity. Let the hon. Gentleman look in his own back yard for an answer to his question.
    Mr. Evennett: Is my hon. Friend aware that businesses, pensioners and families all appreciate low inflation, which the Government have achieved? Further, does my hon. Friend agree that the greatest threat to economic confidence in this country would be the election of a Labour Government?
    Mr. Mackinlay: What are you doing about it?
    Mr. Jack: I entirely agree with my hon. Friend the Member for Erith and Crayford (Mr. Evennett), and I will tell the hon. Member for Thurrock what the people are saying in that constituency. They are saying that they understand that the Government have sound economic policies and that the Government can ask the searching economic questions, unlike the Opposition, who fail ever to answer any question about what they would do about interest rates, and about what their economic and tax policies are. The Labour party is the party of "don't know"; we are the party that does know, and we know that we have the confidence of the British people on economic policy.

    Budget Statement
    Mr. Canavan: To ask the Chancellor of the Exchequer what representations he has received about his Budget statement. [7080]
    Mr. Waldegrave: My right hon. and learned Friend the Chancellor of the Exchequer has received widespread
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    commendation for a responsible Budget which will sustain economic recovery, help control inflation, and put money back into people's pockets.
    Mr. Canavan: Is the Minister aware that the recent severe weather meant that many thousands of people throughout the country suffered from freezing or flooding in their homes, yet the Budget will make things even worse by imposing a cut of 31 per cent. on the home energy efficiency scheme, which will mean that at least 200,000 homes will not be properly insulated and more than 1,000 jobs will be destroyed? Will the Government therefore reverse that deplorable decision and also reduce the rate of VAT on domestic fuel, which is causing widespread hardship?
    Mr. Waldegrave: On the latter point, the hon. Gentleman should address himself to hon. Members on his own Front Bench, who failed to table a motion that would have enabled a vote on VAT on fuel.
    On the former point, it seems sensible that help should go to those people who need it, and not to pensioners and others who may be well able to afford it, so we should be aiming that valuable scheme at those who really need the help.
    Sir Mark Lennox-Boyd: Has my right hon. Friend received representations from the bingo industry? In the recent Budget, general gaming duty was cut by 1 per cent. and pools duty by 6 per cent., but the bingo industry was excluded. That appears extraordinarily unfair to an industry that provides gambling with entertainment to millions of people, is well run and even in this day, when the national lottery is advertising throughout the country, is prevented from advertising its prize money to attract the public.
    Mr. Waldegrave: I am aware of the worries that have been expressed by that industry. Especially, I believe that the latter part of my hon. Friend's question, which related to the possibility of deregulating the industry somewhat, perhaps on the advertising side, would touch a sympathetic chord in the Government. We shall examine those proposals closely.
    Mr. Andrew Smith: Further to the Chancellor's remarks in his Budget statement about private finance, will the Chief Secretary tell the House how the Government are responding to the representations that Eurotunnel is making for Government guarantees to underwrite a bond to refinance its massive debt? Has a request been received by Ministers? How are the Government responding? Will they stick to their policy of no subsidy, and will the Chief Secretary give an undertaking to make a statement to the House before there is any change?
    Mr. Waldegrave: There is no change in policy. There is a growing consensus between the two sides of the House on private finance in general. As the Labour party begins to understand the policy, I think that it is beginning to support it, although there are some exceptions among Labour Front Benchers.
    Mr. John Greenway: Is my right hon. Friend aware that the reduction of 1 per cent. in general betting duty has been warmly welcomed throughout the racing industry? Will he take this opportunity to encourage all elements of the racing industry—including bookmakers

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    and the British Horseracing Board—to advance their already well-progressed discussions and reach an early conclusion on how the money should be distributed for the benefit of racing and bookmakers?
    Mr. Waldegrave: I am grateful to my hon. Friend for what he has said. We hope to help to broker such an agreement and to reach an agreement fairly soon. It would be sensible to achieve such an agreement.

    Greenbury Report
    Mr. Hain: To ask the Chancellor of the Exchequer what representations he has received on the Greenbury report. [7081]
    Mr. Jack: Since the publication of the report my right hon. and learned Friend the Chancellor of the Exchequer has received a number of representations, both written and oral.
    Mr. Hain: Surely there is a strong case for legislation to implement the proposals of the Greenbury report, not least because more than half the electricity companies are being taken over and will therefore not be listed on the stock exchange in the near future. Are the Government selling out to private greed yet again?
    Mr. Jack: I am surprised that the hon. Gentleman asks that question. It shows that there is a fundamental distrust among Opposition Members and doubt as to whether private industry can put its own House in order in relation to the matters discussed by Greenbury. The hon. Gentleman will know that, in his report, Sir Richard stated that he felt that legislation was an inappropriate way of dealing with the problem. The hon. Gentleman will also know that the stock exchange responded with commendable speed to change the listing arrangements on disclosure, particularly of salary. My right hon. Friend the President of the Board of Trade has said that a review will take place—when the pensions aspects of the Greenbury report have been studied—with a view to amending the Companies Act, where necessary, where it relates to disclosure.
    Mr. Thomason: Does my hon. Friend welcome the extension of share ownership and responsible share option agreements? Does he agree that the Government should be proud of their record of extending share ownership from 3 million to 10 million people since 1979? Does he agree that that is the best way of ensuring that people have a stakeholding in this country?
    Mr. Jack: My hon. Friend has put his finger on what real stakeholding is about: having a share of something of which one is a part. That achievement has been made possible in the face of fearsome opposition from the Opposition. The Greenbury report occasioned a thorough debate involving my right hon. and learned Friend the Chancellor, who was able to announce in the Budget the new company share option scheme and enhancement of the profit-sharing and save-as-you-earn schemes which currently benefit 2 million people. I have no doubt that there will be a wide uptake in British industry of further opportunities so that employees can have a stake in the companies for which they work.
    Mr. Darling: The Financial Secretary seems to place a good deal of faith in the privatised utilities putting their own house in order. That faith is not shared by the
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    majority of people. Is he aware that the abuses in the boardrooms of privatised utilities are continuing? Is he also aware that the chairman of the National Association of Pension Funds investment committee—who is himself a member of the Greenbury committee—has warned that powerful voices are trying to block and wreck the Greenbury proposals? Will he give a guarantee that the Government will introduce legislation at the earliest possible opportunity to ensure that the subject of contributions to the pension arrangements of people in boardrooms is brought forward without further delay? Will he also give a guarantee that he will not allow the thrust of the Greenbury report to be wrecked by vested interests in the privatised utilities?
    Mr. Jack: Again, Opposition Front Benchers display a fundamental distrust of the idea of private companies being able to put matters right. The hon. Gentleman's attack on the privatised utilities is a typical smokescreen behind which the Opposition hide the many benefits that privatisation has brought to consumers. Many of the privatised companies have given clear public undertakings that they will accept the Greenbury recommendations and are moving towards them. If the hon. Gentleman considers the facts—clearly his boardroom lunches have not enabled him to do so—he will see that the Institute of Actuaries has been engaged by the stock exchange to work out, in consultation, how the issue of pensions and their benefit to directors should be properly valued. Once that exercise has been completed in June this year, the information will go to the revised listing arrangements and, as I said a moment ago, my right hon. Friend the Secretary of State for Trade and Industry will look at ways of changing the Companies Act, if appropriate, to enable matters of disclosure to be dealt with properly.

    Living Standards
    Mr. Harry Greenway: To ask the Chancellor of the Exchequer what assessment he has made of the prospects for living standards in 1996. [7083]
    Mr. Jack: Real personal disposable income is expected to rise by 2.75 per cent. in 1996. A family on average earnings should be about £450 better off next year after tax and inflation.
    Mr. Greenway: I thank my hon. Friend. Does he agree that living standards have risen at least 10 times faster under the present Government than under their miserable predecessors, the Labour Government? Does he further agree that, in the stakeholder society proposed by the Labour party, people's income, or at least part of it, would be confiscated, as would part of the employers' outgoings and we would have a "Whitehall knows best" job at the worst time?
    Mr. Jack: My hon. Friend is an astute observer of the scene. He will certainly know that since the Conservative party took office the average family on average earnings has been £4,500 a year better off as a result of our policies. The stakeholder society strikes me as the equivalent of stir-fried politics—a bit of this and a bit of that, all mixed up with no recipe. It resembles today's special—here today, gone tomorrow.
    Mr. Sheerman: What effect will the disgraceful 7 per cent. Budget cut in university funding have on living standards? Is it not a disgrace to cut funding to

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    universities by 7 per cent., with all the knock-on effects not only on teaching and research but on the innovation and enterprise in which universities are becoming increasingly involved?
    Mr. Jack: I am not certain whether that question has the approval of the shadow Chief Secretary and his agreement that Labour would immediately restore the position. I shall tell the hon. Gentleman what has happened in terms of ensuring that universities can continue to offer the excellence of their facilities to more and more students occasioned by our education policies. They have taken a tremendous interest in the private finance initiative and I have no doubt whatever that they will use that as a good source of funding to continue the expansion of that vital work.
    Mr. Riddick: Are not prospects for living standards much more positive in the United Kingdom than in the rest of Europe? For example, this morning's Daily Telegraph forecasts that unemployment in Germany will reach more than 4 million this month and quotes German employers as being angry with the German Government for not introducing more flexibility into the work force. Does not the Labour party want to take Britain down the German road of over-regulation, minimum wages and the social chapter which will produce unemployment of more than 4 million in Germany? Does not Germany also want to take Britain down that road?
    Mr. Jack: My hon. Friend highlights some of the important issues that make Britain an ever-improving place to do business. We are competitive, our costs are low, we are not wedded to the social chapter and, according to the Organisation for Economic Co-operation and Development, we will outstrip Germany and France in growth next year. Those factors will lead to further reductions in unemployment and the improvement in living standards predicated by my right hon. and learned Friend's Budget.

    Budget (Industry)
    Mr. Jim Marshall: To ask the Chancellor of the Exchequer what representations have been made to him by industry on his Budget. [7084]
    Mr. Waldegrave: Industry has welcomed the Budget because it recognises that it gives Britain the best chance of steady growth with low inflation.
    Mr. Marshall: That is a typically bullish reply by the Chief Secretary. How does he square that bullish response with a real economic indicator such as manufacturing output, which has shown an increase of less than 1 per cent. over the past 12 months?
    Mr. Waldegrave: Manufacturing output is up, as is manufacturing investment. The hon. Gentleman asked me what the response from industry was to the Budget, so I gave it. The director general of the CBI said:
    "We welcome the fact that Government has broadly stuck to the prudent economic line we recommended".
    Sir John Banham of Tarmac said:
    "The Chancellor is on the right track".
    I could give the hon. Gentleman a dozen other quotations. He asked a question, he got an answer and he did not like it.
    Mr. Gallie: Has my hon. Friend considered what an income tax increase of 3p in the pound for people in Scotland would do to industry? What effect would such an increase have on wage bills and on industrial development?
    Mr. Waldegrave: I think that the answer is obvious: jobs would be lost in Scotland and the high road from Scotland to England would have many more Scots on it, to the great benefit of England. It would prove very destructive to the Scottish economy and it would benefit all Scotland's neighbours.
    Mr. McAvoy: Can the Minister answer the complaint by the Federation of Small Businesses about the absence of any measures to tackle the problems of late payment which affects British industry? If he has received any representations from that organisation, will he ensure that his Department—which has a disgraceful record of late payments—increases its efficiency in paying its bills?
    Mr. Waldegrave: The hon. Gentleman makes a fair point. My Department's performance was not good enough about a year ago. I am happy to say that since August last year it has improved and it is now making just under 90 per cent. of payments within the time allowed. My Department's performance was not satisfactory a year ago and we shall see that it improves.

  PRIME MINISTER

    Engagements
    Mr. Mike O'Brien: To ask the Prime Minister if he will list his official engagements for Thursday 11 January. [7106]
    The Deputy Prime Minister (Mr. Michael Heseltine): I have been asked to reply.
    My right hon. Friend the Prime Minister is in Paris representing Her Majesty's Government at the commemorative service for the late President Mitterrand.
    Mr. O'Brien: Tonight's speech by Baroness Thatcher is set against the background of her well-known opposition to a single currency. As the one who wielded the knife that did her in, will the Deputy Prime Minister take this opportunity to reassert the Prime Minister's view that Britain should be at the heart of Europe, and his own stated view that there can be no truly unified single market without a single currency?
    The Deputy Prime Minister: The whole House understands that there is a massive national self-interest in our policies in Europe. The purpose of our presence in Europe is to fight for British self-interest. That was very much the view of my right hon. Friend Lady Thatcher and it is the view of my right hon. Friend the Prime Minister. Each of us does it in his own way and in his own context.
    Mr. Stephen: Has my right hon. Friend received his £50 electricity rebate? Does he agree that the family silver is still there and that it is working for us better than ever, that millions of people have been turned into stakeholders and that the money that they have paid the Government for their shares has been invested in hospitals, schools, transport and in many other essential services?
    The Deputy Prime Minister: I am very grateful to my hon. Friend. I share his anticipation and that of the electricity consumers of this country that their average bill will be £90 less next year than it would have been otherwise.
    Mr. Prescott: Will the Deputy Prime Minister comment on today's damning report from the British Medical Association which says that patients' lives are being put at risk because of the crisis in the provision of acute hospital beds in our country?
    The Deputy Prime Minister: I am grateful to the right hon. Gentleman for raising that very important issue. The fact is that there has been an increase in the number of emergency and accident admissions to hospitals in some parts of the country. The increase is not universal, as there has actually been a decrease in some areas.
    However, this is obviously a matter of concern for the Government. It is being examined by the chief medical officer and the Government are determined to see that all proper steps will be pursued in terms of the improved management of bed utilisation which has flowed from the immensely more sophisticated treatment that is now available. We are determined to preserve the reputation of the health service as one of the most important aspects of public service.
    Mr. Prescott: Even so, is it not true that yesterday an elderly man who had suffered a heart attack died because none of the 12 Yorkshire hospitals could admit him owing to a shortage of beds? Is it any wonder when one looks at how the money is spent by the Government? They have spent an extra £1 billion on bureaucracy and an extra £25 million on company cars, the number of accountants has doubled, and the number of managers has increased from 500 to 20,000—while they have cut the numbers of beds and nurses. Is that not the real reason why there is a crisis in the national health service?
    The Deputy Prime Minister: The whole House is deeply preoccupied with the standards of the health service and with ensuring that they are maintained. It does no service at all to people who are sick or elderly to raise concerns and fears in the way that the right hon. Gentleman has done. Since 1948, the number of beds in the national health service has been falling under all Governments. One of the reasons why that has been happening is that today patients spend less time in hospital, because the means of treating them enable a speedier recuperative process.
    I can reassure the House that, since our reforms of the health service were put in place, 1.5 million more patients have been treated every year. That is the fact that the patients of this country should hear, because it is the reassurance to which they are entitled.
    Mr. Prescott: Why is it that the Deputy Prime Minister will not admit what everyone knows—the Government are destroying one of our greatest assets? They are destroying the national health service, which was given to the nation by a Labour Government and opposed tooth and nail by the Tories.
    The Deputy Prime Minister: The reason why I will not say it is that it is not true. The fact is that we are treating more patients and building more hospitals, the queues are coming down and the health service is safe with the Conservative party.
    Mr. Jessel: On the subject of hospital accident and emergency admissions, is my right hon. Friend aware that at West Middlesex hospital, which I visited at 11 o'clock last night, staff told me that on 30 December, the day of black ice, they had admitted 60 fracture cases compared with the normal daily total of 10? That is bound to have a knock-on effect for the next week or two when taken with the increase in asthma cases this winter. However, the staff are working hard, their morale is good and they should be warmly commended.
    The Deputy Prime Minister: My hon. Friend raises a most important point. There is no question whatever about the dedication of the staff in the health service and their ability to cope with those problems. Nor is there any universal agreement as to the causes of the increase in the number of admissions. The BMA and the chief medical officer are looking closely at the problem. It is a matter for concern, and it will remain so until it has been dealt with.
    Mr. Pike: To ask the Prime Minister if he will list his official engagements for Thursday 11 January. [7107]
    The Deputy Prime Minister: I have been asked to reply.
    I refer the hon. Gentleman to the reply I gave some moments ago.
    Mr. Pike: The Deputy Prime Minister will recall that Tuesday of this week marked the 10th anniversary of the day on which he marched out of Baroness Thatcher's Cabinet. In view of her much trailed speech tonight, can the Deputy Prime Minister tell the House and the nation why, in 1990, he considered that it was essential that she be removed from office?
    The Deputy Prime Minister: The whole House will know that after leaving Baroness Thatcher's Government I did all in my power to secure her re-election. [Interruption.]
    Madam Speaker: Order.
    The Deputy Prime Minister: As I look back on a long life of public service, I regard the fact that I played such a conspicuous role in the 1987 general election campaign, in which Baroness Thatcher was re-elected, as no mean achievement.
    Sir Colin Shepherd: To ask the Prime Minister if he will list his official engagements for Thursday 11 January. [7109]
    The Deputy Prime Minister: I have been asked to reply.
    I refer my hon. Friend to the reply I gave some moments ago.
    Sir Colin Shepherd: Has my right hon. Friend yet had the chance to give careful consideration to the speech made by the Leader of the Opposition in Singapore? If so, has he yet been able to figure out just what a stakeholder economy is?
    Mr. Skinner: Mine's a sirloin.
    The Deputy Prime Minister: How typical of the hon. Member for Bolsover to choose one of the most expensive and luxurious parts of the animal. At least he has the advantage of having found an answer to the question—which is more than his hon. Friend the

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    Member for Brent, East (Mr. Livingstone) succeeded in doing. According to The Guardian this morning, when asked much the same question he had this to say:
    "It's warm words time again. I haven't a clue what it means. If anyone does could they let me know?"
    If I may trespass on the time of the House, I shall explain what it means. The stakeholders that the Labour party would bring back are all our old familiar Labour friends—the unions, the single-issue pressure groups, the local authorities and the co-operatives. A stakeholder society in a Conservative world, on the other hand, is all about home owners, share owners, pension owners, choice, freedom and a competitive society.
    Mr. Gunnell: To ask the Prime Minister if he will list his official engagements for Thursday 11 January. [7110]
    The Deputy Prime Minister: I have been asked to reply.
    I refer the hon. Member to the answer I gave some moments ago.
    Mr. Gunnell: Further to the Deputy Prime Minister's replies on the question of the elderly man from Bradford who died while waiting for a hospital bed, is he aware that the admitting consultant at the intensive care unit in Leeds general infirmary described the case as just the tip of an iceberg, and said that there were hundreds of such cases? Does the right hon. Gentleman agree with the Yorkshire Evening Post that that is a disgrace? What is he going to do about it?
    The Deputy Prime Minister: I have tried, when answering questions similar to the one put to me by the hon. Gentleman, to express the concern of my right hon. Friend the Secretary of State for Health, who shares the anxieties of all hon. Members and the wider community. These are regrettable individual cases; they evoke nothing but sympathy from everyone involved. But it is quite wrong to believe that they are typical of the treatment that people can expect from the health service. It does this House no good in the public's esteem to try to undermine the high reputation enjoyed by the health service.
    Mr. Garnier: Will my right hon. Friend take an early opportunity to come to Leicestershire—and my constituency in particular—where he will see a growing economy, falling unemployment and increasing confidence? All those things are a direct consequence of the Government's economic policies. Will he come to Market Harborough and the constituency generally to make sure that that message gets home even more loudly than hitherto?
    The Deputy Prime Minister: My hon. and learned Friend is absolutely right. The fact is that we have one of the fastest growing economies in western Europe. Unemployment has been falling for 27 months. Our inward investment is growing, and all we must ensure to keep it going is that the Government remain in charge of managing the economy.
    Mr. Malcolm Bruce: To ask the Prime Minister if he will list his official engagements for Thursday 11 January. [7111]
    The Deputy Prime Minister: I have been asked to reply.
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    I refer the hon. Member to the answer I gave some moments ago.
    Mr. Bruce: I wonder whether the Deputy Prime Minister would like to comment on today's opinion poll in The Guardian showing a six-point drop in Conservative support and a corresponding six-point increase in Liberal Democrat support. That could of course be explained by the decision of my hon. Friend the Member for Torridge and West Devon (Miss Nicholson). May I just point out that if that effect is repeated every time a Tory crosses the Floor to our Benches, after four more defections we will lead both Labour and the Tories?
    The Deputy Prime Minister: I do not find it greatly surprising that the hon. Gentleman should seek to draw our attention to the views of the hon. Member for Torridge and West Devon. I find the views that she expressed in June this year slightly more reassuring:
    "In troubled times such as we are experiencing at present when we have been wrongly assaulted for our Government's many fine achievements by an irresponsible press, our task is to stick together. Those old Conservative virtues of loyalty, thrift, hard work and vision must be our priorities whenever we are under fire."
    The hon. Lady was right then.
    Mr. Stewart: To ask the Prime Minister if he will list his official engagements for Thursday 11 January. [7112]
    The Deputy Prime Minister: I have been asked to reply.
    I refer my hon. Friend to the answer I gave some moments ago.
    Mr. Stewart: Will my right hon. Friend take this opportunity to underline the success and importance of inward investment into the United Kingdom, especially into Scotland—[Interruption.]
    Madam Speaker: Order. Let us have a little less noise on the Government Benches below the gangway. Mr. Stewart, repeat your question. I could not hear because of the noisy ones there.
    Mr. Stewart: Will my right hon. Friend take this opportunity to underline both the success and importance of inward investment in this country? What would be the impact of inward investment in Scotland if people who work in Scotland were subject, uniquely in Europe, to the imposition of the iniquitous tartan tax?
    The Deputy Prime Minister: My hon. Friend is right to draw this matter to the attention of the House and of Scottish people in particular. Under the excellent conditions that the Government have created, 100 inward investment projects, worth more than £1 billion and creating or protecting some 12,000 jobs in 1994–95, were delivered to Scotland in that one year alone. There is no question but that the only thing that would flow from the introduction of a Labour Government and the consequent establishment of a tartan tax would be that inward investment, flowing not to Scotland but to England, Wales and Northern Ireland. That would be good news for everyone except the Scots.

Asylum Seekers (Benefits)
3.31 pm
The Secretary of State for Social Security (Mr. Peter Lilley): With permission, Madam Speaker, I should like to make a statement about the regulations to reform benefit arrangements for asylum seekers, sponsored immigrants and others. I have today laid before the House the regulations together with the accompanying Command Paper.
The aim of these reforms, together with the measures in the Asylum and Immigration Bill, are to ensure that the United Kingdom remains a safe haven for those genuinely fleeing persecution; to deal more speedily with their claims; and to discourage unfounded claims from people who are actually economic migrants.
Of course genuine refugees come to the United Kingdom to escape persecution, not to obtain our benefits. Their rights to asylum will not be altered in any way, and anyone who arrives here as a refugee and seeks asylum at the port of entry will continue to have access to benefits while their claim is considered by the Home Office.
More than 90 per cent. of people claiming asylum, however, are eventually found not to be genuine refugees. The vast majority of asylum claimants are economic migrants. The number who come here is influenced by the ready availability of benefits. Relative to Britain, other European countries offer less generous benefits and less opportunity for work and have tightened up the procedures applying to asylum seekers. As a result, since 1993 the number of asylum claims in western Europe as a whole has fallen by more than a third, yet in Britain it has doubled.
Consequently the proportion of all asylum seekers in Europe who come to Britain has more than trebled in the past decade. The huge number of unfounded applications means that the tiny proportion of claimants who are genuine face an unnecessarily long process. The total cost of social security benefits alone for asylum seekers already exceeds £200 million a year, yet more than 90 per cent. of that money goes to people who are not genuine refugees. No responsible Government could ignore that growing misuse of taxpayers' money.
One way to address the problem is to speed up the processing of asylum claims. The revised procedures in the Asylum and Immigration Bill will speed up the processing of claims. But it is crucial that the new procedures are not in turn overwhelmed by a rising tide of unfounded claims. So benefit changes are essential to discourage unfounded claims.
Under the new benefit regulations, those who enter the country as refugees, declaring themselves to be asylum seekers at the port of entry, will still be entitled to claim benefit while the Home Office deals with their claim. So will those who claim after entering the country as visitors, if there has been a significant upheaval in their homeland since their arrival. But at present some 70 per cent. of all asylum claims are made by people who entered the United Kingdom as tourists, students or business men. As such, they demonstrated that they had the means to support themselves while they were here and accepted that they would not be entitled to claim benefit. Yet, under current rules, when they subsequently apply for asylum, they become entitled to benefit. We propose to end entitlement
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to benefit for those who entered the country saying that they were not here to seek asylum but subsequently changed their story. From now on, there will be no benefits for those who misrepresent their case.
British citizens do not receive a benefit while appealing against refusal. Successive Governments have upheld that policy, or every unsuccessful British benefit claimant would have an incentive to appeal against refusal of his or her benefit. However, under the present rules, asylum seekers are allowed to retain benefit during an appeal. Not surprisingly, the vast majority of asylum seekers appeal against rejection. Yet 96 per cent. of their appeals turn out to be unfounded. I therefore propose that once an asylum seeker's claim has been considered and rejected, entitlement to benefit will cease. They will no longer be able to prolong entitlement to benefit by appealing against refusal of refugee status. In that respect, asylum seekers will, in future, be treated in the same way as United Kingdom citizens whose claims for benefit are refused.
Particular concern has been expressed at the prospect of large numbers of asylum seekers losing entitlement on the day when the new arrangements come into force. Of course, I understand those concerns. When the proposals were announced last October, there was an obvious danger of a surge of pre-emptive claims during the consultation period to get on to benefit before the new regulations came into effect. To discourage that, we announced that those who made in-country claims or appeals after 11 October would lose benefit entitlement once the regulations took place. That announcement seems to have dampened the surge of pre-emptive claims. I have taken note of concerns about handling a large number of benefit terminations simultaneously and the transitional impact that it would have on local authority finances. I have therefore decided to amend the transitional arrangements significantly. No one will now lose benefit when the new regulations come into effect on 5 February.
The 13,000 or more asylum seekers who have made in-country claims or appeals since 12 October and are receiving income support, housing benefit or council tax benefit will continue to get benefit unless or until their claim or appeal is subsequently rejected. That transitional protection will substantially reduce the potential impact on local authorities.
However, the Government also propose to assist local authorities with any unavoidable additional costs arising under homelessness legislation or the Children Act 1989. My right hon. Friends the Secretaries of State for Health and for the Environment will discuss the details with local authority associations shortly. I believe that this fully meets the most pressing concerns put to the Government by the Social Security Advisory Committee and local authorities. Taken together with measures proposed in the Asylum and Immigration Bill and further work between my Department and the Home Office on improving asylum decision times and priority setting, these changes will make a significant contribution to addressing the problem of bogus asylum seekers.
The Government further propose that people from abroad whose leave to enter or remain in the United Kingdom is subject to some limit or condition—for example, that they should not have recourse to public funds—should be excluded from non-contributory benefits. That will bring these benefits into line with exclusions which already apply under income support, housing benefit and council tax benefit rules.

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The arrangement whereby people are allowed into this country on the understanding that a sponsor has promised to support them, has been widely abused. Nearly half the sponsors renege on those agreements. The regulations will hold sponsors to their agreements and benefits will become payable only if the sponsor dies or the sponsorship agreement breaks down after five years. Finally, the Government propose to amend the arrangements to remove the Secretary of State's discretion to make interim payments in some circumstances.
No responsible Government could fail to tackle a situation where well over 90 per cent. of benefit is not going to genuine refugees. These reforms will ensure that the United Kingdom remains a safe haven for genuine refugees. They will help to deal with their claims faster and they will discourage bogus claimants who are bettering themselves at the taxpayers' expense. The changes that I have made will end concerns over the transitional arrangements, alleviate burdens on local authorities and protect the British taxpayer. I believe that the measures are both fair and necessary and I commend them to the House.
Mr. Keith Bradley: Is it not clear that the Secretary of State's statement is further evidence of the harshness of his Administration? Why did the Government not listen to the views of all the groups with an interest in the subject, such as immigration welfare agencies, the churches and local authorities throughout Britain, who urged them not to start down this road?
The Opposition clearly support proper measures to stop fraudulent asylum applications, but surely tackling the appalling administrative delays in the procedures would be far more effective than this indiscriminate attack on applicants?
The Opposition welcome some of the changes that have been forced on the Secretary of State, but a number of issues still require clarification today and I should like to ask the right hon. Gentleman a number of questions.
First, the right hon. Gentleman, in his statement, claims that 90 per cent. of all applicants are not genuine. However, the Government's own figures show that 23 per cent. of applicants are either granted refugee status on conventional grounds or are granted exceptional leave to remain. Does the right hon. Gentleman accept the Government's own figures in that respect?
Secondly, what are the implications for parliamentary democracy of the right hon. Gentleman's authorisation of letters to asylum seekers telling them that their benefits will be cut off on 8 January this year? Does not that show that the right hon. Gentleman expected to push the proposals straight through the House without any parliamentary scrutiny?
Why did the right hon. Gentleman originally set a timetable of only 21 statutory days between laying the regulations and their coming into force, when 18 of those days were during the Christmas and new year recess with no opportunity for hon. Members to comment effectively on the draft regulations?
Why was the Social Security Advisory Committee given only one month to consult on those vital changes when its usual period of consultation is considerably longer than that? Why has the right hon. Gentleman not waited, as he has been asked to do by many hon.
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Members, to have sight of the report of the Select Committee on Social Security, which is currently holding an inquiry into the proposed changes? Would it not have been better to have the benefit of the evidence that was to be put before that Committee?
Has the right hon. Gentleman seen the evidence of his own officials, who, when summoned before the Committee and asked how they expected asylum seekers to survive after 8 January—the original date of implementation—were quite unable to answer, merely replying that
"Ministers believe that in reality the majority of claims are unfounded."
How will people manage in that situation?
What consideration has been given to representations to the Social Security Advisory Committee that the distinction between port and in-country applications is an artificial one? What assessment has the right hon. Gentleman made of the evidence from various refugee organisations that there are good reasons why many applicants do not claim asylum until after they have entered the country, such as having a well-founded fear of officialdom, wishing to seek an interpreter or legal advice, or wishing to make contact with family and friends to give them support when they make the application?
Is the Secretary of State aware that, when the then Home Secretary introduced the Asylum and Immigration Appeals Act 1993, he fully anticipated a rise in the number of applications and set a three-month limit for decisions on those applications, but, owing to Home Office incompetence, the average waiting time is 19 months? Does not that backlog mean that asylum seekers who are unable to find work or alternative sources of funding will be unable to survive for such long periods without the support of the social security system?
Will the Secretary of State confirm that, following the revision of the original regulations, the expected savings are still an estimated £200 million? Will not they be offset, however, by the appalling additional cost to local authorities of, for instance, having to take children into care? Will the right hon. Gentleman confirm that authorities will receive a 100 per cent. reimbursement of those costs?
Why did the Secretary of State not wait for the outcome of the judicial review sought by the London boroughs of Westminster and Wandsworth—Tory flagships, I believe? What consideration has he given to the remarks of his former Cabinet colleague, the right hon. Member for City of London and Westminster, South (Mr. Brooke), in his support for the Westminster application? Should not the Home Secretary accept amendments to the Asylum and Immigration Bill—currently in Committee—which gives the power to deny child benefit to hundreds of thousands of people who are lawfully settled in this country?
Why did not the Secretary of State accept the firm and overriding conclusion of his own Social Security Advisory Committee that the proposals should not be proceeded with? I assure the right hon. Gentleman that we shall continue to oppose them vigorously in debate, and ask him to confirm that he will honour the commitment to allow a full debate in the House before

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the proposals are implemented. Opposition Members wish to ensure that we afford full protection to genuine asylum seekers.
Mr. Lilley: The Opposition's response reveals that they have not changed an iota. They still oppose every measure that is intended to ensure that money is put to good use, and goes to those who are genuinely entitled to it rather than those who are not.
The hon. Member for Manchester, Withington (Mr. Bradley) said that the proposals were harsh. In many respects, however, they simply put asylum seekers on the same footing as British citizens, and endorse rules that have been endorsed by Labour Governments for British citizens. If the hon. Gentleman considers that harsh, he should have opposed his own Government.
The hon. Gentleman believes that the Labour party would support proper measures to deal with the problems, but has suggested no such measures, and no way of ensuring the making of savings and proper direction of the £200 million that will be saved. Labour has opposed every change and improvement in the treatment of asylum seekers made by the Government over the past 15 years.
The hon. Gentleman asked why I had said that more than 90 per cent. of claims were not from genuine refugees. That was the finding of Home Office investigations and the subsequent reviews carried out by judicial adjudicators. We grant exceptional leave to remain, but that does not mean that the people involved are refugees; such leave may be given for humanitarian reasons—because someone is ill, or has suffered a mishap since entering the country. A person may be allowed to remain here temporarily, although the circumstances—[Interruption.] The hon. Member for Blackburn (Mr. Straw) would do well to listen to my answer, rather than nattering on about matters that he manifestly does not understand. [Interruption.] The hon. Gentleman clearly does not understand the difference between exceptional leave to remain, granted by the Government—[Interruption.]
Madam Speaker: Order. The Minister is attempting to answer questions. If the hon. Member for Blackburn wishes to ask a question I shall look his way later.
Mr. Lilley: The hon. Member for Blackburn does not know the difference between exceptional leave to remain and refugee status under the international United Nations convention, which is a different matter.
The hon. Member for Withington also asked why the original suggestion was that the regulations should come in on 8 January. That was the earliest date that they could be introduced, given the statutory consultation period. We said before the recess that we would allow time for debate, and time has been put aside for debate over the next 21 days, before the regulations come into force on 5 February. I should have thought that the hon. Gentleman would welcome that rather than showing a grudging attitude towards it.
The hon. Gentleman said that the distinction between those who claim at the port and those who claim subsequently within this country, having entered as visitors, tourists or business people and then changed their story, is artificial. Most of us think that if people have
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been asked at the port for their reasons for coming to the country and have said that they are coming here as tourists, business people, visitors or students, demonstrated that they have the means to support themselves during the period of their stay here, and accepted that they will not be a burden on public funds, but subsequently, after entry, change their story, albeit after talking to legal advisers who may suggest that they change it, it is not artificial to prevent them from being treated on the same basis as those who honestly arrive as refugees and claim at the port of entry.
I confirm that the long-term savings should be of the order of £200 million. Of course there will be an impact because of the transitional measures that we have announced, and the costs of helping local authorities remain to be determined. However, we do not think that those will be nearly as large as some alarmist suggestions would have us believe, because there will also be savings to local authorities because of the reduced flow of asylum seekers that will result from the discouraging effect on bogus claims of the measures that we have introduced.
It would have been foolish for us to wait until the end of the judicial review sought by Westminster council, because one of the reasons for the review was that the council did not know the outcome of the consultation process. We have now announced the outcome, and I believe that it will be satisfactory to boroughs in London and elsewhere that have problems in that respect. I believe that the measures in general show that we have thoroughly considered the representations made during the consultation period both by concerned lobbies and by local authorities, and have fully met the most serious concerns that they expressed.
None the less, the basic question remains: how could any Government not tackle a situation in which we are paying out more than £200 million, 90 per cent. of which goes to people who are subsequently found not to be genuine refugees?
Several hon. Members rose—
Madam Speaker: Order. After that initial Front-Bench exchange, which has taken about 20 minutes, I now insist on brisk questions and answers. If Members seek to put questions they must be brisk and to the point, and I want the answers likewise.
Sir Jim Lester: I am grateful to my right hon. Friend for the fact that the Government have considered the widespread concerns of many Conservative Members and of many other people. He has responded to those concerns by dealing with the worst situation that many of us envisaged, and I assure him that what he has done will be helpful, bearing in mind what we foresaw might have happened. I still believe that we should shorten the time taken for appeals, and I ask my right hon. Friend to re-examine the position of people who apply for asylum within a short time of coming into the country. I do not mean the people whom my right hon. Friend described, but there is evidence that many genuine asylum seekers apply within two weeks of arrival.
Mr. Lilley: I am grateful to my hon. Friend for his support for the changes that we have introduced, as a result of discussions, not least those that I have had with him over the past few months. I believe that those changes meet the greatest concerns about the transitional period,

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but I agree that we must do all in our power to shorten the time taken to assess claims and appeals. As for people who make claims within a short time after entering the country, close inspection of the figures shows that the case for a change is much weaker than some lobbyists have suggested. It would be difficult to make a change in such a way that it did not validate those who have entered the country with one story but have subsequently changed it, in a way that most people would not think should be a justification for receiving benefit. That is especially so in view of the fact that all such people will have demonstrated that they had the means to support themselves, and they should be held to that statement and that promise.
Ms Liz Lynne: Is it right that persecuted people should now become homeless and destitute? A number of genuine asylum seekers who apply in-country have been tortured. Should not they be treated with compassion, and not kicked in the teeth? What assessment has the Secretary of State made of the number of children who will have to be taken into care under the Children Act? What will be the cost of that to the public purse? Will he guarantee that we will have a full debate on the matter on the Floor of the House? Will he take note of what his own advisory committee said and withdraw the regulations?
Mr. Lilley: The hon. Lady's contribution was characteristically emotive and irresponsible. While this is an emotional subject, it is not a matter on which one should be emotive, which means stirring up unjustified emotion. Of course there is at present a burden on some local authorities and others who care for children, including children who are sent unaccompanied to this country. For the latter group, the changes that I have announced today will make no difference. There is no reason why there should be any increased cost as a result of these responsibilities, nor would local authorities be obliged to take children into care. They must only see that the children are cared for, as is presently the case.
Mr. Peter Brooke: May I express my appreciation to my right hon. Friend for the manner in which he has responded to the representations that have been made to him? Does he accept that while the negotiations with the local authority associations are continuing, the devil will remain in the small print? Does he further accept that nothing could do more harm in terms of relations between the host community and asylum seekers than the cost simply being transferred to council tax payers?
Mr. Lilley: I am grateful to my right hon. Friend for his support for the changes that we have introduced. I hope that they will meet the needs and concerns of boroughs and local authorities in areas where there are concentrations of asylum seekers. It will be important to get the details right, but we will be aiming to offer a significant contribution where there are additional unavoidable costs arising from the changes for local authorities. We have significantly reduced the extent of such costs by the transitional measures that I have announced.
Mr. Frank Field: Does the Secretary of State recall the evidence given by anti-fraud officers which suggested that many of these claims were not made by asylum seekers—bogus or otherwise—but by gangs
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working the social security system? Will he report to the House on the steps he intends to take to counter such benefit fraud before the House votes on the regulations so that we can see the extent of claims that have arisen because of people wrongly claiming benefit?
Mr. Lilley: There can of course be cases of fraud of the type that the hon. Gentleman has mentioned, and we introduced fingerprinting to make that much more difficult. We believe that that has largely eliminated the problem. The amount concerned is a minute fraction of the hundreds of millions of pounds we are talking about today. That money is going to people who are genuinely from abroad but are not genuine asylum seekers and who have come here as economic migrants. I believe that it is right to tackle these problems. I remind the hon. Gentleman that his party strongly opposed the introduction of fingerprinting for asylum seekers, a measure which has enabled us to tackle and largely eliminate the very fraud to which he refers.
Sir Nicholas Scott: In terms of recompensing local authorities which have to bear the burden of expenditure resulting from both homelessness and the provisions of the Children Act, is it not the case that not only will authorities be recompensed for future expenditure but for backdated costs which they have already borne?
Mr. Lilley: I am not certain that there are any costs of the kind my right hon. Friend suggests, but he is a distinguished former Social Security Minister and I would not give a 100 per cent. guarantee on that. I shall certainly look at the point that he has made. We believe that the problem of people who would have lost benefit on the day the regulations came into force has been eliminated by the new transitional arrangements. Therefore, it is only to the extent that the problem is on-going that any costs can arise. We will be seeking to assess with local authorities the extent of additional and unavoidable costs arising from that.
Ms Diane Abbott: Does the Secretary of State accept that the many hundreds of thousands of refugees and asylum seekers who were genuinely worried and frightened by his original proposals will be relieved at his partial backdown this afternoon? Will he take the opportunity to talk to his colleagues in the Home Office, and assure them that it is not too late to reconsider the Asylum and Immigration Bill? That legislation—like his original proposals for change in the regulations—is brutal, ill-thought-out and unworkable, and it will impact harshly on people who are resident in this country whose skins happen to be a different colour from his own.
Mr. Lilley: It is wrong of the hon. Lady to suggest that anything in the measures or in the Asylum and Immigration Bill is based on race or will treat people of different colour in any different way. Part of the problem that we face now is an upsurge in the flow of economic migrants from eastern Europe. That migration is hard to justify on any conceivable grounds of refugee status, and that is why we are tackling the problem.
I hope that the hon. Lady will withdraw her remarks and not seek to exacerbate tensions between communities. One of the intentions of good asylum control is to cement and harmonise those relations.
Sir Patrick Cormack: I thank my right hon. Friend for responding as he has, but could

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he clarify one point in his statement? Did he say that he would remove the Secretary of State's discretionary powers? If that is the case, could he explain why?
Mr. Lilley: I am grateful to my hon. Friend for his support. The proposal to which he refers gives a discretionary power to the Secretary of State, or those acting on his behalf, to give interim benefit payments in cases in which it is known that an individual has an entitlement to benefit, but the amount of the benefit has not yet been calculated. The way in which the rules are framed suggests that the Secretary of State may have discretion to give benefit where an appeal is going on, but it is not known whether the person has an entitlement to benefit. We are trying to eliminate that uncertainty so that only in cases in which entitlement to benefit, but not the amount, has been established can the Secretary of State authorise an interim payment to enable the person to get by.
Mr. Tony Banks: I welcome the statement because it moves the line; however, it does not change the principle. The Secretary of State said that extra support would be made available to local authorities. Will the additional support be ring-fenced? If a local authority, for example, was spending at or above its standard spending assessment, would the additional support be on top of its SSA? It is in areas such as mine in the east end where this proposal will have its greatest impact.
Mr. Lilley: I am grateful to the hon. Gentleman for his welcome for the changes, which is unique among Opposition Members. I have said that there will be discussions between my right hon. Friend the Secretary of State for the Environment and the local authorities about the treatment of local authorities. I hesitate to pre-empt any arcane implications that those discussions might have for the complex and, to me, nearly incomprehensible financial arrangements which exist for local authorities.
The intention, however, is to provide a significant degree of help in cases in which there is additional and unavoidable cost—which will be monitored and, by implication, measured ex post facto rather than doled out through the normal SSA system.
Mr. James Couchman: May I welcome the transitional arrangements that my right hon. Friend has announced today? I welcome the fact that he proposes to continue allowing benefit to people who seek asylum when they first make UK landfall at a port of entry. Will he confirm to the House that his proposals are fully in accordance with international law on those points?
Mr. Lilley: I am grateful to my hon. Friend for his support. I can confirm that we have taken full advice to ensure that what we do is in accordance with the letter and the spirit of international law.
Mr. Bernie Grant: I welcome the Minister's change of heart in relation to some of the regulations, but he has not gone far enough. Will he take this opportunity to make a public apology to those asylum seekers in my constituency who were written to by officials in his Department before Christmas to tell them, illegally, that their benefits would be withdrawn on 8 January? He has written to me about it but has not made a public statement. Could he do so and also say what will
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happen to asylum seekers whose appeals have been turned down and who are waiting to leave the country? How will they live and what is going to be done with those people and their children?
Mr. Lilley: I am grateful to the hon. Gentleman for his welcome for the changes. They are not, of course, in any way a reversal, but to avoid an upsurge of claims it was essential to announce, as we did, the impact that would be made by the changes on those who made claims in the interim. That has served its purpose. It is now possible the amend the regulations to ensure that there is no withdrawal of benefit from anybody when they come into force.
As for the issue about which I have written to the hon. Gentleman, where people were prematurely given an indication of the date on which the regulations might have come into force, I am glad that he has made his letter public. Our regret that that premature statement was made is therefore already in the public domain. Of course, it was essential at some stage that people knew what the arrangements would be.
The hon. Gentleman asked what would happen at the end of the appeal stage when, having exhausted all their appeal rights, people are found not to be genuine claimants. At present, they lose the right to benefit and the right to work in this country. There will be no change in that. Of course, once they are found, having exhausted all appeal rights, not to be refugees and if they are not given exceptional leave to remain, they will be expected to return to their own countries.
Mr. Nicholas Baker: Does my right hon. Friend accept that our international obligations, as well as our duty to genuine refugees, demand that we reduce the magnet that the benefits and jobs available in this country currently provide? Is he aware that he will have the tacit support and understanding of many Government Ministers in African countries for doing precisely that? Is he aware that the current rising tide of unfounded applications for asylum is threatening good race relations in this country?
Mr. Lilley: My hon. Friend's experience in this area gives authority to what he has just said and I entirely endorse it. The measures that we have taken are absolutely right and it would be grossly irresponsible, as the Opposition's position is grossly irresponsible, not to make any changes either to the asylum procedures under the Asylum and Immigration Bill or on the benefits side. They are effectively allowing thousands and thousands of people with unfounded asylum claims to block up the procedures and affecting those with genuine claims. We should put those with genuine claims first.
Mr. Neil Gerrard: The Secretary of State said that by taking away benefits while someone is waiting for an appeal, he is merely putting them on a par with any other person waiting for an appeal. Does he not understand that asylum seekers who wait for appeals may be without money for several months and may be forced, if they have no friends to support them, to go back to where they came from? People who might well have won appeals may end up going back to countries where they are in danger of being persecuted. Could he give an example of someone else waiting for an appeal who would be under the same sort of pressure?
Mr. Lilley: I endeavoured to explain to the House that the rules will be effectively identical for both British

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citizens and asylum seekers. No other means of support is made available for people whose claims for income support, say, are rejected during the period in which they appeal against such decisions. I remind the hon. Gentleman that, in the case of asylum seekers, 96 per cent. of appeals are finally rejected.
Mr. David Shaw: Can my right hon. Friend confirm that nine out of 10 applications for asylum are ultimately turned down and that those people have been costing the country some £200 million? If that is the case, my constituents welcome the decision that he has announced today.
Mr. Lilley: I can confirm the figures that my hon. Friend has given. As he knows, the Opposition have pretended recently to be against the abuse of the welfare system. Of the benefits that go to domestic claimants, the most vulnerable benefits are subject to some 10 per cent. abuse, but at least 90 per cent. gets through to those who are genuinely entitled to it. In the case of benefits for asylum seekers, the proportions are reversed, yet the Labour party wants that position to remain unchanged.
Mrs. Maria Fyfe: Does the Secretary of State believe that no child will end up in care as a result of his disgraceful statement? If he does not, will he estimate how many children will end up in care?
Mr. Lilley: I have tried to explain that no change that I have announced today will affect the most heart-rending cases where children are sent to this country unaccompanied. As for children accompanied by families, it is open to local authorities to help the family look after its children. Local authorities are not required to take the children into care.
Mr. Robert G. Hughes: Does my right hon. Friend agree that his response on transitional relief, which will be warmly welcomed by any reasonable person, represents a response to the most persuasive evidence that was given in public to the Social Security Select Committee inquiry into this matter? Is not the lesson to be learnt that he has responded fully to those concerns because they were factually based, and those people who feel that they have not been responded to should think again about the emotive language and exaggeration that they use in putting forward their case?
Mr. Lilley: I entirely endorse the points that my hon. Friend has made, which are given greater authority by the fact that he has been chairing the sub-committee of the Select Committee investigating that matter. I naturally look forward to receiving his report as soon as it is available.
Ms Angela Eagle: If the evidence for those changes is so overwhelming, why did the Secretary of State's adviser, the Social Security Advisory Committee, in an unprecedented statement, say that it wanted the draft regulations completely withdrawn?
Mr. Lilley: It is far from unprecedented that the Social Security Advisory Committee, whose job is to consider and receive all the representations made following the Government's announcement of proposals for social security, should say that a proposal should be withdrawn. Those proposals invariably generate hostile representations. I have often been told to withdraw proposals before I have responded to the most serious and
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poignant concerns that they raise. I remind the hon. Lady, however, that almost every other country in Europe has tightened up either on its procedures or benefits, or both. It is extraordinary that the Labour party should think that this country should take an ever-rising proportion of asylum claimants in western Europe. The number that we take has already quadrupled and the Labour party clearly wants our share to go up even more.
Mr. Peter Bottomley: May I anticipate the response of the church leaders in south-east London and say on their behalf that they will be grateful that the transitional arrangements have been modified? However, there remains the problem of the children of people who are unauthorised to be here but who have been here for more than five years, who are then sent away. This may be a Home Office issue. The real test is that people who come from abroad and change their stories will no longer be able to get the benefits that are denied to people in this country, who may be in an even worse position.
Mr. Lilley: I very much welcome the points that my hon. Friend made. He is right to say that there is a clear distinction between people who come to this country as refugees precisely because they trust this country and declare their claim for asylum at the port of entry, and those who tell the immigration authorities one story but subsequently change their story once they are in the country, having received advice that it may be in their interest and help to get benefits.
Mr. Jeremy Corbyn: Will the Secretary of State confirm that the underlying principles of his draft order are totally unchanged and that it will simply happen further along the line? While those whose asylum applications have been refused legitimately wait for an appeal to have their cases reconsidered, they will be forced into destitution. The Secretary of State intended that to happen on 8 January but has been forced to put it back by a month.
Mr. Lilley: I do not often agree with the hon. Gentleman, but I respect his continuing concern about this issue and the consistency of his line on asylum seekers. He is right to say that, essentially, the change in the transitional arrangements means that no one will have benefit withdrawn on the day that the regulations come in but if, in future, they are found not to be genuine asylum seekers, they will lose benefit at that point. That seems reasonable and sensible, although alas it may not to the hon. Gentleman.
Mr. John Wilkinson: May I, as the Member who has the principal port of entry to the United Kingdom, Heathrow, in his borough, warmly commend my right hon. Friend for his clarity of mind, consistency of purpose and courage in tackling what, to my constituents, is obviously an abuse, which enables public funds to be disbursed to their disbenefit? May I also say that it is important, as local authority representatives from Hillingdon have made clear to the Under-Secretary of State for the Environment, my hon. Friend the Member for Croydon, Central (Sir P. Beresford), that something be done to provide funding to accommodate the unaccompanied refugee children who continue to pour in through Heathrow?
Mr. Lilley: I am grateful to my hon. Friend, who rightly has specific constituency concerns about that issue.

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I am glad that he welcomes the measures that we have introduced. I will convey the final argument that he made to my right hon. Friend the Secretary of State for the Environment, but I believe that the changes that we have announced will mean that local authorities, and people with genuine anxieties about the transitional arrangements, have their concerns properly met. Like my hon. Friend, I believe that the vast majority of people in this country, whatever their colour or ethnic origin, will support those measures.
Ms Glenda Jackson: If these proposals are not withdrawn in their entirety, there will undoubtedly be additional responsibilities for all local authorities under the Housing Act 1985 and the Children Act. Will the Secretary of State give a figure for the amount of transitional relief and the length of time that that will run? My local authority, Camden, expects to be confronted with an increase of £4.6 million.
Mr. Lilley: I said in my statement that we would seek to help local authorities that have unavoidable additional expenditures. We believe that those expenditures will be far less than the number that the hon. Lady quoted, which ante-dates the change in the transitional arrangements, which has relieved local authorities of the prospect of the biggest potential impact on their budgets.
When the hon. Lady speaks about removing those measures in their entirety, she is saying that we should continue to spend £200 million, the vast bulk of it going to people who will be found not to be genuine asylum seekers. Where else in the welfare budget or the tax system do she and the Labour party propose to obtain £200 million? Will it come from genuine domestic claimants in order to be given to bogus asylum seekers?
Mr. Anthony Coombs: Does my right hon. Friend agree that the widespread abuse of our social security system by bogus asylum seekers is widely resented in this country and is bad for good community relations? In that context, is it not significant that Amnesty International has identified abuse of the asylum system as a significant and difficult problem, not only because of its effects on the taxpayer but because of the way in which it discriminates indirectly against genuine asylum seekers?
Mr. Lilley: I agree entirely with my hon. Friend. He is right to quote Amnesty International, which did say that that is a genuine problem and, in so doing, rebutted effectively the arguments of Opposition Front Bench Members, who have tried to pretend that it is a non-problem.
Mr. Stephen Timms: The Secretary of State knows that the Social Security Advisory Committee, which he appointed, has recommended to him that the proposals that he made should not only be abandoned, but scrapped. Given that he appointed that committee and that the report's recommendation about asylum seekers is perfectly explicit, why has he rejected its recommendations?
Mr. Lilley: I am not sure about the fine distinction between abandoning and scrapping, but the reason why I have done what I have done is that, having considered the representations that the Social Security Advisory Committee had received and relayed to me, I believed that
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the most sensitive issue was that of transitional problems—the possibility of sudden withdrawal of benefit from a large number of people. It was necessary to create that prospect to prevent an upsurge of claims and, having served its purpose, it was reasonable to change that measure in that respect. I have listened to what the committee has said and to what the local authorities, which we have also consulted, have said and I have produced, I believe, a package that most sensible people would consider to be both fair and essential.
Mr. Harry Greenway: May I associate myself with the remarks of my hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson)? Is my right hon. Friend aware of the housing difficulties in the London borough of Ealing and other boroughs near to Heathrow airport, where, in a recent year, the entire new housing supply had to go to asylum seekers? Has he any plans to ensure that there is a greater dispersal of asylum seekers and appeals so that people on the housing list in Ealing and other boroughs who have been there for months and years are not pushed out of the queue unfairly?
Mr. Lilley: I understand my hon. Friend's concerns. There are certainly no powers at the Government's disposal or within the regulations to determine where people live when they have the right to live in this country. But it creates problems when an extra 50,000 people a year come to this country, the vast majority of whom are not escaping persecution, but seeking economic betterment. The amount of extra housing, schools and facilities that those additional numbers require in this country is over and above the £200 million in benefit costs to which I referred.
Mr. Malcolm Chisholm: I have received letters from a large number of constituents who are outraged at the Secretary of State's proposals, which are still unchanged apart from the transitional period. Why does he continue to make the fatuous analogy between those appealing against the refusal of benefit and those appealing against the refusal of asylum? Even right-wing Conservatives should feel slightly uneasy at the prospect of a large number of genuine asylum seekers—even according to the Government's figures—no longer having the means to apply or appeal.
Mr. Lilley: I am astonished that the hon. Gentleman cannot see the similarity between an asylum seeker appealing against a decision that deprives him of benefit and a British person appealing against a decision that deprives him of benefit. I do not discriminate between those who come from abroad and British citizens, and do not think that we should do so in the benefit system.
Mr. John Marshall: Does my right hon. Friend accept that his statement will be warmly welcomed by the vast majority of people in this country who want Britain to be a safe haven for genuine asylum seekers, but not a soft touch for economic migrants? Will he confirm that the rate of application for asylum in 1995 of 40,000 a year was equivalent to 200,000 applications in a five-year Parliament, and that no Government of any political persuasion could have done anything but take action?
Mr. Lilley: My hon. Friend is absolutely right. In fact, the position is even more daunting than he suggests because the number of claims is rising rapidly and might

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continue to rise if the changes that we are making, both in the regulations and the Asylum and Immigration Bill, do not go through. We cannot assume that the level of claims will settle at 50,000 a year; it may continue to rise. This country's share of total claims for asylum made in Europe has risen from about 4 per cent. a decade ago to 13 per cent., and is set to go on rising if we do nothing to bring our system more in line with those of our continental partners.
Mr. David Alton: Throughout the statement the Minister excluded people who are in the United Kingdom with exceptional leave to remain from falling within the "genuine" category. Does he not think that in doing so he does them a disservice and that it would have been better to have told the House that, even according to his figures, the percentage was 75 per cent. rather than 90 per cent.? Does he accept that, as the figure represents just 0.25 per cent. of his Department's entire budget, he has turned a molehill into a legislative mountain? Many in the House will wish to vote against the regulations, so will he say whether there will be a debate on the Floor of the House or in an obscure Committee Room? Will we all have the chance to vote on the proposals? Will they be placed before Parliament in its total authority?
Mr. Lilley: The simple fact is that anyone receiving exceptional leave to remain will first have been found by the authorities not to be a genuine asylum seeker. I do not see why I should give a different verdict from that given by officials who have considered the case in the light of the official definitions of refugees. Those people may encounter mishaps; they may come here from a country where there is no persecution and their claim may be heard. They may be sick and we may decide, for humanitarian purposes, to allow them to stay for a while. But that does not make them genuine refugees fleeing from political persecution and we should not present them as such. Where does the Liberal party propose to obtain £200 million from within the welfare budget? Would it take it from pensioners? One per cent. off pensions would be a small figure in the hon. Gentleman's terms and would finance the continued existence of unwarranted benefits for people who are not genuine refugees.
Mr. Geoffrey Clifton-Brown: Does my hon. Friend agree that it is conceivable that the Government would have been censored by the Audit Commission had they not taken measures to prevent the abuse of £200 million in the social security system? Does he further agree that the measure is likely to improve race relations because the last thing that genuine asylum seekers and immigrants want is people falsely using the system in that way?
Mr. Lilley: My hon. Friend makes an important point. We could well be open to investigation by the Audit Office or the Public Accounts Committee if we continued a system in which a high portion of benefit expenditure went to those subsequently found not to fulfil the conditions for which it was intended. In those circumstances, it is only right that we should act responsibly. I do not want to wait until I am censored before I act. That seems to be the attitude of the Opposition.

Business of the House
4.25 pm
Mrs. Ann Taylor: Will the Leader of the House make a statement about the business for next week?
The Lord President of the Council and Leader of the House of Commons (Mr. Tony Newton): The business for next week will be as follows:
MONDAY 15 JANUARY—Second Reading of the Finance Bill.
TUESDAY 16 JANUARY—Opposition day (1st allotted day). Until about 7 o'clock there will be a debate entitled, "The threat to the BBC World Service", followed by a debate entitled "Cuts in the training budget and the abandonment of the Community Action programme". Both debates will arise on Opposition motions.
WEDNESDAY 17 JANUARY—Until 2 o'clock there will be debates on the motion for the Adjournment of the House.
Until 7 o'clock there will be motions on the Employer's Contributions Reimbursement Regulations, Housing Benefit, Supply of Information and Council Tax Benefit (Amendment) Regulations, Income Support (General) (Jobseeker's Allowance Consequential Amendments) Regulations, the Jobseeker's Allowance Regulations and the Social Security (Back to Work Bonus) Regulations.
Remaining stages of the Education (Student Loans) Bill.
Motion on the Potato Marketing Scheme (Commencement of Revocation Period) Order.
THURSDAY 18 JANUARY—Debate on the Army on a motion for the Adjournment of the House.
FRIDAY 19 JANUARY—Private Members' Bills.
MONDAY 22 JANUARY—Second Reading of the Nursery Education and Grant-maintained Schools Bill.
The House will also wish to know that European Standing Committee B will meet at 10.30 am on Wednesday 17 January to consider European Community documents Nos. A4-0102/95; SEC(95)731; CM 2866; and two unnumbered reports relating to the operation of the treaty on European Union and the unnumbered explanatory memorandum submitted by the Foreign and Commonwealth Office on 8 December 1995 relating to the report of the study group preparing for the 1996 intergovernmental conference.
[Wednesday 17 January:
European Standing Committee B—Relevant European Community documents: (a) A4-0102/95, Resolution of the European Parliament on the functioning of the Treaty on European Union; (b) CM 2866, Report of the Council on the functioning of the Treaty on European Union; (c) SEC(95)731, Report by the Commission on the operation of the Treaty on European Union;(d) Unnumbered, Report by the Court of Auditors on the operation of the Treaty on European Union;(e) Unnumbered, Report of the Court of Justice on certain aspects of the application of the Treaty on European Union; and (f) Unnumbered, Report of the Study Group preparing for the 1996 Intergovernmental Conference. Relevant reports of the European Legislation Committee:

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(a) HC 70-xix (1994–95) and HC 239-I (1994–95);

(b) HC 70-xix (1994–95) and HC 239-I (1994–95);

(c) HC 70-xix (1994–95) and HC 239-I (1994–95);

(d) HC 239-I (1994–95); (e) HC 239-I (1994–95);

(f) HC 51-v (1995–96).]

I am not yet able to give details of the business for the following three days, but I expect to provide for an Opposition day and that Government business will be taken on Thursday 25 January. On Friday 26 January, the business will be private Members' Bills.
Mrs. Taylor: I thank the Leader of the House for that statement. He was present during the previous statement by the Secretary of State for Social Security on the asylum seekers benefit regulations. During questioning, the Secretary of State said that time had been set aside for a debate on those regulations. As those regulations were laid today and prayed against today, can the Leader of the House let us know when that debate will take place?
The Leader of the House announced a debate on Thursday on the Army. He will be aware of the widespread disquiet on both sides of the House that the Government are considering buying military ambulances from Austria, when British-built ones are available which represent better value for money, are preferred by the armed forces and are interoperable with those in other NATO countries. Will the Leader of the House ensure that Ministers explain their current thinking about the matter in the debate on Thursday? Will he also make sure that Ministers reach no final decisions about the issue until hon. Members have the chance to debate it in the House on Thursday, because it is so important to so many people?
Secondly, the Leader of the House must be aware of the depth of public concern and fear about the pressures that are facing hospital accident and emergency services. The subject was raised during Prime Minister's questions today and I thought that the Deputy Prime Minister was amazingly complacent about the whole issue. We hear almost daily about dangerously ill patients who have been driven around the country or who have been flown by helicopter to other parts of the country in order to find intensive care beds. Those incidents have sometimes had fatal consequences.
Will the Leader of the House be more reasonable than the Deputy Prime Minister in his approach to the issue, and will he acknowledge that our constituents are genuinely and deeply concerned about it? Will he ensure that there is a debate in Government time about the very responsible, if alarming, British Medical Association report, which was published today?
Finally, is the Leader of the House aware that yesterday the Select Committee on European Legislation recommended that five directives should be debated together on the Floor of the House because of their interrelationship and their intrinsic importance? Given the Select Committee's many previous requests that issues be debated on the Floor of the House—most notably its recommendations lating to European Union enlargement—and given that many of those recommendations have been ignored, will the Leader of the House ensure that the Committee's unanimous recommendation is upheld and that the items on economic and monetary union, convergence and social protection are debated on the Floor of the House as soon as possible? The
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British public will not understand if the Government prevent debate in Parliament on fundamental issues of that kind before the intergovernmental conference.
Mr. Newton: Perhaps I may take the hon. Lady's questions in reverse order. First, I have not had an opportunity to study the recommendations of the Select Committee on European Legislation, and I do not wish to respond until I do so. However, I shall take note of the hon. Lady's representations, along with any that the Select Committee has made.
Secondly, as to the hon. Lady's point about accident and emergency departments, I was present during the exchanges with my right hon. Friend the Deputy Prime Minister during Prime Minister's questions and I thought that he was entirely reasonable about the matter. He explained very carefully the action that the Government are taking. I have no plans to provide for a debate on the subject in Government time, but I have said that, apart from the Opposition time that I am providing next week, I also anticipate providing Opposition time in the week after that.
Thirdly, the hon. Lady put her points about the Army ambulance in the context of the debate on Thursday 18 January. I think that the correct course is for me to bring her remarks to the attention of the Minister to whom they were indirectly directed.
Lastly, with regard to the asylum seekers regulations, I have said before that I expect to provide time for debate on the Floor of the House in response to a prayer of the kind that I understand has been laid. I cannot yet give an exact time and date for that debate, but the House will remember that I was not able to give details of business on the three middle days of the week after next.
Sir Norman Fowler: Is it not a tradition of Parliament that the most important and controversial Bills start their lives in this place? If that is the case, why was the Broadcasting Bill—which, by any stretch of the imagination, is both a major and an important Bill—introduced in the other place?
Mr. Newton: I do not think that the convention is quite as clear cut as my right hon. Friend suggests—although certain Bills with particular characteristics would normally begin in the House of Commons. However, we must make a judgment about the balance of legislation between the two Houses when considering the pattern of any parliamentary year and we took all the relevant factors into account.
Mr. Archy Kirkwood: May I return to the important question of social security statutory instruments in relation to asylum seekers? I heard clearly what the Leader of the House said, but he must surely acknowledge that there is exceptional interest in those regulations. Reports are being prepared by the Select Committee on Social Security and by the Commission for Racial Equality, and we have just been able to read the Social Security Advisory Committee's report.
I should like to press the Leader of the House on what he has just said, because he implied that there was a real likelihood of a debate in the last week of January. Will the right hon. Gentleman also consider the fact that one and a half hours may not be enough for such an important matter?
Mr. Newton: I do not think that I can add to what I have just said, except that, of course, arrangements for such
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debates are normally subject to discussion through the usual channels, in which the hon. Gentleman plays his part.
Mr. John Wilkinson: May I refer my right hon. Friend to the deliberations of European Standing Committee B on Wednesday next week? He has been good enough to cite the documents that could be relevant to the discussions on the European Union treaty and the forthcoming IGC. However, is not the most important document—a prerequisite for a meaningful debate—a White Paper from the Government? In a White Paper, the Government could lay down clearly the principles on which they intend to negotiate.
Mr. Newton: My hon. Friend will, I am sure, have heard what my right hon. Friend the Prime Minister said on that matter earlier this week. I am not able to add to that at the moment.
Mr. Dennis Skinner: May we have a guarantee that next week Cabinet Ministers will be here to answer questions? In the past week, after a fortnight's recess, we have found that, on Tuesday, the Defence Secretary was gallivanting around Japan instead of being here; on Wednesday, the Foreign Secretary was up the wall in China; and today, the Chancellor of the Exchequer is nowhere to be found. I make no case against the Prime Minister because we know what he is doing today. I am beginning to wonder whether those Cabinet Ministers were told to keep away from the House of Commons this week, in advance of Lady Thatcher's speech, so as not to put their foot in it.
Mr. Newton: Well, I am here answering questions, even if they are not very good.
Mr. John Marshall: May I thank my right hon. Friend for arranging the debate on the Second Reading of the Nursery Education and Grant-maintained Schools Bill? Will I be in order during that debate if I refer to the activities of the Labour and Liberal-controlled Barnet council? Before a recent ballot at Christ's college, which my son attends, the headmaster was threatened that if the parents voted for grant-maintained status, necessary repairs to the school roof would be cancelled. After the ballot, the leader of the Labour-controlled council told the headmaster that he should consider resigning. Is not that more like the thought police of Ceausescu's Romania than the traditions of a liberal democracy in the United Kingdom?
Mr. Newton: I hope that my hon. Friend is right in thinking that those matters would be in order during the debate to which he referred. I know from my own experience that there is a growing number of those disturbing stories, and they are not confined to Barnet.
Mrs. Alice Mahon: Will the Leader of the House reconsider the request for a debate on the crisis in beds in the national health service? Is he aware that all of us face the results of that crisis? At the moment, I am investigating the case of a woman who was removed from the intensive care unit in Halifax. Even though she was given only a 50:50 chance of surviving, she was taken on a two-hour, nightmare journey to Manchester to an intensive care bed there. She was moved because her bed in Halifax was needed for somebody in an even worse state. Does not
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the Leader of the House realise that there is a crisis facing the NHS because of the massive bed closures, especially in accident and emergency and intensive care units?
Mr. Newton: I am sure that the hon. Lady does not expect me to comment on an individual case from the Dispatch Box.
Mrs. Mahon: We should have a debate, though.
Mr. Newton: I understand that, but I felt that I should make my first point.
On the hon. Lady's other points, my right hon. Friend the Deputy Prime Minister put the position in a sensible and balanced way earlier.
Mr. Jacques Arnold: May we have a debate next week on voting arrangements in the House? During that debate, we could consider carefully the circumstances of the vote yesterday afternoon, when we rejected a Liberal Democrat ten-minute Bill. Part of the reason for the defeat of the Bill was the absence of the new Liberal Democrat, the hon. Member for Torridge and West Devon (Miss Nicholson), who did not turn up to support her colleagues, any more than she did the previous night.
Mr. Newton: An interesting point, but not, I think, one that would lead me to arrange for a debate in Government time.
Rev. Martin Smyth: I offer my party's support for the request about Army ambulances.
Would it be possible—if not in the coming week, then in the week in which there still seems to be some time—to have a debate on hospital reorganisation in Northern Ireland? The need arises not just because of today's statement about the amalgamation work in Belfast, but because of the resignations of two distinguished chairmen of trusts and the chief executive of a trust.
Mr. Newton: I note the hon. Gentleman's support for the point about Army ambulances—as, I am sure, will my colleagues in the Ministry of Defence.
I think I had better admit straightforwardly that a debate on hospital reorganisation in Northern Ireland was not among the items on my list for the three days to which the hon. Gentleman refers. The subject seems to me perhaps an appropriate one for a Wednesday morning. The hon. Gentleman might like to bear that in mind.
Lady Olga Maitland: Will my right hon. Friend consider a debate on the new concept of a stakeholder society being proposed by the Labour party? Does he agree that the time has now come when it should be clearly spelt out who these stakeholders are? Are they trade unionists, pressure groups and community groups telling bosses how to run their businesses? Would not such an idea crush businesses when what we want to do is allow them to prosper?
Mr. Newton: As far as I can see, through the miasma of uncertainty surrounding what this is supposed to mean, the answer to my hon. Friend's question is that she is right.
Mr. Jim Marshall: Does the Leader of the House recall that just before Christmas I raised with him the concern in Leicester about the Government's

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failure to lay the order conferring unitary status on that city? He will probably know that that fear has not been allayed in the interim. Can he announce the date for the order to be laid; failing that, can he give us a reason why the delay is occurring in the first place?
Mr. Newton: I am not in a position even now to give the hon. Gentleman an instant response, but I shall try to ensure that I communicate with him further before the next business questions.
Mr. Peter Luff: Will my right hon. Friend find time for a debate on the effectiveness of prison in deterring crime and discouraging criminality? That would provide an opportunity to discuss the case of my constituent, Helen Wallace, who was reported in the Worcester Evening News yesterday as saying that she is a reformed drug dealer now because of her experience in prison. Her mother prayed that she would go to prison, and she says that it was right that she should go there. She says that she will not go back to drug dealing because she does not want to go back to prison. Such a debate would show which party is really tough on the causes of crime.
Mr. Newton: There have been a number of opportunities in the past few months for such debates. I cannot promise an immediate further opportunity, but I can certainly undertake to draw that powerful point to the attention of my right hon. and learned Friend the Home Secretary.
Mr. John Austin-Walker: It would appear from the reply that the Deputy Prime Minister gave earlier that he has not read or understood today's statement by the British Medical Association. Is the Leader of the House aware that the BMA places the responsibility for the present crisis not just on the shortage of finance and beds but on the perverse operational effects of the internal market, the Government's distortion of clinical priorities through their waiting list initiative, and the failure of the community care programme, which is blocking beds? In short, the BMA says that the Government are responsible.
May I draw the right hon. Gentleman's attention to early-day motion 248?
[That this House notes with concern that the Greenwich Healthcare NHS Trust cancelled 26 elective non-urgent surgical admissions during the weekend 6th–7th January, that a further eight admissions were cancelled on 8th January and that all non-urgent elective surgery has now been postponed for at least seven days; further notes that the Greenwich Healthcare Trust has experienced a loss of 120 acute beds amounting to 16.37 per cent. of the total between 1993–94 and 1994–95; believes that this pattern is common to other areas of London and shows that London is both under-bedded and under-resourced; and calls upon the Secretary of State to set up an independent inquiry into bed needs and availability in London and an immediate moratorium on hospital and bed closures.]
The motion points out that the healthcare trust in my district has had to cancel all elective, non-urgent surgery as a result of the current crisis. Will the right hon. Gentleman reconsider the request from many hon. Members for a debate on the crisis in the health service to be held as soon as possible?
Mr. Newton: If the hon. Gentleman reads Hansard when it is published, he will find that the Deputy Prime Minister's comments touched on many of the points that he has just mentioned. I understand that the BMA chairman also said that it is
"largely a matter of making the most effective use of the resources we've got."
That is the whole thrust of the Government's policy.
Mr. George Galloway: The whole House will welcome the announcement of a debate on the future of the BBC World Service, given the widespread feeling that that most precious of national assets is being sold short as a result of cuts in the Foreign Office budget. Will the right hon. Gentleman ensure, however, the presence at that debate of the Secretary of State for National Heritage, who has overall responsibility for the BBC, so that she can give us answers about the inquiry that must be going on into the repeated blackouts of the BBC World Service's Arabic television news broadcasts to the middle east? The interruptions appear to have been caused by Orbit Communications, the company in Rome with which the BBC has a contract and which turns out to be owned by a prince of the Saudi royal family, a cousin of King Fahd. We shall also want an explanation of why the BBC's precious editorial independence has been sold to a family like that.
Mr. Newton: Without accepting the generality of the hon. Gentleman's remarks about the position of the World Service, which will no doubt be extensively canvassed in next week's debate, I shall of course draw the more specific part of his question to the attention of the Heritage Secretary.
Mr. Tony Banks: Thank you for calling me, Madam Speaker. I hope that you have noticed that the usual suspects are here on a Thursday evening.
Madam Speaker: I have.
Mr. Banks: Thank you. May I draw the attention of the Leader of the House to early-day motion 260?
[That this House expresses concern at the appointment of Sir Christopher Bland, a well-known Tory party supporter, as the new Chairman of the BBC; believes that the political impartiality and independence of the BBC is compromised by the appointment of someone who has held senior elected office for the Tories and who is clearly a political appointee; and calls for an open, competitive system of appointment for such positions of national significance in order to ensure widespread public support and an end to the use of cronyism by a discredited and exhausted Government anxious to secure placemen in institutions such as the BBC before defeat at the coming General Election.]
The motion concerns the appointment of Sir Christopher Bland as the new chairman of the BBC. I remember him from his days as a Tory member of the Greater London council. Can the right hon. Gentleman imagine the outrage that there would be among Tory Members if an overtly Labour politician had been appointed to such a senior position?
May we have a debate on the method of selection of senior figures for these important public institutions, so that the public can be certain that the appointments are genuinely independent and politically impartial, not just filled by placemen of the Government?
Mr. Newton: If one thing is clear about this appointment, it is that it was in no way the appointment of a politician to do the job. Sir Christopher has wide experience of the broadcasting industry and a considerable understanding of the business, financial and technical issues facing the BBC. That appears to me to have been widely accepted by those who comment on those matters in the public prints.
Mr. Richard Burden: May I echo the points made by the shadow Leader of the House about the relevance of the military ambulances issue to next week's debate on the Army? I draw the right hon. Gentleman's attention to the growing concern on both sides of the House about the fact that the Government are even considering placing a contract with an Austrian company when British-built military ambulances are available to meet the Ministry of Defence's quality and cost-effectiveness specifications. When drawing those matters to the attention of the Secretary of State for Defence next week, will the right hon. Gentleman emphasise to him the strength of feeling on both sides of the House—amplified in two early-day motions signed by a growing number of hon. Members of all parties?
Mr. Newton: I take the hon. Gentleman's question to be: will I add his name to the list of those who have expressed their concern and draw it to the attention of the Defence Secretary? The answer to that is yes.
Ms Glenda Jackson: May we have an early debate on the barbaric practice of shackling pregnant women prisoners? The Government's response on Tuesday to a private notice question on that issue led the House to believe that staff at Whittington hospital in my constituency, where the women are taken to give birth and to be treated, view such practices with equanimity. Yet a report in today's newspaper states that Baroness Hayman, chair of the Whittington trust, has written to Baroness Cumberlege asking for an early meeting and expressing grave professional concern at such practices.
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Two issues seem to be at stake: first, the possibility that the House may have been misled; and secondly, the fact that that barbaric and inhumane practice still continues. The sooner we have a full debate and get the matter out in the open and the practice abandoned, the better.
Mr. Newton: I cannot of course add to what my hon. Friend the Minister of State, Home Office said in her statement in response to the private notice question on Tuesday, but I will bring the hon. Lady's comments to her attention and bear in mind her request.
Mr. Andrew Mackinlay: Will the Leader of the House reflect on the fact that, over a year, we have general debates in Government time on Wales, Scotland and Greater London, yet outside Greater London in the south-east of England, there are some 13 million people? I hope and ask that he will agree with one thing: to a large extent, that will be the battleground of the next general election. Is there not an overwhelming case for the Government to have a debate in which they could defend—I assume that they would want to do so robustly—their stewardship of the interests of the people of the south-east of England? In such a debate, my hon. Friends and I could attack the Government and Members of Parliament in marginal seats around the M25 in Hertfordshire, Kent and Essex for their defence of a Government who have caused enormous problems to people in terms of negative equity, anxiety about the national health service and lack of mobility on public transport. Let us have a debate—a gladitorial contest—on the Floor of the House, in which we could attack the Government for their stewardship of the south-east of England and in which Ministers could try to defend their position.
Mr. Newton: According to my observations over a long period, confirmed this afternoon, the hon. Gentleman is not short of opportunities to make his points without me staging further debates. As to the rest, the Government would defend their record robustly, not only on the south-east, but on the whole of the United Kingdom.

Orders of the Day
  Rating (Caravans and Boats) Bill
  Not amended (in the Standing Committee), considered.
  Rating (Caravans and Boats) Bill
    Clause 1

      CARAVANS AND BOATS OCCUPIED AS SOLE OR MAIN RESIDENCE
      Amendment made: No. 1, in page 1, line 24, leave out subsection (5) and insert—
      '() Subsection (4) does not apply in relation to a hereditament where—

      (a) a proposal for the alteration of a local non-domestic rating list in respect of the hereditament has been made, and not withdrawn, before 30th January 1995 in accordance with regulations under section 55 of the Local Government Finance Act 1988,

      (b) the ground for the proposal was that the list was inaccurate because the hereditament ought not to be shown in the list or, in the case of a composite hereditament, the rateable value shown in the list was too high, and

      (c) the reason or one of the reasons given in the proposal, or on an appeal (in accordance with those regulations) to a tribunal against a refusal to make the proposed alteration, for the list being inaccurate was that any pitch occupied by a caravan or (as the case may be) mooring occupied by a boat was domestic property by virtue of section 66(1)(a) or (b) of that Act'.—[Sir Paul Beresford.]

      Order for Third Reading read.—[Queen's consent signified.]
      4.51 pm
      The Parliamentary Under-Secretary of State for the Environment (Sir Paul Beresford): I beg to move, That the Bill be now read the Third time.
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      First, I am grateful to hon. Members for accepting the amendment. I understand that residential boat owners have some concerns about the way in which local taxation affects them. Those concerns seem primarily to be about the council tax and are outside the Bill's scope, but once we have had full details of their concerns, we shall consider them carefully.
      The Bill returns the law on the rating of pitches for caravans and of moorings for boats to what we had always intended it to be. Unless the Bill is enacted, most caravan and boat owners will face higher local tax bills. I commend the Bill, as amended, to the House.
      4.52 pm
      Ms Hilary Armstrong: I shall be as brief as the Minister, whom I thank for the commitment to consider the case that the Residential Boat Owners Association is making. Those people are concerned that the Bill, although not directly affecting the owners' council tax problem, will make it more difficult for them to advance their arguments. That is why they were worried that the Bill was going through without their involvement. I am therefore grateful to the Minister for agreeing that their concerns will he considered.
      As the Minister said, the Bill restores the position to that which we all thought it was until a valuation tribunal decision. I know that not only many caravan and boat owners, but local authorities will be relieved. They are having enough problems in sorting out council tax issues for this year. The thought that they would have to go back three years to recover money and to repay other moneys did not fill them with great joy.
      Therefore, it is in everyone's interests that the Bill receives a speedy passage. I thank the Minister for acknowledging the point that the Residential Boat Owners Association has been making and I look forward to its concerns being dealt with.
      Question put and agreed to.
      Bill accordingly read the Third time, and passed.

Business Links
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Streeter.]
4.54 pm
The Minister for Small Business, Industry and Energy (Mr. Richard Page): There is a belief in some quarters that it is easier to run a small business than a big one—it is thought that the bigger the company, the more the problems and the more the difficulties. There is nothing further from the truth. The small business man or woman must be an expert at absolutely everything. They must be knowledgeable when the Health and Safety Executive official appears; they must have tax information at their fingertips when the Inland Revenue inspector knocks; they must be skilled in the details of value added tax when the VAT man calls. They must work through the many layers of officialdom that are needed to run a complex society, and let us not forget that that business man or woman has not yet got around to running his or her business.
Another range of skills is needed: to be skilled in design to produce an attractive product; to be a purchasing agent and to ensure that the raw materials are bought at the best price; to be a production engineer to ensure that the assembly line works effectively and that goods are made to price and quality; and, of course, to be a financial wizard to ensure that the cash flow is under control and that the bank manager is kept happy.
Having done all that, the business man or woman has not even got around to selling anything yet, which is the whole object of the exercise and where another raft of skills is needed: in marketing, sales and, again, in credit control. By contrast, a manager in a large company has a simple life. He can monitor the overall scene and subcontract in and out where necessary, when he thinks that he needs expert advice. Who could possibly believe that running a small business is easy? I do not and the Government do not, which is why, over the years, there has been sympathy from and appreciation by the Government for the work undertaken by the small business sector.
The best thing that any Government can do for a business man or woman is to provide a stable, solid economic environment of low taxation, low interest rates and low inflation—that is what the Government are delivering for the small business sector. Added to that, for the first time we are providing stable exchange rates. I know from hard personal experience that small business is more affected by the swings and changes of inflation and interest rates than large ones, which have the capability to hedge. Small businesses do not have the resources to protect themselves against such future changes. That is why, as I said, the best service that any Government can give to the small business sector is a stable economy.
Of course, having said that, it is too easy to forget what, over the years, we have done for the small business sector: small companies' corporation tax rate has been reduced from 42 to 24 per cent.; simplified accounts procedures for very small firms have been introduced; tax rules for
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the self-employed have been simplified; inheritance tax has been reformed; VAT thresholds have been increased. I could go on. There is, however, more to it than that.
Mr. Barry Sheerman: To be entirely honest, should not the Minister also mention that small businesses and medium-sized enterprises did not want a three-year recession after the 1992 election, which hit so many small businesses and sent them into liquidation?
Mr. Page: Obviously no business wants a recession, but it does want to have a sensible recovery. For the first time for years, the Government have got us out of the boom-bust cycle—vast growth and vast inflation, which then go back down again. Each time we came out of recovery, we found ourselves that bit further down the world economic league table. That is why the Government have given the best basis for any organisation's continual growth that this country has seen since the second world war.
The Prime Minister recognises small businesses' importance to this country's economy and stability, which is why, at a Downing street launch in October, he enthusiastically endorsed a programme of conferences for small businesses throughout this country's length and breadth. The conferences, called "Your Business Matters", are organised and run by the leading associations for small businesses. They bring together everybody involved in the small business sector in the biggest and most comprehensive consultation exercise that anyone can recall. They provide an opportunity for small businesses to have their voices heard and to influence policy, and a report will be given at a final conference in London in March.
Mr. Sheerman: Will the report address the concern that hon. Members have heard consistently at their surgeries since the abolition of the enterprise allowance? If the Prime Minister meant what he said at the Conservative party conference about small businesses being central to the country's prosperity, why will he not bring back an enterprise allowance, which would give so many people the chance to start a small business?
Mr. Page: The hon. Gentleman exhibits all the traits of old Labour. The purpose of the conferences is not to allow the Government to dictate to business what it should have, but to allow small business men and women to tell Government what they want. At the final conference, we shall hear not what the hon. Gentleman says that businesses want but what they say they want, and there is a vital difference. That is a philosophical divide that the hon. Gentleman has yet to cross in coming to terms with the modern competitive world in which we live.
My right hon. Friend the President of the Board of Trade gave a further commitment last October that there would be a Minister with responsibility for small business in every Department to watch out for anything that might harm small businesses. On 29 January, I shall chair a meeting of a group that will review progress since its inception. We want to help small businesses to be more efficient and to give customers what they want in quality, price, design and delivery.
We have come a long way in the past few years. The efficiency of British business has taken a leap forward, but we live in an increasingly international and competitive world. Goods can be traded in as easily as

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they can be traded out. Businesses that think that they can plod on, unchanged and uncaring are heading for a rude awakening. Increasingly, professionals are passing the enthusiastic amateur. Smaller companies are able to adapt and change, to diversify and to grow, and we have seen some of the advantages of that. The number of small firms in the United Kingdom has been steadily increasing for the past 20 years. At the beginning of the 1980s, there were some 2.4 million; there are now 3.6 million—an increase of more than 1 million. Ten million people work in small businesses that employ fewer than 100 staff. Such employment is vital to the United Kingdom's economy.
Growth in the small firms sector has been rapid. The start-up rate for small businesses has been some 500,000 a year, and hurrah for that, but it is not all good news. The number of firms going out of business is far too high, but the Government are addressing that by urging, supporting and training small businesses to be professional.
In other countries, small business men and women experience problems getting started unless they can show that they have appropriate qualifications. In this country, anybody—qualified or unqualified—can start a business. In other countries, the ability to trade depends on securing approval from the chamber of commerce, and the ability to borrow money is subject to strict scrutiny.
I do not want to stifle the traditional entrepreneurial spirit of the British people, which is well known and respected. We should give as much help as possible to a business start-up or expansion to ensure that it has the best chance of success and to weed out the "impossibles", thus saving all the heartache that occurs when the dreams come crashing down about the ears of a business's owner.
When such dreams collapse, it is not just the small business man or woman who is hurt but their families and other small businesses, which are not paid for services and goods supplied. It is tough in the business jungle, as I know well.
I am aware that goods are more easily traded internationally than ever before. The single market is a great opportunity. We talk of the opportunity of having 300 million-plus people with whom to trade, but it is a two-way street. Anyone who believes that he or she can operate in business without constantly evaluating its efficiency is destined for a rude awakening.
To be a small business man or woman, one must be different—one must be an individualist. Their desire to run their own business sets them apart. They must have that little bit extra—that independence to do their own thing and that individualism not to be part of a crowd. That independence is all very well, but with it must come the realisation that the small business man or woman cannot be expert at everything. They cannot keep up to date with the latest technology, watch the credit control, market survey the effect of the latest designs, investigate export markets, monitor cash flow, and so on—unless, of course, they are super-human, and few of us are. For mere mortals, therefore, the odds are that it will be difficult. The chances are that they might do some of those tasks—if not most of them—badly.
Now help is at hand. A revolution in small business support is sweeping the country. It went largely unnoticed at the beginning of last year, but it grows in stature daily.
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Last October, the President of the Board of Trade formally launched business link to deliver business support services in England. In Scotland and Wales, the business shop and business connect initiatives are developing in similar ways.
All Governments—I look at the hon. Member for Hornsey and Wood Green (Mrs. Roche) when I say this—have had the interests of the small business at heart and have provided a range of services in a variety of ways. I must say, however, that the present Government, who are no different from previous Governments, have done so with confusing systems, with one Department for this and another for that. The small business man or woman, with precious little time to spare, often threw his or her hands up in despair and did what all small business men and women have always done—got on with doing his or her own thing.
The Government have realised that, and in introducing business link have set in train the most exciting support system for small business that the country has ever seen. For the first time, firms have a single local point of access for a wide range of high-quality services. Some 180 business links are open throughout England, and the number is growing daily. By the middle of this year, there should be some 260.
Mr. Peter L. Pike: The Minister will know that East Lancashire still does not have a business link, despite the overwhelming feeling that we should have one. Will he put pressure on Eltec—East Lancashire training and enterprise council—to get the business link off the skids and under way as soon as possible, because people want to see it in action? We cannot afford to waste time.
Mr. Page: I shall deal with that point in a moment, when I shall respond to the hon. Gentleman. I must say, however, that I agree, I agree and I agree.
Business links are designed to meet local needs. I should have liked more business links to be in place sooner, and I freely admit that I set ambitious targets, but the business link national assessment panel quite rightly will not approve any proposal to set up a business link until it is satisfied that there is a solid basis for continued success.
I come now to the point made by the hon. Member for Burnley (Mr. Pike). I am told that the business plan of only one TEC area remains to be approved. The hon. Gentleman has correctly identified it and it is my hope and wish that all the partners in the area will come together to ensure that England has 100 per cent. coverage. I am doing what I can to bring about exactly what the hon. Gentleman has requested.
Mr. Pike: I thank the Minister for that. I do not wish to apportion blame for the delay. If I can help in any way to achieve that objective, I shall be most happy to do so.
Mr. Page: Faced with the combined wrath of myself and the hon. Gentleman, East Lancashire will probably roll over and agree to proposals in a remarkably short space of time. I thank the hon. Gentleman for that kind offer.
The business links are a coming together of all the local support services for small and medium-sized businesses. They include the TECs, chambers of commerce, local authorities, enterprise agencies and export clubs. They will provide one focused support system for the small

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business men and women of Britain. There will be one contact point, one doorway, one information source and one telephone number rather than the confusion of addresses, numbers and systems of the past.
In addition, in the further interests of simplicity, I have decided that from April 1996 the diagnostic and consultancy service will be integrated with the other similar services presently available through business link. That will help to reduce the number of separate schemes with which business link will have to deal.
It would be helpful if I were to give the House an update of business link's position today. Eighty per cent. of VAT registered businesses are now covered by operational business links. Some 64 business link companies are in business, running 180 outlets. When complete, there will be in the region of 267 outlets. Of the 195 towns and cities with populations of more than 50,000, 141 are covered by business link. At the moment, there are in post 460 personal business advisers, 30 innovation and technology counsellors, 20 export development counsellors and 18 design counsellors. The impact of business link grows literally daily.
The figures for the quarterly assessment for July to September 1995—the only ones available—when only 120 business links were in place show that at that time some 391,000 businesses were registered on the business link databases; more than 4,000 businesses a week were using business link; 7,000 businesses were advised by personal business advisers; more than 1,000 businesses were provided with diagnostic or health check services; more than 8,000 businesses were receiving counselling and more than 1,000 businesses were advised by innovation, technology, design and export counsellors.
Most important of all—and something to which I shall refer on more than one occasion—is the high level of customer satisfaction. For business link to be successful, there must be quality in every outlet—quality of information and service. Quality must be the watchword. It must be in every aspect of the organisation. Just as the name of a seaside resort runs through a stick of rock from beginning to end, quality and business link must be synonymous. That is why business link is required to undergo a tough accreditation process based on the internationally recognised system ISO9001. There will be a third-party assessment by approved certification bodies, independent, I hasten to add, of Government.
Monitoring and evaluations are necessary buttresses to the process to ensure that quality is high. That means quarterly monitoring information covering the number of businesses using the business links, the number of businesses provided with information by business links and the number of businesses advised by personal business advisers—the PBAs—and specialist advisers, as well as customer satisfaction. In addition, Ernst and Young is evaluating the earliest business links, the results of which I hope to have to hand in the near future.
The objectives are to provide early information on business link's effectiveness, to assess the added value of business link and to identify critical issues in the first years of business link's life. In addition, as if that were not enough to ensure high standards and quality, MORI is operating a business link tracking survey to measure firms' awareness, perception and use of business link. Furthermore, an impact indicators feasibility study—a rather grand phrase—will track the performances of firms
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helped by business link against a control group. There is also the wild card in the pack, a mystery inquirer exercise, to analyse the quality of the information and service received by businesses from business link.
I have gone through everything that is happening, the numbers involved and the growth rate of business link, and I have emphasised the importance of quality. But what does all that mean in the tough marketplace out there in which every business must take part? I have here a wodge of literally hundreds of cases of companies which have been helped by business link. I pull out a couple, purely at random, and surprise, surprise, one happens to be in the constituency of the Leader of the Opposition.
That is a company called Minicraft, a management buy-out company making miniature power tools in Durham. The management team of Neil Stentiford and Neil McPherson met the personal business adviser in Durham, Eddie Jonas, with the result that they have received help in staff training and in overseas exhibitions and their sponsorship. As I understand it, that business link partnership will continue and the company is now forecasting a 50 per cent. increase in activity during the next three years.
The other case that I have by chance selected concerns a company called Med-Lab in the constituency of the shadow Secretary of State for Trade and Industry, the right hon. Member for Derby, South (Mrs. Beckett). Med-Lab is a supplier of materials to the aircraft industry and monitoring equipment to the petrochemical industry. The area PBA, Caroline Feneley, worked with the managing director, Steve Exon, helping to introduce electronic data interchange. As a result, the company now has a simpler ordering process for its materials, cutting time and cost and giving it a competitive edge. The managing director, Mr. Exon, concluded:
"Business Link have been of invaluable help during this period of development."
Those experiences come from the real world where one lives or dies depending on how well a business is run. As I say, I have literally hundreds of examples here and I know that there are even more at each individual business link.
But when we look to the future, everything comes back, as I said, to the quality of service. The more businesses there are with experience of the high-quality help and advice provided by business link, the greater will be the snowball effect in terms of awareness.
I am under no illusions. The challenges are formidable, but we must meet them if business links are to achieve the potential of which they and British businesses are capable. That will require continual commitment from all. It will require the commitment of partners to set aside occasional unproductive rivalry—I look at the hon. Member for Burnley as I say that—and concentrate on the needs of customers, the commitment of business link to continued improvement and high-quality services and the commitment of customers to spread the word. In addition, there must be commitment from Government to help to develop the network and fund the continuing provision of services.
The country's wealth was built on trade. Small business men and women went to every corner of the globe to sell British products, beating foreign competition and creating this nation. I believe that a resurgence of small business will enable the country to claw its way back up the

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economic table and create more jobs and wealth, and to aid the expansion of a caring society. Only small businesses—not the big boys—will bring that about.
I strongly believe in the concept of business links' pulling together all the partners that I have mentioned. I think that, when the political history of the 1990s is written, the start of business links will rank among the Government's finest achievements. The spirit that motivates the small business man and woman is at the heart of the nation: it is a spirit to be cared for and nurtured. I will not forget that, and nor will the Government.
5.20 pm
Mrs. Barbara Roche: The Opposition welcome the debate. I shall begin on a harmonious note. The idea of business links is undoubtedly good, and I agree with the Minister that small businesses are the backbone of our economy as both wealth creators and employers; but they face a formidable task. All too often they lose out to big business in the attempt to obtain finance from the banks at the right time, and to cope with the compliance burden placed on them by government.
I welcomed the Minister's frank admission that the country needs to claw its way back up the economic table. Britain has fallen behind in the world prosperity league, and enabling small businesses to grow and prosper is one way in which we shall be able to claw our way up. It is good to hear a Minister admit what the Opposition have been saying for some time.
As my right hon. Friend the Leader of the Opposition—the next Prime Minister—said in Singapore on Monday,
"stakeholders in a modern economy will today, more frequently than ever before, be self employed or small businesses. We should encourage this, diversify the range of help and advice for those wanting to start out on their own and use the huge potential of a developing technology to allow them to do so successfully".
I say with conviction that business links are a good idea because they were Labour's idea. The idea was set out in our manifesto, in which we promised to
"establish a network of one-stop advice centres providing small and growing businesses with access to high-quality specialist assistance."
Such a network was badly needed: small businesses were faced with a chaotic maze when it came to obtaining support and help. Should they go to the local training and enterprise council, the local enterprise agency, a high street bank, the economic development unit of the local council, an accountancy firm or some other body? Daunted by the prospect of trailing around all of them, a small business might decide that it would be better off managing on its own. Because they do not know where to go, many small businesses fail to realise their potential for growth.
Opposition Members welcome the Government's decision to take Labour's good advice and introduce a network of one stop shops. Unfortunately, Ministers have handled the implementation of that decision incompetently, hastily and in a manner that—according to the Department of Trade and Industry's own internal auditors—exposed the Department to
"financial risk and potential embarrassment".
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The report was written a year ago, in January 1995, by four members of the DTI's internal audit team, and it makes chilling reading. It reveals that the current Deputy Prime Minister was so desperate to get the business links programme up and running that he ignored the warnings of officials, sidestepped proper procedures, authorised ultra vires payments and exposed the Department to financial risk and embarrassment.
According to the report,
"the first BL projects were pilots, but there was insufficient time for full evaluation and the establishment of best practice…On a number of occasions the Guidelines for Officials and other appraisal procedures were not rigorously observed, so that, for example, BL outlets could meet target opening dates."
Those observations were borne out by a conversation that I had recently with the chairman of a business link, who told me that, if he had followed DTI guidelines, his organisation would have gone into liquidation.
The report also states:
"Financial appraisal of BL business plans has not been sufficiently rigorous."
The auditors found
"instances where Government Office accountants had questioned the future viability of a BL as proposed, and although the accountants' caution had been noted, the business plan proceeded."
The auditors considered that
"the lack of rigour in financial appraisal and approval…may have contributed to the parlous financial state of many Business Links."
A damning sentence reads:
"Many of the problems stem from policy decisions outside the control of DTI officials".
Those decisions were clearly taken by Ministers.
For some reason, Ministers do not seem to want to discuss the report. When asked about it on 5 April, the current Deputy Prime Minister told my hon. Friend the Member for Leeds, East (Mr. Mudie):
"the hon. Gentleman should respect the rights of Ministers to conduct internal investigations into projects which they are establishing…I do not think that it adds to the confidence in the regimes that we are establishing if reports are leaked before time and if misjudgments are then paraded in newspaper headlines."—[Official Report, 5 April 1995; Vol. 257, c. 1727.]
That is an extraordinary view for a Minister—a Deputy Prime Minister—who proclaims that he is in favour of open government.
When I wrote to the President of the Board of Trade to express my concern, I was told:
"funds used in the Business Link programme have not been, and will not be, jeopardised by a lack of financial appraisal and control".
Although every hon. Member would like to believe that assurance, the letter seems to express a remarkably ostrich-like view of the statement in the report that the then President of the Board of Trade's behaviour resulted in ultra vires payments, and the DTI's possible exposure to
"financial risk and potential embarrassment".
Nor could the Minister give me any assurances that what was described as a "parlous financial state" in the internal auditors' report had improved, and that a similar situation would not arise again.
The report highlighted financial problems and risks because 55 outlets had been opened in 16 months. Since then, 121 outlets have opened in a year. Can the Minister explain what has changed to ensure that those risks do not continue?

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I must also ask about financial management. Given that the internal auditors' report referred to accountants' concern about the ignoring of the viability of business plans, and in view of the collapse of the South Thames training and enterprise council, which left huge debts, most members of the public would want to think that the DTI had considered what to do in the event of the financial collapse of a business link, but when my hon. Friend the Member for Barnsley, West and Penistone (Mr. Clapham) asked about the matter in July, he was told in a written answer that the DTI
"has not considered arrangements to respond to the financial collapse of an individual business link because the Department is not aware of any instances where a business link is facing or is likely to face this situation."—[Official Report, 18 July 1995; Vol. 263, c. 1223.]
In view of the internal auditors' remarks, I find that reply astonishing.
Despite Government mismanagement on what most people—certainly taxpayers—would consider a fairly major scale, there is some good news about business links. Some are providing businesses with effective and helpful services. That is a tribute to their staff, many of whom are working hard to give the best possible service and to make the one stop shop network a reality.
Yesterday, I visited the London, City, Hackney and Islington business link in Old street, where I met members of staff whose commitment, ideas and record were admirable. Staff are working in difficult circumstances, and I was impressed with what I saw.
I travel around and speak to people. I must tell the Minister that a senior person, who until recently was working with another new business link, told me recently that she had felt that she was living in a "bureaucratic nightmare", so the Department still has much work to do. The overwhelming picture of business links that has emerged so far suggests that the service is patchy and the quality extremely variable.
When the Minister told us about the evaluation exercise that is to involve Ernst and Young, he said that a "mystery shopper" would be used. That is an excellent idea, and earlier this week I carried out my own mystery shopper exercise. The business link signpost line was launched with a flurry in October by the then President of the Board of Trade. Its aim was to ensure that, with one quick telephone call, members of the public could find out where their nearest business link was.
That is a good idea, but how does it work in practice? I decided to use the mystery shopper technique and find out. On Tuesday, I asked someone in my office to telephone the line and ask where the nearest business link office to Parliament street was. The person who telephoned was told most politely that the database was finding it difficult to cope at the moment, and that the inquiry taker would have to refer her to a freephone number.
The official could not find the freephone number, so she promised to call back. We have heard nothing since. As the member of staff had been on the line for five minutes while the freephone number was being sought, the person from my office asked whether the signpost line was free. The reply was that it probably was free, but that the official was not entirely sure.
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When the Deputy Prime Minister launched the line in October, he said:
"It will not be Government or partner organisations which will ultimately judge whether Business Links are successful. Business customers will judge the effectiveness of services and determine their success."
I agree, but on the basis of the experience of this mystery shopper, the judgment is not a happy one.
I am not the only person who has found the service unhelpful. Today's issue of Design Week carries a letter from a woman who runs a small design consultancy in central London, and who contacted her local business link to find out the type of advice and information that it offered on local design consultancies.
The letter, which reveals an astonishing practice, says:
"Presumably Business Links' service is focused on saving businesses both time and expense locating specific resources, so you can imagine my bewilderment when I received numerous photocopied sheets from their local Thomson Directory. The listing included services from Artists to Interior Designers, incorporating the categories: Dental Technicians, Interpreters and Invalid Equipment and Services. This piece of literature, although no doubt fascinating reading, may prove in the long term to be limited in its ability to enlighten business managers."
As the Minister knows, design is a sensitive area for business links. According to the Minister's own admission, the ill-fated consultancy brokerage service wasted almost £3 million of public money when it was scrapped before it was launched. I understood from the Minister's reply, when I raised the matter with him, that the fact that the service collapsed before it was even started was partly the fault of the press. Apparently, hurtful articles had been written about the service and its mismanagement. Perhaps when he replies the Minister will enlighten us further.
I have given some examples of what makes small businesses loth to trust business link initiatives, and what makes the public rightly suspicious about the way in which public money is being spent.
A final concern is the extent to which firms know about business links. One of the Forum of Private Business's quarterly surveys last year asked respondents to rate the help that they had received from various support agencies and organisations in categories ranging from "significant help" to "no contact".
Of all the agencies listed—including enterprise agencies, TECs, local enterprise companies, banks, local authorities, colleges and others—business links had the lowest level of contact with small firms. Only 9.7 per cent. of respondents had had any contact with a business link.
Of course, members of the Forum of Private Business are typically at the small end of the range of small businesses and one must bear in mind the fact that the business links network is quite new and not yet complete, but it is worrying that such a small percentage of businesses had any contact with it.
Another major concern is the service that business links provide, or do not provide, for very small businesses with fewer than 10 employees which, according to the figures that the Department of Trade and Industry published last June, account for 94.4 per cent. of firms. Again, it appears that the service to them is patchy.
The bottom line of what business links must provide is spelt out in the business link service guide, published in October 1995, as:

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"an enquiry, information and referral service to start up and microfirms".
The manual does not encourage business links to consider that firms with fewer than 10 employees have growth potential. It suggests that a way of targeting firms with growth potential is the
"database approach—segmenting by size, possibly starting with all firms with more than ten employees."
We know that many firms—indeed, most small businesses—have fewer than 10 employees. We talk about small businesses being the backbone of our economy; we must remember that firms that employ fewer than 10 people often have tremendous growth potential and provide a significant proportion of the wealth of this country.
The manual continues:
"The national partners recognise that as a result of recent public funding changes some areas will offer typical start-up firms very limited services. Although only a small proportion of all start ups have traditionally received publicly funded support, in some areas this proportion will fall further and it will probably be impossible to achieve the suggested service options."
Business link's own manual makes the startling admission that there will be a decrease in service to small firms. I know that both the Federation of Small Businesses and the Forum of Private Business are rightly much concerned about that. The whole House, too, will be concerned about it. As constituency Members of Parliament, we frequently encounter such firms, and there will be much apprehension if it is felt that the service for them will be "very limited".
The Prince's Youth Business Trust has also expressed anxieties. Everyone agrees that that trust has an excellent record. Indeed, I remember the Minister of State for the Armed Forces saying on television that the Prince's Youth Business Trust's record in creating small businesses and dealing with unemployment was much better than that of the Government. The trust's excellent work in helping more than 24,000 18 to 29-year-olds set up small firms is well documented. The top 100 businesses started with the support of the trust employ more than 2,000 people and have a total turnover of £50 million a year.
In the past, young people who were helped to set up a business had recourse to enterprise allowance to get them over the period when they were no longer receiving benefit but when money was taking some time to come in from the new business that they had started up. Now that the business start-up scheme has been subsumed into the single regeneration budget, its national coverage is again extremely patchy. The trust found that only one third of TECs provide any form of grant for business start-ups. On top of that, it is estimated that the number of training places for new start-ups has reduced by approximately half. I would be extremely grateful if the Minister would address these points.
The uneven and inadequate provision hardly fits in with the Deputy Prime Minister's vision—he announced the beginning of business links as
"the highest calibre…business support arrangements in each area of the country."
Another worry in this regard was expressed by the Trade and Industry Committee, which reported that the unwillingness of business links
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"to assist the smallest firms might encourage the establishment of a new range of services outside the BL network, particularly in regions where a higher rate of business start-ups is regarded as an important aim".
Since I had the honour to take on my shadow post, I have gone up and down the country to talk to small businesses. I have been struck by the number of small business networks that are purely self-help operations. For them, the local TEC or business link means very little. When I ask someone involved in a small business whether they have any relationship with the TEC or business link, I am often greeted with, at the very least, a lift of a sceptical eyebrow. There is a problem—in that the Government do not appear to be reaching the people who need the services.
At the beginning of my speech, I said that small businesses were the lifeblood of the country. They are absolutely essential to growth and—like the Minister—I salute the men and women who work in small businesses for every hour God sends to provide for their families and their communities. While we welcome the setting up of business links, the sad fact is that the Government's mismanagement of the scheme means that the picture has not changed for far too many small businesses. A good idea has been mishandled by the Government, who have been described by the ex-deputy chairman of the Conservative party as
"ineffectual and unable to deliver its promises."
No wonder John Maples said that
"small businessmen in particular feel let down".
I can assure the House that the next Labour Government will not let them down.
5.43 pm
Sir John Cope: I am glad that the debate gives me an opportunity to applaud business links, as the hon. Member for Hornsey and Wood Green (Mrs. Roche) did—at least in principle. But I shall go further, as I wish to welcome the progress that has been made, more of which has been announced by my hon. Friend the Minister this afternoon.
My hon. Friend said that business links were the first single point of contact for small firms. I know what he means, but he is not quite right about that, as ideas on the subject have been developed over many years. In 1967—a long time before I became a Member of Parliament—I helped my noble Friend Lord Weatherill, who was then a new Back-Bench Member, to write a pamphlet on small firms called "Acorns to Oaks". At the time, that seemed to be a novel and sparkling title.
In the pamphlet, we advocated a one-stop shop for advice and counselling centres for small firms, to be based on the American model of the Small Business Administration and to be provided or backed by the Government. I am glad to say that the Government's small firms service came into being under the Conservative Government a few years later. I believe that the service did an excellent job, both in signposting those who contacted it to all sorts of other services and Government Departments and through the counselling and advice service that it built up over the years.
Subsequently, the enterprise agency movement began to grow in the private sector, and an excellent movement it has proved to be. It was encouraged and financially

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supported in the early years by the Government, and it was doing a broadly similar job in many respects to the small firms service. A multiplicity of provision grew up, which became more and more confusing as time went on. The services provided by the agency were added to those of the chambers of commerce and chambers of trade, which in many cases had existed for a long time and were providing advice and other services to all kinds of businesses. That is particularly true in the case of chambers of trade, which provided assistance to the smallest businesses and continue to do so effectively.
Twenty years after helping to write that pamphlet, I became the Minister with responsibility for small firms. While I was in that job, we created the training and enterprise councils, to build a partnership between the public and private sectors. The Government gave them responsibility for fostering enterprise, and business links have developed from the initiative taken at that time. The importance of business links is due partly to the concept of a one-stop shop. Information of the broadest kind on anything that a business might wish to know about—often in a signposting form—should be available in a single place for small firms. I believe that that is of particular value to the smallest type of firm—to which the hon. Lady was referring—which is least likely to have contacts and specialist expertise at its fingertips.
The TECs also provide training, counselling and guidance to small firms. My hon. Friend the Minister emphasised that far too high a proportion of small firms which start do not go on to succeed. We need a higher success rate, and we also need more of the firms that now exist to grow and expand. The hon. Lady made that point as well. I believe that advice and training are essential if that is to occur.
One of the difficult things about trying to run a small business is the breadth of matters with which a small business man or woman has to deal on any business day. Those involved must deal not only with the business, selling products and hiring staff, but with premises, machinery and production. A small business man must also deal with all the various agencies, and there is an enormous list of Government and local government agencies with which every small firm has to deal at one time or another. Those include the taxation agencies and revenue collectors to which my hon. Friend the Minister drew attention. There are also the local government controls of one sort or another that apply to different businesses—many of them apply to all businesses—and the various employment regulations and tribunals are also important.
There is a huge spectrum of matters with which a single person trying to run a small business has to deal, making life difficult for a small firm. A large firm has a finance director to deal with finance matters and to argue with the bank, a production director to deal with the production side, a marketing director to deal with marketing and specialists in different skills. Outside specialists, in the form of accountants and lawyers, can also be brought into play when required. The larger firm, with all its expertise, has a much better chance of mastering all the regulations.
The, small firm has the crucial difficulty of trying to cover such a wide spectrum of necessary expertise, which is why training and guidance are so important. One cannot train someone in everything, across the board, in a single set of training sessions. That is why a place to go for expert and follow-up advice when trouble occurs or when
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a part of the business needs to be developed—as well as a place for initial and further training once the business develops—is so important. The link between training, advice and a successful enterprise was part of the logic at the heart of the idea behind training and enterprise councils, which combine training and enterprise under a single council that is composed of the leaders of local industry and commerce.
I cannot speak for the way in which business links are developing in the rest of the country, but I have been keeping an eye on the one that serves my part of the country—Bristol and the surrounding area. As far as I can see, our business link is doing extremely well. It is still early days though, as it is for any business link.
The business link in my constituency is rightly based in Bristol, but it has three outstations up and running. I very much hope that my hon. Friend the Minister will come and help us open the South Gloucestershire business link. Recently the Northavon chamber of commerce has rightly changed its name, in anticipation of the local government changes, to the South Gloucestershire chamber of commerce. The South Gloucestershire business link is due to be launched later this year and will provide a further service in what has been, up to now, the county of Avon. It will have the full backing of the South Gloucestershire chamber of commerce, of which I have the honour to be the president, as well as the support of the enterprising university of the West of England and the excellent New Work Trust, which is an enterprise agency of great vigour, and the other people who are backing the main business link in Bristol.
Wholehearted backing is extremely important. The Bristol business link is doing so well because of the wholehearted involvement of the main players: the Bristol chamber of commerce initiative, the TEC, and the local offices of Government Departments.
The revitalisation of the Bristol chamber of commerce, which took place two or three years ago, is of great importance. It is part of a whole new spirit that I detect in Bristol, which has been stimulated by developments such as the Bristol development corporation and the port of Bristol. I believe that the abolition of the county of Avon has also helped to revive the spirit of an enterprising city, which Bristol has been for many centuries.
The Bristol business link is situated in the chamber of commerce's own premises. It has an agency agreement with the chamber of commerce by means of which about £750,000 a year of services that were previously provided directly by the chamber of commerce are now being provided through and by the business link. That shows how much the chamber of commerce has been prepared to put its eggs into the business link basket. WESTEC, the West of England TEC, similarly provides its enterprise services and training through the business link. The Department of Transport has done the same in relation to its export services locally. That commitment by Bristol business link's backers is crucial to its success.
We heard earlier from the hon. Member for Burnley (Mr. Pike) about the difficulties in his part of the country. Any hon. Members who are having difficulty with their TEC should look carefully to see whether the business link has the wholehearted commitment of the chamber of commerce and the TEC. If not, they should do everything possible to encourage that support.

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The hon. Member for Hornsey and Wood Green endorsed the idea, as do I, that the customers will ultimately judge whether business links are successful. In that respect, business links are exactly like any other business. The customers decide in the end whether a business is successful by deciding whether to purchase its services or goods. Bristol business link is receiving about 1,500 calls each month, and I gather that there is a high level of satisfaction among the callers when their wide range of queries are dealt with. I believe that that is a success story.
It was good to hear the hon. Member for Hornsey and Wood Green speak in support, admittedly in general terms, of small firms and to know that the Labour party has taken on board the importance of small firms. I take that as part of its lurch to the right, which has been going on firmly during the past year or so. To somebody like me, however, who has been a Member of Parliament for quite a while, in some senses it is rather surprising to hear the Labour party say such things.
Mrs. Roche: The right hon. Gentleman had the great good fortune to be a Minister with responsibility for small business. I am sure that he will agree that the first small business Minister was the late Lord Lever, which demonstrates Labour's commitment to small firms. The right hon. Gentleman will remember that the Bolton committee on small firms was set up under a Labour Government.
Sir John Cope: I—[Interruption.] My hon. Friend the Minister points out that Lord Lever really had his finger on the pulse of small firms; but I would certainly not take away from him the credit for having been the first small firms Minister. The Bolton report was not produced entirely in response to the pamphlet that I mentioned earlier, but the pamphlet was part of a movement that built up the pressure of small businesses. Harold Wilson's way of escaping that pressure was, first, to delegate the matter to Lord Lever and, secondly, to set up a committee to go away and look into it for a long while. The report that the Bolton committee produced was much more erudite, much larger and thicker and had many more appendices than our pamphlet, but our pamphlet read like a summary of the report even though it had been written two or three years earlier. The Bolton committee report came to the same conclusions, but by that time the Labour Government had been defeated and were unable to implement it.
What the Labour Government did do—I have no doubt that they would do so again if they had the opportunity, which I hope they do not—was to load burdens on to small firms. I believe that if Labour again had the chance, the steam would go out of the deregulation initiative, for example. We know that it would sign up for the social chapter and introduce a minimum wage, and we are told that it wants to give councils the opportunity to raise extra money from business rates instead of raising it from the voters through council tax.
Those measures are anti-small business and would make life extremely difficult. There is no doubt that in due course Labour would think of ways to discriminate against the self-employed, as it did in the past, in matters such as national insurance. That is no way to help small
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businesses flourish and grow. The proof of that is in the way in which small firms, as my hon. Friend the Minister said, have grown and flourished since the Labour Government were defeated in 1979 and all the various bits of discrimination that I described have been unravelled.
It is important that small businesses flourish, as both the hon. Member for Hornsey and Wood Green and my hon. Friend the Minister said, because it is only the smaller firms that can provide the employment growth that we need, as well as a great deal of dynamism and flexibility in the economy. For the sake of the British economy and people, it is essential that we do all that we can to support small and medium-sized businesses and help them grow. Business links are an important core of that work and it is good to hear from my hon. Friend the Minister of the progress that they are making.
5.59 pm
Mr. Barry Sheerman: I, too, congratulate whoever decided that there would be a debate on business links, in which I am most interested. We have rather a select little group in the House this evening. As I am a former shadow spokesperson on small business, it seems that most of us have had some role in the subject.
The right hon. Member for Northavon (Sir J. Cope) spoilt an otherwise excellent contribution when at the end of his speech he had to make a party-political onslaught. He misled the House in one slight sense. The fact is that all parties have neglected small business over a long period because they all had the view that the big companies—the big corporations, the massive employers—were the way to regenerate our economy, make ourselves more competitive, sell more abroad and bring our wealth creation and production to bear on our problems. All parties started to realise at about the same time that that was not going to happen. The number of large companies, and the number of people they employed, declined. Their percentage impact on our economy declined. That is dramatically demonstrated by recruitment.
Any university vice chancellor who was asked about graduate recruitment would say that the days of the big companies, the ICIs and the Unilevers, which recruited hundreds of graduates on the milk round, have gone. All political parties realised that future employment and wealth creation would come more from small and medium-sized firms and less from the big companies. Sometimes we are not honest enough to say that those are the facts of history. So often we, as politicians, do not lead the trend but follow it. Many people in business were saying that small and medium-sized enterprises would be the salvation of our country long before any political party or Government grasped that nettle.
Business links have arrived, as history shows, with all-party support. We all wanted some mechanism through which we could stimulate small and medium-sized enterprise. Over time, all the parties have committed themselves in their manifestos and working party documents to creating something like Business Links. It was not all in search of a one-stop shop. I have seen all the literature and know all the speeches about one-stop shops. Of course, it is good to have available one place to go to telephone and either get information there or access to information held there that leads on to advice from elsewhere.

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Let us be honest about the fact that all Ministers, and potential Ministers, wanted a direct delivery system through which the Department of Trade and Industry could intervene in the small and medium-sized enterprise world. That is the truth of the matter. The Opposition wanted it, and the Government also wanted it, but the DTI never had a reliable mechanism through which it could operate at grass roots level.
The quality of economic development units of local authorities was patchy: some were good, some were excellent, some were average and a lot were pretty awful. The training and enterprise councils—late entrants—were patchy. One did not know whether they were still bound by civil servants who had not quite come into the enterprise economy, or who had done so but could not quite come to terms with it. The TECs were not exactly what was wanted by a DTI Minister.
The chambers of commerce were also patchy. Some of us have marvellous chambers of commerce—in mid-Yorkshire we have one of the best in the country—but in some places they are described as lawyers' luncheon clubs and they certainly do not have the ability to deliver.
Mr. Denis MacShane: My hon. Friend means that they are Conservative party dining clubs.
Mr. Sheerman: I dare not say that as my friends in the chamber of commerce movement would never forgive me.
Whatever agency one looked at from No. 1 Victoria street, there was a deficiency. The creation of business links got all-party support when the then President of the Board of Trade made the announcement in December 1992 because we all looked at Germany and the statutory chambers of commerce and talked of having a mechanism as good as that at delivering policy on the ground. Let us get history accurate in respect of the all-party support and why it existed.
To add a little salt and pepper of party-political debate, the Conservative Government's track record since 1979 on small business is pretty quiet. With all respect to the former Minister for small business, the right hon. Member for Northavon, my impression, in Opposition and as shadow Minister, was that the non-interventionist stance of the Thatcher years meant that there was little desire to get out there and intervene. Indeed, both sides of the House recognise that after Lady Thatcher ceased to be Prime Minister and we got a new President of the Board of Trade—who said that he was going to intervene before breakfast, after breakfast, before lunch, after lunch, and so on—the business links scheme was part of a change in the Conservative party, which recognised late in the day that it needed to be able not only to intervene but to intervene at grass roots level.
Sir John Cope: I absolutely disagree with much of what the hon. Gentleman said about the history of the matter. In the first place, the small firms service, which was set up under the previous Conservative Government, was a much more direct intervention by the DTI than were the TECs or business links, because they were Government offices full of Government employees. They did not have the partnership approach which has since developed.
Secondly, I disagree with the hon. Gentleman's description of what happened under my noble Friend Baroness Thatcher when she was Prime Minister. If he
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wants proof of that, he should consider the increase in the number of small firms and the huge list of things that were done on tax—some of which my hon. Friend the Minister mentioned—and on regulation, as well as the setting up of training and enterprise councils.
Mr. Sheerman: The hon. Gentleman and I can disagree on the history. Many would say that the restrictions under which small business operated through the 1980s became greater and that it became more difficult to run a small start-up business.
Let us consider business links in a positive spirit because we must make them successful. If they provide quality advice, they will survive and thrive. The only element of discord that I have picked up is the constant reiteration, "But that is always linked to being a business and making a profit". One of the biggest question marks over business links is where the medium and long-term funding will come from and whether the DTI's commitment will remain once the initial finance period, which I understand was for three years, dries up.
We must be careful, however, because while businesses will be able to stand on their own feet in our big cities, in constituencies such as yours, Mr. Deputy Speaker, and mine, it will be more difficult, if not impossible, for businesses to be a commercial success. That does not mean that business links are not doing a marvellous job by delivering quality and a service that helps small business. They are worth while and should be supported, but the Government and the forthcoming Labour Government must face that problem.
The business links programme delivers three kinds of specific advice: on exporting, design, and information technology, all of which are vital. The most fascinating and encouraging of those is advice on design. The Design Council's input is probably the secret of the programme's success because the local design networks that support the design counsellor give advice on which he or she can rely and a lot of information issued by the Design Council through publications and networking. That is how to maintain quality.
It is still early days and it will take time to get that aspect of the business links programme established. Criticisms are inevitable as the system gets up and running, but the design counsellor aspect is the secret of business links' success. If we want quality we must ensure that management and advice are monitored, and the Design Council has a role to play in that respect. I am not sure how the Minister intends to proceed in terms of the other two areas of expertise, exports and information technology, but those, too, need to be monitored.
If quality is to be maintained, we must ensure that the personal business advisers at the heart of this concept are of good quality. If they are the sort of managers who failed to run their own enterprise and could find nothing else to do, business links will not work. There has been a tendency to employ such people in some of the agencies that have been set up over a number of years. We need dedication to get the best personal business advisers. They must therefore be trained and, if we are to train them well, we must engage the best business schools, and economics and management departments.
We must also involve the best of the high quality private sector. I see an interesting synthesis in linking our business schools to some of this country's great

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consultancies, such as Price Waterhouse and KPMG, so that they can participate in training personal business managers and then monitor their performance. If that is not done, small business people in the business link scheme will say that they received duff advice. Members of Parliament know that the business network in any town or city is the best network possible because business people tell their friends, and once a scheme gets a bad reputation it will not be resuscitated without a total relaunch and new name. So whichever party runs business links, it must ensure that quality is maintained.
The success of the scheme also depends on partnership. One reason why business links came into operation was that the partnership was not good enough. Chambers of commerce may not have talked to local universities, and local universities may not have been on speaking terms with their local authorities' economic development units. There were rivalries and a lack of ability to work together. Given that business links has funding and all sorts of advantages, it must be seen to be able to draw that partnership together and make it work. It must not be seen as a representative big brother—or big sister—of the DTI that will impose its will. A little frisson is coming from some sectors—
Mr. Page indicated dissent.
Mr. Sheerman: The Minister may shake his head, but a little frisson is already coming from some areas. No one is perfect and, given that 180 business links have now been commenced, one would not expect no disharmony whatever. A careful balance must be struck and local politicians and Ministers must do all that they can to encourage the partners to work together and ensure that the business link group does not get a reputation for trying to get its own way. Politicians know that that is not how to achieve an effective partnership and good results. We must make small and medium-sized firms understand that concept.
I strongly agreed with my hon. Friend the Member for Hornsey and Wood Green (Mrs. Roche) that the scheme must not be geared only to where the Government think that they will achieve the quickest results. We all know that business schools and researchers have told the Government how to achieve the quickest fix and double the size of medium-sized businesses, but we must make the scheme appeal to and help small as well as large enterprises. I remember when the former President of the Board of Trade introduced the first pilot scheme in December 1992, which was designed for very small as well as large enterprises. Those small enterprises must be helped, which is why I made the jibe to the Minister when he introduced this debate that it is a pity that enterprise allowance has been lost. Helping small businesses to start up remains vital to their life blood.
Small and medium-sized businesses need help and good-quality advice, and the business link programme can deliver that. It is odd that I have been described as "old Labour" as the other day someone trying to be rude to me in a meeting said that I was a Blairite before Blair. I believe that the private sector should not be shut out.
Many of our constituents work as accountants, in the financial services sector or as bank managers and, over the years, have given high quality advice. They, too, must
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be brought into the partnership and not treated badly, although I agree that they must be monitored. Part of a Member of Parliament's job is to signpost good solicitors, lawyers and accountants to our constituents, so we do a monitoring job in that respect. All those partners must be given respect, evaluated and encouraged. In that way, business links can make a real contribution to wealth creation and the success of our country.
6.19 pm
Mr. David Chidgey: I have listened to the debate with increasing fascination because we appear almost to be running a parallel debate. All hon. Members who have spoken appear to agree, which is obviously causing confusion. It appears that we are witnessing the Government and the official Opposition debating not whether the business links is a good idea, but who thought of it first. It is vastly entertaining.
I am always tempted to scurry out of the Chamber and fetch the famous Liberal yellow book of the early years of the present century and demonstrate that all the good ideas emanated from my party, but that might test the patience of the House too much. [HON. MEMBERS: "Hear, hear."] I shall therefore refrain from embarking on what I believe would be a sterile exercise—my words would fall on deaf ears, at least.
I listened to the Minister's remarks with great interest. Although I cannot quite accept some of the glowing sentiments that he expressed, I can agree that the one stop shop—the business links—is a good idea that deserves support from both sides of the House. By concentrating services and help for small business in one place which, one hopes, is accessible by one telephone call, business links is a vast improvement on the confusing plethora of services from different sources that existed previously. Organisations that were trying to make their way in business might previously have found it too daunting to seek help, and returned to doing whatever they did previously.
I shall discuss several matters that show that we should not be complacent. I hope that the Minister will direct attention to those matters of concern in the months ahead. Specifically, I shall speak about the help that is needed by very small businesses, about which several hon. Members have spoken. I shall also discuss the amount that the business link is likely to charge small businesses for its services, and the best way in which to streamline the services that are provided by chambers of commerce, training and enterprise councils and other organisations. I do not believe that streamlining is quite as easy as might have been inferred from some hon. Members' speeches.
We must emphasise the importance of micro-businesses—businesses with one to nine employees. Several hon. Members have mentioned them. As the hon. Member for Hornsey and Wood Green (Mrs. Roche) said, they represent nearly 95 per cent. of all the firms in the country. Equally important is the fact that they represent more than 28 per cent. of the work force. They make an important contribution to our economy.
The Minister emphasised the importance of small businesses to the economy. Their needs should be addressed carefully and specifically and they should be vigorous supported.

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The small business has great difficulty employing key staff to cope with the management tasks that are taken on as a matter of course by larger enterprises. I remember, from my professional experience running my own office with a few staff—slightly more than 10, but certainly not in the wider range—becoming a multi-skilled person, not because I wanted to but because I had to. That is a common experience. People spend many long hours trying to do the accountant's job after most others have gone home, and hope that they have got it right.
A great problem for micro-businesses, as I call them, is having skills in-house, training their staff and undertaking financial planning, business development and the essential management task of marketing. The problem is that, although they recognise that they do not have skills in-house, they often do not have the financial resources to buy in expertise either. They are too busy trying to make a turn on their day-to-day business. Whatever profit they make might be kept for the days when the orders do not come in; it is not automatically spent on buying in expertise on matters that are separate from their main function.
Many small business are very suspicious of consultants. I am an ex-consulting engineer, so I know. The people who earn their living on the knife edge often say, "If you ask a consultant the time, the first thing he will do is borrow your watch". A politician would probably not give it back. The key point is that many small businesses operate at the margins, and cling on by their fingertips to survive. They do not have the fat in their financial operations that enables them to employ outside expertise.
Under the current regulations, many firms have little opportunity to take up the services offered by business links. It is not only a question of cost. Small firms with four or five employees—there are many of them—cannot spare the employee time involved in making contact with business links.
We must introduce imaginative ways of delivering business links services. We must use distance learning techniques, set up support networks—as other hon. Members have said, that is happening informally—and use new technology. If business link is to succeed, it must be based on imaginative and time and resource efficient techniques to enable very small businesses to take advantage of it.
I should like to mention cost comparison. I mentioned that small businesses are conscious of the margins on their resources. We must come to grips with the fact that many small businesses will take a very critical look at the charges that will eventually flow from using business link services.
We know that the highest growth in new businesses is in the service sector which, basically, involves selling people's time and expertise. The hourly rates chargeable for people's time have inevitably been driven down by the recession and by fierce competition, not only in the United Kingdom but world wide. We now confront global competition through the information super-highway. That competition will have a strong impact on the profitability—and the soundness—of small businesses in the service sector.
It is now possible, in no more time than it takes to go down the road to a local supplier, to buy in computer programming and project design from centres as far away as India, where overheads and wage costs are much lower.
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A company that sells a product that depends on a person's time, finds itself competing—somewhat unfairly, one might say—with companies whose costs are dramatically lower but whose products are as available because they are on tap on the information super-highway.
The charges for business link services must reflect that super-competitive environment. If clients or potential clients of business links who are in the service sector find that, when pricing their products, they cannot do more than double the salary costs to cover overheads, social costs and perhaps some profit, they will not be prepared to pay business links charges approaching those that management consultants like to charge. Business links must be able to operate sympathetically to small businesses and at rates that clients consider reasonable and worth while. Their clients are at the sharp end and know how tight the margins are.
I shall now discuss combining the skills of the chambers of commerce with those of the TECs. Following that avenue to concentrate services is an attractive option because one draws in established skills and the other draws in organisations that are well known in the business community and supported by it. It would be wrong, however, if the House were to assume that that course would be a panacea. Much depends on the location and culture of the business community being served.
When I was the Liberal Democrat spokesman for employment and training, I had the opportunity to visit Northampton. I was much impressed by the results of the Northamptonshire TEC's merging with the Northamptonshire chamber of commerce. There were some remarkable results in training programmes, but that is a subject for another day. The important factor is that both bodies served the county of Northamptonshire. Their boundaries were coterminous, so, when they merged, the synergy between the two was obvious and the chamber of commerce's representatives on the board of the new organisation were elected from the membership of the old chamber of commerce—something that is unusual, but to be encouraged.
In Hampshire, such easy merging and synergy is probably a long way away. We have two major cities, Portsmouth and Southampton, which have distinctly different cultures. There is a long history of fierce competition between them, perhaps going back to the civil war when, as I remember, they were on different sides. That competition runs through everything from their soccer teams to their universities. Each city has a powerful chamber of commerce that competes with the other for Government assistance, business development and export trade.
Hampshire TEC, however, has to serve the needs of both cities fairly and without favouritism—and they are two completely different areas. The day that the Hampshire TEC and the chambers of commerce of Portsmouth and Southampton contemplate a merger is so far away as to be out of sight.
I have received feedback from the business community in Hampshire, where business link is due to be launched in 1996. During the past couple of years, much effort has been expended on ensuring that we set in place effective working partnerships for the benefit of the business community of Hampshire. I have received feedback that suggests that, at times, the efforts have been plagued by shifting goalposts as the DTI's objectives change to

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respond to the problems that it encounters in other parts of the country. I accept that the process is iterative, but that creates extra problems for the TEC which is trying to set business links in place.
The primary concern in Hampshire in the run-up to the launch of business links is its longer-term financial viability, which hon. Members touched on earlier. It is intended that, after three years of DTI pump-priming, funding should end. The DTI's view seems to be that, by that time, sponsor and partner contributions and the income generated from services will be sufficient to allow the organisation to survive independently. That might be right, but it is difficult to see where the profits will be made. Will they be made from making margins on DTI service contracts? For that to happen, the DTI will have to be happy with the level of margin made, bearing in mind the value-for-money responsibilities rightly attached to Government funding. The DTI will not want business links to make excessive profits on contracts. Will the profits come from charging customers for services, in full or in part, taking due regard to the European Union's state aid rules?
We are only too aware—I think that the DTI is learning by experience of business links elsewhere—of the reluctance of small businesses to pay for anything they do not have to pay for. Some services will continue to be funded, in part or in full, by the DTI, but that funding will not cover the costs of operating even the most cost-effective business links. The worry is that the business links network is only now beginning to confront the DTI with the reality of business plans and the likely funding gap in the fourth year of operation.
The DTI recognises that some of the assumptions of growth in income from customers are at best over-optimistic and at worst totally unrealistic. It cannot have it both ways: either such growth will occur or the DTI must be prepared either to invest more money or to allow business links to make bigger margins on publicly funded services. More realism is essential if business links is to work.
6.34 pm
Mr. Denis MacShane: I have enjoyed our debate, which has been held in a relatively uncrowded House. I particularly enjoyed the imagery of acorns and oaks used by the right hon. Member for Northavon (Sir J. Cope). The evidence on the ground in Rotherham and South Yorkshire is that the Government's support for business has remained very much at the acorn stage in terms of creating new jobs or new businesses.
I also enjoyed the honesty of the Minister for Small Business, Industry and Energy, as I think that we heard for the first time from the Government Front Bench an open admission of the dismay and shame that all hon. Members should feel at the dramatic slump in the United Kingdom's standing in world competitive league tables. We have dropped from 12th when Labour was last in office to 18th today—and we are still falling fast. Investment as a percentage of gross domestic product—along with demand, that is one of the key components for sustaining any small business culture—is about 17 per cent. compared to 23 per cent. in Australia, 25 per cent.
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in Switzerland and 29 per cent. in Japan. The Government's lack of commitment to jobs and business is reflected in the number of small businesses that we have.
I am grateful to the Minister for a written reply that he provided to me just before Christmas in which he said that in Yorkshire and Humberside the number of VAT registrations, which is the only real measure we have for small businesses, dropped from 17,100 in 1990 to 13,300 in 1994—a slump of 25 per cent. Even taking into account the change in the VAT threshold, the Yorkshire figures show an absolute decline. The significant problem faced in South Yorkshire is the slump in small businesses.
One reason why small businesses fail to get off the ground in Rotherham and South Yorkshire is that so many organisations purport to help them. I was pleased to hear my hon. Friend the Member for Hornsey and Wood Green (Mrs. Roche), the shadow Minister with responsibility for small businesses, draw attention to the plethora of organisations that purport to represent businesses. There are TECs, chambers of commerce and, in the industrial sector, the Engineering Employers Federation. Companies may belong to the Confederation of British Industry or they may belong to the Institute of Directors. The sum of the parts of business representation, guidance and advice never seems to add up to a convincing whole.
We have to take a special test to drive a bus, practise law or build a house. But the Minister proclaimed with pride that no test, qualification, proof of financial commitment or willingness to join an organisation that might provide guidance and help was necessary for anyone wishing to start a business. I do not wish to put hoops in the way of individuals who wish to form any sort of business, but we must look at our more successful competitor partners and be modest enough to learn from their experience.
There are 12,000 unemployed people in Rotherham and approximately 4,000 firms can be identified in the borough. The question that I continually ask myself is: how can policies be shaped allowing each firm to take on one extra employee—which would mean that unemployment in Rotherham would drop by one third—or even two extra employees? It is not a simple mechanical, arithmetical progression, but if we endeavour to help small businesses, perhaps we shall tackle the pressing problem of unemployment in my constituency and those of my hon. Friends who also represent Rotherham.
The social chapter is quite irrelevant as it expressly excludes small businesse. Low wages, however, are vital. Rotherham employment service advertises jobs paying £1.80, £2, £2.50 and £3.50 per hour. Anyone who accepts those low-paid jobs then has to be subsidised through the welfare system by the taxpayers of Rotherham. That is why the tremendous echo that is reverberating around the country was created not by Baroness Thatcher in a speech designed to divide the Conservative party, as we shall hear later tonight, but by my right hon. Friend the Leader of the Opposition in his speech on the need for a stakeholder economy. That speech was based on the idea of partnership.
The Minister for Small Business, Industry and Energy will reply to the debate. His predecessor as the Minister for acorns, now the Minister for Science and Technology, the hon. Member for Esher (Mr. Taylor), was formerly at the Department of Employment, where he poured sulphuric acid over all notions of partnership.

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In the dynamic economies of Asia and the more successful partner competitors of Europe, partnership is built into the world of work. In Britain, even at the lowest level, there is immense ideological hostility to partnership in the workplace. That is the abiding legacy of modern Toryism. Instead of drawing on the talent, knowledge and commitment to their firm of employees through their representative organisations, we have suffered from the denial of partnership and a complete disinterest in the idea of the stakeholder economy.
During a recent visit to the Bundesbank in Germany, I was interested to discover that the strongest component element of the Bundesbank was the 4,000 co-operative banks based in the region. Representatives of those banks take the decisions that often have a great impact on our own economy, such as those on the interest rates set in Germany. There is a much stronger regional identity there and its banks and institutions are closer to the ground than our highly centralised, London-focused economy. That is why the chances of support for small business are so much better.
My hon. Friends have mentioned that the business links chain is unable to provide any help to the micro-businesses with fewer than 10 employees. Those businesses are the acorns that need fertilising, nurturing, guiding, sheltering from the sun or exposing to the rain, to continue down the metaphorical path of gardening, which is one of my favourite hobbies.
The excellent staff at business link in Rotherham are unable to provide the advice to the small firms in Rotherham that should receive backing. To reiterate the point made by my hon. Friend the Member for Huddersfield (Mr. Sheerman), they find it difficult to support innovation and invention because the destruction of the apprenticeship schemes, which are the core of successful small businesses in so many of our competitive partner countries, has produced a shortage of skilled intermediate workers—low, medium and high-tech workers.
I pay tribute to the staff of business link at Templeborough in Rotherham, which occupies a wonderful site open to inward investment. I hope that representatives of all companies here and abroad reading Hansard tomorrow will speed to Rotherham, where they will find a warm welcome.
I also pray in aid the Deputy Prime Minister, whose performance this afternoon, when he kept a straight face while commenting on his support for the former Prime Minister, Baroness Thatcher, was a remarkable example of a still-lipped rictus such as I have never seen in the House of Commons.
When the Deputy Prime Minister was President of the Board of Trade—before he was replaced in that post by an invisible kilt—he wrote to me expressing support for the merger of the Rotherham chamber of commerce and the TEC. Voting for that process is now under way and I would like to place it on record that all three Members representing Rotherham support the merger, as do the leaders of the TEC, the business community and the trade union movement in Rotherham. We hope that all relevant companies will vote in favour of the merger. It will create a successful and vibrant Chamtec, as it will be called, which, together with the Rotherham economic partnership—which includes the local authority and business link—will work to promote the interests of the people and businesses of Rotherham. In essence, there is
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a sense of partnership and the creation in outline of a stakeholder economy and community in which everybody is invited to participate. No one is excluded for ideological reasons, as has been the case since 1979.
Labour's commitment to small businesses is clear. We are and always have been the party of the little person, in the sense of the men and women who are oppressed by stronger, more authoritarian, richer and more powerful elements in our society. We are also placing ourselves closely in common cause with the interests of small business in Rotherham and throughout the country.
6.46 pm
Mr. Page: With the leave of the House, I shall make a few comments in reply to the debate, which has been helpful and supportive. I welcome some of the words of the hon. Member for Hornsey and Wood Green (Mrs. Roche). I was not surprised that she claimed business link as a Labour idea. Labour has tried to pinch, beg and borrow practically all our other clothes, and this will be no exception, so its attempts to acquire business link as part of Labour party policy is no surprise.
I am not quite so sure about Labour's latest claims. The stakeholder gimmick sounds more like a return to the minimum wage, the social chapter and more trade union rights—but that would be moving away from the purpose of the debate.
When the hon. Lady has a chance to review her speech, she will note that she made very little allowance for the fact that many of the business links are freshly formed and still feeling their way. I wonder whether anybody working up a new business link will find encouragement and understanding in her words.
The hon. Lady's criticism of London is grossly unfair. She is obviously not aware that business links are not yet open throughout the capital and the overarching central link for London is still not fully in place. Therefore, I am not surprised that she did not receive the immediate, quality service that should be available when everything is in place.
The hon. Lady is absolutely correct about the consultancy brokerage service. It was an attempt to provide an unified listing service on a national basis. It was conceived with all the best of intentions, but when I took up my present post it was obvious that business links were planning that service on a regional basis. I am sure that the hon. Lady would not want me to pursue and continue a scheme that the business links did not wish to see operate.
Mrs. Roche: I am grateful to the Minister for giving way and I am interested in what he said about the consultancy brokerage service. My point was not that more public money should have been allocated but that the Minister or his predecessor should have taken responsibility for the decision, rather than blaming the press for its demise and the loss of almost £3 million in public money.
Mr. Page: I can say little other than reiterate that I have taken responsibility for that decision. When I assumed my current post, I said that the scheme would not receive the support of all the business links and that therefore it should be closed. That is exactly what we did, and I cannot follow the hon. Lady's logic.

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The hon. Lady also made great play of a conspiracy theory regarding the internal audit report. The Department of Trade and Industry informed the commission about the pilot project and later informed the commission that we were working up a fully fledged scheme. It was believed to be important to sustain the momentum of the development of the business network while awaiting the commission's formal approval, which I understand came through on 6 September 1994.
I turn now to the comments of the hon. Member for Huddersfield (Mr. Sheerman), who has explained to me that he meant no discourtesy in disappearing from the Chamber, as he had a pressing engagement. I was very grateful for his contribution to the debate and I agreed with much of what he said. I thought he adopted a very positive approach to business link. In teasing him about his contribution—I hope that he will read my remarks in Hansard—I shall not comment on his attempts to rewrite history. However, I agree with him—and I return to my opening remarks—that we must have quality. He has obviously recognised fully the speed at which a business link can lose its good reputation with the local business community, and I am also only too well aware of that fact.
What can I say to my right hon. Friend the Member for Northavon (Sir J. Cope)? He is a previous and most successful small business Minister and he has forgotten more about the small business scene than I shall ever know. I can only recommend that hon. Members read his words again and again, because they are wise, knowledgeable and skilful.
I thank the hon. Member for Eastleigh (Mr. Chidgey) for his support. He is correct to draw attention to the future financing of business link. The Government have given a commitment for the three-year programme and we shall look beyond that when the time comes. I am convinced that there must be some element of charging. However, as we can see from the support programmes, more than £100 million will be available in 1998–99 from the Department of Trade and Industry for services.
The comment was made that small business people do not like to make any payment unless they have to do so. I understand that, but if business link can establish a reputation for quality and for being a sensible investment for small business to make, I believe that people will be prepared to contribute to making their businesses even more viable and profitable.
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I acknowledge what the hon. Member for Eastleigh said about Northampton; however, I am conscious of the fact that in this Chamber there is someone, in the form of our Deputy Speaker, who has vast knowledge, skill and influence with regard to the merger to which the hon. Gentleman referred.
I am glad that the hon. Member for Rotherham (Mr. MacShane) supported business link once again. He managed to plug his constituency business link in Rotherham and he referred to the merger between the training and enterprise council and the chamber of commerce. I leave it to the local partners to identify how unified delivery of service to business men and women in the area can be best achieved.
I shall not follow the hon. Gentleman by making international comparisons, as I could spend a considerable time pointing to the huge success of inward investment in this country: hundreds of thousands of jobs have been created and we now have one of the lowest unemployment rates in the European Union. However, that would be contentious and I would hate to introduce a discordant note at this stage of the debate. I take on board the fact that there must be support services for the micro-business. Obviously, micro-businesses grow into small and then medium-sized businesses. Huge, successful businesses that have developed from a standing start are few and far between.
I am glad that there is broad consensus in the House about the issue. It must be a good idea when every party claims credit for introducing and developing it. However, I must point out that it is this Government who have put business links in place. On a serious note, business links face formidable challenges. It will need the commitment of all the partners, political parties and customers in order to spread the word. As I understand it, the message from the House tonight is, "Well done so far. We look forward to seeing business links achieve so much more in the future."
I beg to ask leave to withdraw the motion.
Motion, by leave, withdrawn.

BUSINESS OF THE HOUSE
Ordered,
That, at the sitting on Wednesday 17th January, the Speaker shall put the Questions on the Motions in the name of Mr. Secretary Lilley relating to draft Regulations on Social Security not later than Seven o'clock.—[Mr. Brandreth.]

Hospitals (North-west Kent)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Brandreth.]
6.56 pm
Mr. Bob Dunn: I am delighted to have secured the Adjournment debate this evening on the subject of hospital provision in north-west Kent as it gives me the opportunity to reaffirm my determination to help to bring about the construction of a new, all-purpose, state-of-the-art general hospital in Dartford by the end of the decade. The new hospital will serve the interests and health needs of the people of north-west Kent well into the next century.
The Minister will know that the journey to this point has been troubled in the past, but it now appears that the hospital will become a reality, with the consent of all levels of Government and all levels of the national health service. For the benefit of the House, I must explain that the changes that are taking place in north-west Kent in the context of development within the Thames gateway strengthen the case for the new district general hospital as we debate health care in and for the next century.
Conservative Members who take a strong interest in health matters in north-west Kent are fully aware of the firm but sure steps that have been, and are being, taken along the path towards new build. Not for us the manipulation and incorrect usage of the A and B lists as issued by the private finance initiative sector and not for us the shroud waving of the Labour party: we are determined to get things done. It is interesting to note that, despite Labour's huffing and puffing, not a single Labour Member is present in the Chamber tonight to listen to and participate in this important debate.
As a matter of public record, I seek an assurance from the Minister, whom I welcome most heartily to the Dispatch Box, that his Department will ensure that the timetable for the construction of the new hospital is not allowed to slip. Will the Minister assure me that the involvement and interrelationship of the private sector through the private finance initiative is working satisfactorily and that the objectives that the private sector need to see fulfilled are, in themselves, sufficient reward to retain that sector's interest now and in the future? There may well be a need for the involvement of public funds alongside private funding and that would be a sufficient lever for the project in Dartford to come to fruition. I also hope that my hon. Friend the Minister will assure me that the evaluation of the project will be carried out speedily and effectively by Whitehall Departments so that there is no delay whatever to the timetable. I hope that he will be able to mention the timetable in his reply.
It is essential that my constituents in Dartford have an understanding of the progress made so far, and the progress that needs to be made in the future, if the project is to happen by the end of the century. It is worth placing on record the fact that we will have in Dartford, in north-west Kent, a huge range of diverse developments that will make the construction of the new district general hospital more essential.
Perhaps at this point I may pay tribute, not only to the work of my local authority and the leader of the Conservative group, Councillor Kenneth Leadbeater, but to the work of my hon. Friend the Member for Gravesham
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(Mr. Arnold). He has worked with me in the trenches to secure our objective. I must also pay tribute to the work of my hon. Friend the Member for Sevenoaks (Mr. Wolfson) who has battled with us shoulder to shoulder on this issue.
During the next three years, the new station and its associated infrastructure will be developed at Ebbsfleet for the channel tunnel rail link. Bluewater park, which is a little closer to the centre of north Dartford, will generate many thousands of work opportunities for the people of south London and Kent. We have a huge programme of house building over the next 10 to 20 years, with a range of houses to suit all needs. I know that I sound like an estate agent.
Those changes will bring new residents and new workers, and people will come into north Kent for leisure purposes. The burden on the health service will be immense. We cannot expect a health structure that was developed largely in the last century, for purposes which were relevant and germane then, to be available to support the needs for health care of my constituents in the 21st century.
I hope that there will be no doubt after this debate of my commitment and my hon. Friend's commitment to the construction of the new district hospital. The determination of the Department of Health to support us means that the different interests will come together to ensure that we have new district general hospital in Dartford very soon. I am most grateful to the Minister for coming here tonight and I look forward with interest to hearing his remarks.
7.2 pm
Mr. Jacques Arnold: In the nine years that I have served as Member for Gravesham, one of the highest priorities for my constituents has been the replacement of our hospital facilities. My hon. Friend the Member for Dartford (Mr. Dunn) has served Dartford for much longer and the replacement of our hospital provision has also been a high priority for him.
As my hon. Friend said, we depend now on three old hospitals that have served the area well since the last century. The need for a new hospital has always been clear, but the problem has been the cost of some £100 million, and it has been a daunting job for Ministers in the Department of Health to ask the Chancellor of the Exchequer for a cheque for that amount. That is why, year after year, we have not got our hospital.
I am now absolutely delighted with the Government's new private finance initiative, which will bring private capital and expertise to ensure that we can enjoy the hospital that our constituents in north-west Kent have always deserved. I take great encouragement from the fact that there are four consortia composed of great household names bidding for the opportunity to build the hospital for local people.
I remind the Minister that there are two parts to the project. By far the greatest is the provision of the new district general hospital at Darenth park, but the provision of a community hospital is also of great concern to the people of Gravesend. At the moment, approximately one third of our general hospital provision is provided at the Gravesend and North Kent hospital in Gravesend, which is very close to the hearts of my constituents.

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The conurbation of Gravesend and Northfleet and the surrounding villages like Meopham and Istead Rise, and Longfield in the constituency of my hon. Friend the Member for Dartford, contain some 100,000 people. Clearly, basic hospital provision is necessary. Therefore, I am very encouraged by the intention of the Dartford and Gravesham NHS trust and the other trusts, especially the Thameslink Healthcare Services NHS trust, to use the Gravesend and North Kent site to provide a community hospital at a cost of about £8.5 million.
I hope that the Minister will be able to assure us that he has in his sights the need to provide finance, through the private finance initiative, for the follow-through. We will need a community hospital in Gravesend, when the general hospital provision—mostly maternity—departs from Gravesend and North Kent hospital to our brand new hospital in Darenth park.
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The Parliamentary Under-Secretary of State for Health (Mr. John Horam): May I congratulate my hon. Friend the Member for Dartford (Mr. Dunn) on his success and his luck in securing this debate? I gather it was because another hon. Member had to withdraw his subject and therefore my hon. Friend could bring forward his subject. We are having this debate at a rather more timely hour than could perhaps have been foreseen.
My hon. Friend the Member for Dartford has always been a stalwart supporter of local health services, and I am very pleased to be able to respond to his comments about hospital provision in the Dartford and Gravesham area. He has spoken eloquently about the need for improved hospital services in the area, and makes very good points which I have listened to carefully.
My hon. Friend the Member for Gravesham (Mr. Arnold) also spoke and I also know of his commitment and enthusiasm over the years to his hospital services. I note also his support, not only for the new hospital proposed at Dartford, but for the follow-through, as he put it, that is so important to Gravesham—the new community hospital—which we hope will follow on from the main hospital.
Acute services in the area, as we know, are provided by Dartford and Gravesham NHS trust and are spread across three hospitals—Joyce Green, West Hill, and Gravesend and North Kent hospital. The latter, I believe, is known colloquially as the GNK. The main acute hospital is Joyce Green which dates from Victorian times. While those hospitals have served the local population extremely well over the years, they are clearly no longer well suited to the delivery of modern health care. They would need significant investment to remain in use in the longer term.
At present, accident and emergency services are located at West Hill hospital in central Dartford, along with trauma and orthopaedics. General medical, elderly and surgical services are provided from Joyce Green, while maternity and gynaecology are based at Gravesend and North Kent hospital. The difficulties of that three-way split are readily apparent. My hon. Friend the Member for Dartford has often made that point. Not only do patients frequently need to be transferred between sites, but the arrangement also creates practical staffing difficulties.
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Despite operating from relatively poor buildings, the trust provides a full range of excellent health services, to the considerable credit of its 2,000 doctors, nurses and other staff who work for the trust. I am sure that my hon. Friends appreciate the work that the staff have done despite the inadequacy of the buildings in which they work.
The trust treated about 164,000 patients in 1994–95, and it expects to treat a remarkable 10 per cent. more during this year. That is excellent news for my hon. Friends' constituents, who will also be heartened to know that waiting times have been substantially reduced. The trust expects to have no over-12-month waiters by the end of March; the number of over-12-month waiters fell from more than 400 in February to no more than 69 in September of this year. That is a remarkable improvement and a great credit to all concerned.
More evidence of improving performance is to be found in the NHS performance tables. The trust achieved an impressive five 5-star rankings in 1994–95, including assessment of A and E services—four more than the previous year. Well over half of all the trust's elective surgery is now carried out on a day case basis.
As my hon. Friends pointed out, various proposals for a new hospital were made during the 1980s, but it was not until 1994 that a scheme appearing to be really viable emerged. It would not be helpful this evening to rehearse the discussions that took place in the intervening years; but people's expectations of a new hospital were raised, only to be disappointed. I can therefore understand the frustration felt by all concerned—local residents, hospital staff, my hon. Friends who have campaigned tirelessly and other hon. Members.
Although I can give no guarantees, there is now much more than a chink of light at the end of the tunnel. Dartford is clearly closer than ever before to getting its new hospital. For good reasons to which I shall come in a minute it is necessary for the trust to explore private finance for the scheme. In that respect it is making excellent progress. In June 1995 the trust was granted approval to test the scheme to provide a new general hospital under the private finance initiative. It advertised the scheme in the Official Journal of the European Communities on 5 September; following a pre-qualification exercise, four consortia, representing a good selection of the major players, were selected—as my hon. Friend the Member for Gravesham pointed out.
The short-listed consortia have been issued with a draft contract, service level agreements and other documentation, and have been invited to submit their detailed proposals by the end of January. Following evaluation, the trust will select two candidates with which to renegotiate detailed contracts. Further negotiations will follow and the trust will select a preferred partner, probably this summer. It will then submit a full business case for approval to the NHS executive. On present plans I expect it to be forthcoming this autumn.
The overall process is as short and efficient as it can be, consistent with ensuring that value for money and the requirements of public accountability are achieved. If all goes to plan, building work should begin during the first half of 1997—that is the present supposition.
I can assure my hon. Friend the Member for Dartford that the project has the full support of all concerned—at authority level, regional level, NHS executive level and

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Government level. I can assure him also that the evaluation will be carried out as speedily as possible in Whitehall, so there will be no delays at our end. The speed will of course depend on the detailed progress of negotiations between the selected consortia and the local hospital trust. I cannot guarantee how quickly or slowly they will proceed, but I know of no reason why they should not maintain their present rate of progress.
The scheme would create a new acute general hospital with up to 400 beds, an accident and emergency department and a full range of services on the proposed Darenth Park site. The new hospital would replace the hospitals at West Hill and Joyce Green and the Gravesend and North Kent hospital.
The GNK hospital will be transferred to Thameslink Healthcare NHS trust and be converted to a community hospital. I emphasise that it will be a large community hospital—the plans for it are quite ambitious. I can well understand the enthusiasm of my hon. Friend the Member for Gravesham for the project, and I can assure him that the plans to take it forward will be finalised as quickly as possible, consistent with progress on the scheme for the main hospital. I hope that the follow-through will be quick, but it will depend on progress at the main hospital.
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West Kent health authority is responsible for identifying the health needs of all its residents, including the people of Dartford and Gravesham, and for ensuring that those needs are met. The health authority supports the proposed new hospital. As the main purchaser of Dartford and Gravesham trust's services, it is in its interests to see that the trust provides services of the highest quality as cost-effectively as possible.
The planned allocation for West Kent for 1996–97 is £369 million, an increase of no less than £9.4 million, or 2.7 per cent., on this year after taking account of inflation. I refer here to the running costs of the health services in the area. That considerable improvement should be of immediate benefit to my hon. Friends' constituents.
The people of Dartford and Gravesham are now closer than ever to getting a new acute hospital, with the trust at an advanced stage of the PFI process. As my hon. Friend the Member for Gravesham pointed out, the plans include not just a new acute general hospital but a community hospital too. All this is excellent news for my hon. Friends and their constituents.
Question put and agreed to.
Adjourned accordingly at fifteen minutes past Seven o'clock.